2013 North Dakota Century Code Title 54 State Government Chapter 54-17.7 Pipeline Authority
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CHAPTER 54-17.7
PIPELINE AUTHORITY
54-17.7-01. North Dakota pipeline authority.
There is created the North Dakota pipeline authority, which shall be governed by the
industrial commission.
54-17.7-02. Definitions.
As used in this chapter:
1. "Authority" means the industrial commission acting as the North Dakota pipeline
authority.
2. "Commission" means the North Dakota industrial commission.
3. "Energy-related commodities" means any substance, element, or compound, either
gaseous, liquid, or solid, associated with the production, refining, or processing of
renewable energy, crude oil, natural gas, coal, or coal byproducts, including oil, natural
gas liquids, refined petroleum products, carbon dioxide, hydrogen, ethanol, propane,
butane, ethane, methane, sulfur, helium, synthetic fuels, nitrogen, biodiesel, green
diesel, and liquids made from coal.
4. "Natural gas" means hydrocarbons or nonhydrocarbons that at atmospheric conditions
of temperature and pressure are in a gaseous phase.
5. "Notice of intent" means the notice a person delivers to the authority indicating
willingness to construct pipeline facilities contemplated by the authority or to provide
services fulfilling the need for such pipeline facilities.
6. "Pipeline facilities" means pipelines, pumps, compressors, storage, and all other
facilities, structures, and properties incidental and necessary or useful in the
interconnection of pipelines or the transportation, distribution, and delivery of
energy-related commodities to points of sale or consumption or to the point or points of
distribution for consumption located within and without this state.
7. "Project area" means the geographic area in which construction of a pipeline facility
contemplated by the authority is likely to occur.
54-17.7-03. Pipeline authority purposes.
The authority is created for the purpose of diversifying and expanding the North Dakota
economy by facilitating development of pipeline facilities to support the production,
transportation, and utilization of North Dakota energy-related commodities, thereby increasing
employment, stimulating economic activity, augmenting sources of tax revenue, fostering
economic stability, and improving the state's economy.
54-17.7-04. Powers.
The authority has all powers necessary to carry out the purposes of this chapter, including
the power to:
1. Make grants or loans and to provide other forms of financial assistance as necessary
or appropriate for the purposes of this chapter.
2. Make and execute contracts and all other instruments necessary or convenient for the
performance of the authority's powers and functions.
3. Acquire, purchase, hold, use, lease, license, sell, transfer, and dispose of an undivided
or other interest in or the right to capacity in any pipeline system or systems, including
interconnection of pipeline systems, within or without the state of North Dakota in order
to facilitate the production, transportation, distribution, or delivery of energy-related
commodities produced in North Dakota as a purchaser of last resort. The obligation of
the state may not exceed ten percent of the pipeline authority's acquisition or purchase
of a right to capacity in any pipeline system or systems, or interconnection of pipeline
systems, and the state's obligation is limited to the funding available from the oil and
gas research fund.
4. Borrow money and issue evidences of indebtedness as provided in this chapter.
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Receive and accept aid, grants, or contributions of money or other things of value from
any source, including aid, grants, or contributions from any department, agency, or
instrumentality of the United States, subject to the conditions upon which the aid,
grants, or contributions are made and consistent with the provisions of this chapter.
Issue and sell evidences of indebtedness in an amount or amounts as the authority
may determine, but not to exceed eight hundred million dollars, plus costs of issuance,
credit enhancement, and any reserve funds required by agreements with or for the
benefit of holders of the evidences of indebtedness for the purposes for which the
authority is created under this chapter, provided that the amount of any refinancing
shall not be counted toward such eight hundred million dollar limitation to the extent it
does not exceed the outstanding amount of the obligations being refinanced.
Refund and refinance its evidences of indebtedness.
Make and execute interest rate exchange contracts.
Enter lease-sale contracts.
Pledge any and all revenues derived by the authority under this chapter or from a
pipeline facility, service, or activity funded under this chapter to secure payment or
redemption of the evidences of indebtedness.
To the extent and for the period of time necessary for the accomplishment of the
purposes for which the authority was created plan, finance, develop, acquire, own in
whole or in part, lease, rent, and dispose of pipeline facilities.
Enter contracts to construct, maintain, and operate pipeline facilities.
Consult with the public service commission, regional organizations, and any other
relevant state or federal authority or persons as necessary and establish reasonable
fees, rates, tariffs, or other charges for pipeline facilities and all services rendered by
the authority.
Lease, rent, and dispose of pipeline facilities owned pursuant to this chapter.
Investigate, plan, prioritize, and propose corridors for the transport of energy-related
commodities.
Make and execute contracts and all other instruments necessary or convenient for the
performance of the authority's powers and functions with other state pipeline
authorities.
Cooperate with and participate in joint projects, research projects, and other activities
with other state pipeline authorities and participate in and join regional pipeline
organizations.
Do any and all things necessary or expedient for the purposes of the authority
provided in this chapter.
54-17.7-05. Authority may act.
1. Before exercising its powers to construct pipeline facilities granted to it in this chapter
except for subsection 3 of section 54-17.7-04, the authority shall publish in a
newspaper of general circulation in North Dakota and in a newspaper in the project
area a notice describing the need for pipeline facilities contemplated by the authority. A
person willing to construct the pipeline facilities or furnish services to satisfy the needs
described in the notice has a period of one hundred eighty days from the date of last
publication of the notice within which to delivery to the authority a notice of intent. After
receipt of a notice of intent, the authority may not exercise its powers to construct
pipeline facilities unless the authority finds that exercising its authority would be in the
public interest. In making such a finding, the authority shall consider factors, including
economic impact to the state, economic feasibility, technical performance, reliability,
past performance, and the likelihood of successful completion and ongoing operation.
2. The authority may require a person giving a notice of intent to provide a bond and to
submit a plan for completion of the pipeline facilities or commencement of services
within a period of time acceptable to the authority. If no person submits an adequate
plan or bond as required by the authority, the authority may proceed with contracting
for construction of the facility described in the authority's published notice.
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54-17.7-06. Authority may participate upon request.
The authority may participate in a pipeline facility through financing, planning, joint
ownership, or other arrangements at the request of a person giving a notice of intent.
54-17.7-07. Evidences of indebtedness.
1. Evidences of indebtedness of the authority must be authorized by resolution of the
industrial commission and may be issued in one or more series and must bear such
date or dates, mature at such time or times, bear interest at such rate or rates of
interest per year, be in such denomination or denominations, be in such form, either
coupon or registered, carry such conversion or registration privileges, have such rank
or priority, be executed in such manner, be payable from such sources in such medium
of payment at such place or places within or without the state, and be subject to such
terms of redemption, with or without premium, as such resolution or resolutions may
provide. Evidences of indebtedness of the authority are to mature not more than forty
years from the date of issue. Evidences of indebtedness of the authority may be sold
at such time or times and at such price or prices as the authority determines.
2. Evidences of indebtedness and grants, loans, or other forms of financial assistance
issued by the authority are payable solely from:
a. Revenues that may be received by the authority from pipeline facilities, services,
or activities funded under this chapter with the proceeds of the authority's
evidences of indebtedness, subject only to prior payment of the reasonable and
necessary expenses of operating and maintaining such pipeline facilities except
depreciation.
b. Amounts received by the authority under loans authorized under this chapter.
c. Revenues received by the authority under this chapter from any source other
than general tax revenues.
3. The evidences of indebtedness are not subject to taxation by the state or any of its
political subdivisions and do not constitute a debt of the state of North Dakota within
the meaning of any statutory or constitutional provision and must contain a statement
to that effect on their face.
4. The authority may establish and maintain a reserve fund for evidences of
indebtedness issued under this chapter. There must be deposited in the reserve fund:
a. All moneys appropriated by the legislative assembly to the authority for the
purpose of the reserve fund.
b. All proceeds of evidences of indebtedness issued under this chapter required to
be deposited in the reserve fund by the terms of any contract between the
authority and the holders of its evidences of indebtedness or any resolution of the
authority.
c. Any lawfully available moneys of the authority which it may determine to deposit
in the reserve fund.
d. Any moneys from any other source made available to the authority for deposit in
the reserve fund or any contractual right to the receipt of moneys by the authority
for the purpose of the fund, including a letter of credit, surety bond, or similar
instrument.
5. The authority must include in its biennial request to the office of the budget the
amount, if any, necessary to restore any reserve fund established under this section to
an amount equal to the amount required to be deposited in the fund by the terms of
any contract or resolution approved by the commission.
6. Any pledge of revenue made by the industrial commission as security for the
authority's evidences of indebtedness is valid and binding from time to time when the
pledge is made. The revenues or other moneys so pledged and thereafter received by
the authority are immediately subject to the lien of any such pledge without any
physical delivery thereof or further act, and the lien of any such pledge is valid and
binding as against all parties having claims of any kind in tort, contract, or otherwise
against the authority, regardless of whether such parties have notice thereof. Neither
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the resolution nor any other instrument by which a pledge is created need be filed or
recorded except in the records of the authority.
The authority may obtain from any entity of the state, any department or agency of the
United States, or any nongovernmental insurer, any insurance, guaranty, or liquidity
facility, or from a financial institution, a letter of credit to the extent such insurance,
guaranty, liquidity facility, or letter of credit now or hereafter available, as to, or for, the
payment or repayment of, interest or principal, or both, or any part thereof, on any
evidences of indebtedness issued by the authority pursuant to this chapter, and may
enter into any agreement or contract with respect to any such insurance, guaranty,
letter of credit, or liquidity facility, and pay any required fee, unless the same would
impair or interfere with the ability of the authority to fulfill the terms of any agreement
made with the holders of its evidences of indebtedness.
After issuance, all evidences of indebtedness of the authority are conclusively
presumed to be fully authorized and issued under the laws of the state, and any
person or governmental unit is estopped from questioning their authorization, sale,
issuance, execution, or delivery by the authority.
When the authority has issued evidences of indebtedness and pledged the revenues
of the pipeline facilities for the payment thereof as herein provided, the authority shall
operate and maintain the pipeline facilities and shall impose and collect fees and
charges for the services furnished by the pipeline facilities, including those furnished to
the authority itself, in the amounts and at the rates as are fully sufficient at all times to:
a. Pay the expenses of operating and maintaining the pipeline facilities.
b. Provide a debt service fund sufficient to assure the prompt payment of principal
and interest on the evidences of indebtedness at maturity.
c. Provide a reasonable fund for contingencies as may be required by the resolution
authorizing the evidences of indebtedness.
54-17.7-08. Public service commission jurisdiction and consultation.
1. Until sold or disposed of by the authority, the authority and the pipeline facilities built
under this chapter are exempt from the provisions of title 49 except for chapter 49-22
and sections 49-02-01.2 and 49-07-05.1. Upon sale or disposal by the authority,
pipeline facilities built under this chapter are subject to the provisions of title 49.
2. The authority shall consult with the public service commission with respect to the rates
charged by the authority for use of its pipeline facilities and such rates must thereafter
be considered just and reasonable in proceedings before the public service
commission pursuant to section 49-05-06.
3. The authority shall conduct its activities in consultation with pipeline providers, the oil
and gas research council, energy-related commodities interests, and other persons
having relevant expertise.
54-17.7-09. Bonds as legal investments.
The bonds of the authority are legal investments which may be used as collateral for public
funds of the state, insurance companies, banks, savings and loan associations, credit unions,
investment companies, trustees, and other fiduciaries which may properly and legally invest
funds in their control or belonging to them in bonds of the authority. The state investment board
may invest in bonds of the authority in an amount specified by the state investment board.
54-17.7-10. Disposal of pipeline facilities.
1. Before becoming an owner or partial owner of a pipeline facility or acquiring capacity in
a pipeline system, the authority shall develop a plan identifying:
a. The public purposes of the authority's ownership or capacity acquisition.
b. Conditions that would make the authority's ownership no longer necessary for
accomplishing those public purposes.
c. A plan to divest the authority's ownership or capacity interest as soon as
economically prudent once those conditions occur.
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For pipeline facilities that are leased to another entity by the authority at the end of the
lease, absent default by the lessee, the authority shall convey its interest in the
pipeline facilities to the lessee.
For pipeline facilities that are owned by the authority without a lessee, the authority
shall divest itself of ownership as soon as economically prudent in accordance with the
divestiture plan developed pursuant to subsection 1.
54-17.7-11. Pipeline authority administrative fund - Continuing appropriation.
There is created a pipeline authority administrative fund.
1. Revenue to the fund must include:
a. Moneys received from the state's oil and gas research council administrative
budget.
b. Moneys received from any federal agency for the purpose of this section.
c. Moneys donated to the pipeline authority for the purposes of this section.
d. Moneys received from the state's oil and gas impact fund.
e. Such other moneys as may be deposited in the fund for use in carrying out the
purposes of the authority.
2. This fund must be maintained as a special fund and all moneys transferred into the
fund are appropriated on a continuing basis and must be used and disbursed solely for
the purpose of defraying the administrative costs incurred by the pipeline authority.
3. Utilizing funds from the oil and gas research fund, the industrial commission shall
contract for or hire staffing necessary to effectively administer the pipeline authority.
54-17.7-12. Access to authority records.
1. Materials and data submitted to, or made or received by, the authority, to the extent
that the authority determines the materials or data consist of trade secrets or
commercial, financial, or proprietary information of individuals or entities applying to or
contracting with the authority or receiving authority services under this chapter are
subject to section 44-04-18.4.
2. A person or entity must file a request with the authority to have material designated as
confidential under subsection 1. The request must contain any information required by
the authority, and must include at least:
a. A general description of the nature of the information sought to be protected.
b. An explanation of why the information derives independent economic value,
actual or potential, from not being generally known to other persons.
c. An explanation of why the information is not readily ascertainable by proper
means by other persons.
d. A general description of any person or entity that may obtain economic value from
disclosure or use of the information and how the person or entity may obtain this
value.
e. A description of the efforts used to maintain the secrecy of the information.
f. The fact that a request has been made is exempt.
3. The information submitted pursuant to subsection 2 is confidential. The authority shall
examine the request and determine whether the information is relevant to the matter at
hand and is a trade secret under the definition in section 47-25.1-01 or 44-04-18.4. If
the authority determines the information is either not relevant or not a trade secret, the
authority shall notify the requester and the requester may ask for the return of the
information and request within ten days of the notice. If no return is sought, the
information and request are a public record.
54-17.7-13. Reporting requirements.
The authority shall deliver a written report on its activities to the legislative council each
biennium. The authority is not subject to the requirements of chapter 54-60.1, but to ensure
public accountability, the authority shall provide an annual report to the industrial commission
detailing activities and expenditures incurred during the preceding year.
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