2016 North Dakota Century Code Title 21 Governmental Finance Chapter 21-13 Political Subdivision Borrowing
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CHAPTER 21-13
POLITICAL SUBDIVISION BORROWING
21-13-01. Definitions.
As used in this chapter, unless the context or subject matter otherwise requires:
1. "Political subdivision" means a local government unit created by statute or by the
Constitution of North Dakota for local governmental or other public purposes.
2. "Revenue" means any of the following:
a. Amounts to be received from a distribution of federal moneys, including bureau of
Indian affairs contracts.
b. Amounts to be received from a distribution of state moneys pursuant to a state
appropriation or a state statutory or constitutional provision.
21-13-02. Political subdivision authority to enter agreement for bank or credit union
loans.
A political subdivision may borrow against its anticipated revenue, from a bank or credit
union located in this state. A bank or credit union loan and terms must be authorized by
resolution of the governing body for the political subdivision. The resolution must identify the
revenue to be used to repay the loan and any collateral that will secure repayment of the loan.
The loan agreement must be signed on behalf of the political subdivision by the president,
chairman, or equivalent officer; auditor; business manager; and secretary or equivalent officer of
the political subdivision.
21-13-03. Limit on amount of loans - Loan terms.
Except as limited by this section, a bank or a credit union and political subdivision may
agree to terms and conditions of a bank or credit union loan, including the rate of interest and
any collateral.
1. A political subdivision may have no more than five hundred thousand dollars in
outstanding principal on bank or credit union loans at any time.
2. A political subdivision bank or credit union loan must be paid in full within five years
from the date of loan origination.
3. The loan documents must describe the revenues from which the loan is anticipated to
be paid and may require the political subdivision to establish a separate fund for the
repayment of the loan, including interest, on or before the due date.
4. Collateral for a loan may consist only of property that is purchased with loan proceeds.
21-13-04. Delinquent loans.
If designated revenues are not sufficient to pay a loan balance, in addition to the designated
revenues, the political subdivision may set aside up to ten percent of the amount of the
collections from current tax revenues to pay to the lending bank or credit union on a monthly
basis until the delinquent loans have been paid in full.
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