N.D.C.C. § 57-62-03 — Loans - Terms and conditions - Repayment

The board of university and school lands is authorized to make loans to coal
development-impacted counties, cities, and school districts before or after the beginning of
actual coal mining from moneys deposited in the coal development trust fund established by
subsection 2 of section 57 -62-02. Loans made prior to actual mining must be preceded by site
permitting and by beginning actual construction of the mine or its mine mouth facility. Loans may
be made for any purpose for which a grant may be made pursuant to this chapter, but before
making any loan the board of university and school lands shall receive the recommendation of
the energy infrastructure and impact office. The board of university and school lands shall
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prescribe the terms and conditions of such loans within the provisions of this chapter and shall
require a warrant executed by the governing body of the county, city, or school district as
evidence of such loan. The warrants must bear interest at a rate not to exceed six percent. The
warrants shall be payable only from the allocations of moneys from the coal development fund
to the borrowing county, city, or school district and shall not constitute a general obligation of the
county, city, or school district nor may such loans be considered as indebtedness of the county,
city, or school district. Loans made in advance of actual coal mining must provide that
repayment is to begin when the borrowing county, city, or school district receives allocations
from the coal development fund. The terms of the loan must provide that not less than ten
percent of each allocation made to the borrowing county, city, or school district pursuant to this
chapter must be withheld by the state treasurer to repay the principal of the warrants and the
interest thereon. The amount withheld by the state treasurer as payment of interest must be
deposited in the general fund and the amount withheld by the state treasurer as payment of
principal must be remitted to the board of university and school lands and deposited by the
board in the trust fund provided for in subsection 2 of section 57 -62-02. The warrants executed
by the county, city, or school district have all of the qualities and incidents of negotiable paper
and are not subject to taxation by the state of North Dakota or by any political subdivision
thereof.
The board of university and school lands is authorized to sell such warrants to other parties
and the proceeds of such sale which constitute principal must be deposited in the coal
development trust fund and that which constitutes interest in the general fund. If the future
allocations of moneys to the borrowing county, city, or school district should, for any reason,
permanently cease, the loan shall be canceled except that if the county, city, or school district is
merged with another county, city, or school district which receives an allocation of moneys from
the coal development fund, the surviving county, city, or school district is obligated to repay the
loan from such allocation. If the loan is canceled due to the permanent cessation of allocations
of moneys to the county, city, or school district pursuant to this chapter, the board of university
and school lands shall cancel those warrants it holds from such county, city, or school district
and shall pay from any moneys in the trust fund provided for in subsection 2 of section 57-62-02
the principal and interest, as it becomes due, on those warrants of the county, city, or school
district which are held by another party.