North Dakota Code 40-58-10 – Issuance of bonds
1. A municipality may issue bonds from time to time in its discretion to finance the undertaking of any development or renewal project, including the payment of principal and interest upon any advances for surveys and plans for development or renewal projects, and may issue refunding bonds for the payment or retirement of bonds previously issued by it. The bonds must be made payable, as to both principal and interest, solely from the income, proceeds, revenues, and funds of the municipality derived from or held in connection with its undertaking and carrying out of development or renewal projects; provided, however, that the payment of bonds, both as to principal and interest, may be further secured by a pledge of any loan, grant, or contribution from the federal government or other source, in aid of any development or renewal projects of the municipality, and by a mortgage of all or any part of a development or renewal project, title to which is in the municipality.
Terms Used In North Dakota Code 40-58-10
- Interest rate: The amount paid by a borrower to a lender in exchange for the use of the lender's money for a certain period of time. Interest is paid on loans or on debt instruments, such as notes or bonds, either at regular intervals or as part of a lump sum payment when the issue matures. Source: OCC
- Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
- State: when applied to the different parts of the United States, includes the District of Columbia and the territories. See North Dakota Code 1-01-49
2. Bonds issued under this section do not constitute an indebtedness within the meaning of any constitutional or statutory debt limitation or restriction, and are not subject to any other law or charter relating to the authorization, issuance, or sale of bonds. Bonds issued under this chapter are declared to be issued for an essential public and governmental purpose and, together with interest and income, are exempt from all taxation.
3. Bonds issued under this section must be authorized by resolution or ordinance of the governing body and may be issued in one or more series and must bear such date or dates, be payable upon demand or mature at such time or times, bear interest at such rate or rates, resulting in an average annual net interest cost not exceeding twelve per centum per annum on those issues which are sold at private sale. The bonds must be in such 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 in such medium of payment, at such places, and be subject to such terms of redemption with or without premium, be secured in such manner, and have such other characteristics, as may be provided by the resolution or trust indenture or mortgage issued pursuant to the resolution.
4. The bonds may be sold at not less than par at public sales held after notice published prior to the sale in a newspaper having a general circulation in the area of operation and in any other medium of publication as the municipality may determine or may be exchanged for other bonds on the basis of par; provided, that the bonds may be sold to the federal government at private sale at not less than par, and, in the event less than all of the authorized principal amount of the bonds is sold to the federal government, the balance may be sold at private sale at not less than par at an interest cost to the municipality of not to exceed the interest cost to the municipality of the portion of the bonds sold to the federal government. The bonds may also be sold at private sale if the obligations do not exceed the total sum of one hundred thousand dollars. There is no interest rate ceiling on issues sold at public sale or to the state of North Dakota or any of its agencies or instrumentalities.
5. If a public official of the municipality whose signature appears on any bonds or coupons issued under this chapter ceases to be a public official before the delivery of the bonds, the signature is, nevertheless, valid and sufficient for all purposes, as if the official had remained in office until the delivery. Any law to the contrary notwithstanding, any bonds issued pursuant to this chapter are fully negotiable.
6. In any suit, action, or proceeding involving the validity or enforceability of any bond issued under this chapter or the security for the bond, any bond reciting in substance that it has been issued by the municipality in connection with a development or renewal project is conclusively deemed to have been issued for that purpose and the project is conclusively deemed to have been planned, located, and carried out in accordance with this chapter.