40-57 Municipal Industrial Development Act

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CHAPTER 40-57MUNICIPAL INDUSTRIAL DEVELOPMENT ACT40-57-01.Short title.This chapter may be cited as the Municipal IndustrialDevelopment Act of 1955.40-57-02.Definitions.As used in this chapter, unless a different meaning clearlyappears from the context:1."Municipality" means counties as well as municipalities of the types listed in subsection 4 of section 40-01-01 and, in the case of parking projects, municipal parking authorities created pursuant to section 40-61-02 and the public finance authority or any successor in interest to the public finance authority for the purpose of issuing revenue bonds under this chapter. In acting as a municipality under this chapter, the public finance authority or its successor in interest shall follow the provisions of this chapter to the extent applicable or practicable but it need not comply with the notice and hearing provisions contained in sections 40-57-04 and 40-57-04.1 or the provisions of section 40-57-10. In the event of a conflict between the provisions of this chapter and chapter 6-09.4, the provisions of chapter 6-09.4 govern.2."Project" means any real property, buildings, and improvements on real property or the buildings thereon, and any equipment located on the real property or in the buildings, or elsewhere, or personal property, including working capital, which is used or useful in connection with a revenue-producing enterprise, or any combination of two or more revenue-producing enterprises, engaged or to be engaged in:a.Assembling,fabricating,manufacturing,mixing,orprocessingofanyagricultural, mineral, or manufactured products, or any combination thereof.b.Storing, warehousing, distributing, or selling any products of agriculture, mining, or manufacture.c.Providing child care facilities or hospital, nursing home, or other health care facilities and service.d.Improvements or equipment used or to be used for the abatement or control of environmentalpollutioninconnectionwithanyneworexistingrevenue-producing enterprise.e.Public career and technical education.f.Any other industry or business not prohibited by the constitution or laws of the state of North Dakota.In no event, however, does the term "project" include those undertakings defined in chapter 40-35, with the exception of projects referred to in this subsection.3."Revenue agreement" means a written agreement between a municipality and a contracting party with respect to a project, whereby the contracting party agrees to pay to the municipality or its order amounts sufficient at all times to pay when due the principal of, premium, if any, and interest on all bonds issued by the municipality with respect to that project. A revenue agreement may be in the form of a lease, mortgage, direct or installment sale contract, loan agreement, take-or-pay or similar agreement, and be secured in a manner the parties agree to or be unsecured.Page No. 140-57-03.Powers of municipality.Any municipality, in addition to the powersprescribed elsewhere by the laws of this state, shall have the power to:1.Acquire whether by purchase, lease, or gift, from any source whatsoever, any real property, buildings, improvements on real property or buildings, including easements, profits, rights in land and water rights deemed necessary in connection therewith, and to construct, reconstruct, improve, better, or extend to real property, buildings, and improvements on real property and buildings of any project which shall be located within this state; provided, that the property acquired for the project shall be located wholly within the boundaries of the municipality acquiring it unless a contract or agreement between that municipality and any other municipality in which part or all of the property is located is entered into as authorized by subsection 8.2.Issue revenue bonds, in anticipation of the collection of revenues of the project, to finance, in whole or in part, the cost of the project, whether then in existence or not.3.Lease projects to any industrial or commercial enterprise or nonprofit corporation or to any school district for career and technical education purposes, in such manner that rents to be charged for the use of such projects shall be fixed, and revised from time to time as necessary, so as to produce income and revenue sufficient to provide for the prompt payment of interest upon all bonds issued hereunder, to create a sinking fund to pay the principal of such bonds when due, and to provide for the operation, maintenance, insurance on, and depreciation of such projects, and any taxes thereon.4.With respect to any project, enter into revenue agreements providing for the municipality to loan the proceeds derived from the issuance of bonds pursuant to this chapter to the contracting party to be used to pay costs of the project and providing for the repayment of the loan by the contracting party, and which may provide for such loans or bonds to be secured by a mortgage on and security in the project or such other security as may be determined by the municipality, whether delivered or granted to the municipality, the holder or holders of said bonds, a trustee therefor or otherwise.5.Pledge to the punctual payment of said bonds and the interest thereof, all or any part of the revenues of such project, including the revenues of projects which shall be acquired or constructed subsequent to the issuance of such bonds, as well as revenues of projects existing when such bonds were issued.6.Mortgage or otherwise encumber said projects in favor of the holder, or holders, of said revenue bonds, or a trustee therefor; provided, that in creating any such mortgages or encumbrances, a municipality shall not have the power to obligate itself except with respect to the project, except as otherwise provided by section 40-57-19.7.Make all contracts, execute all instruments, and do all things necessary or convenient in the exercise of the powers herein granted, or in the performance of its covenants or duties, or in order to secure the payments of its bonds.8.Enter into and perform such contracts and agreements with other municipalities, political subdivisions, and state agencies, authorities, and institutions as the respective governing bodies of the same may deem proper and feasible for or concerning the planning, construction, lease, or other acquisition, and the financing of such facilities, and the maintenance thereof.Any such municipalities socontracting with each other may also provide in their contract or agreement for a board, commission, or such other body as their governing bodies may deem proper for the supervision and general management of the facilities of the project.Page No. 29.Accept from any authorized agency of the federal government loans or grants for the planning, construction, acquisition, leasing, or other provision of any project, and to enter into agreements with such agency respecting such loans or grants.10.Sell and convey all properties acquired in connection with such projects, including without limitation the sale and conveyance thereof subject to such mortgage as herein provided, and the sale and conveyance thereof to the lessee under an option granted in the lease of the project, for such price and at such time as the governing body of the municipality may determine; provided, however, that no sale or conveyance of such properties shall ever be made in such manner as to impair the rights or interests of the holder, or holders, of any bonds issued under the authority of this chapter.11.Issue revenue bonds to refund, in whole or in part, bonds previously issued under this chapter.12.Iftheprojectfinancedbythe municipality consists of the construction,reconstruction, improvement, or betterment of real property, buildings and improvements on real property, and buildings, the provisions of chapter 48-01.2 and other applicable statutes shall apply; except that the municipality, in the revenue agreement and resolution or mortgage defining the terms and conditions upon which the project is to be constructed and financed, or in a preliminary agreement establishing the general terms of the revenue agreement and financing of the project when constructed, may permit a contracting party which is not a governmental entity or a public institution, subject to such terms and conditions as the municipality shall find necessary or desirable and proper, to provide for the construction, acquisition, and installation of the buildings, improvements, and equipment to be included in the project by any means available to the contracting party, whether or not the procedure followed by the contracting party is in conformity with said chapter 48-01.2.No municipality may operate any project referred to in this chapter as a business or in any manner whatsoever, except as the lessor, contract vendor, secured party, or lender thereof. No debt on the general credit of the municipality may be incurred in any manner for any purpose under this chapter, except as otherwise provided by section 40-57-19. No municipality may pay out of its general fund for, or otherwise contribute to the cost of, construction of a project, except as otherwise provided by section 40-57-19.40-57-04.Resolution authorizing project and the issuance of revenue bonds -Public notice and hearing - No election required.The acquisition, construction,reconstruction, improvement, betterment, extension, or financing of any project, and the issue of bonds in anticipation of the collection of the revenues of the project to provide funds to pay for the cost of the project, may be authorized by an ordinance or resolution of the governing body adopted at a regular or special meeting of the governing body by the affirmative vote of a majority of its members. Before the issuance of revenue bonds under this chapter, the governing body shall give notice and hold a public hearing on the proposed bond issue. Notice of the hearing must be published in the official newspaper of the municipality once a week for two successive weeks before the time set for the hearing. The notice must specify the time and place of the hearing, and the amount and purpose of the proposed bond issue. The governing body may not approve the bond issue unless it appears, after the public hearing, that approval is in the public interest of the municipality. Except as provided in section 40-57-19, no election is required to authorize the use of any of the powers conferred by this chapter. No public hearing is required before the issuance of refunding bonds issued under section 40-57-19.1.40-57-04.1.Notice to competitors - Authority to issue bonds limited if projectwould compete with existing enterprises. Prior to approval of the issuance of any bonds under authority of this chapter, except refunding bonds issued pursuant to section 40-57-19.1, the governing body of the municipality shall, when a competitive project is involved, include notice of the competitive nature of the proposed project in the public notice required to bePage No. 3published prior to the public hearing required under section 40-57-04. The governing body shall not approve the bond issue unless it appears that the impact and effect of the issue upon existing industry and business will not result in an unfair advantage for the proposed project to the substantial detriment of existing enterprises.40-57-05. Approval of public officer not required. The consent of any governmentalbody or public officer of the state is not required to authorize the issuance or sale of bonds or the making of any mortgage in connection therewith.40-57-06.Certificate of convenience or necessity not required.It shall not benecessary for any municipality proceeding under this chapter to obtain any certificate of convenience or necessity, franchise, license, permit, or other authorization from any bureau, board, commission, or other instrumentality of the state in order to acquire, construct, reconstruct, improve, better, or extend any project or for the issuance of bonds in connection therewith.40-57-07. Cost of project - How determined. In determining the cost of a project, thegoverning body may include all costs and estimated costs of the issuance of the revenue bonds; all engineering, inspection, fiscal, and legal expenses; any bond reserves and the interest that it is estimated will accrue during the construction period and for six months thereafter on money borrowed or which it is estimated will be borrowed under this chapter; and the cost of retiring any existing indebtedness that the governing body of the municipality determines to be necessary or desirable and in furtherance of the public health or welfare, regardless of whether the existing indebtedness constitutes all or a portion of the cost being financed by the issuance of the bonds.40-57-08.Excess revenues not to revert to general fund of municipality -Exception.Any revenues of any and all projects in excess of the amount required to payinterest upon all bonds issued hereunder, to create a sinking fund to pay the principal of such bonds, when due, to provide for the operation, maintenance, insurance, taxes, and depreciation of such project, shall not revert to the general fund of the municipality. However, at such time as there shall be outstanding no revenue bonds issued by the municipality, any excess of revenues may be transferred to the general fund of the municipality in such amounts and at such times as the governing body of the municipality may deem proper and feasible.40-57-09.Provisions governing revenue bonds.The resolution or ordinanceauthorizing the issuance of revenue bonds under this chapter, or ordinance or resolution adopted subsequent to the adoption of the original resolution or ordinance, shall prescribe:1.The rate or rates of interest which such bonds shall bear;2.Whether the bonds shall be in one or more series;3.The date or dates which such bonds shall bear;4.The time or times, not exceeding forty years from their respective dates, when such bonds shall mature;5.The medium in which such bonds shall be payable;6.The place or places where such bonds shall be payable;7.Whether or not such bonds shall carry registration privileges, and what such privileges, if any, shall be;8.The terms of redemption, if any, to which such bonds shall be subject;9.The manner in which such bonds shall be executed;10.The terms, covenants, and conditions which such bonds shall contain; andPage No. 411.The form, either coupon or registered, in which such bonds shall be issued.40-57-09.1.Industrial development revenue bond guarantee program - Bondissuance fee - Appropriation. 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40-57 Municipal Industrial Development Act