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

"Revenue" means any of the following: a

Amounts to be received from a distribution of federal moneys, including bureau of Indian affairs contracts

Amounts to be received from a distribution of state moneys pursuant to a state appropriation or a state statutory or constitutional provision

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b

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, and also by the political subdivision's auditor, business manager, secretary, or equivalent officer

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

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A political subdivision may have no more than five hundred thousand dollars in outstanding principal on bank or credit union loans at any time

A political subdivision bank or credit union loan must be paid in full within five years from the date of loan origination

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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