Evidences of indebtedness - Authority to withhold school district state aid
N.D. Cent. Code § 6-09.4-23
in effect6-09.4-23. Evidences of indebtedness - Authority to withhold school district state aid
1. If the public finance authority or a paying agent notifies the superintendent of public
instruction, in writing, that a school district has failed to pay when due the principal or
interest on any evidences of indebtedness issued after July 31, 1999, or that the public
finance authority, school district, or the paying agent has reason to believe a school
district will not be able to make a full payment of the principal and interest when the
payment is due, the superintendent of public instruction shall withhold any funds that
are due or payable or appropriated to the school district under chapter 15.1-27 until
the payment of the principal or interest has been made to the public finance authority
or the paying agent, or until the public finance authority, school district, or the paying
agent notifies the superintendent of public instruction that arrangements satisfactory to
the public finance authority or the paying agent have been made for the payment of
the principal and interest then due and owing. The notification must include information
required by the superintendent of public instruction. State funds available to a school
district under chapter 15.1-27 are not subject to withholding under this section unless
the withholding is authorized by resolution of the district's school board.
2. If the public finance authority or a paying agent notifies the state treasurer, in writing,
that a school district has failed to pay when due the principal or interest on any
evidence of indebtedness issued after July 31, 2023, or that the public finance
authority, school district, or the paying agent has reason to believe a school district will
not be able to make a full payment of the principal and interest when the payment is
due, the state treasurer shall withhold any funds that are due or payable or
appropriated to the school district under chapter 57-51 until the payment of the
principal or interest has been made to the public finance authority or the paying agent,
or until the public finance authority, school district, or the paying agent notifies the state
treasurer that arrangements satisfactory to the public finance authority or the paying
agent have been made for the payment of the principal and interest then due and
owing. The notification must include information required by the state treasurer. State
funds available to a school district under chapter 57-51 are not subject to withholding
under this section unless the withholding is authorized by resolution of the district's
school board.
3. If the public finance authority or a paying agent notifies the county auditor, in writing,
that a school district has failed to pay when due the principal or interest on any
evidence of indebtedness issued after July 31, 2023, or that the public finance
authority, school district, or the paying agent has reason to believe a school district will
not be able to make a full payment of the principal and interest when the payment is
due, the county auditor shall withhold any funds that are due or payable or
appropriated to the school district under chapters 57-33.2, 57-34, and 57-55 and
section 21-06-10 until the payment of the principal or interest has been made to the
public finance authority or the paying agent, or until the public finance authority, school
district, or the paying agent notifies the county auditor that arrangements satisfactory
to the public finance authority or the paying agent have been made for the payment of
the principal and interest then due and owing. The notification must include information
required by the county auditor. State funds available to a school district under chapters
57-33.2, 57-34, and 57-55 and section 21-06-10 are not subject to withholding under
this section unless the withholding is authorized by resolution of the district's school
board.
4. Notification by the public finance authority, school district, or the paying agent that
satisfactory arrangements have been made for the payment of the principal and
interest then due and owing under subsection 1, 2, or 3 must be made at least fifteen
working days before the principal or interest is due. The notice must be in writing and
include the name of the school district, an identification of the debt obligation issue, the
date the payment is due, the amount of principal and interest due on the payment
date, the amount of principal or interest the school district will be unable to pay, the
paying agent for the debt obligation, the wire transfer instructions to transfer funds to
the paying agent, and an indication that payment is requested under this section. A
paying agent shall notify the superintendent of public instruction, the state treasurer,
and the appropriate county auditor if the paying agent becomes aware of a potential
default. If the superintendent, state treasurer, or the county auditor receives notice of a
requested payment under this section, the superintendent of public instruction, state
treasurer, or county auditor shall withhold and transfer funds due or payable or
appropriated to the school district under chapter 15.1-27 or 57-51 to the paying agent
after:
a. Consulting with the school district and the paying agent; and
b. Verifying the accuracy of the provided request information.
5. Notwithstanding any withholding of state funds under section 15-39.1-23 or any other
law, the superintendent of public instruction, state treasurer, and county auditor shall
make available any funds withheld under subsection 1, 2, or 3 to the public finance
authority or the paying agent. The public finance authority or the paying agent shall
apply the funds to payments that the school district is required to make to the public
finance authority or the paying agent.
6. If funds are withheld from a school district and made available to the public finance
authority or a paying agent under this section and if tax revenues are received by the
school district during the fiscal year in which the funds are withheld and are deposited
in the district's sinking fund established in accordance with section 21-03-42, the
district, with the consent of the public finance authority or the paying agent, may
withdraw from its sinking fund an amount equal to that withheld and made available to
the public finance authority or a paying agent under this section.
7. The superintendent of public instruction, state treasurer, and county auditor shall
develop detailed procedures for a school district to notify the superintendent of public
instruction, state treasurer, and the county auditor that the school district has obligated
the district to be bound by this section; procedures for a school district, paying agent,
and the public finance authority to notify the superintendent of public instruction, state
treasurer, or county auditors of potential defaults and to request payment under this
section; and procedures for the state to expedite payments to prevent defaults.
Source: Open US Law by Vaquill AI (CC BY 4.0)URL: https://ndlegis.gov/cencode/t06c09-4.pdf#nameddest=6-09p4-23Fetched: 10/16/2026