Bill Summary – FastDemocracy

0317.01000
     Sixty-eighth
     Legislative Assembly                    HOUSE BILL NO. 1125
     of North Dakota
     Introduced by
       Representatives Richter, Longmuir, Monson, Nathe
       Senators Patten, Schaible
  A BILL for an Act to amend and reenact section 6-09.4-23 of the North Dakota Century Code,
  relating to withholding school district state aid payments and the school district credit
  enhancement program.
  BE IT ENACTED BY THE LEGISLATIVE ASSEMBLY OF NORTH DAKOTA:
      SECTION 1. AMENDMENT. Section 6-09.4-23 of the North Dakota Century Code is
  amended and reenacted as follows:
      6-09.4-23. 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 or the state treasurer, 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
          or the state treasurer 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 or 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 superintendent of public instruction or the state treasurer. 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.
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     Legislative Assembly
      2.   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 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 or the state treasurer if the
          paying agent becomes aware of a potential default. If the superintendent or the state
          treasurer receives notice of a requested payment under this section, the
          superintendent of public instruction or the state treasurer shall withhold and transfer
          funds due or payable or appropriated to the school district under chapter 15.1-27 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.
     3.   Notwithstanding any withholding of state funds under section 15-39.1-23 or any other
          law, the superintendent of public instruction or the state treasurer shall make available
          any funds withheld under subsection 1 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.
     4.   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 by the superintendent
          of public instruction and made available to the public finance authority or a paying
          agent under this section.
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     Legislative Assembly
      5.   Any excess funds at the Bank of North Dakota escrowed pursuant to an agreement
           between the public finance authority and the state board of public school education for
           the benefit of the public finance authority and a school district must be held by the
           Bank. With the approval of the superintendent of public instruction, those funds may
           be used to subsidize the debt service payments on construction loans that are made
           to school districts by the public finance authority and which are subject to the
           withholding provisions of this section or construction loans made to school districts
           under the state school construction program established by section 11 of chapter 2 of
           the 1989 Session Laws. Notwithstanding the existence of an escrow agreement
          between the public finance authority and the state board of public school education,
          those funds must be transferred to the public finance authority upon certification by the
          public finance authority that the funds are in excess of the amount needed to provide
          for the payment in full of the outstanding principal and interest, when due, on the
          public finance authority bonds issued to purchase the municipal securities for which
          the escrow fund was established.
     6.   The superintendent of public instruction and the state treasurer shall develop detailed
          procedures for a school districtsdistrict to notify the superintendent of public instruction
          or the state treasurer that they havethe school district has obligated themselvesthe
          district to be bound by the provisions of this section; procedures for school
          districtsdistrict, paying agents, and the public finance authority to notify the
          superintendent of public instruction or the state treasurer of potential defaults and to
          request payment under this section; and procedures for the state to expedite
          payments to prevent defaults.
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Statutes affected: 
INTRODUCED: 6-09.4-23
FIRST ENGROSSMENT: 6-09.4-23
Enrollment: 6-09.4-23