North Dakota Legislative Council

Prepared for Representative Becker

LC# 21.9225.03000

March 2020

PROPOSED AMENDMENTS TO THE CONSTITUTION OF NORTH DAKOTA

The text of this proposed constitutional amendment was received from an outside source. The role of the North Dakota Legislative Council in preparing this document was to conduct a form and style review in accordance with North Dakota Legislative Council drafting guidelines and to ensure the language conforms with the requester's intent.

BE IT ENACTED BY THE PEOPLE OF THE STATE OF NORTH DAKOTA:

SECTION 1. AMENDMENT. Section 1 of article X of the Constitution of North Dakota is amended and reenacted as follows:

Section 1.

  1. TheExcept as provided in subsection 2, the legislative assembly and all political subdivisions shall be prohibited from raising revenue to defray the expenses of the state through the levying of aany tax on the assessed value of real or personal property.
  2. A political subdivision may continue to levy tax on the assessed value of real property if the tax was dedicated for the payment of bonded indebtedness incurred on or before December 2, 2020, until such debt is paid.
  3. The state shall provide annual property tax revenue replacement payments to political subdivisions in an amount equal to no less than the amount of tax levied on real property by the political subdivision, excluding tax levied on real property for the payment of bonded indebtedness, during the 2020 calendar year.

SECTION 2. AMENDMENT. Section 14 of article X of the Constitution of North Dakota is amended and reenacted as follows:

Section 14.

  1. Notwithstanding any other provision in the constitution, and for the purpose of promoting the economic growth of the state, the development of its natural resources, and the prosperity and welfare of its people, the state may issue bonds and use the proceeds thereof to make loans to privately or cooperatively owned enterprises to plan, construct, acquire, equip, improve, and extend facilities for converting natural resources into power and generating and transmitting such power, and to acquire real and personal property and water and mineral rights needed for such facilities.
  2. The state may issue general obligation bonds for this purpose to an amount which, with all outstanding general obligation bonds, less the amount of all money on hand and taxes in process of collection which are appropriated for their payment, will not exceed five percent of the full and true value of all of the taxablereal property in the state, to be ascertained by the last assessment made for state and county purposes: but nothing herein shall. The provision does not increase or diminish the limitations established by other provisions of the constitution on the amount of bonds therein authorized to be issued.
  3. The state may also issue revenue bonds for the purpose of providing part or all of the funds required for any project undertaken under subsection 1, payable solely from sums realized from payments of principal and interest on money loaned for such project, and from other similar projects if so determined by the legislaturelegislative assembly, and from the liquidation of security given for such payments. Revenue bonds issued for any project shall not exceed the cost thereof, including all expenses reasonably incurred to complete and finance the project, but shall not be subject to any other limitation of amount.
  4. The full faith and credit of the state shall be pledged for the prompt and full payment of all bonds issued under subsection 2. Its obligation with respect to bonds issued under subsection 3 shall be limited to the prompt and full performance of such covenants as the legislaturelegislative assembly may authorize to be made respecting the enforcing of the provisions of underlying loan agreements and the segregation, accounting, and application of bond proceeds and of loan payments and other security pledged for the payment of the bonds. All bonds authorized by subsections 1 to 3, inclusive, shall mature within forty years from their respective dates of issue, but may be refunded at or before maturity in such manner and for such term and upon such conditions as the legislaturelegislative assembly may direct. Any such bonds may, but need not be, secured by mortgage upon real or personal property acquired with the proceeds of the same or any other issue of general obligation or revenue bonds, or upon other property mortgaged by the debtor.
    Pledges of revenues and mortgages of property securing bonds of any issue may be prior or subordinate to or on a parity with pledges and mortgages securing any other issue of general obligation or revenue bonds, as determined by the legislaturelegislative assembly from time to time in conformity with any provisions made for the security of outstanding bonds.
  5. The legislaturelegislative assembly shall pass such laws as are appropriate to implement this amendment.
  6. If any subsection of this amendment, or any part of a subsection, or any application thereof to particular circumstances should be held invalid for any reason, such invalidity shall not affect the validity of all remaining provisions of this amendment which may be given effect without that which is declared invalid, as applied to any circumstances and for this purpose all subsections and parts of subsections and applications thereof are declared to be severable.

SECTION 3. AMENDMENT. Section 15 of article X of the Constitution of North Dakota is amended and reenacted as follows:

Section 15.

The debt of any county, township, city, town, school district, or any other political subdivision, shall never exceed five per centumtwo and one-half percent upon the assessedfull and true value of the taxablereal property therein; provided that any incorporated city may, by a two-thirds vote, increase such indebtedness three per centumone and one-half percent on such assessedfull and true value beyond said five per centumthe two and one-half percent limit, and a school district, by a majority vote may increase such indebtedness fivetwo and one-half percent on such assessedfull and true value beyond said five per centumthe two and one-half percent limit; provided also that any county or city by a majority vote may issue bonds upon any revenue-producing utility owned by such county or city, or for the purchasing or acquiring the same or building or establishment thereof, in amounts not exceeding the physical value of such utility, industry or enterprise.
In estimating the indebtedness which a city, county, township, school district, or any other political subdivision may incur, the entire amount, exclusive of the bonds upon said revenue-producing utilities, whether contracted prior or subsequent to the adoption of this constitution, shall be included; provided further that any incorporated city may become indebted in any amount not exceeding four per centumtwo percent of such assessedfull and true value without regard to the existing indebtedness of such city for the purpose of constructing or purchasing waterworks for furnishing a supply of water to the inhabitants of such city, or for the purpose of constructing sewers, and for no other purposes whatever. All bonds and obligations in excess of the amount of indebtedness permitted by this constitution, given by any city, county, township, town, school district, or any other political subdivision shall be void.

SECTION 4. AMENDMENT. Section 16 of article X of the Constitution of North Dakota is amended and reenacted as follows:

Section 16.

Any city, county, township, town, school district, or any other political subdivision incurring indebtedness shall, at or before the time of so doing, provide for the collection of an annual taxrevenues sufficient to pay the interest and also the principal thereof when due, and all laws or ordinances providing for the payment of the interest or principal of any debt shall be irrepealable until such debt be paid. A political subdivision may not issue general obligation bonds secured with tax levied on the assessed value of property after December 2, 2020.

SECTION 5. REPEAL. Sections 4, 5, 7, 9, and 10 of article X of the Constitution of North Dakota are repealed.

SECTION 6. EFFECTIVE DATE. If approved by the voters, sections 1, 2, 3, and 5 of this measure become effective on January 1, 2022.