North Dakota law protects loan-funded local services during loan terms

A local government’s service may not be cut back because its service area becomes part of another local government or a private provider receives a franchise for similar service. The protection covers a local government’s service in the area it serves. The service must be provided or made available through building or acquiring an improvement, or through its revenues, financed in whole or in part by a loan from the public finance authority or another state agency or enterprise. The local government may not be required to get a franchise, license, or permit to keep serving the area if it becomes part of another local government during the loan term. The protection applies during the term of the loan.

The two local governments may negotiate who has the right or duty to provide the service, but the lender or financing agency must join the agreement. This applies when the loan-funded service area becomes part of another local government. The agreement is invalid and cannot be enforced unless it includes adequate safeguards for the security and timely payment of outstanding public finance authority bonds issued to fund the loan. The agreement concerns service during the loan term.

The public finance authority or other state agency or enterprise may void a covered agreement by giving its parties 30 days’ written notice. This applies to agreements made before January 1, 2025, that violate the agreement requirements. Only the public finance authority or other state agency or enterprise may choose to void the agreement. This rule does not apply to litigation started before January 1, 2025. The agreement must have been made before January 1, 2025; litigation must have started before that date to qualify for the exception.