ND HB1428

Superintendent of public instruction shall withhold state aid funds owed to school districts under chapter 15.1-27 when notified by the public finance authority or paying agent that a district has failed to pay principal or interest on indebtedness issued after July 31, 1999, or risks defaulting on such payments.

Withheld funds must be made available to the public finance authority or paying agent to apply toward the school district's debt service payments, unless the withholding is authorized by school board resolution.

School districts may withdraw from their sinking fund an amount equal to withheld state aid if tax revenues are received during the fiscal year in which funds are withheld, with consent of the public finance authority or paying agent.

Excess funds held in escrow by the Bank of North Dakota may be transferred to the public finance authority to subsidize debt service payments on construction loans to school districts, upon certification that funds exceed the amount needed for outstanding principal and interest payments.

Superintendent of public instruction shall develop detailed procedures for school districts to notify regarding debt obligations, procedures for entities to report potential defaults, and procedures to expedite state payments to prevent defaults.