ND HB1192

Superintendent of public instruction shall withhold state aid funds to school districts under chapter 15.1-27 when notified that a district has failed to pay principal or interest on indebtedness issued after July 31, 1999, or may not be able to make full payment when due.

Withholding of state funds for debt obligations requires written notification and authorization by the school district's school board resolution; notification of satisfactory payment arrangements must occur at least 15 working days before the payment due date.

Superintendent must consult with the school district and paying agent, and verify accuracy of request information, before withholding and transferring funds to the public finance authority or paying agent.

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

Superintendent shall develop detailed procedures for school districts to notify of their obligation to this section, for parties to report potential defaults, and for the state to expedite payments to prevent defaults.