Article X Finance and Public Debt

N.D. Const.

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Section 1

The legislative assembly shall be prohibited from raising revenue to defray the
expenses of the state through the levying of a tax on the assessed value of real or personal
property.

Section 2

The power of taxation shall never be surrendered or suspended by any grant or
contract to which the state or any county or other municipal corporation shall be a party.

Section 3

No tax shall be levied except in pursuance of law, and every law imposing a tax
shall state distinctly the object of the same, to which only it shall be applied. Notwithstanding
the foregoing or any other provisions of this constitution, the legislative assembly, in any law
imposing a tax or taxes on, in respect to or measured by income, may define the income on, in
respect to or by which such tax or taxes are imposed or measured or may define the tax itself
by reference to any provision of the laws of the United States as the same may be or become
effective at any time or from time to time, and may prescribe exceptions or modifications to any
such provision.

Section 4

All taxable property except as hereinafter in this section provided, shall be
assessed in the county, city, township, village or district in which it is situated, in the manner
prescribed by law. The property, including franchises of all railroads operated in this state, and
of all express companies, freight line companies, dining car companies, sleeping car
companies, car equipment companies, or private car line companies, telegraph or telephone
companies, the property of any person, firm or corporation used for the purpose of furnishing
electric light, heat or power, or in distributing the same for public use, and the property of any
other corporation, firm or individual now or hereafter operating in this state, and used directly
or indirectly in the carrying of persons, property or messages, shall be assessed by the state
board of equalization in a manner prescribed by such state board or commission as may be
provided by law. But should any railroad allow any portion of its railway to be used for any
purpose other than the operation of a railroad thereon, such portion of its railway, while so
used shall be assessed in a manner provided for the assessment of other real property.

Section 5

Taxes shall be uniform upon the same class of property including franchises
within the territorial limits of the authority levying the tax. The legislative assembly may by law
exempt any or all classes of personal property from taxation and within the meaning of this
section, fixtures, buildings and improvements of every character, whatsoever, upon land shall
be deemed personal property. The property of the United States, to the extent immunity from
taxation has not been waived by an act of Congress, property of the state, county, and
municipal corporations, to the extent immunity from taxation has not been waived by an act of
the legislative assembly, and property used exclusively for schools, religious, cemetery,
charitable or other public purposes shall be exempt from taxation. Real property used for
conservation or wildlife purposes is not exempt from taxation unless an exemption is provided
by the legislative assembly. Except as restricted by this article, the legislative assembly may
provide for raising revenue and fixing the situs of all property for the purpose of taxation.
Provided that all taxes and exemptions in force when this amendment is adopted shall remain
in force until otherwise provided by statute.

Section 6

Repealed.

Section 7

The legislature may by law provide for the levy and collection of an acreage tax
on lands within the state in addition to the limitations specified in article X, section 1, of the
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constitution. The proceeds of such tax shall be used to indemnify the owners of growing crops
against damages by hail, provided that lands used exclusively for public roads, rights of way of
common carriers, mining, manufacturing or pasturage may be exempt from such tax.

Section 8

The legislative assembly shall pass all laws necessary to carry out the
provisions of this article.

Section 9

The legislative assembly may provide for the levy of a tax upon lands within the
state for the purpose of creating a fund to insure the owners of growing crops against losses
by hail. The legislative assembly may classify lands within the state, and divide the state into
districts on such basis as shall seem just and necessary, and may vary the tax rates in such
districts in accordance with the risk, in order to secure an equitable distribution of the burden of
the tax among the owners of such lands.

Section 10

1.
Upon the adoption of this amendment to the Constitution of the State of North Dakota
there shall be annually levied by the state of North Dakota one mill upon all of the
taxable property within the state of North Dakota which, when collected, shall be
covered into the state treasury of the state of North Dakota and placed to the credit of
the North Dakota state medical center at the university of North Dakota; said fund
shall be expended as the legislature shall direct for the development and
maintenance necessary to the efficient operation of the said North Dakota state
medical center.
2.
This amendment shall be self
-
executing, but legislation may be enacted to facilitate
its operation.

Section 11

Revenue from gasoline and other motor fuel excise and license taxation,
motor vehicle registration and license taxes, except revenue from aviation gasoline and
unclaimed aviation motor fuel refunds and other aviation motor fuel excise and license taxation
used by aircraft, after deduction of cost of administration and collection authorized by
legislative appropriation only, and statutory refunds, shall be appropriated and used solely for
construction, reconstruction, repair and maintenance of public highways, and the payment of
obligations incurred in the construction, reconstruction, repair and maintenance of public
highways.

Section 12

1.
All public moneys, from whatever source derived, shall be paid over monthly by the
public official, employee, agent, director, manager, board, bureau, or institution of the
state receiving the same, to the state treasurer, and deposited by him to the credit of
the state, and shall be paid out and disbursed only pursuant to appropriation first
made by the legislature; provided, however, that there is hereby appropriated the
necessary funds required in the financial transactions of the Bank of North Dakota,
and required for the payment of losses, duly approved, payable from the state hail
insurance fund, state bonding fund, and state fire and tornado fund, and required for
the payment of compensation to injured employees or death claims, duly approved,
payable from the workmen's compensation fund, and required for authorized
investments made by the board of university and school lands, and required for the
financial operations of the state mill and elevator association, and required for the
payment of interest and principal of bonds and other fixed obligations of the state,
and required for payments required by law to be paid to beneficiaries of the teachers'
insurance and retirement fund, and required for refunds made under the provisions of
the Retail Sales Tax Act, and the State Income Tax Law, and the State Gasoline Tax
Law, and the Estate and Succession Tax Law, and the income of any state institution
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derived from permanent trust funds, and the funds allocated under the law to the
state highway department and the various counties for the construction,
reconstruction, and maintenance of public roads.
This constitutional amendment shall not be construed to apply to fees and
moneys received in connection with the licensing and organization of physicians and
surgeons, pharmacists, dentists, osteopaths, optometrists, embalmers, barbers,
lawyers, veterinarians, nurses, chiropractors, accountants, architects, hairdressers,
chiropodists, and other similarly organized, licensed trades and professions; and this
constitutional amendment shall not be construed to amend or repeal existing laws or
Acts amendatory thereof concerning such fees and moneys.
2.
No bills, claims, accounts, or demands against the state or any county or other
political subdivision shall be audited, allowed, or paid until a full itemized statement in
writing shall be filed with the officer or officers whose duty it may be to audit the
same, and then only upon warrant drawn upon the treasurer of such funds by the
proper officer or officers.
3.
This amendment shall become effective on July 1, 1939.

Section 13

The state may issue or guarantee the payment of bonds, provided that all
bonds in excess of two million dollars shall be secured by first mortgage upon real estate in
amounts not to exceed sixty
-
five percent of its value; or upon real and personal property of
state
-
owned utilities, enterprises, or industries, in amounts not exceeding its value, and
provided further, that the state shall not issue or guarantee bonds upon property of
state
-
owned utilities, enterprises, or industries in excess of ten million dollars.
No further indebtedness shall be incurred by the state unless evidenced by a bond issue,
which shall be authorized by law for certain purposes, to be clearly defined. Every law
authorizing a bond issue shall provide for levying an annual tax, or make other provision,
sufficient to pay the interest semiannually, and the principal within thirty years from the date of
the issue of such bonds and shall specially appropriate the proceeds of such tax, or of such
other provisions to the payment of said principal and interest, and such appropriation shall not
be repealed nor the tax or other provisions discontinued until such debt, both principal and
interest, shall have been paid. No debt in excess of the limit named herein shall be incurred
except for the purpose of repelling invasion, suppressing insurrection, defending the state in
time of war or to provide for the public defense in case of threatened hostilities.

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 taxable property in the state,
to be ascertained by the last assessment made for state and county purposes: but
nothing herein shall 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
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project, and from other similar projects if so determined by the legislature, 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 legislature 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
legislature 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 legislature from time to time in conformity with any provisions made for the
security of outstanding bonds.
5.
The legislature 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 15

The debt of any county, township, city, town, school district or any other
political subdivision, shall never exceed five per centum upon the assessed value of the
taxable property therein; provided that any incorporated city may, by a two
-
thirds vote,
increase such indebtedness three per centum on such assessed value beyond said five per
centum limit, and a school district, by a majority vote may increase such indebtedness five
percent on such assessed value beyond said five per centum 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 centum of such assessed 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.
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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 tax 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.

Section 17

No bond or evidence of indebtedness of the state is valid unless it has
endorsed thereon a certificate, signed by the auditor and secretary of state showing that the
bond or evidence of debt is issued pursuant to law and is within the debt limit. No bond or
evidence of debt of any county, or bond of any township or other political subdivision is valid
unless it has endorsed thereon a certificate signed by the officer authorized by law to sign such
certificate, stating that said bond or evidence of debt is issued pursuant to law and is within the
debt limit.

Section 18

The state, any county or city may make internal improvements and may
engage in any industry, enterprise or business, not prohibited by article XX of the constitution,
but neither the state nor any political subdivision thereof shall otherwise loan or give its credit
or make donations to or in aid of any individual, association or corporation except for
reasonable support of the poor, nor subscribe to or become the owner of capital stock in any
association or corporation.

Section 19

The legislative assembly is hereby authorized and empowered to provide by
law for the erection, purchasing or leasing and operation of one or more terminal grain
elevators in the states of Minnesota or Wisconsin, or both, to be maintained and operated in
such manner as the legislative assembly shall prescribe, and provide for inspection, weighing
and grading of all grain received in such elevator or elevators.

Section 20

The legislative assembly is hereby authorized and empowered to provide by
law for the erection, purchasing or leasing and operation of one or more terminal grain
elevators in the state of North Dakota, to be maintained and operated in such manner as the
legislative assembly shall prescribe, and provide for inspection, weighing and grading of all
grain received in such elevator or elevators.

Section 21

Not less than fifteen percent of the tax imposed for severing coal shall be
placed into a permanent trust fund in the state treasury to be held in trust and administered by
the board of university and school lands, which shall have full authority to invest said trust
funds as provided by law, and may loan moneys from the fund to political subdivisions as
provided by law. The interest earned on the moneys in said trust fund shall be used first to
replace uncollectable loans made from the fund, and the balance shall be credited to the
general fund of the state. Up to fifty percent of the taxes collected and deposited in the
permanent trust fund during a biennium may be appropriated by the legislative assembly for
lignite research, development, and marketing as provided by law. An additional twenty percent
of the taxes collected and deposited in the permanent trust fund during a biennium may be
appropriated by the legislative assembly for clean coal demonstration projects approved by the
industrial commission.

Section 22

The legislative assembly may provide by law for a percentage of revenue from
taxes imposed on the extraction or production of oil to be allocated and credited to a special
trust fund, to be known as the resources trust fund. The principal and income of the resources
trust fund may be expended only pursuant to legislative appropriation for:
1.
Constructing water
-
related projects, including rural water systems; and
2.
Funding of programs for energy conservation.
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Section 23

The legislative assembly may provide for the payment of adjusted
compensation to North Dakota residents who were members of the regular active duty armed
forces and who served in the Persian Gulf theatre or in the Grenada, Lebanon, or Panama
areas of armed conflict as designated by the President of the United States or to heirs of North
Dakota residents who were members of the regular active duty armed forces and who died
while on orders to or from the Persian Gulf theatre or in the Grenada, Lebanon, or Panama
areas of armed conflict as designated by the President of the United States. The legislative
assembly may provide a direct appropriation or provide for the issuance, sale, and delivery of
bonds of the state of North Dakota in such principal amounts as determined by the legislative
assembly to be necessary for the payment of adjusted compensation under this section.
Adjusted compensation under this section may be paid at such rates, terms of service, and
conditions as the legislative assembly provides.

Section 24

1.
Ten percent of the revenue from oil extraction taxes from taxable oil produced in this
state must be deposited in the common schools trust fund.
2.
Ten percent of the revenue from oil extraction taxes from taxable oil produced in this
state must be deposited in the foundation aid stabilization fund in the state treasury,
the interest of which must be transferred to the state general fund on July first of each
year.
a.
Except as otherwise provided, the principal of the foundation aid stabilization
fund may be expended upon order of the governor, who may direct such a
transfer only to offset reductions in state aid to school districts, which were
made by executive action pursuant to law, due to a revenue shortage.
b.
Whenever the principal balance of the foundation aid stabilization fund exceeds
fifteen percent of the general fund appropriation for state aid to school districts,
for the most recently completed biennium, as determined by the office of
management and budget, the legislative assembly may appropriate or transfer
any excess principal balance. Such amount may be used for education-related
purposes, as provided by law.

Section 25

The veterans' postwar trust fund shall be a permanent trust fund of the state
of North Dakota and shall consist of moneys transferred or credited to the fund as authorized
by legislative enactment. Investment of the fund shall be the responsibility of the state
treasurer who shall have full authority to invest the fund only in the same manner as the state
investment board is authorized to make investments. All income received from investments is
to be utilized for programs which must be of benefit and service to veterans, who are defined
by legislative enactment, or their dependents, and such income is hereby appropriated to the
administrative committee on veterans' affairs on a continuing basis for expenditure upon those
programs selected at the discretion of the administrative committee on veterans' affairs.

Section 26

1.
Thirty percent of total revenue derived from taxes on oil and gas production or
extraction must be transferred by the state treasurer to a special fund in the state
treasury known as the legacy fund. The legislative assembly may transfer funds from
any source into the legacy fund. Transfers under this subsection and earnings
accruing prior to July
1, 2017, are the principal of the legacy fund.
2.
The principal of the legacy fund may be expended, but an expenditure of principal
requires a vote of at least two-thirds of the members elected to each house of the
legislative assembly. Not more than five percent of the principal of the legacy fund
may be expended during a biennium.
3.
Statutory programs, in existence as a result of legislation enacted through 2009,
providing for impact grants, direct revenue allocations to political subdivisions, and
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deposits in the oil and gas research fund must remain in effect but the legislative
assembly may adjust statutory allocations for those purposes.
4.
The state investment board shall invest the moneys in the legacy fund.
5.
On July first of each odd
-
numbered year, the state treasurer shall make a distribution
from the legacy fund to a legacy earnings fund as provided by law, but a distribution
may not result in an expenditure of principal.

Section 27

The state and any county, township, city, or any other political subdivision of
the state may not impose any mortgage taxes or any sales or transfer taxes on the mortgage
or transfer of real property.
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