The board may provide for interim financing pending completion of revenue-producing projects at state institutions of higher learning and financing the cost thereof and may authorize the issuance and sale of special interim warrants for that essential governmental purpose, such warrants to be paid with interest from: 1. The proceeds of definitive bonds issued in accordance with this chapter; 2. Warrants issued to refund outstanding warrants; or 3. The combined net revenues to be derived from the operation of buildings and campus improvements for which bonds are outstanding with which the definitive bonds to be issued for such project will be on a parity. The board shall arrange for the proper preparation and sale of the warrants and shall issue the warrants in an aggregate principal amount not exceeding the sum of bonds authorized and necessary to finance completion of the project. Interim warrants are subject to call and prepayment on thirty days' prior written notice to the place of payment at par and accrued interest to date of prepayment at the option of the board; must mature not more than three years from their date; and may bear such rate or rates of interest as the board may provide, not exceeding an average net interest cost of twelve percent per annum on issues sold at private sale. There is no interest rate ceiling on warrant issues sold at public sale or to the state of North Dakota or any of its agencies or instrumentalities. Interim warrants may be sold on the basis of ninety-five percent of par plus accrued interest to date of delivery. All warrants for a particular project must mature within three years from the date of issuing the first warrants for the project. If warrants are issued to refund warrants, the refunded warrants must be paid and canceled upon the issuance of the refunding warrants, or the proceeds at the sale of the refunding warrants, excepting the accrued interest received, must be used to purchase direct obligations of the United States of America. Such obligations must mature at such time or times, with interest thereon or the proceeds received therefrom, to provide funds adequate to pay, when due or called for redemption prior to maturity, the warrants to be refunded together with the interest accrued thereon and any redemption premium due thereon. Such proceeds or obligations of the United States of America must, with all other funds legally available for such
purpose, be deposited in escrow with a banking corporation or national banking association located in and doing business in the state of North Dakota, with power to accept and execute trusts, or any successor thereto, which is also a member of the federal deposit insurance corporation and of the federal reserve system. The proceeds or obligations are to be held in an irrevocable trust solely for and until the payment and redemption of the warrant to be refunded. Any balance remaining in escrow after the payment and retirement of the warrants to be refunded must be returned to the board to be used and held for use as revenues pledged for the payment of the definitive bonds. Interim warrants have all of the qualities and incidents of negotiable paper and are not subject to taxation by the state of North Dakota or by any county, municipality, or political subdivision therein. Interim warrants are eligible for investment of funds the same as definitive bonds are or would be eligible for investment under section 15-55-08. Such warrants may not constitute a general obligation indebtedness of the state of North Dakota nor of the institution for which they are issued nor of the state board of higher education nor of the individual members, officers, or agents thereof; are payable solely as provided in this section; and the warrants issued and sold must so state.
15-55-06. Designations of agent and depositories - Disposition and use of revenues - Funds created. All income and revenues derived from the operation of any building or other campus improvement financed or the revenues of which are pledged in the manner provided in this chapter must be collected by such officer or agent of the institution where the building or other campus improvement is located as the state board of higher education from time to time may designate and must be accounted for by such officer or agent, deposited, and remitted as in this section provided. The said board, in its resolution authorizing the bonds or in the trust agreement or agreements executed and delivered by the board, shall provide for the disposition of and accounting for all such revenues by such officer or agent, including the designation of a depository or depositories, the payment of expenses of operation and maintenance, the remittance of revenues to the paying agent designated in the bonds for payment of principal of and interest on the bonds when due, and the investment and disposition of revenues not immediately required for payment of expenses, principal, and interest. The board may designate as a depository for such revenues and funds either the state treasury or the Bank of North Dakota or the trustee under the trust agreement for the bondholders or a bank which is a duly designated depository for state funds or as provided in section 15-55-05. The said board may, in its resolution authorizing the bonds or in the trust agreement or agreements executed and delivered by the board, provide for an expense fund to be retained by the collecting officer for the purpose of paying and may direct the collecting officer to pay the accrued or anticipated expenses of operation and maintenance of the building or campus improvement, and if the board so directs or if such expense fund is so provided, the collecting officer may pay such expenses as so directed by the board or from said fund. The funds required to be remitted to the state treasurer, if any, and any funds derived from revenues pledged to the bondholders must be held by the collecting officer or in the depository for such funds designated by the board in a special fund or funds, to be applied solely to the payment of the principal and interest on said bonds, and the establishment of a reserve for future payments until all of said bonds and interest thereon have been fully paid; provided, that to the extent not prohibited or restricted by any covenant made with or for the benefit of the bondholders, the board may invest any such funds in direct obligations of, or obligations the principal of and interest on which are guaranteed by, the United States of America, or obligations of the state of North Dakota or of any municipality as defined in section 21-03-01 and may devote revenues not currently required for payment of principal and interest, for the creation or maintenance of a debt service reserve, or for expenses of operation and maintenance to such purposes as the board from time to time may designate, including replacing the furnishings and equipment of such building or buildings or campus improvements and improving said building or buildings or campus improvements.
15-55-07. Endorsement of bonds - Attorney general to approve - Incontestable - Exception. All bonds issued under the provisions of this chapter must have endorsed thereon a statement to the effect that the same do not constitute an obligation of the state of North Dakota, the state board of higher education, nor the individual members, officers, or agents thereof, nor of the institution upon the campus of which the building or campus improvement is located, and that the said bonds are payable solely and only out of the revenues to be produced and received from the operation of said building or campus improvement. Such bonds must be submitted to the attorney general of North Dakota for examination and when such bonds have been examined and certified as legal obligations by the attorney general in accordance with such requirements as the attorney general may make, are incontestable in any court in this state unless suit thereon is brought in a court having jurisdiction thereof within thirty days from the date of such approval. Bonds so approved by the attorney general are prima facie valid and binding obligations according to their terms and the only defense which may be offered thereto in any suit instituted after such thirty-day period has expired is forgery, fraud, or violation of the constitution.