# Title 40 — Municipal Government

## Chapter 40-34 — Sewage and Garbage Disposal

### § 40-34-01. Disposal of garbage or sewage in municipalities - Acquiring land.

Any municipality in this state, either individually or jointly by agreement, may own, acquire,
construct, equip, extend, and improve, operate, and maintain, either within or without the
corporate limits of the municipality, intercepting sewers, including pumping stations, a plant or
plants for the treatment, purification, and disposal in a sanitary manner of the liquid and solid
wastes, sewage, and night soil of the municipality, or a plant or system for the disposal of the
garbage thereof, and may issue bonds therefor as herein prescribed. Any municipality may
acquire by gift, grant, purchase, or condemnation necessary lands therefor, either within or
without the corporate limits of the municipality and within or without the state of North Dakota.
Subject to chapter 32-15, municipalities may invoke and shall have all the rights and privileges
granted to public corporations under existing laws with reference to eminent domain for the
purpose of acquiring land for the uses mentioned in this section. Any municipality which has
outstanding bonds issued pursuant to this chapter may issue additional bonds by the procedure
herein prescribed for the purpose of refunding all or any part of such outstanding bonds,
whether at or prior to maturity, or for the purpose of providing moneys to be deposited in escrow
for the purchase or redemption of such bonds at or prior to maturity. Bonds issued for any of the
purposes referred to herein may be combined in a single issue.
### § 40-34-01.1. Municipalities to maintain sanitary conditions on certain roads -

Exception.
It shall be the duty of any incorporated city to maintain in a sanitary condition the road or
highway leading to the grounds maintained by said municipality for the disposal of garbage
collected in said municipality. Such road shall be kept free from refuse or garbage resulting from
the transportation of the same by the municipality maintaining said grounds. Nothing in this
section shall be construed to limit the right of a municipality to provide penalties applying to any
persons found guilty of depositing refuse or garbage on said road or roads leading to such
grounds maintained by the municipality for the disposal of refuse and garbage.
### § 40-34-02. Methods of defraying cost of sewage or garbage disposal improvements or

lease.
The total cost of a sewage or garbage disposal system, or any portion thereof, may be
defrayed by the following alternative methods:
1. Out of the general current tax revenues on hand and appropriated for that purpose.
2. Out of the proceeds of the sale of general liability bonds issued in accordance with the
procedure and subject to the conditions and limitations prescribed by chapter 21-03,
as far as the same are applicable.
3. Partly out of general current tax revenues on hand and appropriated for that purpose
and the residue out of the proceeds of the sale of general liability bonds as provided in
subsection 2, as the governing body of the municipality shall determine by a majority
vote.
4. Partly from moneys secured by the issuance of mortgage bonds secured by the net
revenues of the improvement or system and by a mortgage or deed of trust upon the
improvement or system issued by the municipality. Bonds issued under this subsection
shall not exceed sixty percent of the cost of the improvement, and the remaining forty
percent of such cost shall be defrayed as provided in subsection 1, 2, or 3.
5. From moneys secured by the issuance and sale of first mortgage bonds secured by
the assets and property of the improvement or system in like manner as provided in
subsection 4, except that such bonds may be issued for the total cost of the
improvement upon compliance with this subsection. Bonds issued under this
subsection shall be secured by a pledge of the net revenues of the improvement or
system to be set apart as an interest and sinking fund to pay the principal and interest
of such first mortgage bonds as they mature. If the method provided in this subsection

is utilized by any municipality to defray the cost of a sewage disposal system, it, by a
resolution of its governing body, shall create the district, provide for and approve the
plans and specifications and estimates of the cost, and adopt and publish the
resolution declaring the work necessary to be done in accordance with the
requirements of chapter 40-22 as far as the same may be applicable. If the owners of
property liable to be imposed with the sewage disposal service charges as provided in
this subsection shall file with the city auditor, within thirty days after the first publication
of the resolution, a written protest against the improvement, the governing body at its
next meeting after the expiration of the time for filing protests against the improvement
shall hear and determine the sufficiency of the protests. After the hearing has been
had, the governing body, if it finds the protests to contain the signatures of the owners
of a majority of the property liable to be charged, shall not proceed further with the
improvement. If the protests are found insufficient or invalid, the governing body of the
municipality may cause the improvement to be made, contract therefor, and defray the
cost thereof in the manner provided in this subsection.
A municipality may pay the cost of leasing any sewage systems and all related real and
personal property for the collection, treatment, purification, and disposal in a sanitary manner of
sewage from the state, or any agency or institution of the state under section 40-34-19, solely
from revenues to be derived by the municipality from the ownership, sale, lease, disposition,
and operation of the sewage systems; the funds or any other amounts invested by the
municipality pursuant to section 21-06-07, or invested on the municipality's behalf by the state,
or any agency of the state, in conformity with policies of the industrial commission, including
investment in a guaranteed investment contract and any earnings thereon, to the extent pledged
therefor; and funds, if any, appropriated annually by the governing body of the municipality or
received from federal or state sources.
### § 40-34-03. Mortgages and mortgage bonds - Issuance over debt limit - Not general

obligations - Vote required to issue - Conditions.
Municipalities may issue mortgage bonds beyond the general limits of the bonded
indebtedness prescribed by law for the purpose of defraying the cost, or a part thereof, of a
sewage disposal plant and system or of a garbage disposal plant in accordance with the
provisions of section 40-34-02. The bonds shall not impose any general liability upon the issuing
municipality but shall be paid only out of the revenues received from the service charges as
provided in this chapter or from the sale of the property under foreclosure of the mortgage or
deed of trust. The bonds shall be sold for not less than ninety-eight percent of par and shall bear
interest at a rate or rates resulting in an average annual net interest cost of not more than
twelve percent per annum on those issues which are sold at private sale. There is no interest
rate ceiling on those issues sold at public sale or to the state of North Dakota or any of its
agencies or instrumentalities. No bonds shall be issued, however, except upon the affirmative
vote of three-fifths or more of the members of the governing body of the issuing municipality,
and the form, recitals, maturities, rate of interest, and whether the bonds shall be payable
annually or semiannually, shall be determined by the same vote. A municipality is authorized to
execute and deliver any mortgage or deed of trust contemplated under this chapter.
### § 40-34-04. Bonds may be issued by municipality - Term of bonds - Determining

conditions.
Any municipality through its governing body, or any municipalities jointly through their
governing bodies, may issue and sell the necessary bonds for the construction and installation
of any improvement described in this chapter, including the disposal plant and such intercepting
and other sewers as may be necessary to permit the effective operation of such system, and for
the purchase of such real and personal property as may be necessary for use in connection with
such system. Such bonds shall be payable in not more than thirty years from the date of
issuance. The governing body or the respective governing bodies shall determine the
denomination, the date, time, and manner of payment of such bonds.

### § 40-34-05. Supervision and control of plant - Rules and regulations governing -

Charges for use of plant - Failure to pay - Collection.
The governing body of any municipality, or the respective governing bodies of municipalities
which may have agreed to own and operate intercepting sewers or sewage disposal plants or
garbage disposal plants jointly, may designate certain officials of the municipality or
municipalities to have the supervision and control of the sewage disposal plant or plants and of
the garbage disposal plant or plants, or either of such plants. The governing body or the
respective governing bodies of such municipalities may make all necessary rules and
regulations governing the use, operation, and control thereof, and may establish just and
equitable rates and charges to be paid for the use of such disposal plant or system and such
garbage disposal plant or system, or either thereof, by a person, firm, corporation, or limited
liability company whose premises are served thereby. If the established service charge is not
paid when due, such sum may be recovered by the municipality or by the municipalities jointly in
an action at law, or such sum may be assessed against the premises served and collected and
returned in the same manner as other county and municipal taxes are assessed, certified,
collected, and returned.
### § 40-34-06. Sinking fund for payment of interest and principal.

If a service rate is charged to the users of an improvement made under this chapter, a
sufficient portion of the moneys collected for such service shall be set aside as a sinking fund
for the payment of the interest on the bonds and the principal thereof at maturity, and shall
constitute a special fund which shall be used for no other purpose.
### § 40-34-07. First mortgage bonds are negotiable.

All first mortgage bonds issued under the provisions of this chapter may be negotiated in
the same manner and with the same legal effect as negotiable instruments under title 41.
### § 40-34-08. Tax levy to pay deficiency when bonds become due.

If the last maturing bonds secured by a first mortgage or deed of trust on an improvement,
as provided in this chapter, are not paid when they become due, and if a deficiency remains, the
governing body of the municipality, or the respective governing bodies of the municipalities,
shall levy a tax upon all of the taxable property within the limits of the municipality or
municipalities for the payment of such deficiency.
### § 40-34-09. Action maintained on failure to pay principal or interest of bonds - Court

receiver - Sale of property - Redemption - Sheriff's deed.
If a default occurs in the payment of the principal or interest of any bonds secured by a
mortgage or deed of trust on the improvement and such default continues for a period of not
less than six months, an action may be commenced in the district court of the county in which
such improvement or some part thereof is located, by the holder or holders of not less than
one-half of the outstanding past-due bonds or by the legal holder of the deed of trust, when
authorized by a like number of bondholders, for the purpose of foreclosing the mortgage or deed
of trust securing such bonds. In such action, the court may enter a decree providing for the
management and operation of such improvement by a court receiver and for the sale of the
property secured by such mortgage or trust deed and for the application of the net revenues
arising from the operation of such plant upon the secured debt during the period of redemption,
which shall be one year from and after the date of the sale thereof. If there is no redemption
from such sale within the time herein provided, a sheriff's deed shall issue to the holder of the
certificate of sale. The procedure subsequent to the entry of a foreclosure decree shall be, as
far as applicable, that provided in title 32 for the sale of real property under special execution.
### § 40-34-10. Franchise granted to holder of sheriff's deed to operate property - Contents

of franchise.
If after the issuance of a sheriff's deed as provided in section 40-34-09, it shall be made to
appear to the public service commission that it is in the public interest that such utility and

improvement be continued in operation, such commission may grant a franchise to the owners
of such utility and improvement to engage in such business and to operate such improvement
and utility. Such franchise may:
1. Authorize such owner or owners to charge each person, firm, corporation, or limited
liability company owning property from which sewage or garbage is received such fee
therefor as may be determined to be reasonable by such commission upon proper
application and after notice to the municipality affected and a hearing upon such
application;
2. Grant to such owner or owners, under such reasonable rules, regulations, and
supervision as may be established by such commission, the right and privilege to lay
all intercepting and other sewers and connecting pipes in the public streets and alleys
of the municipality or municipalities as may be necessary to receive and conduct the
sewage to the disposal plant; and
3. Provide for an accounting from time to time of the gross revenues of the utility or
improvement and the application of the net revenues as determined by such
commission upon the original secured indebtedness to the end that the holder of such
franchise will use the net revenues as determined by such commission to discharge
the original secured debt, together with all interest, costs, and other charges which the
commission shall determine shall be paid.
### § 40-34-11. Revesting title and ownership of improvement or utility in municipality.

When, after notice to the interested parties and due hearing thereon, the public service
commission shall determine that the owner or owners of the utility or improvement have been
paid in full out of the net revenues arising from the operation thereof, the commission shall issue
a certificate of ownership revesting the title and ownership of such utility and improvement in the
municipality or municipalities.
### § 40-34-12. Appeal from decision of public service commission in revesting title -

Conditions.
Any party in interest feeling aggrieved by the determination of the public service
commission revesting the title to and ownership of the utility or improvement in the municipality
or municipalities may appeal, within sixty days after the date of the issuance of such certificate
of ownership or other decision by such commission, to the district court of the county in which
such utility or improvement, or some part thereof, is located, for a review and trial de novo of the
determination of the public service commission therein. The court, in such a case, may permit
the party in possession to continue the operation of such utility and improvement upon the
giving of a suitable bond, with such surety and upon such conditions as the court may fix.
### § 40-34-13. Residue of money remaining after payment of bonds - Disposal.

After the principal and interest on the bonds secured by a first mortgage or deed of trust on
an improvement as provided in this chapter have been fully paid, as the governing body of the
municipality or the respective governing bodies of the municipalities may direct by resolution,
the revenues of such utility and improvement set apart for the payment of such bonds may be:
1. Used for the repair, improvement, or extension of such utility or improvement;
2. Credited to the interest and sinking fund established for the retirement and payment of
the general liability bonds; or
3. Transferred to the general fund.
### § 40-34-14. Payment of bonds by taxation - Limitations.

Municipalities issuing bonds under this chapter, the principal or interest of which are not to
be paid out of funds created from service charges as provided in this chapter, may raise such
sum annually by taxation as the governing body or the respective governing bodies may deem
necessary to pay the interest on such bonds and to create a sinking fund to pay the principal
thereof as it falls due, but the amounts so raised shall not exceed in amount the limitations
provided in chapter 21-03.

### § 40-34-15. Agreements between municipalities within and without state - Acquiring

property - Erecting dams - Use of waters - Eminent domain.
If it is deemed expedient for the safety and health of the people, municipalities of this state
may enter into agreements with each other, or jointly or severally with governmental agencies or
municipalities outside the state, to erect and maintain intercepting sewers and sewage
treatment plants, or may enter into contracts with governmental agencies or municipalities
outside the state to furnish to such extraterritorial agencies or municipalities sewage disposal for
such compensation and upon such terms and conditions as the parties under such agreement
may stipulate. Whenever it shall be convenient or necessary as determined by a majority vote of
the governing body or the respective governing bodies of such governmental agencies or
municipalities, they may acquire, purchase, own, or maintain lands and personal property within
or without this state and may improve the same and erect structures thereon, including dams
and damsites. If the governing body of a municipality or the respective governing bodies of
municipalities shall determine to do so by a resolution adopted by a majority vote thereof, such
municipalities may erect dams upon streams, watercourses, or other bodies of water located
within or without this state, or constituting in whole or in part the boundary waters of this state,
and may alter or improve the bed, banks, or courses of such streams, watercourses, or bodies
of water. In the enjoyment of such power, municipalities may purchase and hold property within
and without this state and, subject to chapter 32-15, may exercise the right of eminent domain
as provided by the laws of this state, and may enter into contracts and engagements with
persons, firms, corporations, limited liability companies, or with municipalities or governmental
agencies located without this state for like purposes.
### § 40-34-16. Contractual relationship between municipalities - Approval - Operating as

an independent enterprise.
Whenever governmental agencies or municipalities desire to act under the provisions of this
chapter, the relationship established between them shall be fixed by contract. Such contracts
may be made by governmental agencies and municipalities under the provisions of this chapter
in the manner and to the extent that natural persons may make contracts for like purposes,
subject only to the limitations provided by this chapter. Such contracts, before becoming
operative, shall be approved by a vote of the majority of the members of each of the respective
governing bodies of the municipalities or governmental agencies operating under the provisions
of this chapter. If any municipality desires to act under the provisions of this chapter without
establishing a relationship with another municipality or agency, it may proceed as a separate
and independent enterprise.
### § 40-34-17. Municipality which authorized bond issue prior to March 3, 1933, may

finance under this chapter.
Any municipality, which has obtained authority prior to March 3, 1933, to issue and sell
bonds for the construction and installation of any of the improvements mentioned in this chapter
may defray the cost of such improvements entirely out of the proceeds of the sale of such
bonds, or it may defray the cost of such improvement in part out of the proceeds of the sale of
such general liability bonds and in part out of the proceeds of the sale of mortgage bonds as
provided in this chapter, except that the mortgage indebtedness upon such improvement, when
the same is created originally, shall not exceed three-fifths of the total cost of such
improvement. Bonds issued under this section which are a general liability of the municipality
shall not be issued except upon a vote of the people as provided in chapter 21-03.
### § 40-34-18. Power granted by chapter considered an addition.

The power given to municipalities in this chapter shall be in addition to and not in derogation
of any power existing in any municipality under any provision of the laws of this state.

### § 40-34-19. Agreements between municipalities and with the state or private parties -

Leasing property.
Notwithstanding any other law, any municipality of the state, either individually or jointly by
agreement, may enter agreements to lease to the state, or any agency or institution of the state,
or to any person for such compensation and upon such terms and conditions as the parties
under such agreement may stipulate, all or part of, or an undivided or other interest in, its
sewage system and all related real and personal property for the collection, treatment,
purification, and disposal in a sanitary manner of sewage. In addition, any municipality of the
state, either individually or jointly by agreement, may enter agreements to lease from the state,
or any agency or institution of the state, or from any person all or part of, or an undivided or
other interest in, its sewage system and all related real and personal property for the collection,
treatment, purification, and disposal in a sanitary manner of sewage for such compensation and
upon such terms and conditions as the parties under such agreement may stipulate. Such
agreements must be authorized by resolution of the governing body of a municipality upon a
majority vote of the members of the governing body. For the purposes of this section, such
agreements include any lease, sublease, purchase agreement, lease-purchase agreement,
installment purchase agreement, leaseback agreement, or other contract, agreement,
instrument, or arrangement pursuant to which any rights, interests, or other property are
transferred to, by, or from any party to, by, or from one or more parties, and any related
documents entered or to be entered, including any operating agreement, service agreement,
indemnity agreement, participation agreement, loan agreement, or payment undertaking
agreement. A lease obligation under this section may not exceed a term of ninety-nine years. A
lease obligation under this section does not constitute an indebtedness of the municipality or a
pledge of the full faith and credit or unlimited taxing resources of the municipality.
Notwithstanding any other law, a municipality may solicit and accept one or more proposals for
a lease transaction, including the arrangement thereof, under this section. The municipality may,
by resolution of the governing body upon a majority vote of the members of the governing body,
accept a proposal that it determines to be in the public interest.
