# Title 40 — Municipal Government

## Chapter 40-24 — Special Assessment Funds and Disbursements Thereof

### § 40-24-01. Lien of special assessment - Attaches on approval of assessment list -

Subject only to general tax lien.
A special assessment, together with all interest and penalties which accrue thereon, shall
be and remain a lien upon the property upon which the assessment is levied from the time the
assessment list is approved by the governing body until the assessment is paid fully. Such lien
shall have precedence over all other liens except general tax liens and shall not be divested by
any judicial sale. No mistake in the description of the property covered by the special
assessment lien or in the name of the owner of such property shall defeat the lien if the
assessed property can be identified by the description in the assessment list.
### § 40-24-02. Payment of special assessments - Interest.

All special assessments levied under this title may be paid without interest within ten days
after they have been approved by the governing body and thereafter shall bear interest at an
annual rate not exceeding one and one-half percentage points above the average net annual
interest rate on any warrants or bonds for the payment of which they are pledged on the total
amount thereof remaining unpaid.
### § 40-24-03. Lien between vendor and vendee of special assessments.

As between a vendor and vendee of real property, unless the purchase contract otherwise
provides, the installments of all special assessments for local improvements which are required
to be certified and returned to the county auditor in each year shall be and become a lien upon
the real property upon which the same are assessed from and after the first day of December in
such year.
### § 40-24-04. Sewer special assessments extended over a period of not more than thirty

years.
Special assessments for the payment of the cost of constructing any sewer shall be payable
in equal annual amounts, or in such annual amounts as will permit the annual increase in
payment of principal to approximate the annual decrease in the interest on amounts remaining
unpaid, extending over a period of not exceeding thirty years as the governing body may fix by
ordinance or resolution.
### § 40-24-05. Water main and waterworks special assessments extended over a period of

not more than thirty years.
Special assessments for the payment of the cost of constructing or laying any water mains
or constructing any waterworks shall be payable in equal annual amounts, or in such annual
amounts as will permit the annual increase in payment of principal to approximate the annual
decrease in the interest on amounts remaining unpaid, extending over a period of not more than
thirty years as the governing body may fix by ordinance or resolution.
### § 40-24-06. Paving and repaving special assessments extended over a period of not

more than thirty years.
Special assessments for the payment of the cost of paving or repaving shall be payable in
equal annual amounts, or in such annual amounts as will permit the annual increase in payment
of principal to approximate the annual decrease in the interest on amounts remaining unpaid,
extending over a period of not more than thirty years.
### § 40-24-07. Street improvement assessments extended over a period of not more than

thirty years.
Special assessments for the expense of opening, widening, grading, graveling, or extending
streets shall be payable in equal annual amounts, or in such annual amounts as will permit the

annual increase in payment of principal to approximate the annual decrease in the interest on
amounts remaining unpaid, extending over a period of not more than thirty years.
### § 40-24-08. Assessments for street beautification extended over a period of not more

than ten years.
Special assessments for maintaining grass plots or trees or for parking or other
improvements for the beautification of the streets of the municipality shall be payable in equal
annual installments or in such annual amounts as will permit the annual increase in payment of
principal to approximate the annual decrease in the interest on amounts remaining unpaid,
extending over a period of not more than ten years as the governing body may fix by ordinance
or resolution.
### § 40-24-09. Payments in full of assessments - Payments to county treasurer or city

auditor - Receipts.
The owner of any property against which an assessment shall have been made under this
title for the cost of any improvement may pay in full or in part the amount remaining unpaid and
the unpaid interest accumulated thereon. The payment in full shall discharge the lien of the
assessment upon the owner's property. The payment may be made to the county treasurer
upon all installments of the assessments which have been certified to the county auditor and
may be made to the city auditor upon all portions of the assessment which have not been
certified. Any person desiring to pay any portion of the assessment to the city auditor shall
obtain from the city auditor a certificate of the amount due upon the assessment which has not
been certified to the county auditor and shall present such certificate to the city auditor. The city
auditor shall receive and collect such amount and issue a receipt to the person paying the
assessment. The city auditor shall note upon the city auditor's records the payment of the
assessment.
### § 40-24-10. One-fifth of cost of improvement may be paid by general assessment within

constitutional debt limit.
Any municipality, at the option of its governing body, may provide for the payment by
general taxation of all the taxable property in the municipality of not more than one-fifth of the
cost of any improvement financed by the levying of special assessments other than the opening
and widening of streets or the laying of sewer or water connections from the main to the curb
line. Any amount which the municipality shall determine to pay by general assessment shall be
considered as a part of the debt of the municipality and shall not be valid unless such amount is
within the constitutional debt limit of such municipality. Any incorporated city, by a two-thirds vote
of the qualified voters thereof voting upon the question at a general or special election, may
increase its limit of indebtedness three percent on the assessed valuation of taxable property in
such city beyond five percent of the valuation thereof, and by a majority vote, in like manner,
may increase its limit of indebtedness four percent of such valuation 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; provided, that such increase or increases must be duly voted before the levy of any
general taxes exceeding the existing debt limit may be made to pay part of the cost of any such
improvement. In making any contract with reference to any special improvement, the governing
body may take into consideration such portion of the cost of the improvement as will be paid by
general assessment and may make appropriations and levy taxes and assessments therefor in
annual installments extending over the same period of time as is provided in the special
assessments for such improvement. The appropriation may be made at such time as occasion
may require and shall be included in the municipality's first annual tax levy thereafter. The
appropriation and levy, whether it is made as a part of the regular annual appropriation
ordinance or otherwise, shall state the specific improvement for which the assessment is made
and the tax levied, the amount thereof, and the district in which the improvement is made. The
amount of such assessment and the moneys collected thereon shall become a part of the
district fund upon which the warrants issued in payment for the improvement are to be drawn.

### § 40-24-11. Certification of assessments to county auditor.

Annually, the city auditor shall certify to the county auditor all uncertified installments of
assessments which are to be extended upon the tax lists of the municipality for the current year
in the manner provided in section 40-24-12. The annual certification shall continue until the
amount of moneys on deposit in the fund established pursuant to section 40-24-18 is sufficient
to cover outstanding principal of and interest on any obligations issued to fund such projects,
and in addition thereto, to repay the city for any payments made by the city to fund deficiencies
in the fund established pursuant to section 40-24-18.
### § 40-24-12. City auditor to insert amount of improvements in county real estate book or

other forms - Regulations governing.
The city auditor shall notify the county auditor not later than August twentieth in each year of
any special assessments which were made in the municipality in addition to those reported in
the previous year. The county auditor shall make and deliver to the city auditor on or before
September twentieth each year a copy of the real estate assessment book or other forms for the
current year covering all additions in which any special assessments have existed and where
any will appear for the current year as advised by the city auditor. The city auditor shall insert in
the proper columns under the appropriate headings the amount of each of the installments of
the assessments on the lots or subdivisions of lots or tracts of land which are to be extended
upon the tax lists of the municipality for the current year. The city auditor shall show the total
amount of special assessments certified to the county auditor for the current year. When a
division of property has been made since the original assessment, the city auditor shall make or
cause to be made, with the assistance and advice of the special assessment commission, the
proper division of the special assessments on the lots or tracts of land as the same are divided
and assessed for the general taxes as furnished by the county auditor. The city auditor shall
certify the special assessments to the county auditor by November first of each year.
### § 40-24-13. Governing body to provide compensation for special assessment

commission in making divisions of special assessments.
The governing body shall provide suitable compensation to the members of the municipal
special assessment commission for services rendered in making the divisions of special
assessments on property which was divided subsequent to the original assessment.
### § 40-24-14. Extension of special assessments on tax lists - Collection - Payment over to

municipality.
The county auditor shall extend the special assessments upon the tax lists of the
municipality for the current year, and such assessments with interest and penalties shall be
collected as general taxes are collected and paid over to the city auditor and shall be placed by
the city auditor in the respective funds for which they were collected.
### § 40-24-15. Special assessment record book kept by county auditor - Assessments

certified for more than one year.
The county auditor shall keep in the county auditor's office a special assessment record.
When any municipality causes the installments of special assessments for a period of more than
one year to be certified, the county auditor shall cause the special assessments so certified to
be recorded in such book for the respective years and in the amounts shown in the certificate of
the city auditor. In such event the certificate of the city auditor shall include a list of all lots and
tracts of land upon which such assessments are levied, designating the purpose of the
assessment, the fund to which it belongs, and the installment of such assessment for each year
against each lot or tract, including interest thereon.
### § 40-24-16. County treasurer to certify and receipt for amount of special assessments

collected - Contents of certificate - Procedure for abatement.
Special assessments of any kind certified to the county auditor by the city auditor shall be
paid to the county treasurer and included in the statement required by section 57-20-07.1 and

the receipt required by section 57-20-08. If the county treasurer receives less than the full
amount of taxes and special assessments due at any time on any lot or tract of real estate, the
county treasurer shall allocate the amount received between taxes and special assessments in
proportion to the respective amounts of taxes and special assessments due. When prorating
any tax payment received prior to October fifteenth, the term "due", as it pertains to real estate
taxes, shall include only the first installment of real estate taxes. Special assessments shall not
be subject to abatement or refund by proceedings under chapter 57-23, but shall be reviewed
and corrected only in the manner and upon the conditions provided in chapter 40-26. The
county treasurer, at the time set by law for the payment to the city auditor of all the taxes and
special assessments collected during the preceding month, shall certify the amounts of special
assessments collected. The certificate shall state specifically the lot or known subdivision
thereof as it appears on the tax books of the county treasurer, and the block, addition, amount
collected, and the amount credited to each lot or known subdivision thereof, and the year for
which the sum was collected. The certificate shall be furnished to the city auditor.
### § 40-24-17. Interest and penalties added to special assessments - County treasurer to

collect and pay over.
The county treasurer shall add to all special assessments the same interest and penalties
that are added in the case of general taxes and at the same time. The county treasurer shall
collect the interest and penalties with the special assessments and shall pay all such interest
and penalties collected over to the city auditor.
### § 40-24-18. Special improvement moneys to be kept separate - Designation and

numbering of funds - Diversion of moneys prohibited.
All special assessments and taxes levied and other revenues pledged under the provisions
of this title to pay the cost of an improvement shall constitute a fund for the payment of such
cost, including all principal of and interest on warrants and other obligations issued by the
municipality to finance the improvement, and shall be diverted to no other purpose. The city
auditor shall hold all moneys received for any such fund as a special fund to be applied to
payment for the improvement. Each such fund shall be designated by the name and number of
the improvement district in or for which said special assessments, taxes, and revenues are
collected. When all principal and interest on warrants and other obligations of the fund have
been fully paid, all moneys remaining in a fund may be transferred into the general fund of the
municipality.
### § 40-24-19. Warrants and improvement bonds - Issuance - When payable - Amounts -

Temporary warrants and temporary improvement bonds - Interest - Interest coupons -
Negotiability - Eligibility as investments.
The municipality, at any time after making a contract for the construction of any
improvement to be financed in whole or in part by assessments, under authority of any chapter
of this title, or prior thereto but after the period for filing protests against the making of such
improvement has expired and the protests filed, if any, have been heard and determined to be
insufficient, and in anticipation of the levy and collection of such assessments and of any taxes
or revenues derived from service charges pledged to pay for such improvement, may issue
warrants or improvement bonds on the fund created for such improvement. The municipality is
responsible to the holders of the warrants or improvement bonds for the proper advertisement
and award of a contract or contracts or provision by other means for the completion of the
improvement; for the acquisition of all land, easements, licenses, and permits required for such
completion; and for the valid and final levy of special assessments upon all properties within the
improvement district to be benefited by the improvement, in an aggregate principal amount
equal to the total cost of the improvement as finally ascertained, less the portions thereof, if any,
determined to be paid from taxes, service charges, and any other source. The issuance of the
warrants or improvement bonds constitutes a representation and covenant binding upon the
municipality that the aggregate benefits to be derived from the making of the improvement by
the properties to be assessed therefor are not less than the aggregate amount of the special

assessments so required to be levied. The warrants or improvement bonds shall be issued and
shall mature in such amounts as in the judgment of the governing body will be provided for, at or
before the maturity dates specified, by the taxes and assessments to be levied and spread and
the revenues pledged therefor. In lieu of issuing definitive warrants or improvement bonds on
any such fund, the governing body may by resolution authorize the issuance and sale of
temporary warrants or temporary improvement bonds maturing in not to exceed three years
from the date of issue of the first such warrant or temporary improvement bonds, to be repaid
with interest from the proceeds of definitive warrants or improvement bonds maturing as
hereinabove required, which the governing body shall issue and sell at or before the maturing
date of said temporary warrants or temporary improvement bonds, in the amount required, with
moneys theretofore received in such fund, to pay the total cost of the improvement and all
temporary warrants or temporary improvement bonds theretofore issued on the fund, with
interest then accrued thereon. The warrants or temporary improvement bonds must bear
interest at a rate or rates and must be sold at a price, not less than ninety-eight percent of par,
resulting in an average net interest cost not to exceed twelve percent per annum payable
annually or semiannually, except that there is no interest rate ceiling on an issue sold at public
sale or to the state of North Dakota or any of its agencies or instrumentalities. The definitive
warrants or improvement bonds may bear interest at a rate or rates higher or lower than those
borne by the temporary warrants or temporary improvement bonds, as determined by the
governing body in effecting the sale thereof. In the sale of temporary warrants or temporary
improvement bonds, the municipality may by resolution of the governing body agree to issue to
the holder or holders thereof definitive warrants or improvement bonds upon specified terms as
to interest, maturity, redemption provisions, and all other pertinent details, in the event that the
municipality is unable to sell definitive warrants or improvement bonds to others upon more
favorable terms. Coupons representing the interest for each year or lesser period may be
attached to the warrants, whether definitive or temporary, or improvement bonds or temporary
improvement bonds. All such warrants or bonds shall be negotiable within the meaning of and
for all the purposes specified in title 41, and, to the same extent as general obligation bonds of
the issuing municipality, are valid investments of the funds of any guardian, trustee, and other
fiduciary of any kind or nature, any bank or other financial institution, any charitable,
educational, or eleemosynary institution, and any public corporation or official, municipality,
school district, or other political subdivision, including bond sinking funds, special improvement
funds, municipal utility funds, and funds of the state of North Dakota and its instrumentalities
and agencies.
### § 40-24-20. Contents of warrants.

Improvement warrants shall state upon their face for what purpose they were issued and
the fund from which they are payable and shall be signed by the executive officer and
countersigned by the city auditor under the seal of the municipality.
### § 40-24-21. Warrants may be used as payment to contractor.

Special improvement warrants may be used in making payments on contracts for the
improvements for which the special improvement fund was created at not less than the par
value thereof.
### § 40-24-22. Payment and cancellation of warrants by city auditor.

The city auditor shall pay special improvement warrants and the interest coupons
appurtenant thereto as they mature and are presented for payment out of the district funds on
which they are drawn respectively and shall cancel the warrants when paid, except that
definitive improvement warrants, when refunded pursuant to the provisions of sections 40-27-06
to 40-27-12, shall not be canceled but shall be retained by the municipality, in trust for the
holders of the refunding improvement warrants or bonds issued thereunder, as therein provided.
Definitive warrants shall be issued in lieu of temporary warrants at or before the time when any
such warrants are to be so refunded.

### § 40-24-23. Matured improvement warrants or interest coupons may be used to pay

special assessments.
Any matured special improvement warrant or interest coupon may be used in the payment
of special assessments levied for the payment of the improvement for which the warrant or
interest coupons were issued. The warrants or coupons so used shall be canceled and retired
by the city auditor.
### § 40-24-24. Validation.

Repealed by S.L. 1981, ch. 277, § 2.
