# Title 40 — Municipal Government

## Chapter 40-22.1 — Special Assessments for Promotion of Business Activity

### § 40-22.1-01. Improvements by special assessments for business promotion.

A municipality may defray the expense of improvements by special assessments for the
promotion of business activity and new business development through any means not
inconsistent with the purposes of this chapter, including advertising, public information,
marketing, maintenance and decoration of public places, promotion of public events, furnishing
of music in any public place, providing professional management, planning, and promotion, and
the general promotion of trade activities. The governing body of the municipality may make and
execute necessary or convenient agreements to exercise the powers and functions under this
chapter, including contracts with any entity. In planning an improvement project under this
chapter the governing body may include any work and materials which are deemed necessary
or reasonably incidental to the project. A municipality may not issue warrants, bonds, or any
other form of indebtedness in anticipation of the levy and collection of assessments under this
chapter.
### § 40-22.1-02. Improvement districts to be created.

For an improvement project under section 40-22.1-01 and defraying the costs of the project
by special assessments, a municipality may create and alter a business improvement district by
ordinance or resolution. The governing body of the municipality shall designate the district by an
appropriate name and by a number distinguishing it from other improvement districts. A
municipality may make and finance any improvement and levy special assessments for the
improvement under any alternate procedure in this title. If the proposal for creation of an
improvement project under this chapter is made by any person, group, or entity that is not an
officer, board, or agency of the municipality, the person, group, or entity shall file a bond or other
sufficient security, payable to the municipality, to defray all costs incurred if the improvement
project is later barred under section 40-22.1-08. The bond or other sufficient security must be
filed with the city auditor prior to the initiation of any further proceedings under this chapter. The
governing body of the municipality shall determine the amount and form of the bond or other
sufficient security.
### § 40-22.1-03. Size and form of improvement district - Regulations governing.

Any business improvement district created by a municipality may embrace two or more
separate property areas. A business improvement district must include all properties which in
the judgment of the governing body, after consultation with the city auditor or city auditor's
designee planning the improvement, will be benefited by the creation of all or a portion of the
business improvement project. A district may be created without uniformity among the types,
items, or quantities of work and materials to be used at particular locations throughout the
district. The jurisdiction of a municipality to make, finance, and assess the cost of any
improvement project may not be impaired by any lack of commonness, unity, or singleness of
the location, purpose, or character of the improvement, or by the fact that any one or more of
the properties included in the district is subsequently determined not to be benefited by the
improvement, or by a particular portion of the improvement. Upon receipt of a petition signed by
the owners of three-fourths of the area to be added to a business improvement district in which
an improvement is proposed or created, the governing body may enlarge the district. Any district
created under this chapter shall include only property devoted, in whole or in part, to commercial
or business use.
### § 40-22.1-04. Auditor's report required - Contents.

After a business improvement district has been created, the governing body of a
municipality, to make any of the improvements set out in section 40-22.1-01 in the manner
provided in this chapter, shall direct the city auditor for the municipality or some other person,
group, or entity to prepare a report as to the general nature, purpose, and feasibility of the
proposed improvement and an estimate of the probable cost of the work.

### § 40-22.1-05. Approval of plans, specifications, and estimates.

At any time after receiving the report required by section 40-22.1-04, the governing body
may direct the city auditor or other person, group, or other entity preparing the report to prepare
detailed plans and specifications concerning the improvement. The plans and specifications
must be approved by a resolution of the governing body of the municipality. The plans,
specifications, and estimates are the property of the municipality and must be filed in the office
of the city auditor and shall remain on file in that office subject to inspection by the public.
### § 40-22.1-06. Resolution declaring improvements necessary - Contents of resolution -

Publication of resolution.
After the report required by section 40-22.1-04 has been filed and approved, the governing
body of the municipality shall declare by resolution that it is necessary to make the
improvements. A resolution is not required if the governing body determines by resolution that a
written petition for the improvement, signed by the owners of a majority of the area of the
property included within a district, has been received. The resolution must refer intelligibly to the
report and must include a map of the municipality showing the proposed business improvement
district. The resolution must be published once each week for two consecutive weeks in the
official newspaper of the municipality.
### § 40-22.1-07. Protest against resolution of necessity - Meeting to hear protest.

If, within thirty days after the first publication of the resolution declaring the necessity of a
business improvement project, the owners of any property within the improvement district file
written protest with the city auditor against the adoption of the resolution and describing the
property which is the subject of the protest, the governing body of the municipality, at its next
meeting after the expiration of the time for filing protests, shall hear and determine the
sufficiency of the protests.
### § 40-22.1-08. Protest bar to proceeding - Invalid or insufficient protest - Payment of

costs - Tax levy.
If the governing body finds the protest to contain the names of the owners of one-third or
more of the area of the property included within the business improvement district, the protest
bars proceeding further with the improvement project described in the plans and specifications.
If the governing body finds the protest to contain the names of the owners of one-third or more
of any separate property area included within the district, the protest bars proceeding with the
applicable portion of the improvement project, but does not bar proceeding with the remainder
of the improvement project or assessing the cost of the improvement project against other areas
within the district, unless the protest represents one-third or more of the area of the entire
district. Termination of proceedings does not relieve the municipality of responsibility for
payment of costs incurred. The municipality is not responsible for payment of costs incurred if
the improvement project is proposed by any person, group, or entity that is not an officer, board,
or agency of the municipality. Payment of the costs incurred for such a barred improvement
project must be as provided in section 40-22.1-02. For payment of costs incurred for a barred
improvement project proposed by a municipality, the municipality may, if available funds are
insufficient, issue its certificates of indebtedness or warrants, or levy a tax which shall be
considered a tax for a portion of the costs of a special improvement project by general taxation
within the meaning of section 57-15-10. If the protests are found to be insufficient or invalid, the
governing body may cause the improvement to be made, levy and collect necessary
assessments, and contract for the improvement and acquisition of necessary property or
services.
### § 40-22.1-09. Execution and filing of contracts.

All contracts under this chapter must be entered into in the name of the municipality and
must be executed for the municipality by the executive officer and countersigned by the auditor.
After the contract is signed by the other party, it must be filed in the office of the city auditor.

### § 40-22.1-10. Contracts - Conditions and terms.

A contract executed under this chapter must require the work to be done pursuant to the
plans and specifications on file in the office of the city auditor, subject to the approval of the city
auditor acting for the municipality, and must provide:
1. The governing body may suspend the work at any time for improper performance and
relet the contract or order reperformance of all or any of the work improperly done.
2. The time within which the work is to be completed.
3. The period of time for which the work must be guaranteed or warranted.
4. The fund from which the contract price is to be paid by the municipality.
5. That the consideration expressed in the contract is payable only in warrants drawn on
the fund described in the contract.
6. That the municipality assumes and incurs no general liability under the contract.
7. That the failure of the city auditor to reject work and materials which are not up to
specifications and acceptance of the job by the city auditor does not release the party
from liability for any failure to perform work or furnish materials in accordance with the
plans and specifications.
The city auditor acting for the municipality shall supervise and inspect the work during its
progress. In addition to any rights which a municipality may have under its contract for
establishment and operation of part or all of a business improvement after a contract has been
awarded and before contract work has been completed, a municipality may, with the consent of
the other party and without advertising for bids, order additional work done by that party of the
same character as that which was contracted for, whether within or without the improvement
district for which the original contract was made, and upon the same terms and conditions
specified in the original contract except as to time of performance, and at the same prices for
the additional work; provided, that the total price payable to said party for such additional work
may not exceed twenty percent of the amount estimated by the city auditor for the municipality
to be payable for that character of work under the original contract.
### § 40-22.1-11. Abbreviations, letters, and figures may be used in proceedings for levy

and collection of special assessments.
In all proceedings for the levy and collection of special assessments abbreviations, letters,
and figures may be used to denote full or partial additions, lots, blocks, sections, townships, and
ranges or years, days of the month, and amounts of money.
### § 40-22.1-12. City auditor to keep complete record of improvements - Record as

evidence.
The city auditor shall keep a complete record of all the proceedings in the matter of making
any improvements under this chapter. The records must include all reports and confirmations,
all petitions, orders, appointments of commissioners, notices and proofs of publication, and
resolutions of the governing body. The records, a certified transcript of the records, or the
original papers, proofs, publications, orders, or resolutions on file in the auditor's office may be
admitted in evidence in any court or place in this state without further proof as evidence of the
facts they contain.
### § 40-22.1-13. Defects and irregularities in improvement proceedings are not fatal.

If the proceedings are for a lawful purpose, unaffected by fraud, and do not violate any
constitutional limitation or restriction, defects or irregularities in proceedings under this chapter
do not invalidate the proceedings. No action may be commenced or maintained and no defense
or counterclaim in any action may be recognized in the courts of this state founded on any
defects or irregularities in proceedings under this chapter, unless commenced within thirty days
of the adoption of the resolution of the governing body awarding the sale of warrants to finance
the improvement.

### § 40-22.1-14. City auditor's statement of estimated cost required - Governing body to

enter into contracts.
Before adopting or rejecting any contract proposed under this chapter, the governing body
shall require the city auditor for the municipality to make a careful and detailed statement of the
estimated cost of the work. The governing body may not award the contract if the city auditor's
estimate prepared under this section exceeds the estimate prepared under section 40-22.1-04.
If all proposals are not rejected, the governing body shall award the contract to that person, firm,
corporation, limited liability company, or other entity best able to perform the work, upon the
basis of cash payment for the work.
