# Title 61 — Waters

## Chapter 61-02 — Water Commission

### § 61-02-01. Water conservation, flood control, management, and development declared

a public purpose.
It is hereby declared that the general welfare and the protection of the lives, health,
property, and the rights of all the people of this state require that the conservation,
management, development, and control of waters in this state, public or private, navigable or
non-navigable, surface or subsurface, the control of floods, and the management of the
atmospheric resources, involve and necessitate the exercise of the sovereign powers of this
state and are affected with and concern a public purpose. It is declared further that any and all
exercise of sovereign powers of this state in investigating, constructing, maintaining, regulating,
supervising, and controlling any system of works involving such subject matter embraces and
concerns a single object, and that the state water commission in the exercise of its powers, and
in the performance of all its official duties, shall be considered and construed to be performing a
governmental function for the benefit, welfare, and prosperity of all the people of this state.
### § 61-02-01.1. Statewide water development program.

The legislative assembly finds that there is a critical need to develop a comprehensive
statewide water development program. The state water commission shall develop and
implement a comprehensive statewide water development program. The commission shall
design the program to serve the long-term water resource needs of the state and its people and
to protect the state's current usage of, and the state's claim to, its proper share of Missouri River
water.
### § 61-02-01.2. State water commission - Policies for water retention projects.

The state water commission shall develop policies, including cost-sharing guidelines, which
further the development of water retention projects for flood control. The commission shall
provide a report regarding the policies to the sixty-second legislative assembly.
### § 61-02-01.3. Comprehensive water development plan.

1. Biennially, the commission shall develop and maintain a comprehensive water
development plan organized on a river basin perspective, including an inventory of
future water projects for budgeting and planning purposes.
2. As part of the commission's planning process, to facilitate local project sponsor
participation and project prioritization and to assist in education regarding life cycle
analyses for municipal water supply projects, and economic analyses for flood control
and water conveyance projects expected to cost more than one million dollars, the
commission shall develop a policy that outlines procedures for commissioner-hosted
meetings within the upper Missouri River, lower Missouri River, James River, upper
Red River, lower Red River, Mouse River, Devils Lake, Little Missouri River, upper
Heart River, and upper Cannonball River drainage basins.
3. The commission may not require an economic analysis for an assessment drain
project if the project is expected to cost one million dollars or less.
### § 61-02-01.4. State water commission cost-share policy.

The state water commission shall review, gather stakeholder input on, and rewrite as
necessary the commission's "Cost-share Policy, Procedure and General Requirements" and
"Project Prioritization Guidance" documents. The commission's cost-share policy:
1. Must provide a water supply project is eligible for a cost-share up to seventy-five
percent of the total eligible project costs.
2. May not determine program eligibility of water supply projects based on a population
growth factor. However, a population growth factor may be used in prioritizing projects
for that purpose.

3. Must consider all project costs potentially eligible for reimbursement, except the
commission shall exclude operations expense, regular maintenance, and removal of
vegetative materials and sediment, for assessment drains, and may exclude
operations expense and regular maintenance for other projects. Snagging and clearing
of watercourses and deepening or widening of existing drains are eligible for
reimbursement. The commission shall require a water project sponsor to maintain a
capital improvement fund from the rates charged customers for future extraordinary
maintenance projects as condition of funding an extraordinary maintenance project.
4. May not determine program eligibility of water supply projects based on affordability.
However, affordability may be used in prioritizing projects for that purpose.
### § 61-02-01.5. North Dakota outdoor heritage fund grants - Effect on local cost-share.

Repealed by S.L. 2021, ch. 489, § 2.
### § 61-02-01.6. Economic analysis for assessment drain projects - Moratorium.

(Expired
effective August 1, 2027)
Notwithstanding section 61-02-01.3, between August 1, 2025, and July 31, 2027, the state
water commission or the department of water resources may not conduct an economic analysis
for an assessment drain project within the state.
### § 61-02-02. Definitions.

In this chapter, unless the context or subject matter otherwise requires:
1. "Commission" means the state water commission.
2. "Cost of works" includes:
a. The cost of construction, the cost of all lands, property rights, water rights,
easements, and franchises acquired which are deemed necessary for such
construction;
b. The cost of all water rights acquired or exercised by the commission in
connection with the works;
c. The cost of all machinery and equipment, financing charges, interest before and
during construction and for a period not exceeding three years after the
completion of construction;
d. The cost of engineering and legal expenses, plans, specifications, surveys,
estimates of cost, and other expenses necessary or incident to determining the
feasibility or practicability of a project;
e. Administrative expenses;
f. The construction of the works and the placing of the works in operation; and
g. Other expenses necessary or incident to the financing authorized in this chapter,
including funding of debt service, repair and replacement reserves, capitalized
interest, and the payment of bond issuance costs.
3. "Cost-share" means funds appropriated by the legislative assembly or otherwise
transferred by the commission to a local entity under commission policy as
reimbursement for a percentage of the total approved cost of a project approved by
the commission.
4. "Economic analysis" means an estimate of economic benefits and direct costs that
result from the development of a project.
5. "Grant" means a one-time sum of money appropriated by the legislative assembly and
transferred by the commission to a local entity for a particular purpose. A grant is not
dependent on the local entity providing a particular percentage of the cost of the
project.
6. "Life cycle analysis" means the summation of all costs associated with the anticipated
useful life of a project, including project development, land, construction, operation,
maintenance, and disposal or decommissioning.

7. "Loan" means an amount of money lent to a sponsor of a project approved by the
commission to assist with funding approved project components. A loan may be
stand-alone financial assistance.
8. "Owner" includes all individuals, associations, corporations, limited liability companies,
districts, municipalities, and other political subdivisions of this state having any title or
interest in any properties, rights, water rights, easements, or franchises to be acquired.
9. "Project" means a water conveyance project or any one of the works defined in
subsection 11, or any combination of such works, which are physically connected or
jointly managed and operated as a single unit.
10. "Water conveyance project" means any assessment drain, streambank stabilization, or
snagging and clearing of water courses.
11. "Works" includes:
a. All property rights, easements, and franchises relating to and deemed necessary
or convenient for their operation;
b. All water rights acquired and exercised by the commission in connection with
such works;
c. All means of conserving and distributing water, including reservoirs, dams,
diversion canals, distributing canals, channels, lateral ditches, pumping units,
mains, pipelines, treatment plants, and waterworks systems; and
d. All works for the conservation, control, development, storage, treatment,
distribution, and utilization of water, including works for the purpose of irrigation,
flood control, watering stock, supplying water for public, domestic, industrial, and
recreational use, fire protection, and the draining of lands injured or in danger of
injury as a result of such water utilization.
### § 61-02-03. Apportioning or allocating water rights by commission.

In case any water rights shall be acquired or exercised by the commission in connection
with two or more works and projects, the commission, by resolution, shall apportion or allocate
to each of such works or projects such part of such water rights as it may determine, and upon
adoption of such a resolution, such water rights shall be deemed to be a part of each of such
works and projects to the extent that such water rights have been so apportioned or allocated
thereto respectively.
### § 61-02-04. State water commission - Members - Terms - Qualifications.

The state water commission consists of the governor, agriculture commissioner, and eight
other members appointed by the governor who shall take into account reasonable geographic
considerations in making the appointments with the intent of having each of the eight major
drainage basins represented by a commissioner who resides in the basin. The major drainage
basins are the upper Missouri River basin; the lower Missouri River basin; the James River
basin; the upper Red River basin; the lower Red River basin; the Mouse River basin; the Devils
Lake basin; and the Little Missouri River, upper Heart River, and upper Cannonball River basin.
The governor or the agriculture commissioner, or both, may appoint a representative to serve in
that official's capacity at meetings that official is unable to attend. The eight appointive members
of the commission must be appointed for a term of six years each with the terms of office so
arranged that not more than four terms expire on the first day of July of each odd-numbered
year. Each appointive member must be a qualified elector of the state and is subject to removal
by judicial procedure. In case of a vacancy, the vacancy must be filled by appointment by the
governor for the remainder of the unexpired term. Before entering upon the discharge of official
duties, each appointive member shall take, subscribe, and file with the secretary of state the
oath prescribed for civil officers.
### § 61-02-04.1. Conflict of interest.

1. A member of the commission who has a direct or indirect personal or pecuniary
interest in a matter before the commission must disclose that fact to the commission
and may not participate in or vote on that particular matter.

2. Sections 12.1-13-02, 12.1-13-03, and 48-01.2-08 do not apply to contracts in which a
member of the commission is directly or indirectly interested if the requirements of
subsection 1 have been met.
### § 61-02-05. Chairman of commission.

The governor is the chairman of the commission. The governor shall designate a vice
chairman from the members of the commission. The director of the department of water
resources is the secretary of the commission.
### § 61-02-06. Principal and branch offices of commission.

The commission shall maintain its principal office in the city of Bismarck and may maintain
such branch offices in the state as it may determine.
### § 61-02-07. Quorum - What constitutes.

A majority of the members of the commission constitutes a quorum, and the affirmative or
negative vote of six members is necessary to bind the commission except for adjournment.
### § 61-02-08. Meetings of commission.

The commission shall hold at least one meeting every two months at places as it, by
resolution, may provide. The chairman, or in the chairman's absence or disability, the vice
chairman of the commission, may issue a call for any meeting at any time. The governor or
governor's appointed representative shall preside at all meetings of the commission, and in
case of the absence or disability of the governor and governor's appointed representative, the
vice chairman shall preside.
### § 61-02-09. Commission a state agency - Function as state.

The commission shall be a state agency with all of the powers and authority possessed by
such a state agency in the performance of its duties. The commission may sue and be sued,
plead and be impleaded, and contract and be contracted with. The commission in the exercise
of all its powers and in the performance of all its duties shall be the state of North Dakota
functioning in its sovereign and governmental capacity.
### § 61-02-10. Commission to have seal - Judicial notice.

The commission shall have a seal bearing its name. Such seal shall be affixed to such
records and other instruments as the commission may direct, and all courts shall take judicial
notice thereof.
### § 61-02-11. Commission may adopt rules and regulations - Record kept by commission

- Inspection.
The commission may adopt and enact all rules, regulations, resolutions, and bylaws
deemed suitable and necessary in the conduct of its business and the performance of its duties.
It shall keep accurate minutes and records of all its acts which at all reasonable times shall be
open for public inspection and which it may cause to be published as it may deem desirable.
### § 61-02-12. Compensation and expenses of appointive members of commission.

Each appointive member of the commission is entitled to receive compensation per day in
the amount provided for members of the legislative management under section 54-35-10 and
must be reimbursed for expenses in the amounts provided in sections 44-08-04 and 54-06-09
while attending meetings of the commission or, at the discretion of the member, may receive
either per diem compensation or expenses in those amounts while otherwise engaged in official
business of the commission, including time of travel between home and the place at which the
member performs such duties.

### § 61-02-13. Employment of assistants.

The commission may hire and employ all necessary aid, help, and assistants, including
members of all the professions, for the efficient performance of its powers and duties.
### § 61-02-14. Powers and duties of the commission.

The commission is authorized:
1. To investigate, plan, regulate, undertake, construct, establish, maintain, control,
operate, and supervise all works, dams, and projects, public and private, which in the
commission's judgment may be necessary or advisable:
a. To control the low-water flow of streams in the state.
b. To impound water for the improvement of municipal, industrial, and rural water
supplies.
c. To control and regulate floodflow in the streams of the state to minimize the
damage of floodwaters.
d. To conserve and develop the waters within the natural watershed areas of the
state and, subject to vested rights, to divert the waters within a watershed area to
another watershed area and the waters of any river, lake, or stream into another
river, lake, or stream.
e. To improve the channels of the streams for more efficient transportation of the
available water in the streams.
f. To provide sufficient water flow for the abatement of stream pollution.
g. To develop, restore, and stabilize the waters of the state for domestic,
agricultural, and municipal needs; irrigation; flood control; recreation; and wildlife
conservation by the construction and maintenance of dams, reservoirs, and
diversion canals.
h. To promote the maintenance of existing drainage channels in agricultural lands
and to construct needed channels.
i. To provide more satisfactory subsurface water supplies for the state's
municipalities.
j. To finance the construction, establishment, and extraordinary maintenance of
public works, dams, and irrigation projects, which in the commission's judgment
may be necessary and advisable. The commission may not provide a cost-share
for the costs of operation, regular maintenance, or removal of vegetative
materials and sediment, for assessment drains. Snagging and clearing of
watercourses are not regular maintenance.
k. To provide for the storage, development, diversion, delivery, and distribution of
water for the irrigation of agricultural land and supply water for municipal and
industrial purposes.
l. To provide for the drainage of lands injured by or susceptible of injury from
excessive rainfall or from the utilization of irrigation water, and subject to the
limitations prescribed by law, to aid and cooperate with the United States and any
department, agency, or officer of the United States, and with any county,
township, drainage district, or irrigation district of this state, or of another state, in
the construction or improvement of the drains.
m. To provide water for stock.
n. To provide water for the generation of electric power and for mining and
manufacturing purposes.
2. To define, declare, and establish rules and regulations:
a. For the sale of waters and water rights to individuals, associations, corporations,
limited liability companies, municipalities, and other political subdivisions of the
state and for the delivery of water to users.
b. For the full and complete supervision, regulation, and control of the water
supplies within the state.
c. Governing and providing for financing by local participants to the maximum extent
deemed practical and equitable in any water development project in which the

state participates in cooperation with the United States or with political
subdivisions or local entities.
3. To exercise full power and control of the construction, operation, and maintenance of
works and the collection of rates, charges, and revenues realized from the works.
4. To sell, lease, and otherwise distribute all waters which may be developed,
impounded, and diverted by the commission under this chapter, for the purposes of
irrigation, the development of power, and the watering of livestock, and for any other
private or public use.
5. To exercise all express and implied rights, power, and authority that may be necessary,
and to do, perform, and carry out the expressed purposes of this chapter and the
purposes reasonably implied incidentally to or lawfully connected with the expressed
purposes of this chapter.
6. To acquire, own, and develop lands for irrigation and water conservation and to
acquire, own, and develop damsites and reservoir sites and to acquire easements and
rights of way for diversion and distributing systems.
7. To cooperate with the United States and any department, agency, or officer of the
United States in the planning, establishment, operation, and maintenance of dams,
reservoirs, diversion and distributing systems, for the utilization of the waters of the
state for domestic, municipal, and industrial needs, irrigation, flood control, water
conservation, and generation of electric power and for mining, agricultural, and
manufacturing purposes. The commission may, within the limitations prescribed by
law, acquire, convey, contribute, or grant to the United States, moneys, real and
personal property, including land or easements for dams and reservoir sites and rights
of way and easements for diversion and distribution systems or participate in the cost
of any project.
8. To consider cost-sharing for water quality improvement projects.
### § 61-02-14.1. Release or assignment of easements - Procedure.

The commission may, when it deems such action to be in the best interests of the state, for
good and valuable consideration, release easements granted to the state for the construction,
operation, and maintenance of dams, along with access thereto, if such dams have not been
constructed within ten years of the granting of the easement or if such dams are no longer
useful. The commission may also assign such easements to a political subdivision if it
determines the assignment would be in the best interests of the state. Any release or
assignment shall be in the name of the state of North Dakota by the governor and attested by
the secretary of state.
### § 61-02-14.2. Commission contracts may be executed by director.

The director of the department of water resources, or the director's authorized designee,
may execute contracts approved by the commission.
### § 61-02-14.3. Commission agreements - Terms, conditions, and reapplication.

An agreement for funding which is approved by the commission to fund a water project
under this chapter must require a progress report to the commission at least every four years if
the term of the project exceeds four years. If a progress report is not timely received or, if after a
review of a progress report, the commission determines the project has not made sufficient
progress, the commission may terminate the agreement for project funding. The project sponsor
may submit a new application to the commission for funding for a project for which the
commission previously terminated funding.
### § 61-02-14.4. Carryover projects - Reporting requirements to the legislative

management.
1. The state water commission shall report quarterly to a legislative committee
designated by the legislative management:

a. Each project the state water commission has designated as a carryover project
that has had a cost-share agreement in place for at least four years;
b. The amount of funds still committed for each carryover project included in the
report;
c. The total amount of funds reallocated or made available from carryover projects
included in a previous report to other projects since the commission's preceding
report; and
d. The status of each carryover project for which the committee has made a
recommendation under subsection 2 since the commission's preceding report.
2. The legislative committee designated by the legislative management to receive the
state water commission's reports may make a recommendation to the state water
commission that a carryover project included in a report be terminated under section
available for projects with the same general purpose as the carryover project.
### § 61-02-15. Provisions of chapter not to limit or deprive state department of health of

authority.
Repealed by S.L. 1975, ch. 575, § 2.
### § 61-02-16. Preference is given to individual farmer or irrigation district when planning

or constructing irrigation projects.
In planning and constructing irrigation projects, it shall be the policy of the commission to
give preference to the individual farmer or groups of farmers or irrigation districts who intend to
farm the land themselves.
### § 61-02-17. Records, accounts, and statements of works and projects undertaken -

Filed with office of management and budget.
The commission shall keep full and complete accounts and records of all matters and things
relating to works and projects undertaken, established, and maintained by the commission and
shall prepare annual balance sheets, income, and profit and loss statements, showing the
financial condition of each project, and shall file copies thereof with the office of management
and budget for public inspection at all reasonable times by any interested parties or citizens of
the state.
### § 61-02-18. Application for irrigation project - Fees to accompany - Surveys made.

Upon application by any landowner, holder of any easement, or holder of any lease of five
or more years' duration, or of any group or association of such landowners, easement holders,
or leaseholders for an irrigation project, the commission shall make such preliminary
engineering, soil survey, and other investigations as may be necessary to determine the
feasibility of any such proposed project. Such applicant shall submit with the application such
fees as the commission shall establish for projects of different classes. Following such
preliminary survey and upon further application by the applicant, the commission shall enter into
a contract with such applicant for a complete engineering, soil survey, and other investigations
of said project. The soil survey shall meet such standards as are prescribed by the bureau of
chemistry and soils of the federal government and the North Dakota state university of
agriculture and applied science. The engineering survey shall be of sufficient detail and quality
to enable the applicant to comply with the requirements for obtaining a permit to appropriate
water, and to enable any competent contractor to estimate costs and quantities of material
needed within reasonable limits, and to install such project without further engineering service.
The contract for such engineering service between the applicant and the commission shall
require the commission to pay not more than seventy-five percent of the cost of such detailed
engineering survey and the drawing of the necessary plans and specifications, with not less
than twenty-five percent to be paid by the applicant.

### § 61-02-19. Works of commission may include preparation of land for irrigation when

project undertaken by commission.
In any irrigation project undertaken by the commission serving a single individual, or a
group of individuals owning irrigable lands, the works of the commission may include
preparation of the land for irrigation.
### § 61-02-20. Approval of commission necessary before constructing certain size dams -

Inspection during construction.
Repealed by S.L. 1981, ch. 365, § 8.
### § 61-02-21. Sewage and waste disposal or discharge - Water supply plant - Approval of

commission required.
Repealed by S.L. 1975, ch. 575, § 2.
### § 61-02-22. Acquisition of necessary property and power of condemnation.

The commission has full power and authority to acquire by purchase or exchange, upon
such terms and conditions as the commission determines necessary and proper, and by
condemnation in accordance with and subject to chapter 32-15 and the provisions of all laws
applicable to the condemnation of property for public use, any lands, rights, water rights of
whatever character, easements, franchises, and other property determined necessary or proper
for the construction, operation, and maintenance of works. This chapter does not require the
commission, in condemning any riparian water right, to condemn also the riparian land to which
such right may be incident. The title to all property purchased, acquired, or condemned must be
taken in the name of the commission and held in trust for, and for the use and benefit of, the
people of this state.
### § 61-02-23. Actions to acquire property rights.

The commission shall have full power and authority:
1. To institute, maintain, and prosecute to final determination in any of the courts of this
or any other state, or in any of the federal courts, any and all actions, suits, and special
proceedings that may be necessary:
a. To enable it to acquire, own, and develop lands for irrigation and water
conservation, water distribution, and other necessary purposes. The commission
may sell such lands upon such terms and conditions as it may prescribe and may
own and hold title to lands for damsites, reservoir sites, water rights, easements,
and rights of way for diversion and distributing systems, lateral ditches, and other
means for the distribution of waters in this state, and for any other necessary
purposes.
b. To adjudicate all water rights upon any stream, watercourse, or source of water
supply from which are derived the waters for such reservoir, diversion and
distributing systems, lateral ditches, and other means of distribution.
2. To join in any action any and all owners of vested water rights acquired by any person,
association, corporation, or limited liability company, so that adjudication may be had
of all surplus water upon all of the watercourses and sources, water supplies or any
project constructed under the supervision and control of the commission.
3. To join all persons interested as parties in all actions or condemnation proceedings
affecting the title of, or holding liens upon, the property sought to be acquired as
disclosed by the public records, and the court in such actions or special proceedings
shall implead all parties necessary for a full and final determination of all issues upon
their merits for the partition and distribution of damages awarded. In the event of
controversy between such parties, the court may direct the amount of damages
awarded to be paid in or deposited with the clerk of court to abide the result of further
appropriate proceedings either in law or in equity. The taking possession of property
sought to be condemned shall not be delayed by reason of any dispute between rival

claimants or the failure to join any of them as parties to such action or condemnation
proceedings.
### § 61-02-23.1. Condemnation by the water commission.

Whenever a right of way is to be taken by condemnation proceedings for any purpose
authorized by chapters 61-24.3 or 61-24.6, the commission may take possession of the right of
way after making a written offer to purchase and depositing the amount of the offer with the
clerk of the district court of the county wherein the right of way is located. The clerk shall
immediately notify the property owner in writing of the deposit. Within thirty days after receiving
notice, the property owner may appeal to the district court by serving notice of appeal upon the
water commission and the matter must be tried at the next term of court with a jury, unless a jury
is waived, in the manner prescribed for trials under chapter 32-15.
### § 61-02-23.2. Devils Lake outlet - Eminent domain - Design and build construction.

In the construction of an outlet from Devils Lake, the commission:
1. Shall make a reasonable and diligent effort to acquire the property interests needed by
negotiation. The commission is deemed to have made a reasonable and diligent effort
if it has contacted or attempted to contact the owner of the property interest needed at
least three times over a thirty-day period. If the commission is unable to acquire the
interest needed by negotiation, then it may take possession of the interests needed
after making a written offer to purchase and depositing the amount of the offer with the
clerk of the district court of the county in which the property interest is located. The
amount of the offer must be at least the average value per acre of comparable
property. The clerk shall immediately notify the property owner in writing of the deposit.
Within thirty days after receiving notice, the property owner may appeal to district court
by serving notice of appeal upon the commission and the matter must be tried in the
manner prescribed under chapter 32-15.
2. May issue, when it determines that it would be advantageous to the state or that it is
necessary in order to construct the outlet in a timely manner, a request for proposals to
design and build the outlet. The request for proposals must require that each proposal
submitted contain a single price that includes the cost to design and build the outlet.
Neither chapter 48-01.2 or 54-44.7, nor any other law requiring competitive bidding
applies to the construction of the outlet if the commission determines to use the design
and build procedure. The commission shall select the proposal that it determines is the
most advantageous to the state.
### § 61-02-23.3. Construction and operation of the Devils Lake outlet - Authorization -

Agreement.
The state water commission may do all things reasonably necessary to construct an outlet
from Devils Lake, including executing an agreement with the federal government in which the
state water commission agrees to hold the United States harmless and free from damages,
except for damages due to the fault or negligence of the United States or its contractors. The
director of the department of water resources may employ full-time personnel and other
personnel as necessary for the operation and maintenance of the Devils Lake outlet within the
limits of legislative appropriations for that purpose. Notwithstanding section 61-02-64.1, funds
disbursed from the contract fund and appropriated for the purposes of this section may be used
for salaries, equipment, operations, and maintenance costs relating to the Devils Lake outlet.
### § 61-02-24. Cooperation and coordination with entities.

1. The commission may investigate, plan, cooperate, and make all contracts or compacts
necessary or requisite:
a. With the United States and any department, agency, or officer thereof.
b. With the states of Minnesota, South Dakota, Montana, and Wyoming, or any
political subdivision thereof, and with any other state, and with any department or
officer or political subdivision of any state.

c. With Canada or any of its provinces, and with any agency, department, or officer
of Canada or any of its provinces.
d. With federally recognized Indian tribes, or any agency, department, or officer
thereof.
2. The powers granted by this section shall extend to all waters, whether considered as
intrastate, interstate, or international. The commission is specially authorized and
empowered to cooperate with the United States or any of its agencies concerned with
investigating, planning, conserving, utilizing, developing, and handling water in any
form for purposes of water conservation, flood control, prevention of water pollution, or
soil reclamation, or with any other resources of the state, and concerned with the
administration of the public works program of the state or any part thereof. The
commission is authorized to act and to contract fully with the United States, or with any
department, agency, or officer thereof, with full power of purchase, sale, or lease to
carry out, develop, or administer any federal project within this state or partly within the
state, and also to accept and to use any funds provided by the United States or any
agency thereof for any such purposes.
### § 61-02-24.1. Cooperation and participation of political subdivisions and federally

recognized Indian tribes.
Any political subdivision, including a county, township, city, park district, and water resource
district, and federally recognized Indian tribes, may separately or jointly, with each other, the
state of North Dakota through the commission, or federal departments or agencies, investigate,
plan, and do all things necessary for participating in or undertaking underground or surface
water surveys, development, construction, reconstruction, and maintenance of works, dams,
and projects for the beneficial utilization and control of water resources, and may enter into
contracts with the commission to pay rents, charges, or other payments for the use of works of
the commission.
### § 61-02-24.2. Payments in lieu of real estate taxes.

For land acquired for the Devils Lake project, the state water commission shall make
payments in lieu of real estate taxes to the counties in which the property is located in the same
manner and according to the same conditions and procedures as provided in chapter 57-02.1
for payments in lieu of real estate taxes by the state game and fish department.
### § 61-02-25. Duties of state agencies acting through interstate compacts or agreements.

Every state officer, department, board, and commission authorized by any law of this state
to act upon or to be concerned with any interstate commission involving any interstate compact,
or to act upon any foreign commission involving any foreign compact, or with any federal
agency or department of the United States, the subject matter of which in any way concerns or
involves water conservation, flood control, irrigation, water pollution or contamination, or the
exercise of the powers and duties granted to the commission by this chapter, first shall submit to
the commission the plans, purposes, and contemplated action and shall receive the approval of
the commission therefor before making any agreement, contract, purchase, sale, or lease, for
any of said purposes. The commission may give its aid and assistance to any state agency so
acting with respect to any interstate compact.
### § 61-02-26. Duties of state agencies concerned with intrastate use or disposition of

waters.
Every state officer, department, board, and commission authorized by any law of this state
to take any action, perform any duties, or make any contract concerning the use or disposition
of waters, or water rights, within the state first shall submit to the department of water resources
any plans, purposes, and contemplated action with respect to the use or disposition of the
waters, and except as provided in this chapter, must receive the consent and approval of the
department of water resources before making any agreement, contract, purchase, sale, or lease
to carry into execution any works or projects authorized under the provisions of this chapter.

### § 61-02-27. Proposals with respect to use or disposition of waters to be presented to

department of water resources.
All persons, when concerned with any agreement, contract, sale, or purchase, or the
construction of any works or project which involves the use and disposition of any water or
water rights, shall present to the department of water resources all proposals with respect to the
use or disposition of any waters before making any agreement, contract, purchase, sale, or
lease regarding the waters.
### § 61-02-28. Plans, investigations, and surveys concerning use of waters - Special

powers of commission.
The commission may make plans, investigations, and surveys concerning the use of any
and all waters, either within or without this state, for purposes of establishing, maintaining,
operating, controlling, and regulating systems of irrigation, municipal, domestic, industrial,
recreational, and fish and wildlife works and projects in connection therewith within the state.
The commission shall have all necessary powers of purchasing, selling, leasing, and assigning
in accordance with chapter 61-04, rights and interests in the use or in the appropriation of
waters for which it has filed a declaration of intent pursuant to section 61-02-30, or obtained a
conditional water permit for projects or works and shall possess full authority and jurisdiction to
exercise and assert actual control over the corpus of all of such waters, and to regulate the
diversion thereof subject to rules and methods prescribed by the commission. This power and
authority shall include full right to contract and agree with any person, association, agency, or
entity concerning water rights held by such person, association, agency, or entity through which
the commission may be given full authority and jurisdiction over such water and water rights. In
connection therewith the commission may coordinate, subordinate, supplement, and act jointly
or subordinately with the United States, and any agency or department thereof, covering or
concerning any federal project affecting water use, works, or projects in connection therewith.
### § 61-02-29. Commission to have full control over unappropriated public waters of state.

The commission shall have full control over all unappropriated public waters of the state,
whether above or under the ground, for which it has filed a declaration of intention pursuant to
section 61-02-30, to the extent necessary to fulfill the purposes of this chapter.
### § 61-02-30. Commission acquiring water rights and administering provisions of chapter

- Declaration of intention.
In acquiring the rights and administering the terms of this chapter, the commission may
initiate a right to waters of this state by executing a declaration in writing of the intention to store,
divert, or control the unappropriated waters of a particular body, stream, basin, or source,
designating and describing in general terms the waters claimed, means of appropriation, and
location of proposed use, and shall cause the declaration to be filed in the department of water
resources. The department shall issue a conditional water permit to the commission consistent
with the terms of the declaration of intention, which vests in the commission on the date of the
filing of the declaration. The commission also shall file in the department copies of the
commission's plans and specifications involved in completing any project for the appropriation of
water which the commission intends to construct. Except as provided by this section, water
rights must be acquired by any person, association, firm, corporation, limited liability company,
municipality, or state or federal agency, department, or political subdivision in the manner
provided by chapter 61-04.
### § 61-02-31. Priority of a water right dates from when.

Repealed by S.L. 1983, ch. 676, § 38.
### § 61-02-32. Modification of plans by commission regarding project to appropriate

waters - Filing declaration of intention.
If the commission modifies its plans in connection with any proposed project for which the
commission filed a declaration of intention to appropriate waters, the commission shall file in the

department of water resources a declaration releasing all or part of the waters affected by the
declaration.
### § 61-02-33. Commission to file declaration of completion of appropriation with

department of water resources.
Upon completing the construction of works and application to beneficial use of the waters
described in the declaration provided in section 61-02-30, the commission shall file in the
department of water resources a declaration of completion of the appropriation, reciting the
matters contained in the original declaration of intention to appropriate and the conditional water
permit for the works obtained from the department.
### § 61-02-34. Declaration of intention to appropriate or release waters or completion of

appropriation as evidence.
A certified copy of the record of the commission's declaration of intention to appropriate
waters, or of the release of all or part of said waters, or of the completion of appropriation, shall
be received as competent evidence in all courts and shall be deemed prima facie proof of all
matters recited therein.
### § 61-02-35. When right of commission to waters attaches - Continuation of authority

and jurisdiction.
The right of the commission to the waters within this state acquired as provided in this
chapter for the purposes defined in this chapter shall attach at and from their source and while
flowing in the streams, traveling to the means of control, as well as when actually confined by
such means. The authority and jurisdiction of the commission shall continue over such waters
after they are released for purposes of use and shall continue to such places of use, and the
commission, through and by officers and agents under its authority, may continue to exercise
control over such waters and may prevent the diversion thereof without permission first
obtained. The commission may reclaim and possess all waters furnished or supplied by it
seeping or overflowing from the previous place of use.
### § 61-02-36. Natural streams employed as a means of diversion of water - Adopting

methods to determine natural flow.
Wherever natural streams are employed as a means of diversion of water from the place of
confinement to the place of use, the commission shall adopt proper methods and means of
determining the natural flow of such streams when the amount of such natural flow is insufficient
to satisfy or fill the needs of appropriators prior in right.
### § 61-02-37. Headgates and measuring devices maintained by appropriators of natural

streams - Commission adopting rules preventing diversion of water.
All appropriators of the natural flow of natural streams shall maintain headgates and
measuring devices at their respective points of diversion for the purpose of enabling the
commission or its authorized agents to determine the amount of water being diverted at any
time. The commission may adopt and exercise any method or act to prevent the diversion of
any waters under its control without permission first obtained.
### § 61-02-38. Holder of water right on natural stream may turn control over to

commission.
Any holder of a water right on a natural stream may agree with the commission that it shall
have control of the diversion of waters due under such right. In such an event, the commission,
through its officers and agents, may exercise the same authority over the waters due said
appropriator and may cause them to be delivered to the appropriator in the same manner as in
case of waters appropriated by the commission.

### § 61-02-39. Commission may adjust plans and operation of project to obtain financial

aid from United States.
For the purpose of obtaining financial aid from the United States, the commission may
adjust the plans and operation of any project created under this chapter to conform to the laws
and regulations of the federal government and the supervision of any board, bureau, or
commission constituted under such authority and may exercise such powers whenever
conferred.
### § 61-02-40. Authority of commission to extend and be applied to natural waters of state.

The authority of the commission conferred by the provisions of this chapter shall extend and
be applied to any right to the natural flow of the waters of this state which it may acquire by
condemnation, purchase, exchange, appropriation, or agreement.
### § 61-02-41. Surveys for the diversion of waters.

For the purpose of regulating the diversion of the natural flow of waters, employees of the
department of water resources may enter upon the means and place of use of all appropriators
for the purpose of making surveys of respective rights and seasonal needs.
### § 61-02-42. Commission to take into consideration decrees of court adjudicating waters

of natural stream.
The commission shall take into consideration the decrees of the courts of this state having
jurisdiction which purport to adjudicate the waters of any natural stream or its tributaries, and a
fair, reasonable, and equitable reconciliation shall be made between the claimants asserting
rights under different decrees and between decreed rights and asserted rights of appropriation
not adjudicated by any court.
### § 61-02-43. Commission may hold hearings relating to rights of claimants - Notice -

Findings made.
The commission may hold hearings relating to the rights of respective claimants after first
giving such notice as it deems appropriate, and it may make findings of the date and quantity of
appropriation and use of all claimants, which it shall recognize and observe in diverting the
waters which it owns. The commission may police and distribute to the owner of any such
recognized appropriation the waters due the owner upon request of such owner and under
terms agreed upon.
### § 61-02-44. Controlling natural flow of stream deemed police power - Water

commissioners not to deprive commission.
The commission, when engaged in controlling and diverting the natural flow of any stream
under the authority granted by the provisions of this chapter, shall be deemed to be exercising a
police power of this state. Water commissioners appointed by any court shall not have any
authority or jurisdiction to deprive the commission of any of the waters owned or administered
under agreement with respective owners, but the owner of any prior or vested right contending
that the commission is not recognizing and respecting such right may resort to a court of law or
equity for the purpose of determining whether or not the rights of said claimant have been
invaded, and the commission shall observe the terms of any final decree.
### § 61-02-45. Commission may divert at any place on stream after impounding or

acquiring the right of appropriation.
On the commission's impounding or acquiring the right of appropriation of the waters of any
stream, it may divert or authorize the diversion at any point on said stream, or any portion
thereof, when the same may be done without injury to any prior appropriator or riparian owner
whose rights shall not have been acquired by the commission as provided in this chapter.

### § 61-02-46. Commission may issue bonds - Legislative authorization - Payment

restricted.
1. The commission may provide by resolution, at one time or from time to time, for the
issuance of state water development revenue bonds for the purpose of paying the cost
of any one or more of the works authorized by this chapter. The commission may
provide for the refunding and refinancing of the bonds from time to time as often as it
is advantageous and in the public interest to do so.
2. If the principal amount of bonds to be issued for any one works pursuant to this
chapter will exceed in the aggregate two million dollars, no bonds may be issued to
finance that works unless the legislative assembly authorizes the works and declares
the works to be in the public interest.
3. Bonds issued under this chapter shall not be in any way a debt or liability of this state
and shall not constitute a loan of the credit of this state or create any debt or debts,
liability or liabilities on behalf of this state, or be or constitute a pledge of the faith and
credit of this state, but all such bonds shall be payable solely from funds or revenues
pledged or available for their payment as authorized in this chapter. The bonds shall
not constitute a charge, lien, nor encumbrance, legal or equitable, upon any property
of the commission, other than funds or revenues pledged for their payment. Each bond
shall recite in substance that the bond, including interest thereon, is payable solely
from the funds or revenues pledged to the payment thereof, and that the bond does
not constitute a debt of this state or of the commission within the meaning of any
constitutional or statutory limit.
### § 61-02-47. When bonds to mature - Callable before maturity.

The bonds which may be issued by the commission shall mature at such time or times,
either serially or at one time, in not more than forty years from their date, or dates, as may be
fixed by the resolution of the commission, but may be made callable before maturity, if so stated
in the resolution and on the face of each bond.
### § 61-02-48. Commission to determine interest rate, form, denomination, and execution

of bonds.
The commission shall determine the rate of interest bonds issued under this chapter shall
bear, the time or times of payment of such interest, the form of the bonds, and the manner of
executing the bonds, and shall fix the denomination or denominations of the bonds and the
place or places of payment of principal and interest thereon, which may be at any bank or trust
company within or without this state. The bonds shall be sold at public sale or private sale and
at such price or prices as the commission shall determine.
### § 61-02-49. Officers whose names are on bonds ceasing to be officers before delivery

of bonds - Validity of bonds.
In case any of the officers whose signatures appear on the bonds or coupons provided for in
this chapter shall cease to be such officers before the delivery of such bonds, such signatures
nevertheless shall be valid and sufficient for all purposes, the same as if such officers had
remained in office until such delivery.
### § 61-02-50. Bonds issued are negotiable.

Repealed by S.L. 1983, ch. 676, § 38.
### § 61-02-51. How bonds may be secured.

The bonds provided for in this chapter may be secured by works or lands, and the income
derived therefrom, and other funds as the commission may pledge, and the funds received from
the sale or disposal of water and from the operation, lease, sale, or other disposition of the
works, lands, property, and facilities to be acquired out of the proceeds of the bonds and as
provided in this chapter.

### § 61-02-52. Commission may provide for registration of bonds.

Provision may be made by the commission for the registration of any of the bonds as
provided by chapter 21-03.1.
### § 61-02-53. Issuance and sale of bonds - Proceeds from sale - Use.

The bonds authorized under this chapter may be issued and sold from time to time and in
amounts determined by the commission. The commission may, subject to the provisions of
section 61-02-48, provide for the sale of the bonds in such manner and for such price as it may
determine to be for the best interests of the state. The proceeds of the bonds shall be used
solely for the payment of the cost of works authorized by this chapter plus costs of issuance,
interest during construction, and any reasonably required reserve funds, and shall be paid out in
such manner and under such restrictions as the commission may provide.
### § 61-02-54. Resolution providing for issuance of bonds.

Each resolution providing for the issuance of bonds provided for in this chapter shall set
forth the purpose or purposes for which the bonds are to be issued, the provisions for the
payment of the bonds, and the revenues or other funds pledged to secure the payment of the
bonds.
### § 61-02-55. Issuance of temporary bonds.

Prior to the preparation of definitive bonds, the commission may issue or provide for the
issuance of temporary bonds, exchangeable for definitive bonds when the definitive bonds have
been executed and are available for delivery. Temporary bonds may be issued without any other
proceedings or the happening of any other condition or thing specified and required by this
chapter, except that if legislative authorization is required for the issuance of the definitive bonds
pursuant to section 61-02-46, the authorization must be received before the temporary bonds
may be issued.
### § 61-02-56. Bond guaranty or insurance - Method.

Whenever the commission shall find it necessary to insure or guarantee the payment of all
or a part of the principal or interest of any series of bonds, it may enter into an agreement to
place under trust indenture or agree to deposit in a trust fund moneys now or hereafter
appropriated, to guarantee and insure the payment of the interest on and principal of the bonds.
From and with moneys thus appropriated, the commission may guarantee or insure, or agree to
pay, or pay the interest on and principal of the bonds. The appropriation of such funds, and the
use thereof by the commission to guarantee or insure the payment of any of its bonds, shall not
be construed to be pledging the credit of the state of North Dakota nor the guaranteeing by the
state of any bonds. The commission may also enter into an agreement with a private bond
insurer or with a bank or other credit enhancement provider for bond insurance, a guaranty, a
letter of credit, or any other credit enhancement that the commission may find to be
advantageous or necessary to insure or guarantee the payment of the interest on or the
principal of the bonds. The cost of any credit enhancement may be paid with bond proceeds or
other funds available for that purpose.
### § 61-02-57. Moneys appropriated to pay interest and principal of bonds available as a

revolving fund.
Moneys appropriated to enable the commission to guarantee the payment of the interest or
principal of its bonds shall be available to the commission as a continuing revolving fund, and
moneys so appropriated, and any unexpended balances thereof, including interest on the
moneys and unexpended balances, shall not revert to the state general fund at the end of any
biennial fiscal period but shall be available for use by the commission to insure and guarantee
the payment of, or pay, to the extent provided in this chapter, the interest and principal of its
bonds until otherwise required by law.

### § 61-02-58. Lien upon bond proceeds.

All moneys received from bonds of any series issued pursuant to this chapter shall be used
solely for the purpose of paying the cost of the works or projects for the construction of which
the bonds have been issued, or for the purpose of paying costs of issuance, interest during
construction, and establishing any reasonably required reserve funds. There shall be a lien
upon such moneys, until so used in favor of the holders of the bonds or the trustee provided for
in this chapter in respect to the bonds.
### § 61-02-59. Series of bonds may be secured by trust indenture.

In the discretion of the commission, any series of bonds may be secured by a trust
indenture by and between the commission and a corporate trustee, which may be any trust
company or bank having the powers of a trust company within or outside of the state.
### § 61-02-60. Trust indentures - Where filed - Filing constitutes constructive notice.

Each trust indenture, or an executed counterpart thereof, shall be filed in the office of the
secretary of state. The filing of a trust indenture, or an executed counterpart thereof, in the office
of the recorder of the county in which the property covered by said trust indenture is located
shall constitute constructive notice of the contents thereof to all persons from the time of such
filing, and no recording of such trust indenture or the contents thereof shall be necessary.
### § 61-02-61. Resolution or indenture may contain provisions protecting bondholders -

Expenses incurred in carrying out indenture.
Either the resolution providing for the issuance of bonds or the trust indenture may contain
such provisions for protecting and enforcing the rights and remedies of the bondholders as may
be reasonable and proper. No enumeration of particular powers granted may be construed to
impair any general grant of power contained in this chapter. All expenses incurred in carrying
out the provisions of the resolution or trust indenture may be treated as a part of the cost of
maintenance, operation, and repair of the works affected by the resolution or trust indenture.
### § 61-02-62. Powers of commission in issuance of bonds.

In connection with the issuance of any bonds for the purpose of paying in whole or in part,
or as supplemented by a grant from the United States or any instrumentality or agency thereof,
the cost of any works or project, or in order to secure the payment of the bonds, the commission
may:
1. Pledge all or any part of the income, profit, and revenue of the works or project, and all
moneys received from the sale or disposal of water, use of water, water storage, or
other service, and from the operation, lease, sale, or other disposition of all or any part
of the works or project, or other funds as the commission may determine.
2. Covenant against pledging all or any part of the income, profit, and revenue of the
works or project and all moneys received from the sale or disposal of water, use of
water, water storage, or other service, and from the operation, lease, sale, or other
disposition of all or any part of the works or project.
3. Covenant against mortgaging all or any part of the works or project or against
permitting or suffering any lien thereon.
4. Covenant to fix and establish such prices, rates, and charges for water and other
services made available in connection with the works or project as to provide at all
times funds together with other funds the commission may pledge which will be
sufficient:
a. To pay all costs of operation and maintenance of the works or project, as
permitted under this chapter, together with necessary repairs thereto;
b. To meet and pay the principal and interest of all the bonds as they severally
become due and payable; and
c. To create such reserves for the principal and interest of all the bonds and for the
meeting of contingencies in the operation, repair, replacement, and maintenance
of the works or project as the commission shall determine.

5. Make such further covenants as to prices, rates, and charges as the commission shall
determine.
6. Create special funds, in addition to those required by this chapter, for the meeting of
contingencies in the operation and maintenance of the works or project and to
determine the manner in which, and the depository or depositories in which, the funds
shall be deposited and the manner in which the same shall be secured. Any bank or
trust company incorporated under the laws of this state may act as the depository and
shall furnish such indemnifying bonds or pledge such securities as may be required by
the commission on all deposits exceeding the sum of five thousand dollars.
7. Provide for the replacement of lost, destroyed, or mutilated bonds.
8. Covenant against extending the time for the payment of the principal or interest on any
bonds, directly or indirectly, by any means or in any manner.
9. Prescribe and covenant as to the events of default and the terms and conditions upon
which any or all of the bonds shall become, or may be declared, due before maturity,
and as to the terms and conditions upon which a declaration and its consequences
may be waived.
10. Covenant as to the rights, liabilities, powers, and duties arising upon the breach by it of
any covenant, condition, or obligation.
11. Vest in a trustee or trustees the right to enforce any covenant made to secure or to pay
the bonds, or to foreclose any trust indenture in relation thereto, provide for the powers
and duties of the trustee, or trustees, and limit the liabilities thereof, and provide the
terms and conditions upon which the trustee or trustees or the holders of bonds or any
proportion of them may enforce any covenant or exercise the right of foreclosure.
12. Make covenants and do any and all such acts and things as may be necessary or
convenient or desirable in order to secure the bonds, or, in the absolute discretion of
the commission, to make the bonds more marketable, notwithstanding that such
covenants, acts, or things may not be enumerated or expressly authorized in this
chapter.
13. Do all things in the issuance of the bonds, and in providing for their security, that may
not be inconsistent with the Constitution of North Dakota.
### § 61-02-63. Mortgage of commission - Contents - Purchaser at foreclosure sale -

Rights.
Any purchaser at any sale of any works or project pursuant to a judgment or decree in an
action to foreclose a trust indenture conveying in trust or mortgaging any works or project
financed with bonds issued by the commission as authorized by this chapter shall obtain title to
the works or project free from any trust or other obligation of the commission, the state of North
Dakota, or the public thereof, as to its operation, maintenance, use, or disposition except the
obligation to use all water impounded in the works or project for sale, rental distribution, or other
beneficial use.
### § 61-02-64. Fund created by commission - Depository.

The commission shall have a fund to be known as the "contract fund". The moneys in the
contract fund shall be deposited in the state treasury. The contract fund shall have such
accounts as the commission may determine. The use or disposition of such accounts, including
the pledging thereof for the security of and payment on one or more series of bonds, shall be
determined by the commission.
### § 61-02-64.1. Contract fund - Purpose - Reimbursements to be deposited with the state

treasurer.
Unless otherwise provided under the terms of a bond resolution or trust indenture adopted
by the commission pursuant to this chapter, all contractual obligations of the commission,
excepting salaries and expenses of commission employees and the cost of any office supplies,
materials, and equipment, must be paid from the contract fund. The moneys in the contract fund
must be paid out or disbursed in the manner determined by the commission. Any moneys paid

to the commission by any department, agency, or political subdivision of this or another state or
of the United States or any person, corporation, or limited liability company to meet its part of
the cost of a water project, shared with the commission on a matching basis, and as determined
by a contract entered into with the commission, must be held pursuant to the terms of the
resolution or trust indenture adopted by the commission pursuant to this chapter or deposited
with the state treasurer. Moneys deposited with the state treasurer are appropriated to the
commission and must be credited to the contract fund.
### § 61-02-64.2. Repayment of loan proceeds and reimbursements deposited in resources

trust fund.
Notwithstanding section 61-02-64.1, any repayment made after January 1, 1991, of any
loans disbursed from the contract fund or resources trust fund and any moneys paid to the state
or the commission after January 1, 1991, to reimburse the commission for moneys, other than
bond proceeds, used for municipal, rural, and industrial water supply projects must be deposited
in the resources trust fund in the state treasury.
### § 61-02-65. Commission to have complete system of accounting - Contents.

The commission shall have a complete system of accounting to show the total expenditure
of and investment in each project and the total revenue derived therefrom and shall prepare
periodic reports giving the financial statement of each project and the status of all projects
together.
### § 61-02-66. Construction fund - Contents - Disbursements - Surplus remaining.

Repealed by S.L. 1995, ch. 588, § 18.
### § 61-02-67. Revenue bond payment fund - Contents.

Repealed by S.L. 1995, ch. 588, § 18.
### § 61-02-67.1. Revenues and funds available to pay bonds.

Bonds issued under this chapter are payable solely from:
1. Revenues to be received by the commission from the operation of a works financed
with the bonds.
2. Any other revenues available to the commission.
### § 61-02-68. State treasurer to pay interest on bonds - Redemption of bonds -

Appropriation.
Repealed by S.L. 1995, ch. 588, § 18.
### § 61-02-68.1. Borrowing on interim notes - Expenses paid and loans made from

proceeds - Issuance of notes.
The commission, pursuant to appropriate resolution, and in order to carry out the business
of developing the water resources of this state as provided in this chapter, may borrow money
and issue interim financing notes (the terms "interim notes" or "notes", unless the context
otherwise requires, may be used in sections 61-02-68.1 through 61-02-68.19 in lieu of the term
"interim financing notes") in evidence thereof in order to provide owners with construction period
financing. The construction period financing may include the costs of construction of works or
projects, funding of debt service reserves and capitalized interest, and the payment of the costs
of issuance.
### § 61-02-68.2. Interim financing notes guaranteed by United States agency or

instrumentality - Limitations.
In addition to its other powers, the commission may enter into interim financing and loan
agreements with any owner or owners to loan the proceeds of the commission's interim
financing notes to any owner or owners for works or projects authorized by this chapter
anywhere within this state and to adopt the necessary resolution therefor, without regard to the

limitations, provisions, or requirements of any other law, except those of this chapter. Before any
such agreement can be entered into, an agency or instrumentality of the United States
government, including the farmers home administration or the old west regional commission, or
any agency of this state, including the Bank of North Dakota, must have committed itself to
make a grant or loan to such owner or owners. Under this section, the commission may only
provide interim financing less than or equal to the federal or state grant or loan commitment on
each project and may not apply the proceeds of such notes and financing to any purpose other
than expenses allowed by section 61-02-68.1 and the project or works for which the loan
agreement is made. Notes authorized by sections 61-02-68.1 through 61-02-68.13 shall not be
considered revenue bonds under section 61-02-46, and the proceeds of any such notes shall
not be part of any commission fund as enumerated in section 61-02-64, and need not be
deposited in the state treasury.
### § 61-02-68.3. Interim financing - Proper authority required.

Before entering into any loan agreement under section 61-02-68.2, the commission shall be
satisfied by opinion of the attorney general, by an examination of relevant charters, resolutions,
minutes, and other documents, or by other sufficient means that the owner or owners receiving
such interim financing have the authority and power to construct the project or works, borrow
these funds, and enter into the loan agreement. The commission shall also be so satisfied that
all procedures, resolutions, and other things necessary to exercise such authority and power
have been followed or properly performed.
### § 61-02-68.4. Interim financing - Independent review of feasibility of project.

Before issuing any interim financing notes pursuant to section 61-02-68.1, the commission
shall conduct a review of the feasibility of the project or works to ensure that projected water
consumption, operating costs, construction costs, revenues, and other statistics are reliable and
that the project will be able to pay its expenses. The commission shall state the findings of its
review in a motion entered in the minutes of its proceedings.
### § 61-02-68.5. Interim financing - Proceeds pledged as security - Assignment to

commission of rights to proceeds.
Any interim financing agreement pursuant to section 61-02-68.2 shall provide that the owner
or owners receiving the proceeds of such interim financing shall pledge and dedicate the
proceeds of its loan or grant from the United States or the state as security for the interim
financing notes issued pursuant to the loan agreement. In addition, the execution of any interim
financing agreement under section 61-02-68.2 shall constitute an assignment to the commission
of the right to receive the proceeds of the federal or state loan or grant so far as is necessary to
secure the notes issued pursuant to the agreement and in preference to any other obligation
whatsoever of the owner or owners receiving the interim financing. It shall not be necessary for
the financing agreement, trust indentures, or any other document relating to the interim
financing agreement to be filed or recorded in order for the assignment to the commission to be
perfected.
### § 61-02-68.6. Terms of interim financing notes - Extension of maturity dates.

Any resolution authorizing the issuance of interim financing notes shall specify the principal
amount, rate of interest, and maturity date, but not to exceed three years from the date of issue,
and such other terms as may be specified in such resolutions. The time of payment of any such
notes may be extended for a period of not exceeding two years from the maturity date thereof.
### § 61-02-68.7. Pledge of revenues to secure interim financing notes.

All interim financing notes and the interest thereon must be secured by a pledge of, and be
payable from, any grant or loan to be made by an agency or instrumentality of the United States
government or the state of North Dakota, as specified in section 61-02-68.2, and in connection
with such project or works.

### § 61-02-68.8. Additional covenants and conditions to secure interim financing notes.

The commission, in order to further secure the payment of the interim financing notes, is
authorized and empowered to make any other or additional covenants, terms, and conditions,
and to do and perform such acts as may be necessary, convenient, or desirable in order to
secure payment of its notes, and to make the notes more acceptable to lenders. Exercise of
authority pursuant to this section shall be consistent with the provisions of this chapter.
### § 61-02-68.9. Registration of interim financing notes - Interest payment - Redemption

prior to maturity.
The commission may provide for the registration of interim financing notes in the name of
the owner either as to principal alone, or as to both principal and interest, on such terms and
conditions as the commission may determine by the resolution authorizing their issue. Interest
on the notes may be made payable semiannually, annually, or at maturity, however, the first
interest payment period may be less than six months. The notes may be made redeemable,
prior to maturity, at the option of the commission, in the manner and upon the terms fixed by the
resolution authorizing their issuance.
### § 61-02-68.10. Execution and attestation of interim financing notes - Sale.

The interim financing notes must be executed by the chairman or the vice chairman of the
commission and attested by the signature of the director of the department of water resources.
The signature of the chairman or vice chairman, and the director, and any other signatures on
appurtenant coupons, may be facsimiles. The notes must be sold at private or public sale in the
manner and at the rate of interest and price as the commission determines by resolution.
### § 61-02-68.11. Bond provisions applicable to interim financing notes.

The provisions of sections 61-02-49, 61-02-59, 61-02-60, 61-02-61, 61-02-62, and
61-02-65, relating to bonds also apply to notes issued pursuant to section 61-02-68.1.
### § 61-02-68.12. Interim financing notes or guarantees not a state obligation - Payment

restricted to revenues - Notes or guarantees not a lien.
Interim financing notes issued by the commission under this chapter or guarantees provided
under section 61-02-68.14, 61-02-68.15, 61-02-68.16, 61-02-68.17, 61-02-68.18, or
this state or create any debt or debts, liability or liabilities on behalf of this state, or be or
constitute a pledge of the faith and credit of this state, but all notes or guarantees are payable
solely from funds pledged or available for their payment as authorized in this chapter. The notes
or guarantees do not constitute a charge, lien, nor encumbrance, legal or equitable, upon any
property of the commission, other than funds received pursuant to an interim financing
agreement.
Each note issued under this chapter must recite in substance that the note, including
interest thereon, is payable solely from a loan or grant to be made by an agency or
instrumentality of the United States government, or North Dakota, and that the note does not
constitute a debt of the commission within the meaning of any constitutional or statutory limit.
### § 61-02-68.13. Interim financing notes as legal investments and security.

Notwithstanding any restrictions contained in any other law, this state and all public officers,
boards and agencies, and political subdivisions and agencies thereof, all national banking
associations, state banks, trust companies, savings banks and institutions, savings and loan
associations, investment companies, and other persons carrying on a banking business, and all
executors, administrators, guardians, trustees, and other fiduciaries, may legally invest any
sinking funds, moneys, or other funds belonging to them or within their control in any interim
financing notes issued by the commission pursuant to this chapter, and the notes are authorized
security for any and all public deposits.

### § 61-02-68.14. Guarantee issued by commission.

The commission may guarantee evidences of indebtedness issued or other obligations
undertaken by the owners of water projects eligible to receive municipal, rural, and industrial
water supply funds pursuant to Pub. L. 99-294 [100 Stat. 418], or evidences of indebtedness
issued or other obligations undertaken by a not-for-profit organization establishing a financing
program for the owners of the water projects eligible to receive municipal, rural, and industrial
water supply funds pursuant to Pub. L. 99-294 [100 Stat. 418] for the purpose of providing the
owners with construction period financing. Construction period financing may include the cost of
construction of works or projects, funding of debt service reserves and capitalized interest, and
the payment of the costs of issuance. A commission guarantee of indebtedness or other
obligations of an owner of a water project must be authorized by resolution of the commission
and must be evidenced by a written agreement approved by the commission.
### § 61-02-68.15. Pledges.

The commission may pledge the municipal, rural, and industrial water supply funds
authorized by Pub. L. 99-294 [100 Stat. 418] as security for a guarantee or note. A pledge is
valid and binding whenever the pledge is made. The revenues or other moneys pledged and
thereafter received by the commission are immediately subject to the lien of the pledge without
physical delivery or further act, and the lien of the pledge is valid and binding as against all
parties having claims of any kind against the commission, regardless of whether the parties
have notice. Neither the resolution nor any other instrument by which a pledge is created need
be filed or recorded, except in the records of the commission.
### § 61-02-68.16. Reserve fund.

1. The commission shall establish and maintain a reserve fund in which there must be
deposited all moneys appropriated by the legislative assembly for the purpose of the
fund, all proceeds of notes issued or guaranteed by the commission required to be
deposited in the fund by terms of a contract or a resolution of the commission with
respect to the proceeds of notes, any moneys or funds of the commission that it
determines to deposit in the fund, any moneys made available to the commission for
the purposes of the fund from any other source, and any contractual right to the receipt
of moneys by the commission for the purpose of the fund, including a letter of credit or
similar instrument. Moneys in the reserve fund must be held and applied solely to the
payment of the interest on and the principal of notes and sinking fund payments as
they become due and payable and for the retirement of notes, including payment of
any redemption premium required to be paid when any notes are redeemed or retired
before maturity, and for the payment of principal and interest on evidences of
indebtedness or obligations guaranteed by the commission. Moneys in the reserve
fund may not be withdrawn if the withdrawal would reduce the amount in the reserve
fund to an amount less than the required debt service reserve, except for payment of
the interest due and payable on notes and the principal of notes maturing and payable
and sinking fund payments and for the retirement of notes in accordance with the
terms of a contract between the commission and its noteholders, for the payment of
principal and interest on evidences of indebtedness or obligations of an owner of water
projects for which a guarantee has been issued by the commission, and for payment
of interest or principal or sinking fund payments or retirement of notes or draws upon a
guarantee, for which other moneys of the commission are not then available in
accordance with the terms of the contract. The reserve fund may not be used for the
payment of a guarantee by the commission unless the commission has determined
that notes of the commission cannot be issued under acceptable terms for the
payment of the guarantee or that the payment of the guarantee will not reduce the
reserve fund to an amount less than the required debt service reserve. The required
debt service reserve must be an aggregate amount equal to at least the largest
amount of money required by the terms of all contracts between the commission and
its noteholders to be raised in the current or any succeeding calendar year for the
payment of interest on and maturing principal of outstanding notes and the payment

required by the terms of any contract to a sinking fund established for the payment or
redemption of the notes.
2. If the establishment of the reserve fund for an issue or the maintenance of an existing
reserve fund at a required level under this section would necessitate the investment of
all or any portion of a new reserve fund or all or any portion of an existing reserve fund
at a restricted yield, because to not restrict the yield may cause the notes to be taxable
under the Internal Revenue Code, then at the discretion of the commission a reserve
fund does not need be established before the issuance of notes or the reserve fund
need not be funded to the levels required by other subsections of this section or an
existing reserve fund may be reduced.
3. Notes may not be issued by the commission unless there is in the reserve fund the
required debt service reserve for all notes then issued and outstanding and the notes
to be issued. This chapter does not prevent or preclude the commission from satisfying
this requirement by depositing so much of the proceeds of the notes to be issued,
upon their issuance, as is needed to achieve the required debt service reserve. The
commission may issue its notes for the purpose of providing an amount necessary to
increase the amount in the reserve fund to the required debt service reserve, or to
meet any higher or additional reserve as may be fixed by the commission with respect
to the fund.
4. In order to assure the maintenance of the required debt service reserve, there must be
appropriated by the legislative assembly and paid to the commission for deposit in the
reserve fund any sum certified by the commission as necessary to restore the reserve
fund to an amount equal to the required debt service reserve or to maintain a reserve
fund established by the commission under this chapter and required according to the
terms of a guarantee issued by the commission. The commission may approve a
resolution for the issuance of notes, as provided by this chapter, which states in
substance that this subsection is not applicable to the required debt service reserve for
notes issued under that resolution.
5. If the maturity of a series of notes of the commission is not more than three years from
the date of issuance of the notes, the commission may determine that no reserve fund
need be established for that respective series of notes or that the reserve fund may be
in an amount less than the required debt service reserve. If the determination is made,
holders of that respective series of notes do not have an interest in or claim on existing
reserve funds established for the security of the holders of previously issued
commission notes, and do not have an interest in or claim on reserve funds
established for the holders of subsequent issues of notes of the commission.
### § 61-02-68.17. Additional reserves and funds.

The commission may establish additional and further reserves or other funds or accounts as
may be necessary, desirable, or convenient to further the accomplishment of the purposes of
the commission to comply with the provisions of an agreement made by or a resolution of the
commission.
### § 61-02-68.18. Protection of service during term of guarantee or loan.

1. The service provided or made available by owners of water projects through the
construction or acquisition of an improvement, or the improvement revenues, financed
in whole or in part with a guarantee or loan to the owners of water projects from the
commission or any other state entity, may not be curtailed or limited by inclusion of all
or any part of the area served by the owners of water projects within the boundaries of
any other owners of water projects, or by the granting of any private franchise for
similar service within the area served by the owners of water projects, during the term
of the guarantee or loan. The owners of water projects providing the service may not
be required to obtain or secure a franchise, license, or permit as a condition of
continuing to serve the area if it is included within the boundaries of another owner of a
water project during the term of the guarantee or loan.

2. Under the circumstances described in subsection 1, nothing prevents the two owners
of water projects and the commission or other state entity from negotiating an
agreement for the right or obligation to provide the service in question, provided that
an agreement is invalid unless the commission or other state agency or enterprise is a
party to the agreement and unless the agreement contains adequate safeguards to
ensure the security and timely payment of any outstanding notes of the commission
issued to fund the loan.
### § 61-02-68.19. Interim financing notes, guarantees, or bonds for municipal, rural, and

industrial water supply projects - Public interest.
Guarantees made under section 61-02-68.14 or bonds or interim notes issued under this
chapter for the purpose of providing construction period financing for owners of water projects
eligible to receive municipal, rural, and industrial water supply funds pursuant to Pub. L. 99-294
[100 Stat. 418] are in the public interest and are not subject to the limitation contained in
subsection 2 of section 61-02-46.
### § 61-02-69. Property of commission exempt from taxation.

All the property of the commission shall be exempt from taxation.
### § 61-02-70. Expenses paid from administrative fund.

Repealed by S.L. 1965, ch. 447, § 24.
### § 61-02-71. Commission may accept and receive appropriations and contributions.

The commission may receive and accept appropriations and contributions from any source,
either of money or property or things of value, to be held, used, and applied for the purposes
provided for in this chapter.
### § 61-02-72. Revenue bonds of commission are legal and valid investments of financial

institutions - Exemption from taxation.
Notwithstanding any restrictions contained in any other law, the state and all public officers,
boards, and agencies, and political subdivisions and agencies thereof, all national banking
associations, state banks, trust companies, savings banks and institutions, savings and loan
associations, investment companies, and other persons carrying on a banking business, and all
executors, administrators, guardians, trustees, and other fiduciaries, may legally invest any
sinking funds, moneys, or other funds belonging to them or within their control in any bonds
issued by the commission pursuant to this chapter, and the bonds are authorized security for
public deposits. The bonds, and the interest thereon, are exempt from all state, county, and
municipal taxes.
### § 61-02-73. Construction of chapter.

Nothing contained in this chapter shall be deemed to interfere with any vested rights to the
use of water. This chapter being necessary for the welfare of the state and its citizens, it shall be
construed liberally to effect the purposes thereof.
### § 61-02-74. Certain moneys to be deposited in general fund.

Repealed by S.L. 1971, ch. 587, § 1.
### § 61-02-75. Hearing witnesses - Subpoena - Oath - Fees.

Repealed by S.L. 1987, ch. 739, § 1.
### § 61-02-76. Hearing - Appeals from decision of commission.

Except as more specifically provided in this title, any person aggrieved because of any
action or decision of the commission under the provisions of this title has the right to a hearing
by the commission if no hearing on the matter resulting in the action or decision has been held.

If a hearing has been held, the person aggrieved has the right to petition for reconsideration and
to appeal, all in accordance with the provisions of chapter 28-32.
### § 61-02-77. Emergency municipal, tribal, and rural water system drinking water grant

program.
The commission may establish an emergency municipal, tribal, and rural water assistance
program for municipalities, tribes, and rural water systems, whose primary source of water is the
Missouri River, Lake Sakakawea, or Lake Oahe. The commission may establish procedures,
cost-share guidelines, and other criteria for municipalities, tribes, and rural water systems that
request emergency assistance due to low water conditions on the Missouri River, Lake
Sakakawea, or Lake Oahe. The purpose of this program is to provide emergency grant funds to
municipalities, tribes, and rural water systems facing a critical need or health risk as a result of
the inability of the water intake system for the municipal, tribal, or rural water system to supply
an adequate quantity of quality water to the people served by the municipal, tribal, or rural water
system.
### § 61-02-78. Infrastructure revolving loan fund - Continuing appropriation - Rules.

Repealed by S.L. 2021, ch. 80, § 6.
### § 61-02-79. Bank of North Dakota - Line of credit.

The department of water resources may request a line of credit from the Bank of North
Dakota not to exceed two hundred sixty million dollars at the prevailing interest rate charged to
North Dakota government entities. The department of water resources shall repay the line of
credit from funds available in the resources trust fund or other funds, as appropriated by the
legislative assembly. If the moneys available at the end of each biennium are not sufficient to
repay the line of credit, the department of water resources shall request from the legislative
assembly a deficiency appropriation to repay the line of credit. The department of water
resources may access the line of credit, as necessary, to provide up to fifty million dollars for the
southwest pipeline project and two hundred ten million dollars for water projects.
### § 61-02-80. Flood control projects - Financial assistance limited.

Except for flood control projects authorized by the legislative assembly or the commission
before July 1, 2017, the commission shall calculate the amount of its financial assistance,
including loans, grants, cost-share, and issuance of bonds, based on the needs for protection of
health, property, and enterprise, against:
1. One hundred year flood events as determined by a federal agency;
2. The national economic development alternative; or
3. The local sponsor's preferred alternative if the commission first determines the
historical flood prevention costs and flood damages, and the risk of future flood
prevention costs and flood damages, warrant protection to the level of the local
sponsor's preferred alternative.
### § 61-02-81. Development in breach inundation zones - No financial assistance for dam

improvements.
Notwithstanding any other provision of law, if a political subdivision permits building or
development within a breach inundation zone and the building or development causes a change
in a dam's current hazard classification necessitating structural improvements or upgrades to
the dam, the political subdivision shall pay for the necessary improvements or upgrades. State
loans, grants, cost-share, and other financial assistance may not be provided to pay for the dam
improvements or upgrades. For purposes of this section, "breach inundation zone" means the
area downstream of the dam which would be flooded in the event of a dam failure or
uncontrolled release of water.
