# Title 21 — Governmental Finance

## Chapter 21-03.1 — Registration of Public Obligations

### § 21-03.1-01. Definitions.

As used in this chapter, the following terms have the following meanings:
1. "Authorized officer" means any individual required or permitted, alone or with others,
by any provision of law or by the issuing public entity, to execute on behalf of the public
entity a certificated registered public obligation or a writing relating to an uncertificated
registered public obligation.
2. "Certificated registered public obligation" means a registered public obligation which is
represented by an instrument.
3. "Code" means the Internal Revenue Code of 1954, as amended.
4. "Financial intermediary" means a bank, broker, clearing corporation, or other person or
the nominee of any of them, which in the ordinary course of its business maintains
registered public obligation accounts for its customers, when so acting.
5. "Issuer" means a public entity which issues an obligation.
6. "Obligation" means an agreement of a public entity to pay principal and any interest
thereon, and includes a share, participation, or other interest in any such agreement.
7. "Official actions" means the actions by statute, order, ordinance, resolution, contract,
or other authorized means by which the issuer provides for issuance of a registered
public obligation.
8. "Official or official body" means the officer that is empowered under the laws of this
state to provide for original issuance of an obligation of the issuer, by defining the
obligation and its terms, conditions, and other incidents, the successor or successors
of any such official or official body, and such other person or group of persons as shall
be assigned duties of such official or official body with respect to a registered public
obligation under applicable law from time to time.
9. "Public entity" means any entity, department, or agency which is empowered under the
laws of this state to issue obligations any interest with respect to which may, under any
provision of law, be provided an exemption from the income tax referred to in the
Code.
10. "Registered public obligation" means an obligation issued by a public entity pursuant
to a system of registration.
11. "System of registration" and its variants means a plan that provides:
a. With respect to a certificated registered public obligation, that:
(1) The certificated registered public obligation specify a person entitled to the
registered public obligation and the rights it represents; and
(2) Transfer of the certificated registered public obligation and the rights it
represents may be registered upon books maintained for that purpose by or
on behalf of the issuer.
b. With respect to an uncertificated registered public obligation, that:
(1) Books maintained by or on behalf of the issuer for the purpose of
registration of the transfer of a registered public obligation specify a person
entitled to the registered public obligation and the rights evidenced thereby;
and
(2) Transfer of the uncertificated registered public obligation and the rights
evidenced thereby be registered upon such books.
12. "Uncertificated registered public obligation" means a registered public obligation which
is not represented by an instrument.
### § 21-03.1-02. System of registration.

1. Each issuer is authorized to establish and maintain a system of registration with
respect to each obligation which it issues. The system may either be:
a. A system pursuant to which only certificated registered public obligations are
issued.

b. A system pursuant to which only uncertificated registered public obligations are
issued.
c. A system pursuant to which both certificated and uncertificated registered public
obligations are issued.
The issuer may amend, discontinue, and reinstitute any system, from time to time,
subject to covenants.
2. The system must be established, amended, discontinued, or reinstituted for the issuer
by, and must be maintained for the issuer as provided by, the official or official body.
3. The system must be described in the registered public obligation or in the official
actions which provide for original issuance of the registered public obligation, and in
subsequent official actions providing for amendments and other matters from time to
time. Such description may be by reference to a program of the issuer which is
established by the official or official body.
4. The system must define the method or methods by which transfer of the registered
public obligation shall be effective with respect to the issuer, and by which payment of
principal and any interest must be made. The system may permit the issuance of
registered public obligations in any denomination to represent several registered public
obligations of smaller denominations. The system may also provide for the form of any
certificated registered public obligation or of any writing relating to an uncertificated
registered public obligation, for identifying numbers or other designations, for a
sufficient supply of certificates for subsequent transfers, for record and payment dates,
for varying denominations, for communications to holders or owners of obligations,
and for accounting, canceled certificate destruction registration and release of security
interests and other incidental matters. Unless the issuer otherwise provides, the record
date for interest payable on the first or fifteenth day of a month must be the fifteenth
day or the last business day of the preceding month, respectively, and for interest
payable on other than the first or fifteenth day of a month, must be the fifteenth
calendar day before the interest payment date.
5. Under a system pursuant to which both certificated and uncertificated registered public
obligations are issued, both types of registered public obligations may be regularly
issued, or one type may be regularly issued and the other type issued only under
described circumstances or to particular described categories of owners and provision
may be made for registration and release of security interests in registered public
obligations.
6. The system may include covenants of the issuer as to amendments, discontinuances,
and reinstitutions of the system and the effect of such on the exemption of interest
from the income tax provided for by the Code.
7. Whenever an issuer issues an uncertificated registered public obligation, the system of
registration may provide that a true copy of the official actions of the issuer relating to
such uncertificated registered public obligation be maintained by the issuer or by the
person, if any, maintaining such system on behalf of the issuer, so long as the
uncertificated registered public obligation remains outstanding and unpaid. A copy of
such official actions, verified to be such by an authorized officer, is admissible before
any court of record, administrative body, or arbitration panel without further
authentication.
8. Nothing in this chapter precludes a conversion from one of the forms of registered
public obligations provided for by this chapter to a form of obligations not provided for
by this chapter if interest on the obligation so converted will continue to be exempt
from the income tax provided for by the Code.
9. The rights provided by other laws with respect to obligations in forms not provided for
by this chapter, to the extent not inconsistent with this chapter, apply with respect to
registered public obligations issued in forms authorized by this chapter.
### § 21-03.1-03. Execution - Authentication.

1. A certificated registered public obligation must be executed by the issuer by the
manual or facsimile signature or signatures of authorized officers. Any signature of an

authorized officer may be attested by the manual or facsimile signature of another
authorized officer.
2. In addition to the signatures referred to in subsection 1, any certificated registered
public obligation or any writing relating to an uncertificated registered public obligation
may include a certificate or certificates signed by the manual or facsimile signature of
an authenticating agent, registrar, transfer agent, or the like.
3. At least one signature of an authorized officer or other person required or permitted to
be placed on a certificated registered public obligation must be a manual signature.
### § 21-03.1-04. Signatures.

1. Any certificated registered public obligation signed by the authorized officers at the
time of the signing thereof remains valid and binding, notwithstanding that before the
issuance thereof any or all of such officers have ceased to fill their respective offices.
2. Any authorized officer empowered to sign any certificated registered public obligation
may adopt as and for the signature of such officer the signature of a predecessor in
office in the event that such predecessor's signature appears on such certificated
registered public obligation. An authorized officer incurs no liability by adoption of a
predecessor's signature that would not be incurred by such authorized officer if the
signature were that of such authorized officer.
### § 21-03.1-05. Seal.

When a seal is required or permitted in the execution of any certificated registered public
obligation, an authorized officer may cause the seal to be printed, engraved, stamped, or
otherwise placed in facsimile thereon. The facsimile seal has the same legal effect as the
impression of the seal.
### § 21-03.1-06. Agents - Depositories.

1. An issuer may appoint for such term as may be agreed, including for so long as a
registered public obligation may be outstanding, corporate or other authenticating
agents, transfer agents, registrars, paying, or other agents, specify the terms of their
appointment, including their rights, their compensation and duties, limits upon their
liabilities, and provision for their payment of liquidated damages in the event of breach
of certain of the duties imposed, which liquidated damages may be made payable to
the issuer, the owner, or a financial intermediary. None of such agents need have an
office or do business within this state.
2. An issuer may agree with custodian banks and financial intermediaries, and nominees
of any of them, in connection with the establishment and maintenance by others of a
central depository system for the transfer or pledge of registered public obligations.
Any such custodian banks and financial intermediaries, and nominees, may, if qualified
and acting as fiduciaries, also serve as authenticating agents, transfer agents,
registrars, paying, or other agents of the issuer with respect to the same issue of
registered public obligations.
3. Nothing precludes the issuer from itself performing, either alone or jointly with other
issuers, any transfer, registration, authentication, payment, or other function described
in this section.
### § 21-03.1-07. Costs - Collection.

1. An issuer, prior to or at original issuance of registered public obligations, may provide
as a part of a system of registration that the transferor or transferee of the registered
public obligations pay all or a designated part of the costs of the system as a condition
precedent to transfer, that costs be paid out of proceeds of the registered public
obligations, or that both methods be used. The portion of the costs of the system not
provided to be paid for by the transferor or transferee or out of proceeds is the liability
of the issuer.

2. The issuer may as part of a system of registration provide for reimbursement or for
satisfaction of its liability by payment by others. The issuer may enter into agreements
with others respecting such reimbursement or payment, may establish fees and
charges pursuant to such agreements or otherwise, and may provide that the amount
or estimated amount of such fees and charges must be reimbursed or paid from the
same sources and by means of the same collection and enforcement procedures and
with the same priority and effect as with respect to the obligations.
### § 21-03.1-08. Security for deposits.

Obligations issued by public entities under the laws of this state which are in registered
form, whether or not represented by an instrument, and which, except for their form, satisfy the
requirements with regard to security for deposits of moneys of public agencies prescribed
pursuant to any law of this state, must be deemed to satisfy all such requirements even though
they are in registered form if a security interest in such obligations is perfected on behalf of the
public agencies whose moneys are so deposited.
### § 21-03.1-09. Public records - Locations.

1. Records, with regard to the ownership of or security interests in registered public
obligations, are not subject to inspection or copying under any law of this state relating
to the right of the public to inspect or copy public records, notwithstanding any law to
the contrary.
2. Registration records of the issuer may be maintained at such locations within or
without this state as the issuer shall determine.
### § 21-03.1-10. Applicability - Determination.

1. Unless at any time prior to or at original issuance of a registered public obligation the
official or official body of the issuer determines otherwise, this chapter is applicable to
such registered public obligation notwithstanding any provision of law to the contrary.
When this chapter is applicable, no contrary provision applies.
2. Nothing in this chapter limits or prevents the issuance of obligations in any other form
or manner authorized by law.
3. Unless determined otherwise pursuant to subsection 1, the provisions of this chapter
are applicable with respect to obligations which have heretofore been approved by
vote, referendum, or hearing, authorizing or permitting the authorization of obligations
in bearer and registered form, or in bearer form only, and such obligations need not be
resubmitted for a further vote, referendum, or hearing, for the purpose of authorizing or
permitting the authorization of registered public obligations pursuant to this chapter.
### § 21-03.1-11. Construction.

This chapter must be construed in conjunction with the Uniform Commercial Code and the
principles of contract law relative to the registration and transfer of obligations.
### § 21-03.1-12. Amendment or repeal - Effect.

The state hereby covenants with the owners of any registered public obligations that it will
not amend or repeal this chapter if the effect may be to impair the exemption from income
taxation of interest on registered public obligations.
