# Title 40 — Municipal Government

## Chapter 40-23 — Assessment of Benefits

### § 40-23-01. Special assessment commission - Appointment of members - Terms of

office.
The executive officer of each municipality, when it shall be found necessary, shall appoint
three reputable residents and freeholders of the municipality as members of a commission
which shall be known as the special assessment commission. The members appointed to the
first special assessment commission in a municipality shall hold office, respectively, for terms
designated by the executive officer when the appointments are made, as follows:
1. One member shall hold office until the first meeting of the governing body in April in the
first odd-numbered year following that member's appointment.
2. One member shall hold office until the first meeting of the governing body in April in the
second odd-numbered year following that member's appointment.
3. One member shall hold office until the first meeting of the governing body in April in the
third odd-numbered year following that member's appointment.
At the first meeting of the governing body in April of each odd-numbered year, or as soon
thereafter as practicable, the executive officer shall appoint a member of such commission. After
the members of the first special assessment commission have been appointed as provided in
this section, each appointment shall be made for a term of six years.
### § 40-23-02. Commissioners - Appointments subject to confirmation - Qualifications -

Chairman - Compensation.
All appointments made to the special assessment commission shall be subject to the
confirmation of the governing body. Upon appointment and confirmation, each commissioner
shall file with the city auditor a written acceptance of the appointment and shall take and
subscribe the oath required of other municipal officers, which shall be filed with the city auditor.
The member of the commission having the shortest term to serve shall act as chairman. No
member of the commission shall hold any other municipal office while serving as such member.
The appointing authority shall establish the rate of compensation for commissioners and actual
expenses incurred by commissioners may be reimbursed at the official reimbursement rates of
the appointing authority.
### § 40-23-03. Removal of commissioners - Filling vacancies.

Any member of the commission may be removed by the executive officer, with the consent
of a majority of the members of the governing body, for neglect or refusal to perform the duties
of the office or for misconduct in office. A vacancy occurring in the commission by removal,
resignation, or death shall be filled by appointment by the executive officer as soon as
practicable after the vacancy occurs.
### § 40-23-04. Municipal officers and employees to advise commission.

Each officer and employee of the municipality shall give to the special assessment
commission such information, advice, and assistance as it may request.
### § 40-23-05. Notice to special assessment commission.

At any time after the contract and bond for any work for which a special assessment is
required have been executed and approved by the governing body of the municipality and the
total cost of such work shall have been estimated as nearly as practicable, the governing body
may direct assessments to be levied for the payment of all or any part of such cost, and the city
auditor shall notify the chairman of the special assessment commission and shall certify to the
chairman the items of the total cost thereof so far as the same have been ascertained. The
chairman immediately shall call a meeting of the commission, which shall proceed as
expeditiously as possible to make and return the special assessment as provided in this
chapter. The total cost of the improvement which may be certified to the assessment
commission shall include the estimated construction cost under the terms of the contract, a

reasonable allowance as determined by the governing body for cost of extra work which may be
authorized under the plans and specifications, engineering, fiscal agent's and attorney's fees for
any services in connection with the authorization and financing of the improvement, cost of
publication of required notices and printing of improvement warrants, and all expenses incurred
in the making of the improvement and levy of assessments therefor. If any error is made in
estimating the cost, the governing body may direct a supplemental assessment to be made as
provided in section 40-26-02.
### § 40-23-06. Assessments in improvement districts before work completed.

If the work consists of improvements on or additions to sewers or water mains already
installed or paving already laid, and all bids for such work were rejected and the work done by
the municipality, and if, in the opinion of the engineer acting for the municipality, the work can be
done in separate sections or work units, it shall not be necessary that all of the work be
completed before the special assessments are made. The governing body, by resolution
adopted at any time before or after the work has been commenced, may specify what part of the
improvements shall constitute a separate section or work unit, and upon completion of the work
in one or more of such separate sections or work units, the special assessments may be made
in the same manner and with the same force and effect as if all of the work in the entire
improvement district had been completed. Failure for any reason to complete the work in any
remaining separate section or work unit included within such improvement district shall not
affect the validity of the special assessments made or the special assessment warrants issued
for the work completed.
### § 40-23-07. Determination of special assessments by commission - Political

subdivisions not exempt.
Whenever the commission makes any special assessment, the commission shall determine
the particular lots and parcels of land which, in the opinion of the commission, will be especially
benefited by the construction of the work for which the assessment is to be made. The
commission shall determine the amount in which each of the lots and parcels of land will be
especially benefited by the construction of the work for which such special assessment is to be
made, and shall assess against each of such lots and parcels of land such sum, not exceeding
the benefits, as is necessary to pay its just proportion of the total cost of such work, or of the
part thereof which is to be paid by special assessment, including all expenses incurred in
making such assessment and publishing necessary notices with reference thereto and the per
diem of the commission. However, as an alternative to the procedure provided in this section,
the special assessment commission may, in its discretion, determine and allocate the cost of
special assessments in accordance with the method provided for in chapter 40-23.1. Property
owned by a nonprofit entity and used exclusively as a cemetery is exempt from collection of
special assessments for benefits conferred under this title and the city in which such property is
located shall provide for the payment of special assessments, installments, and interest against
such property by the levy of taxes according to law or by payment from other funds available to
the city which are derived from sources other than special assessments. Benefited property
belonging to counties, cities, school districts, park districts, and townships is not exempt from
such assessment, and such public corporations whose property is so assessed shall provide for
the payment of such assessments, installments thereof and interest thereon, by the levy of
taxes according to law. Nothing in this section may be deemed to amend other provisions of law
with reference to the levy of assessments on property sold for delinquent taxes.
### § 40-23-07.1. Validation of prior assessments.

Repealed by omission from this code.
### § 40-23-07.2. Assessment of common area in townhouse development.

If a townhouse development includes a right in the townhouse owners to use any lot or tract
as a common area in connection with the townhouse development, the common area shall not
be separately assessed for benefits but each lot or tract whose owner has a right to use the

common area shall be assessed for the benefit to the common area in the proportion that each
owner's right in the common area bears to all of the owners' rights in the common area.
### § 40-23-08. Assessments collected by suit from beneficial user of exempt property.

Whenever any real property is exempt from special assessments, or cannot be assessed,
as provided in this title, for any improvement for any reason, and such real property otherwise
would be assessable for such improvement, an assessment may be levied against the occupant
or beneficial user of the property and collected by suit from the occupant or person enjoying the
beneficial use thereof.
### § 40-23-09. Assessment list to be prepared - Contents - Certificate attached to

assessment list.
The commission shall make or cause to be made a complete list of the benefits and
assessments setting forth, by legal description or street address or both, each lot or tract of land
assessed, the amount each lot or tract is benefited by the improvement, and the amount
assessed against each. There must be attached to the list of assessments a certificate signed
by a majority of the members of the commission certifying that the same is a true and correct
assessment of the property therein described to the best of their judgment and stating the
several items of expense included in the assessment.
### § 40-23-10. Notice of assessments and notice of hearing of objections.

1. Unless otherwise provided under this section, the commission shall cause the
assessment list, which list may not include the amount each lot or tract is benefited by
the improvement, to be published once each week for two consecutive weeks in the
official newspaper of the municipality.
2. If the assessment list includes more than five thousand lots or tracts, the commission
may cause it to be filed and made available for public inspection at all times after the
first publication of the notice, during reasonable business hours, at such place as must
be designated in the published notice.
3. As an alternative to the notice procedures provided in subsections 1 and 2, the
commission shall send a letter to all property owners of record on the assessment list
stating their assessments. The letter may be sent by certified mail or by regular mail
attested by an affidavit of mailing signed by the city auditor. When notice is provided
under this subsection, the commission shall cause publication of a map outlining the
assessment district with a notification stating that if an individual has not yet received a
letter regarding that individual's assessment, the individual should furnish the city
auditor's office with the individual's present address and the auditor will then mail a
copy of the individual's assessments.
4. The date set for such hearing must be not less than fifteen days after the first
publication of the notice.
5. A copy of the notice must be mailed to each public utility having property on the
assessment list at least ten days before the hearing to its address shown on the tax
rolls.
6. Any notice under this section must include the time and place of a commission
meeting to hear objections to assessments from an interested party or an interested
party's agent or attorney.
7. Any notice under this section must be published on the city's website.
### § 40-23-11. Alteration of assessments at hearing - Limitations.

At the hearing, the commission may make such alterations in the assessments as in its
opinion may be just or necessary to correct any error in the assessment list. The commission
may increase or diminish any assessment as may be just and necessary to make the aggregate
of all assessments equal to the total amount required to pay the entire cost of the work for which
such assessments are made or the part of such cost to be paid by special assessment. No

assessment shall exceed the benefits as determined by the commission to the parcel of land
assessed.
### § 40-23-12. Confirmation of assessment list after hearing - Filing list.

The special assessment commission, after the hearing, shall confirm the list and attach
thereto its further certificate certifying that the list is correct as confirmed by it. The commission
thereafter shall file the assessment list in the office of the city auditor.
### § 40-23-13. Publication of notice of confirmation of assessment list and meeting for

action upon assessments.
The city auditor shall publish at least once in the official newspaper of the municipality a
notice stating that the assessment list has been confirmed by the special assessment
commission and filed in the city auditor's office and is open to public inspection. The notice also
shall state the time when and the place where the governing body will act upon such
assessment list. The assessment list shall be acted upon by the governing body at a regular or
special meeting occurring more than fifteen days after the publication of such notice.
### § 40-23-14. Aggrieved person may file notice of appeal.

Prior to the meeting at which the governing body will act upon the assessment, any
aggrieved person may appeal from the action of the special assessment commission by filing
with the city auditor a written notice of the appeal, stating therein the grounds upon which the
appeal is based.
### § 40-23-15. Governing body to hear and determine appeals and objections to

assessments - Altering assessments - Limitations.
At the regular or special meeting of the governing body at which the assessment list is to be
acted upon, any person aggrieved by the determination of the special assessment commission
in regard to any assessment who has appealed therefrom as provided in section 40-23-14 may
appear before the governing body and present the person's reasons why the action of the
commission should not be confirmed. The governing body shall hear and determine the appeals
and objections and may increase or diminish any of such assessments as it may deem just,
except that the aggregate amount of all the assessments returned by the commission shall not
be changed and no assessments as adjusted shall exceed the benefits to the parcel of land on
which it is assessed as determined by the assessment commission.
### § 40-23-16. Confirmation of assessment list by governing body - Certifying and filing

list.
The governing body shall confirm the assessment list. The city auditor shall attach to the list
the city auditor's certificate that the list is correct as confirmed by the governing body and then
shall file the list in the city auditor's office.
### § 40-23-17. Authority to levy assessments on property not originally assessed.

Any municipality that pays or provides for the payment of part or all of the cost of an
improvement may subsequently levy special assessments for the cost of the improvement upon
properties benefited by the improvement in the cases and in accordance with the procedure and
subject to the conditions set forth in sections 40-23-17 through 40-23-21.
### § 40-23-18. Assessments on property within the corporate limits.

A subsequent assessment may not be levied for any improvement on any property that was
within the corporate limits of the municipality on the date of the execution of the first contract for
any part of the improvement, unless a special improvement district was originally created for the
improvement, and the property on which the subsequent assessment is to be levied was not
originally assessed for the improvement but is subsequently included within another
improvement district created to finance an improvement that will be connected directly or
indirectly with the original improvement. Assessments under this section may be included in a

separate column in the special assessment list prepared for the improvement district and levied
upon the properties included in the district at the same time and upon the same notices and
hearings as provided by law for the other assessments. A resolution determining the necessity
of the improvement must have been adopted in the manner prescribed by law, referring to the
designation of the district created for the original improvement and stating that a portion of the
cost of the improvement is proposed to be assessed upon property within the improvement
district.
### § 40-23-19. Assessments on annexed property for previous benefits.

Any property that was outside the corporate limits of the municipality at the time of
contracting for an improvement, which is benefited by the improvement and is subsequently
annexed to the municipality, may be assessed for the improvement subject to the same
conditions and by the same procedure as provided in section 40-23-18. The property that is
benefited may also be assessed for any improvement, within or outside the corporate limits,
which is determined by the governing body and the special assessment commission to benefit
property that was outside the corporate limits at the time of contracting for the improvement,
whether or not an improvement district was previously created for the improvement. For this
purpose, the governing body may create one or more improvement districts comprising all or
part of the annexed territory. The governing body may provide for the levy of special
assessments upon such property in the manner provided in this title, but may dispense with the
requirements of this title as to the adoption of a resolution of necessity and the advertisement
and award of a contract for the improvement. Assessment proceedings under this section are
valid notwithstanding any failure of the previous proceedings to comply with the provisions of
law regarding improvements to be financed by special assessments. The governing body may
use a reasonable depreciation schedule for the improvement in determining the amount of any
special assessment subsequently levied under this section.
### § 40-23-20. Equalization of original assessments.

In any assessment proceedings under sections 40-23-17 through 40-23-21 the governing
body of the municipality shall have power to direct the cancellation of uncollected installments of
special assessments previously levied for the same improvement, and the refund of installments
prepaid, to the extent determined by it to be necessary to make the original assessments and
the subsequent assessments bear as nearly as possible the same relation to the total benefits
derived from the improvement by the respective properties assessed.
### § 40-23-21. Use of collections of subsequent assessments.

1. All collections of special assessments levied pursuant to sections 40-23-17 through
municipality for the payment of any outstanding special improvement warrants,
refunding improvement bonds, general obligation bonds, or revenue bonds which were
issued to finance the improvement for which the assessments were levied, or, if no
such obligations are outstanding, to such fund as the governing body may direct.
2. If a governing body of a municipality levied and collected an infrastructure fee under
section 40-22-01.3, the funds generated by the fee must be used for the payment of
any outstanding special improvement warrants, refunding improvement bonds, general
obligation bonds, or revenue bonds issued to finance the improvement. The governing
body of a municipality may not use funds generated by an infrastructure fee imposed
after July 1, 2021, for the payment of any outstanding special improvement warrants,
refunding improvement bonds, general obligation bonds, or revenue bonds, issued
before July 1, 2021, for the purpose of financing green field special assessments, as
defined in section 40-05.1-06.
### § 40-23-22. State property subject to special assessments.

Real estate within municipalities of this state owned by the state of North Dakota, other than
for highway right-of-way purposes, may be subjected to special assessments for special

improvements when benefited by such improvement and the state agency or department having
control thereof is hereby authorized to expend public funds in payment of such special
assessments.
### § 40-23-22.1. City flood control special assessment exemption for state property -

Limitations.
1. Notwithstanding any other provision of law, property of the state in a city subject to this
section is exempt from special assessments levied for flood control purposes. Upon
request by the governing body of the city, the exemption under this section may be
completely or partially waived by the legislative assembly or the budget section if the
legislative assembly is not in session. Any request considered by the budget section
must comply with section 54-35-02.9. A city is subject to the exemption under this
section in recognition of state financial assistance for flood control provided to the city
pursuant to section 61-02.1-01 or other appropriation or commitment of state funds.
2. The exemption under this section does not apply to any privately owned structure,
fixture, or improvement located on state-owned land if the structure, fixture, or
improvement is used for commercial purposes unless the structure, fixture, or
improvement is primarily used for athletic or educational purposes at a state institution
of higher education. An assessment allowed under this subsection must be based on
the square footage or front footage of the land occupied by the structure, fixture, or
improvement and made against the structure, fixture, or improvement and not against
the land on which it is located.
### § 40-23-23. Assessments for parking improvements.

For any improvement consisting of acquiring or leasing of property and easements and
construction of parking lots, ramps, garages, and other facilities for motor vehicles, whether
constructed pursuant to chapter 40-22, 40-60, or 40-61 or other law authorizing a municipality to
acquire facilities used and usable in connection with the parking and storing of motor vehicles,
the governing body of the municipality, on or before October first in any year, may cancel all
installments of special assessments theretofore levied for such facilities which are due and
payable in the following year and all subsequent years, and may levy a new assessment for
such facility in accordance with the law authorizing the initial levy of special assessments
therefor, except that the amount to be newly assessed shall not exceed the total principal
amount of the installments of assessments so canceled. The new assessment shall follow the
same district lines as the original assessment district, and the same method of assessment shall
be used as was used in the original assessment. If the new assessment causes any prepaid
payment to be refunded, the refund plus four and one-half percent interest per annum on the
refunded prepaid payment shall be paid to the person, corporation, or limited liability company
who prepaid the original assessment. In determining the special benefit and levying the new
assessment against any lot or parcel, the previous determination of special benefit in any
previous proceeding shall not be binding upon the assessment commission or governing body,
but the new assessment levied on any lot or parcel, together with the principal amount of the
installments of special assessments previously paid or to be paid in the current year for that lot
or parcel with respect to that facility to be assessed, if any, shall not exceed the total special
benefit to the lot or parcel from the facility for which the assessment is levied. In levying new
assessments pursuant to this authority, an assessment commission and governing body of a
municipality may take into account any changes in conditions affecting the benefits derived and
to be derived from the improvement for which the assessments were initially levied against the
respective properties assessed. Provided, however, that in canceling any special assessments
previously levied and in levying new special assessments, a municipality cannot violate any
covenants or agreements which it has made with holders of any obligations issued by the
municipality to finance the acquisition of that improvement.

### § 40-23-24. Audit of certain special assessment improvements.

If the costs of an improvement determined and assessed under section 40-23-07 or
costs included in the assessment for the project, prepared in accordance with generally
accepted auditing standards. The audit report must include a separate statement of the
engineer's estimate of the cost of the work, the actual cost of the work, the cost of extra work,
engineering fees, fiscal agent's fees, attorney's fees, publication costs, warrant printing costs,
interest costs, and each separate item of expense incurred in making the improvement and
levying the assessment for the improvement. The city shall make a copy of the audit report
available without charge to any person who requests a copy. The audit report is not required if
the costs of an improvement exceed the costs of the work as contained in the engineer's
estimate by seventy percent or more because of a petition to enlarge the district under section
area of the property in the district. Audit and copying expenses under this section must be paid
by the city and may not be paid from special assessment funds.
### § 40-23-25. Future assessments on annexed property.

The special assessment commission shall prepare and file with the city auditor a list of
estimated future assessments on property located outside the corporate limits of the city at the
time of contracting for an improvement but which the special assessment commission
determines is potentially benefited by the improvement and likely to be annexed to the city.
