54-17.7 Pipeline Authority - North Dakota Statutes

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CHAPTER 54-17.7PIPELINE AUTHORITY54-17.7-01.North Dakota pipeline authority.There is created the North Dakotapipeline authority, which shall be governed by the industrial commission.54-17.7-02. Definitions. As used in this chapter:1."Authority" means the industrial commission acting as the North Dakota pipeline
authority.2."Commission" means the North Dakota industrial commission.3."Energy-related commodities" means any substance, element, or compound, either
gaseous, liquid, or solid, associated with the production, refining, or processing of
renewable energy, crude oil, natural gas, coal, or coal byproducts, including oil,
natural gas liquids, refined petroleum products, carbon dioxide, hydrogen, ethanol,
propane, butane, ethane, methane, sulfur, helium, synthetic fuels, nitrogen,
biodiesel, and liquids made from coal.4."Natural gas" means hydrocarbons or nonhydrocarbons that at atmospheric
conditions of temperature and pressure are in a gaseous phase.5."Notice of intent" means the notice a person delivers to the authority indicating
willingness to construct pipeline facilities contemplated by the authority or to provide
services fulfilling the need for such pipeline facilities.6."Pipeline facilities" means pipelines, pumps, compressors, storage, and all other
facilities, structures, and properties incidental and necessary or useful in the
interconnection of pipelines or the transportation, distribution, and delivery of
energy-related commodities to points of sale or consumption or to the point or points
of distribution for consumption located within and without this state.7."Project area" means the geographic area in which construction of a pipeline facility
contemplated by the authority is likely to occur.54-17.7-03. Pipeline authority purposes. The authority is created for the purpose ofdiversifying and expanding the North Dakota economy by facilitating development of pipeline
facilities to support the production, transportation, and utilization of North Dakota energy-related
commodities, thereby increasing employment, stimulating economic activity, augmenting sources
of tax revenue, fostering economic stability, and improving the state's economy.54-17.7-04. Powers. The authority has all powers necessary to carry out the purposesof this chapter, including the power to:1.Make grants or loans and to provide other forms of financial assistance as
necessary or appropriate for the purposes of this chapter.2.Make and execute contracts and all other instruments necessary or convenient for
the performance of the authority's powers and functions.3.Acquire, purchase, hold, use, lease, license, sell, transfer, and dispose of an
undivided or other interest in or the right to capacity in any pipeline system or
systems, including interconnection of pipeline systems, within or without the state of
North Dakota in order to facilitate the production, transportation, distribution, or
delivery of energy-related commodities produced in North Dakota as a purchaser of
last resort. The obligation of the state may not exceed ten percent of the pipeline
authority's acquisition or purchase of a right to capacity in any pipeline system orPage No. 1systems, or interconnection of pipeline systems, and the state's obligation is limited
to the funding available from the oil and gas research fund.4.Borrow money and issue evidences of indebtedness as provided in this chapter.5.Receive and accept aid, grants, or contributions of money or other things of value
from any source, including aid, grants, or contributions from any department,
agency, or instrumentality of the United States, subject to the conditions upon which
the aid, grants, or contributions are made and consistent with the provisions of this
chapter.6.Issue and sell evidences of indebtedness in an amount or amounts as the authority
may determine, but not to exceed eight hundred million dollars, plus costs of
issuance, credit enhancement, and any reserve funds required by agreements with
or for the benefit of holders of the evidences of indebtedness for the purposes for
which the authority is created under this chapter, provided that the amount of any
refinancing shall not be counted toward such eight hundred million dollar limitation to
the extent it does not exceed the outstanding amount of the obligations being
refinanced.7.Refund and refinance its evidences of indebtedness.8.Make and execute interest rate exchange contracts.9.Enter lease-sale contracts.10.Pledge any and all revenues derived by the authority under this chapter or from a
pipeline facility, service, or activity funded under this chapter to secure payment or
redemption of the evidences of indebtedness.11.To the extent and for the period of time necessary for the accomplishment of the
purposes for which the authority was created plan, finance, develop, acquire, own in
whole or in part, lease, rent, and dispose of pipeline facilities.12.Enter contracts to construct, maintain, and operate pipeline facilities.13.Consult with the public service commission, regional organizations, and any other
relevant state or federal authority or persons as necessary and establish reasonable
fees, rates, tariffs, or other charges for pipeline facilities and all services rendered by
the authority.14.Lease, rent, and dispose of pipeline facilities owned pursuant to this chapter.15.Investigate, plan, prioritize, and propose corridors for the transport of energy-related
commodities.16.Make and execute contracts and all other instruments necessary or convenient for
the performance of the authority's powers and functions with other state pipeline
authorities.17.Cooperate with and participate in joint projects, research projects, and other
activities with other state pipeline authorities and participate in and join regional
pipeline organizations.18.Do any and all things necessary or expedient for the purposes of the authority
provided in this chapter.54-17.7-05. Authority may act.Page No. 21.Before exercising its powers to construct pipeline facilities granted to it in this
chapter except for subsection 3 of section 54-17.7-04, the authority shall publish in a
newspaper of general circulation in North Dakota and in a newspaper in the project
area a notice describing the need for pipeline facilities contemplated by the authority.
A person willing to construct the pipeline facilities or furnish services to satisfy the
needs described in the notice has a period of one hundred eighty days from the date
of last publication of the notice within which to delivery to the authority a notice of
intent. After receipt of a notice of intent, the authority may not exercise its powers to
construct pipeline facilities unless the authority finds that exercising its authority
would be in the public interest. In making such a finding, the authority shall consider
factors, including economic impact to the state, economic feasibility, technical
performance, reliability, past performance, and the likelihood of successful
completion and ongoing operation.2.The authority may require a person giving a notice of intent to provide a bond and to
submit a plan for completion of the pipeline facilities or commencement of services
within a period of time acceptable to the authority. If no person submits an adequate
plan or bond as required by the authority, the authority may proceed with contracting
for construction of the facility described in the authority's published notice.54-17.7-06. Authority may participate upon request. The authority may participate ina pipeline facility through financing, planning, joint ownership, or other arrangements at the
request of a person giving a notice of intent.54-17.7-07. Evidences of indebtedness.1.Evidences of indebtedness of the authority must be authorized by resolution of the
industrial commission and may be issued in one or more series and must bear such
date or dates, mature at such time or times, bear interest at such rate or rates of
interest per year, be in such denomination or denominations, be in such form, either
coupon or registered, carry such conversion or registration privileges, have such
rank or priority, be executed in such manner, be payable from such sources in such
medium of payment at such place or places within or without the state, and be
subject to such terms of redemption, with or without premium, as such resolution or
resolutions may provide. Evidences of indebtedness of the authority are to mature
not more than forty years from the date of issue. Evidences of indebtedness of the
authority may be sold at such time or times and at such price or prices as the
authority determines.2.Evidences of indebtedness and grants, loans, or other forms of financial assistance
issued by the authority are payable solely from:a.Revenues that may be received by the authority from pipeline facilities,
services, or activities funded under this chapter with the proceeds of the
authority's evidences of indebtedness, subject only to prior payment of the
reasonable and necessary expenses of operating and maintaining such
pipeline facilities except depreciation.b.Amounts received by the authority under loans authorized under this chapter.c.Revenues received by the authority under this chapter from any source other
than general tax revenues.3.The evidences of indebtedness are not subject to taxation by the state or any of its
political subdivisions and do not constitute a debt of the state of North Dakota within
the meaning of any statutory or constitutional provision and must contain a
statement to that effect on their face.Page No. 34.The authority may establish and maintain a reserve fund for evidences of
indebtedness issued under this chapter. There must be deposited in the reserve
fund:a.All moneys appropriated by the legislative assembly to the authority for the
purpose of the reserve fund.b.All proceeds of evidences of indebtedness issued under this chapter required to
be deposited in the reserve fund by the terms of any contract between the
authority and the holders of its evidences of indebtedness or any resolution of
the authority.c.Any lawfully available moneys of the authority which it may determine to
deposit in the reserve fund.d.Any moneys from any other source made available to the authority for deposit
in the reserve fund or any contractual right to the receipt of moneys by the
authority for the purpose of the fund, including a letter of credit, surety bond, or
similar instrument.5.The authority must include in its biennial request to the office of the budget the
amount, if any, necessary to restore any reserve fund established under this section
to an amount equal to the amount required to be deposited in the fund by the terms
of any contract or resolution approved by the commission.6.Any pledge of revenue made by the industrial commission as security for the
authority's evidences of indebtedness is valid and binding from time to time when
the pledge is made.The revenues or other moneys so pledged and thereafterreceived by the authority are immediately subject to the lien of any such pledge
without any physical delivery thereof or further act, and the lien of any such pledge is
valid and binding as against all parties having claims of any kind in tort, contract, or
otherwise against the authority, regardless of whether such parties have notice
thereof. Neither the resolution nor any other instrument by which a pledge is created
need be filed or recorded except in the records of the authority.7.The authority may obtain from any entity of the state, any department or agency of
the United States, or any nongovernmental insurer, any insurance, guaranty, or
liquidity facility, or from a financial institution, a letter of credit to the extent such
insurance, guaranty, liquidity facility, or letter of credit now or hereafter available, as
to, or for, the payment or repayment of, interest or principal, or both, or any part
thereof, on any evidences of indebtedness issued by the authority pursuant to this
chapter, and may enter into any agreement or contract with respect to any such
insurance, guaranty, letter of credit, or liquidity facility, and pay any required fee,
unless the same would impair or interfere with the ability of the authority to fulfill the
terms of any agreement made with the holders of its evidences of indebtedness.8.After issuance, all evidences of indebtedness of the authority are conclusively
presumed to be fully authorized and issued under the laws of the state, and any
person or governmental unit is estopped from questioning their authorization, sale,
issuance, execution, or delivery by the authority.9.When the authority has issued evidences of indebtedness and pledged the revenues
of the pipeline facilities for the payment thereof as herein provided, the authority
shall operate and maintain the pipeline facilities and shall impose and collect fees
and charges for the services furnished by the pipeline facilities, including those
furnished to the authority itself, in the amounts and at the rates as are fully sufficient
at all times to:a.Pay the expenses of operating and maintaining the pipeline facilities.Page No. 4b.Provide a debt service fund sufficient to assure the prompt payment of principal
and interest on the evidences of indebtedness at maturity.c.Provide a reasonable fund for contingencies as may be required by the
resolution authorizing the evidences of indebtedness.54-17.7-08. Public service commission jurisdiction and consultation.1.Until sold or disposed of by the authority, the authority and the pipeline facilities built
under this chapter are exempt from the provisions of title 49 except for chapter 49-22
and sections 49-02-01.2 and 49-07-05.1. Upon sale or disposal by the authority,
pipeline facilities built under this chapter are subject to the provisions of title 49.2.The authority shall consult with the public service commission with respect to the
rates charged by the authority for use of its pipeline facilities and such rates must
thereafter be considered just and reasonable in proceedings before the public
service commission pursuant to section 49-05-06.3.The authority shall conduct its activities in consultation with pipeline providers, the oil
and gas research council, energy-related commodities interests, and other persons
having relevant expertise.54-17.7-09.Bonds as legal investments.The bonds of the authority are legalinvestments which may be used as collateral for public funds of the state, insurance companies,
banks, savings and loan associations, credit unions, investment companies, trustees, and other
fiduciaries which may properly and legally invest funds in their control or belonging to them in
bonds of the authority. The state investment board may invest in bonds of the authority in an
amount specified by the state investment board.54-17.7-10. Disposal of pipeline facilities.1.Before becoming an owner or partial owner of a pipeline facility or acquiring capacity
in a pipeline system, the authority shall develop a plan identifying:a.The public purposes of the authority's ownership or capacity acquisition.b.Conditions that would make the authority's ownership no longer necessary for
accomplishing those public purposes.c.A plan to divest the authority's ownership or capacity interest as soon as
economically prudent once those conditions occur.2.For pipeline facilities that are leased to another entity by the authority at the end of
the lease, absent default by the lessee, the authority shall convey its interest in the
pipeline facilities to the lessee.3.For pipeline facilities that are owned by the authority without a lessee, the authority
shall divest itself of ownership as soon as economically prudent in accordance with
the divestiture plan developed pursuant to subsection 1.54-17.7-11.Pipeline authority administrative fund - Continuing appropriation.There is created a pipeline authority administrative fund.1.Revenue to the fund must include:a.Moneys received from the state's oil and gas research council administrative
budget.b.Moneys received from any federal agency for the purpose of this section.Page No. 5c.Moneys donated to the pipeline authority for the purposes of this section.d.Moneys received from the state's oil and gas impact fund.e.Such other moneys as may be deposited in the fund for use in carrying out the
purposes of the authority.2.This fund must be maintained as a special fund and all moneys transferred into the
fund are appropriated on a continuing basis and must be used and disbursed solely
for the purpose of defraying the administrative costs incurred by the pipeline
authority.3.Utilizing funds from the oil and gas research fund, the industrial commission shall
contract for or hire staffing necessary to effectively administer the pipeline authority.54-17.7-12. Access to authority records.1.Materials and data submitted to, or made or received by, the authority, to the extent
that the authority determines the materials or data consist of trade secrets or
commercial, financial, or proprietary information of individuals or entities applying to
or contracting with the authority or receiving authority services under this chapter are
subject to section 44-04-18.4.2.A person or entity must file a request with the authority to have material designated
as confidential under subsection 1.The request must contain any informationrequired by the authority, and must include at least:a.A general description of the nature of the information sought to be protected.b.An explanation of why the information derives independent economic value,
actual or potential, from not being generally known to other persons.c.An explanation of why the information is not readily ascertainable by proper
means by other persons.d.A general description of any person or entity that may obtain economic value
from disclosure or use of the information and how the person or entity may
obtain this value.e.A description of the efforts used to maintain the secrecy of the information.f.The fact that a request has been made is exempt.3.The information submitted pursuant to subsection 2 is confidential. The authority
shall examine the request and determine whether the information is relevant to the
matter at hand and is a trade secret under the definition in section 47-25.1-01 or
44-04-18.4. If the authority determines the information is either not relevant or not a
trade secret, the authority shall notify the requester and the requester may ask for
the return of the information and request within ten days of the notice. If no return is
sought, the information and request are a public record.54-17.7-13. Reporting requirements. The authority shall deliver a written report on itsactivities to the legislative council each biennium.The authority is not subject to therequirements of chapter 54-60.1, but to ensure public accountability, the authority shall provide
an annual report to the industrial commission detailing activities and expenditures incurred during
the preceding year.Page No. 6Document Outlinechapter 54-17.7 pipeline authority