Which North Dakota school district may levy property tax on Grand Sky's leased land at Grand Forks Air Force Base?

Plain-English summary

Two school districts and the Grand Forks County state's attorney asked which district may levy school property tax on the Grand Sky technology park leasehold at Grand Forks Air Force Base. The Attorney General answered the legal question: under N.D.C.C. § 57-15-13, a district may tax only property inside its boundaries. It did not decide which district contains this parcel, calling that a factual question for local jurisdictions.

The federal government owns the land and leases it to Grand Forks County, which subleases it to Grand Sky Development Company. Federal law, 10 U.S.C. § 2667(f), permits state or local taxation of a lessee's interest. The opinion concludes that Grand Sky's leasehold can be taxed. Grand Forks County had been collecting a school mill levy distributed to Larimore Public School District. The Grand Forks Air Force Base School District was considering a levy on the same parcel. Neither collection history nor the base's ownership settled the district-boundary question for the Attorney General.

The opinion quotes N.D.C.C. § 15.1-08-01(3): a military installation school district's boundaries are coterminous with lands over which the installation has "exclusive concurrent or proprietary jurisdiction." The site lease says the United States "presently exercises proprietary legislative jurisdiction" over the property, and the opinion notes other evidence about installation control. Still, it expressly leaves the jurisdiction and boundary finding to local officials. If the parcel falls within the base district, that district alone may levy school tax on it.

What this means for you

School district officials

The opinion supplies a boundary rule, not a final allocation of Grand Sky tax revenue. A district's school levy cannot extend outside its territory. Local factual findings must establish whether the parcel is inside the military installation school district before its levy can apply.

Grand Forks County tax administrators

The opinion says the leasehold is taxable even though the underlying land is federally owned. Which school district receives the school levy depends on where the property falls under the district-boundary rule. The Attorney General did not resolve that location.

Grand Sky and other base lessees

The federal statute permits taxation of a lessee's interest, and the Attorney General concluded Grand Sky's interest was taxable. The opinion leaves the school-district recipient to the local boundary determination; it does not remove the leasehold from taxation.

Common questions

Q: Can both the Larimore and base school districts tax the Grand Sky parcel? A: The opinion says only the district containing the property may levy a school tax on it. It does not decide which of the two districts contains the parcel.

Q: Does federal ownership exempt Grand Sky's leasehold from local tax? A: No. The opinion cites 10 U.S.C. § 2667(f), which allows a lessee's interest in this federally owned land to be taxed by state or local governments, and concludes that Grand Sky's lease interest is taxable.

Q: Does the lease prove the parcel is in the base school district? A: The lease says the United States exercises proprietary legislative jurisdiction over the property. The Attorney General quotes that language but says whether the property satisfies the military-district boundary test is a factual matter for local jurisdictions.

Q: Why was Larimore receiving the school mill levy?
A: The opinion reports that Grand Forks County collected the levy and distributed it to Larimore after the 2015 lease. It gives that as background, then says the legal power to levy depends on district boundaries. It does not decide whether the past distribution was correct.

Background and statutory framework

The Air Force owns the 216.65-acre parcel. Grand Forks County holds a site-development lease and subleases to Grand Sky. The opinion cites N.D.C.C. § 57-02-08(1) for the federal-property exemption and 10 U.S.C. § 2667(f) for taxation of a lease interest. It then applies N.D.C.C. § 57-15-13's rule that a school district's levy reaches only property inside the district.

For the base district's boundary, the analysis quotes N.D.C.C. § 15.1-08-01(3) and its phrase "exclusive concurrent or proprietary jurisdiction." The final page instead refers to § 15.1-18-01(3). Both section numbers appear in the official PDF; this page follows the section cited beside the opinion's quoted boundary language. The Attorney General does not resolve whether the lease parcel meets that test.

Citations and references

• N.D.C.C. § 57-15-13 (school levy within district boundaries)
• N.D.C.C. § 15.1-08-01(3) (quoted military-installation district boundary provision)
• N.D.C.C. § 57-02-08(1) (federal-property exemption)
• 10 U.S.C. § 2667(f) (taxation of a lessee's interest)

Source

• Landing page: https://attorneygeneral.nd.gov/the-north-dakota-attorney-general-issued-a-letter-opinion-to-mr-swanson-mr-phillips-and-ms-warnstad/
• Original PDF: https://attorneygeneral.nd.gov/wp-content/uploads/2026/09/2026-L-04.pdf

Original opinion text

STATE OF NORTH DAKOTA

OFFICE OF ATTORNEY GENERAL
www. attorneyge ne ra I. n d. gov
(701) 328-2210

Drew H. Wrigley
ATTORNEY GENERAL

LETTER OPINION
2026-L-04

Mr. Howard D. Swanson
Attorney for Grand Forks Air Force
Base Public School Dist. No. 140
1397 Library Circle, Suite 202
Grand Forks, ND 58201
hswanson@swlawltd com

Mr. David Phillips
Attorney for Larimore
Public School Dist. No. 44
100 W. Broadway, Ste. 250
P.O. Box 2798
Bismarck, ND 58502-2798
[email protected]

Ms. Haley Warnstad
Grand Forks County
State's Attorney
124 S. Fourth St.
P.O. Box 5607
Grand Forks, ND 58206-5607
haley. [email protected]

Dear Mr. Swanson, Mr. Phillips, and Ms. Warnstad:
Thank you for your September 30, 2024, letter requesting my opinion regarding the appropriate school district taxing authority for property located adjacent to the Grand Forks Air Force Base and leased to a private entity. Pursuant to N.D.C.C. § 57-15-13, a school district only has taxing authority over property located within the boundaries of the school district, and determining which school district the property is located in is a question of fact. This office, "is limited to dealing with questions oflaw and is not authorized to resolve factual disputes of any nature[.]". 1 FACTS The Grand Sky UAS Technology Park (Grand Sky) was created in 2015 and is located on a parcel of property (Property) on the Grand Forks Air Force Base but outside the base's restricted area. The United States Air Force owns the Property and leases it to Grand Forks County pursuant to a Site Development Lease. Grand Forks County subleases the Property to Grand Sky Development Company, LLC, pursuant to a Sublease for the Enhanced Use Lease Project. The Property encompasses 216.65 acres ofland on the southeastern comer of the Grand Forks Air Force Base, and as noted in the Sublease for the Enhanced Use Lease Project, the Property is "under the administrative control of Grand Forks Air Force Base."2

1

N.D.A.G. 95-L-121; see also N.D.A.G. 2005-L-18 ("This office does not resolve questions of fact in an opinion."); N.D.A.G. 2001-L-19 ("Whether the contract serves the public interest is ultimately a question of fact which cannot be resolved in an Attorney General's opinion."); N.D.A.G. 97-L-177 ("It has been a long-standing position of this office not to issue opinions on questions of fact."). 2 Sublease for the Grand Sky Enhanced Use Lease Project at Grand Forks Air Force Base, N.D., By
& Between The Cnty. of Grand Forks & Grand Sky Dev. Co., LLC (Jan. 28, 2015).

LETTER OPINION 2026-L-04
September 15, 2026
Page2
Prior to the creation of the Grand Forks Air Force Base School District (Base District), the Property was within the boundaries of the Larimore Public School District. 3 In 1989, the North Dakota Legislature created N.D.C.C. ch. 15-27.1 relating to the establishment of school districts on military bases, at which time the Base District was created. 4 Because the federal property was not leased prior to 2015, the land was not subject to taxation on behalf of local political subdivisions. Since the execution of the lease of the Property to Grand Sky in 2015, however, Grand Forks County has collected taxes on the Property, including a school mill levy that is distributed to the Larimore Public School District. The assessment of a local tax on federal property is permissible pursuant to an exception which provides for the taxation of leased property under 10 U.S.C. § 2667(f). The Base District is considering levying taxes upon the Property to provide additional funding for educational services provided by Grand Forks Public School District to the Base District. 5 This desire to levy taxes on the Property has prompted the requesters to seek guidance from this office. ANALYSIS "All property in this state is subject to taxation unless expressly exempted by law."6 All property owned exclusively by the United States is exempt from taxation "except any such property which the state and its political subdivisions are authorized by the laws of the United States to tax." 7 Federal law provides an exception allowing for the Property's lease holders to be taxed, specifically, "[t]he interest of a lessee of a property leased under this section may be taxed by State or local govemments."8 This is reiterated in Section 11 of the Site Development Lease as follows: 11. Taxes. Lessee shall pay to the proper authority, when due and payable, all taxes, assessments, and similar charges that may be imposed on Lessee or the Project. Each Party shall have the right, but not the obligation, at its own expense to take such actions as may be necessary and appropriate (i) to contest the validity, applicability or amount thereof; (ii) minimize such taxes, assessments or charges; or (iii) assert any exemption which may be available with respect to taxes, assessments or charges imposed on the Project. If and to the extent the Leased Premises are made taxable by

3

Letter from Howard D. Swanson, Att'y for Grand Forks Air Force Base Sch. Dist. No. 140, David Phillips, Att'y for Larimore Pub. Sch. Dist. No. 44, & Haley Wamstad, Grand Forks Cnty. State's Att'y, to Drew Wrigley, Att'y Gen., Off. ofAtt'y Gen. (Sept. 30, 2024). 4 H.B. 1304, 1989 N.D. Leg. N.D.C.C. tit. 15 was largely re-codified in 1999, H.B. 1034, 1999 N.D. Leg., as a result the provisions of this chapter are now located in N.D.C.C. ch. 15.1-08. 5 Letter from Howard D. Swanson, Att'y for Grand Forks Air Force Base Sch. Dist. No. 140, David Phillips, Att'y for Larimore Pub. Sch. Dist. No. 44, & Haley Wamstad, Grand Forks Cnty. State's Att'y, to Drew Wrigley, Att'y Gen., Off. ofAtt'y Gen. (Sept. 30, 2024). 6 N.D.C.C. § 57-02-03. 7 N.D.C.C. § 57-02-08(1). 8 10 u.s.c. § 2667(f).

LETTER OPINION 2026-L-04
September 15, 2026
Page 3
state or local governments under an Act of Congress, this Lease shall be renegotiated pursuant to 10 U.S.C. § 2667(f). 9 It is clear from both the law and the information provided that Grand Sky's lease interest in the Property is subject to taxation by the State and local governments, including school districts. North Dakota Century Code establishes local taxing districts, 10 including school districts, 11 and mandates that property is only subject to taxation by the taxing district in which it is located. 12 The authority to levy taxes does not extend beyond the boundaries of the taxing district. Therefore, to levy school taxes on the Property, the Property would need to be located within the boundaries of the school district. Subsection 3 of N.D.C.C. § 15.1-08-01 states that boundaries of a military installation school district are "coterminous with all lands over which the installation has exclusive concurrent or proprietary jurisdiction." 13 Whether the Property is under the exclusive concurrent 14 or proprietary 15 jurisdiction of the Grand Forks Air Force Base is a question of fact, and this office does not resolve questions of fact in an opinion. 16 The Site Development Lease, however, provides the following: The Installation must maintain control over the [Property] due to its strategic location at the south end of the runway and its adjacency to the existing Alert Pad and B

9

Dep't of The Air Force Site Dev. Lease On Grand Forks Air Force Base, Grand Forks Cnty., N.D. (Feb. 6, 2015). 10 "Taxing district[s]" are defined as "any political subdivision empowered to levy taxes." N.D.C.C.
§ 57-15-0l.2(6)(f).
11
School boards possess the authority to levy taxes on "property in the district for school purposes, as permitted in N.D.C.C. ch. 57-15." N.D.C.C. §15.1-09-33(31). See also N.D.C.C. §§ 57-15-13, 57-15-14. 12 A school board may levy a tax on "the taxable valuation of the district." N.D.C.C. § 57-15-14(l)(e)(3) (emphasis added). See also N.D.C.C. § 57-15-12(1) (park districts); N.D.C.C. § 57-15-20 (townships); N.D.C.C. § 57-15-26.1 (recreation service districts); N.D.C.C. § 57-15-26.4 (hospital districts); N.D.C.C. § 57-15-26.8 (Garrison Diversion Conservancy District). 13 N.D.C.C. § 15.1-08-01(3). 14 "Concurrent jurisdiction" refers to the authority of both the federal government and the State to independently enforce their respective laws on federal property. 15 "Proprietary jurisdiction" refers to those instances wherein the federal government has acquired some right or title to an area in a State but has not obtained any measure of the State's authority over the area. Captain Richard F. Papcun, Proprietary Jurisdiction, 13 Air Force L. Rev., 116, 117 (1971). 16 N.D.A.G. 2005-L-18; N.D.A.G. 2001-L-19; N.D.A.G. 97-L-177; N.D.A.G. 95-L-121.

LETTER OPINION 2026-L-04
September 15, 2026
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Ramp, both of which are used by the Installation and will continue to be used and required for mission flexibility. 17 Additionally, Section 15.3 of the Site Development Lease states, in part, "[t]he United States presently exercises proprietary legislative jurisdiction over the [Property]." 18 The local jurisdictions will need to make the factual findings necessary to determine whether the Property meets the requirements of N.D.C.C. § 15.1-18-01(3) such that it falls within the boundaries of the Base District. If it does, that district is the only school district that may levy taxes on the Property. In summary, the Property leased by Grand Sky has an exception that allows for taxation to be levied upon the lessee by the State and local governments. The authority of a school district to levy taxes does not extend beyond the boundaries of the school district. The boundaries of a military installation school district are established by N.D.C.C. § 15.1-18-01(3), however, whether the Property satisfies those requirements depends on the facts, which will be determined through the local jurisdiction's fact-finding process. 19

Drew H. Wrigley
Attorney General
meo/arnh
cc:

Shawn Grinolds - via email only - [email protected]

This opinion is issued pursuant to N.D.C.C. § 54-12-01. It governs the actions of public officials until such time as the question presented is decided by the courts. 20

17

Dep't of The Air Force Site Dev. Lease On Grand Forks Air Force Base, Grand Forks Cnty., N.D. (Feb. 6, 2015) Recitals (iii). The Emergency Services Plan also offers further evidence of concurrent jurisdiction by outlining the emergency services that will be provided by Grand Forks County. Id. Exhibit H, Emergency Servs. Plan. 18 Id. Section 15.3 (emphasis added). 19 N.D.C.C. § 54-12-01(6). See also N.D.A.G. 2018-L-05; N.D.A.G. 99-L-02. 20 See State ex rel. Johnson v. Baker, 21 N.W.2d 355 (N.D. 1946).