An institutional holding association is subject to the following limitations and restrictions:

1.    Dormitories and their equipment and appurtenances must be erected and installed only according to plans and specifications therefor approved by the state board of higher education and at a cost for site, building, and equipment to be fixed by the board within the maximum limit provided in this section.

2.    Such dormitories and their equipment and appurtenances must be owned, managed, operated, and conducted at all times by the association, its successors or assigns, solely for the educational purpose provided in this chapter in connection with one of the state educational institutions and must be under the control and supervision of the state board of higher education, and operated according to such rules and regulations, including rental charges, as must be prescribed by the board, but such rental charges may not be less than an amount sufficient to pay the interest on the bonded indebtedness and the serial bonds of the association as they mature.

3.    An institutional holding association must be nonprofit sharing, shall issue no corporate stock, and no member of the association may have or acquire any divisional or other share or interest in any of its property.

4.    The income of such association must be applied only to the payment of its debts and operating expenses, including necessary repairs and upkeep of its properties.

5.    When all of the debts against any site, dormitory, and equipment are paid, all of the right, title, and interest of the association or its successors or assigns therein     terminates immediately, and the same becomes the property of and must be conveyed to the state.

6.    Any transfer or encumbrance of the property of an institutional holding association, except as permitted in this chapter, is prohibited and is null and void.

7.    The amount of money borrowed or debts contracted by an institutional holding association may not exceed the aggregate cost of the site, dormitory, and equipment as fixed by the state board of higher education, and the payment thereof may not extend over a period of more than fifty years. The terms and conditions of such loans or debts, except as herein provided, must be fixed and approved by the board.

8.    Dormitories must be erected only at the state educational institutions herein named within the cost limits for site, building, and equipment herein specified:

a.    One at or near the university at a cost of not more than two hundred thousand dollars.

b.    One at or near the North Dakota state university of agriculture and applied science at a cost of not more than two hundred thousand dollars.

c.    One at or near each of the normal schools located at Valley City, Mayville, Minot, and Dickinson at a cost of not more than one hundred fifty thousand dollars.

d.    One at or near the state school of science at Wahpeton at a cost of not more than one hundred thousand dollars.

e.    One at or near Dakota college, Bottineau at a cost of not more than fifty thousand dollars.

9.    No dormitory may be erected upon the campus of any state educational institution until a written permit therefor first is granted and issued to the association by the state board of higher education. Such permit must describe the ground to be used and must provide that the dormitory to be erected thereon must be erected, owned, and operated only by the association, its successors and assigns. The association and its successors and assigns shall acquire no right, title, or interest in and to the campus site, the dormitory erected thereon, or the equipment thereof, except the right to operate the dormitory solely for the educational purposes, in the manner, and upon the terms and conditions provided in this chapter.