Legislative staff and the Bank of North Dakota briefed the Water Topics Overview Committee on the state’s principal funding sources for water projects and the limits those sources impose on future investment.

Levi, Legislative Council staff, presented a background memorandum that summarized the principal funds and loan programs available for water projects. He said the Resources Trust Fund receives 20% of the oil extraction tax and that a 0.5% additional allocation to the Resources Trust Fund was added in past legislation to make up earlier shortfalls. Levi said estimated Resources Trust Fund revenue for the 2025–27 biennium was about $880,200,000 and estimated expenditures and transfers were about $878,000,000, leaving an estimated balance of about $1,800,000 at the end of the biennium. He outlined several other state loan and grant sources, including the infrastructure revolving loan fund, the legacy infrastructure loan fund, and the Water Infrastructure Revolving Loan Fund administered through the Bank of North Dakota, plus federal Clean Water and Drinking Water State Revolving Funds administered jointly by the Department of Environmental Quality and the Public Finance Authority.

Kylie Merkel of the Bank of North Dakota described the bank‑administered loan programs in practical detail. The infrastructure revolving loan fund and legacy infrastructure loan fund finance essential political‑subdivision infrastructure with terms up to 30 years and a statutory maximum interest rate of 2 percent; maximum outstanding loans per applicant are limited (statutory caps were cited as $20,000,000 per applicant for some funds and up to $40,000,000 outstanding under other legacy rules). Kylie said the Bank of North Dakota has moved to application rounds when appropriations have not replenished the funds and that an application round in June produced 19 applications totaling about $61,000,000; the bank allocated $26,000,000 to 11 projects and plans another application round in November for $20–25,000,000 in new loans. She said BND currently administers about $200,000,000 in combined outstanding loans across these funds.

Kylie explained the Water Infrastructure Revolving Loan Fund was formed from prior loan funds in 2021 and carries a mix of terms — many earlier loans carry 40‑year terms because they originated under an older program. She also summarized prioritization criteria the bank uses when funds are oversubscribed: community impact, health and safety, affordability metrics, readiness to proceed and matching grant funds.

Levi and Kylie both noted that program structures matter when a project seeks the best funding package. Levi described FIND (Financing for Infrastructure in North Dakota), a multi‑agency portal used to coordinate applications across state agencies and avoid competing grants or loans for the same dollars. Levi also summarized smaller funds and one‑time transfers commonly used for water projects, including the Water Project Stabilization Fund and a municipal infrastructure fund. Analysts and agency staff warned that a long list of identified needs — DWR’s 14‑year inventory estimated eligible projects at roughly $3.4 billion — outstrips likely extraction‑tax revenue in the 2025‑27 biennium and beyond unless new revenue sources are identified.