Senate committee backs bill to protect long‑standing rural water service agreements after court ruling

The Senate Industry and Business Committee on Tuesday voted 5-0 to add an emergency clause and give a do-pass recommendation to House Bill 15‑37, legislation designed to clarify the status of long‑standing water service agreements after a North Dakota Supreme Court ruling found some such contracts void when a state lending agency was not a formal party.

Representative Emily O'Brien, who introduced the bill, told the committee HB 15‑37 would protect agreements made before Jan. 1, 2025, by making them voidable only after 30 days' written notice from the State and by specifying that cities or rural water districts may not themselves void such agreements. "The bill now as written provides those agreements made prior to 01/01/2025 that did not have the state as a party to the agreement is voidable upon 30 days written notice from the state," O'Brien said.

The measure responds to a North Dakota Supreme Court decision interpreting North Dakota Century Code chapter 6‑09.4‑22 and federal statute 7 U.S.C. 1926(b), which, according to testimony, left some multi‑party water service agreements vulnerable to being declared legally nonexistent when the Public Finance Authority or another state lending entity was not explicitly a party.

The dispute in question began…