Senate committee hears bill to create wastewater grant program, sponsors, DEQ and cities outline need

House Bill 1577, which would create a wastewater infrastructure grant program to be administered by the North Dakota Department of Environmental Quality, was the subject of testimony before the Senate Energy and Natural Resources Committee. Representative Alisa Mitskog, the bill sponsor, told the committee “House Bill 1577 proposes to provide a wastewater grant program to be administered through the Department of Environmental Quality.”

The bill as amended directs $25 million from the State Infrastructure Fund (SIF) to the program, down from an original $50 million request. Under the bill’s proposed structure grants would cover up to 60 percent of eligible project costs, with a 40 percent local match. The sponsor and witnesses said the request is intended as a first step to address long-standing gaps in wastewater funding across North Dakota.

Why it matters: Witnesses said wastewater projects have lagged behind drinking-water spending and that many small communities lack the capacity to carry large project costs. Diane Eamonts, executive director of the North Dakota Public Finance Authority, told the committee the Clean Water State Revolving Fund has fewer grant and loan-forgiveness opportunities than the drinking-water side; she said that pattern creates “significant challenges particularly for small communities that are already financially strained.”

Committee members pressed details on eligibility and prioritization. Representative Mitskog said the bill’s language was amended to include a carve‑out for smaller communities and that $12.5 million of the appropriation was directed to cities under the 12,500 population threshold. Matt Gardner, executive director of the North Dakota League of Cities, provided the committee an eight‑page intended‑use plan compiled by the Department of Environmental Quality and said the DEQ priority list contains about 300 wastewater projects totaling roughly $1.7 billion. Gardner told senators, “there’s 300 projects there, totaling for 1,700,000,000.0.”

DEQ and program details: David Brushwein, director of municipal facilities at DEQ, described the agency’s Clean Water State Revolving Fund (Clean Water SRF) ranking process and said the SRF’s priority list can contain many projects that remain on the list for years while communities seek funding. Brushwein said a $25 million appropriation would affect roughly eight projects on DEQ’s list and that most of those are small communities replacing existing infrastructure rather than building new systems. He also confirmed that the Clean Water SRF has an emergency clause to finance projects if a community loses wastewater service.

Funding context and local capacity: Witnesses and committee members discussed how local capacity to provide a 40 percent match will limit applications. Representative Mitskog and Matt Gardner agreed many small towns cannot absorb full project costs through utility rates or special assessments; Gardner noted statewide drinking-water cost‑share programs and federal funding have historically benefited drinking‑water borrowers more than wastewater borrowers. Diane Eamonts described recent loan‑approval and loan‑forgiveness totals and showed that drinking‑water projects have received higher grant shares than clean-water projects.

Local examples and next steps: Matt Veil, finance director for the city of Horace, said his city would seek a grant if the program passes for an estimated project north of $6 million to complete a phase of sewer work that sends wastewater to Fargo for treatment. DEQ and the Public Finance Authority witnesses said the agencies will model application and ranking procedures on existing SRF practices; DEQ staff will be available to answer detailed questions on eligibility, ranking and readiness to proceed.

Outcome: The committee heard testimony in favor and neutral information from DEQ and the Public Finance Authority. No committee action or final vote on House Bill 1577 was recorded at the hearing.

Ending: Sponsors and local officials urged the committee to consider the proposal as an initial program to begin addressing statewide wastewater needs, while acknowledging the appropriation size will not fully meet the backlog of projects. The bill will return to committee for further consideration and technical questions about application criteria, prioritization and the mechanics of the 60/40 cost share.