Senate committee hears plan for $50 million long‑term care infrastructure loan fund; providers ask for $100M and 1% rate

House Bill 1619 would establish a long‑term care facility infrastructure loan fund at the Bank of North Dakota to provide low‑interest loans for renovation, construction and equipment projects at nursing, basic care and assisted‑living facilities. Representative Emily O’Brien (District 42, Grand Forks) told the Senate Human Services Committee the fund would begin with $50,000,000 and support projects of up to $10,000,000, with loans structured as a revolving resource for the state.

That companion bill would be “managed by the Bank of North Dakota and will support up to $10,000,000 per project with low interest loans and favorable terms,” O’Brien said, adding the fund is modeled on the state’s hospital program.

Why it matters: Testimony from facility leaders and the North Dakota Long Term Care Association described aging building stock, large variations in local construction costs and difficulty accessing affordable external financing — especially in rural communities. Advocates said low‑cost capital would help facilities modernize, improve resident safety and retain staff.

Nikki Wagner, president of the North Dakota Long Term Care Association, said many facilities are “aging in urgent need of renovations, updated equipment, and infrastructure improvements,” and that current market conditions and perceived lender risk make major projects hard to finance. Wagner reviewed bill language that would add a new section to chapter 6‑09 of the North Dakota Century Code establishing the loan fund and said the bill calls for loan repayment terms not to exceed 30 years, a requirement that loans not cover more than 50% of project costs, and a 24‑month construction completion deadline for recipients.

Kylie Merkel of the Bank of North Dakota told the committee the draft loan program language is “almost identical” to the state’s hospital loan program, with the interest rate as the main difference. Merkel confirmed the fund would be a special fund in the state treasury administered by the bank and that the bank already administers multiple legislatively created loan programs.

Facility leaders described local budgets and projected cost shortfalls. Trevor Tompkins, administrator of Lutheran Sunset Home in Grafton, said his facility’s feasibility work showed renovation could be as costly as replacement because of building inefficiencies and land constraints; he gave a recent building‑cost estimate of about $625 per square foot for a rural project. Tompkins said his facility’s census averaged 93% over the past three years and urged the legislature to restore the original $100,000,000 request and the 1% interest rate that the hospital program uses.

Doug Panshot, administrator at Service Valley Care Center in Velva, told the committee his architects were quoting well over $600 per square foot and estimated a roughly $24,000,000 shortfall on a replacement project if the facility relied only on USDA financing. He and other presenters said a low‑interest state loan could bridge gaps that USDA or conventional lenders leave.

Provisions and funding mechanics described in testimony: the bill would cap loans at $10,000,000 per project, limit loans to no more than 50% of project cost, set repayment terms of up to 30 years, require project completion within 24 months or risk forfeiture, and return all principal and interest repayments to the revolving fund. Section 2 of the bill directs the Office of Management and Budget to transfer $50,000,000 from the Strategic Investment and Improvements Fund to the new loan fund beginning July 1, 2025, through June 30, 2027.

Speakers pressed committee members about whether to restore the original $100,000,000 appropriation and whether the interest rate should be 1% instead of the bill’s 2%. Testimony from Brad DeYoung, a partner at Eide Bailly who works with senior‑living financing, said the hospital loan program’s 1% loans had been “very beneficial” to hospitals and argued that similar treatment for long‑term care would free up cash flow and reduce private‑pay burdens.

No formal vote was recorded during the hearing. Committee members asked the bank and providers technical questions about cash management and loan administration; Merkel confirmed loan funds are administered by the Bank of North Dakota and rolled into the state’s financial statements for reporting.

What’s next: Committee members did not take a final action during the hearing. Several senators said they were open to discussion about the fund size and rate and to balancing the demands of rural providers and state budget considerations.

The hearing included sustained testimony from multiple providers and industry groups and lasted an extended portion of the committee’s morning and early afternoon agenda.