Bank of North Dakota seeks funding tweaks, confidentiality changes and modest capital spending

The Appropriations - Education and Environment Division reviewed the Bank of North Dakota’s biennial budget and proposed statutory amendments during a committee meeting, where bank officials asked for limited adjustments to staffing and confidentiality rules and described planned capital spending.

Bank of North Dakota President and CEO Don Morgan told the committee there were no new budget requests beyond the packet the bank had already provided, and that the bank could likely absorb initial cash-management work without adding permanent staff. "I think we'd be on board with either considering, you know, them temporary or just removing them," Morgan said of two positions that had been included in an earlier executive proposal.

The request and why it matters

Bank staff and legislative budget analysts contrasted the Armstrong executive budget with the prior Bergum/Bergham submission. The chief differences discussed were a recommended removal of $600,000 in one-time temporary salaries for cash-management work, a proposed $343,000 “true up” to match historical health-insurance and salary adjustments, and an approximately $4 million capital expenditure request to refresh the bank’s building. Adam, a legislative fiscal staff analyst, noted the bank’s operating budget is largely presented as a single line item; the bank’s separate capital-assets line is roughly $1.5 million.

Confidentiality amendments and program changes

Kelvin Hollitz, the bank’s chief business development officer, outlined three proposed statutory amendments the bank is seeking. The first would align confidentiality protections for the bank’s participation-loan records with those typically afforded to local financial institutions so that the bank can coordinate with local lenders without automatic public disclosure of loan participants. Hollitz said that the bank sometimes functions in the background on participation loans and that public disclosure can identify bank involvement where borrowers and lead lenders expect the bank to be a nonpublic participant.

The second amendment would make amounts of certain insurance coverages confidential — Hollitz cited cyber and liability insurance as examples the bank prefers not to disclose publicly. "One of the things that we have really focused on in the biennium is thinking about the confidentiality of our records at the Bank of North Dakota," Hollitz said.

The third amendment set relates to program changes including a request to increase the allowable interest-rate buy-down for large PACE projects. Bank representatives said the current statutory maximum for a buy-down is $500,000 and proposed allowing up to an additional $1,000,000 for projects with substantial economic impact, while preserving local community buy-in by not increasing the required local match.

Other items discussed included moving the UND Small Business Development Center (SBDC) funding to the bank’s program account and increasing the bank’s SBDC allocation from $1.5 million to $1.9 million to capture the available federal match (bringing total program funding to roughly $3.8 million with federal dollars). The bank also described its preference to avoid requiring staff to pay for internal training events and requested authority to hold up to four staff events per biennium at an estimated total cost of $50,000.

Where the committee is headed

Committee leadership said it would schedule a hearing focused on the proposed confidentiality language to allow public comment. No formal votes or appropriation changes were taken at the meeting.

Ending note

Bank officials emphasized the changes they seek are limited: removing the $600,000 temporary salary request, asking the Legislature to consider a $343,000 true-up, proceeding with planned capital refresh funding, and pursuing confidentiality revisions in statute. The committee said it would publish a hearing notice on the confidentiality proposals.