Committee hears proposal for $100 million loan‑guarantee program to help rural nursing, basic care facilities (HB1550)

Bismarck — The House Human Services Committee heard testimony in support of House Bill 1550, which would establish a nursing and basic care facility loan guarantee program administered by the Bank of North Dakota and backed by up to $100 million from the Strategic Investment and Improvements Fund (SIF).

Rep. John Nelson (District 14) introduced the bill and said the fund would operate like other state revolving programs to help finance construction and remodeling of basic care and nursing facilities. “This fund would be a $100,000,000 would be put into a construction loan fund much like the school loan fund that currently is used for school construction,” Nelson said.

Nikki Wagner, president of the North Dakota Long Term Care Association, and Brad DeJong, a CPA with Eide Bailey who advises rural health clients, described how rising construction costs and higher interest rates have made capital projects difficult for small and rural providers. Wagner said the program would reduce lender risk and expand project capacity; DeJong testified that a guarantee could materially lower borrowing costs and therefore facility rates charged to residents.

Technical witnesses including Kelton (Kelvin) Hollott, Senior Vice President for Business Development at the Bank of North Dakota, outlined mechanics: the bank would maintain a dedicated guarantee reserve fund and transfers from SIF to the bank would be made only as guarantees are approved; the bank would reimburse lenders from the reserve fund if guaranteed loans default and then pursue collection. Hollott said guarantees are typically for a portion of a loan (for example 25–30 percent) and the bank would only move funds from SIF equal to the guaranteed amount. He also described a separate companion bill (HB1619) that would create a revolving low‑interest loan fund.

Committee members asked whether lenders would still require project underwriting and forecasts; witnesses confirmed that participating lenders would require thorough financial projections and debt‑service coverage metrics. Witnesses and providers gave examples of specific rural facilities that need replacement or renovation and said the program could support up to roughly ten projects in an initial round given project caps and eligibility constraints. No formal committee vote was recorded in the hearing transcript.

The committee heard multiple provider witnesses who said a loan guarantee or low‑interest loan is essential to allow projects to proceed without large resident rate increases. Witnesses noted existing federal programs such as USDA loans remain available but have also seen interest rate increases.