Senate committee hears bill to let campuses bank capital funds, ease matches for smaller institutions

Senator Jonathan Sickler, District 17 of Grand Forks, told the Senate Appropriations — Education and Environment Division that Senate Bill 2212 would allow public higher-education campuses to bank capital building funds across biennia and alter matching requirements to reflect institutional capacity.

Sickler said the bill would change the current “use it or lose it” approach under tiers 2 and 3 so campuses could save and plan for larger capital and remodeling projects over multiple biennia. “The idea is to help make this a more, say, more organized process, perhaps, or maybe a more thoughtful process in terms of giving campuses the ability to look ahead more than just a couple years,” Senator Sickler said during the hearing.

Why it matters: supporters said the change would help campuses plan and address long‑term deferred maintenance rather than repeatedly asking the Legislature for discrete projects. Witnesses from the university system and several campuses told the committee that some institutions cannot readily provide local matching funds at the same levels as UND and NDSU, and they asked for flexibility in match rules and expanded uses of tier 3 funds.

North Dakota University System staff member Jamie Wilkie asked the committee to adopt an amendment to let tier 3 capital building funds be used for the same deferred‑maintenance purposes as tier 2 where appropriate. “The State Board of Higher Education has not taken an official position on this bill, but does support the capital building fund and increases to it, as well as reduced matching requirements,” Wilkie testified, and later asked the committee for a “do pass” with the amendment.

Campus leaders described persistent maintenance backlogs. Rod Flanagan, president of North Dakota State College of Science, said NDSCS has nearly 1,500,000 square feet of building space and that maintenance obligations run about $4,000,000 each year just to hold the campus at its current condition. Mike Ellingsen, director of facilities at North Dakota State University, told the committee that a 2014 third‑party review put NDSU’s deferred maintenance at about $243 million; the university’s current estimate is about $323 million. Ellingsen said the university’s general‑fund deferred‑maintenance allocation rose from roughly $2.7 million in 2010 to about $9.3 million today and that a proposed additional $10 million would help “turn the corner” on the backlog.

The bill would also increase the total tier funding available in the proposed structure. Legislative counsel explained the current biennium total for tiers 2 and 3 is about $24 million, up from an original $19 million, and that the bill proposes raising available funding to roughly $65 million. Counsel reviewed how tiers were created and allocated: tier 1 historically covered extraordinary repairs and deferred maintenance, was initially determined by the Office of Management and Budget based on square footage and property value and later folded into the funding formula; tiers 2 and 3 were added by the House Appropriations Committee in 2019, with tier 2 allocations tied to student credit hours and tier 3 allocations based on institutional type/size.

Committee members and witnesses noted tradeoffs and open questions: how quickly a new savings mechanism could reduce pressure for ad hoc capital requests; what an appropriate starting dollar amount would be; and how to phase in the approach without undermining ongoing capital appropriations. The committee chair said the bill will remain part of broader higher‑education budget discussions and is unlikely to move to final action immediately.

No formal action or vote was taken in the hearing; the committee closed testimony and indicated the bill would be discussed further as part of the higher‑education budget process.