Committee backs multi-year water funding plan; approves line-of-credit and loan-fund changes

The E & E Committee unanimously recommended a do-pass for House Bill 1020 after adopting amendments that implement a 14-year water funding plan, authorize a strategic $200 million line of credit for the Department of Water Resources and provide targeted appropriations for regional systems and local projects.

Representative Swantek, the bill sponsor, said the proposal aims to “improve resiliency and protect North Dakota citizens and the economy from negative water-related impacts” by accelerating project spending and clarifying governance, cost-share policy and carryover authority. He described a 14-year prioritization framework for statewide water needs and emphasized the Legislature’s intent to retain existing legislative intent for major projects including the Mouse River and Red River efforts while addressing inflationary needs.

Rhys Haas, director of the Department of Water Resources, told the committee that water projects do not fit neatly into a two-year biennial cycle: "Depending on the size and complexity of a water project, it could take anywhere from 3, 4 years to, in some cases, over a decade to actually complete the project." He and Bank of North Dakota staff presented a cash-management model showing how accelerating spending and using a line-of-credit backstop could move committed cash into active projects and yield inflation savings.

Kelvin Hullick, chief business development officer at the Bank of North Dakota, described a modeled scenario in which increased biennial spending (up to about $450 million) and a $200 million line of credit would reduce the Department of Water Resources cash balance over several years while preserving a contingency backstop. Kylie Merkel, Bank of North Dakota loan-programs staff, reviewed the Water Infrastructure Revolving Loan Fund (the “Hofstead” fund), explaining program history, terms (up to 40-year loans in some cases) and current balances. She said the fund has been used to meet local cost-share obligations for large regional projects and that recent activity — including Minot flood control and Red River Valley Water Supply — has reduced available cash.

Key budget and policy details discussed in committee include: - A proposed one-time strategic line of credit of $200,000,000 to accelerate spending and act as an overdraft facility for the Department of Water Resources. - Targeted bonding for the Southwest Pipeline project to free up roughly $100,000,000 in resources-trust-fund capacity for other projects. - Adjustments to the Water Infrastructure Revolving Loan Fund (Hofstead fund), including a $45,000,000 appropriation in the amendments and an anticipated $74,000,000 available for new loans in the 2025–27 biennium after repayments and the deficiency appropriation discussed in committee. - Continued retention of 20.5% of oil-extraction tax revenue into the resources trust fund under the proposed plan; staff warned that lowering that share to 15% would produce significant shortfalls and undermine the proposal’s assumptions. - Project-specific increases in legislative intent amounts for Mouse (Mouse) River and Red River projects, and appropriations for South Bismarck, Devil’s Lake pump replacement, and other priority items. - Several personnel and programline requests funded from special funds, including an accounting position, a deputy director position for succession and continuity, a NAWS operator position funded by water users, and a Silver Jackets liaison position funded through federal partners (Corps of Engineers). A requested legal position was removed from the package.

Representative Swantek moved amendment 25.0164 0.0101; Representative Martinson seconded. The amendment and the do-pass motion were approved in unanimous roll calls. The roll calls recorded votes in favor by Chairman Naithi, Vice Chairman Swantek, Representatives Hansen, Lausser, Martinson, Richter and Sanford (7–0). The committee thanked Representative Swantek and agency and Bank of North Dakota staff for the collaborative work on the multi-year plan.

Representative Swantek said the bill includes reporting and legislative-intent provisions, a governance study for regional systems, and a cost-share policy review to be undertaken during the interim. The committee also included authority for limited discretionary transfers within the water budget and a provision declaring the bill an emergency measure.

House Bill 1020 now advances to the next stage with a committee recommendation and the amendments described above.