The Appropriations - Education and Environment Division spent its meeting reviewing water funding and policy changes as senators and staff sought ways to manage a growing carryover of unspent project dollars.

Committee Chair Sorvaugh opened the session with a review of current numbers and proposals. The chair and staff described a $514,000,000 carryover of water-related funds and explained the revenue forecast reduced available funding by about $93,000,000 compared with the House plan. The committee is working with a working assumption of a $150,000,000 line of credit to provide flexibility: $50,000,000 of that would be reserved as backup for the Southwest Water Treatment Plant and $100,000,000 would be available to leverage carryover into the next biennium.

Chris Katamus, director of administration for the Department of Water Resources, confirmed the Southwest water treatment plant project is roughly a $94,000,000 project and said only limited engineering expenses have been spent so far. Katamus said the project is anticipated to be a three‑year effort and that much of the carryover will be spent through the current biennium as contracts and billing proceed.

Committee members reviewed project-by-project carryover estimates discussed by staff. The chair presented the committee’s current working allocations, which included $12,000,600 to NAS, $35,000,000 for Southwest (plus the $66,000,000 listed elsewhere for the treatment plant), an approximate $13,000,000 allocation for Valley City, and larger carryover balances for other regional projects. The Service River flood control program was cited as having roughly $104,000,000 in carryover while the committee had appropriated $76,100,000 in the prior biennium. Other referenced figures included a proposed $7,000,000 allocation for Heart River work, a $150,000,000 reference for Redwood Water Supply (much of it reported under contract), $35,000,000 for a municipal allocation, $55,000,000 for rural water, and a discretionary balance of $8,000,000. The chair said general water was shown at $18,000,000 in the working sheet.

Members discussed concerns about accumulating carryover while projects remain uncompleted, and the committee chair framed the line-of-credit approach as a temporary tool to manage timing rather than an immediate new spending authorization. The chair emphasized that the Senate’s numbers will be renegotiated in conference committee with the House.

Separately, the committee reviewed proposed statutory changes to activate and use the Water Topics Overview Committee as a formal review step for large new water project requests. Alex (legislative staff) outlined the amendment language being prepared: any new water project anticipated to be submitted to the water commission or to the next legislative assembly with an estimated state cost share of $10,000,000 or more would be required to be presented to the Water Topics Overview Committee for consideration before March 31 of each even‑numbered year. The committee would review requests, make prioritization recommendations to the next legislative assembly, and forward a copy of its report to the Appropriations Committees. Alex also said two interim meetings (generally summer and late summer) were intended to give the committee time to review requests in advance of session.

The committee also agreed to change reporting deadlines for two study sections in the bill (sections 20 and 21) so those studies produce a single report by March 31, 2026, rather than an earlier legislative‑management interim reporting schedule. Alex said the purpose is to provide the Water Topics Overview Committee time to review results and to allow the Appropriations Committees at least two meetings to act on findings.

No formal vote was taken on the line‑of‑credit plan or the Water Topics language during the meeting; staff were asked to circulate the draft amendment and the committee planned to reconvene the next day to finalize language and the long‑sheet numbers. The chair said the committee expects substantial negotiation ahead in conference committee on how the House and Senate funding plans reconcile.