House Bill 16-19 would appropriate $100 million to establish a long-term care facility infrastructure revolving loan fund administered by the Bank of North Dakota to finance renovations, new construction and equipment upgrades for long-term care facilities.

Representative Emily O’Brien, sponsor of HB 16-19, told the Senate Appropriations Human Resources Committee the fund would allow loans up to $10 million per project at a 2% interest rate, with loans capped at 50% of project cost and repayment terms up to 30 years. “It will enable facilities to secure loans at a 2% interest rate, which is significantly lower than the typical 5 to 7 that they are otherwise facing,” O’Brien said.

Kelvin Hollid, chief business development officer at the Bank of North Dakota, explained the fund would mirror other legislatively directed revolving loan funds: the full $100 million would be appropriated to the new fund and disbursed to qualifying projects as applications are approved. Hollid said the bank would administer underwriting, typically working with a lead local lender, and that the bank takes a 50-basis-point administrative fee while the remainder accrues to the fund.

Brad DeYoung, partner at EideBailly and longtime financial consultant to senior-living organizations, described the capital need: “Most of the projects that I can tell you, the 5 that are in place, the lowest cost one will probably be in the $30 to $35 million range,” DeYoung said, noting that high market interest rates and construction costs make new builds infeasible without state support. He said about five major projects are currently in planning and could use the fund; other providers would likely seek loans or smaller renovation financing if the fund is available.

Committee members probed program design: project caps, whether projects could refinance existing debt (testimony said refinancing is not allowed under the proposed bill), how projects would be prioritized, and who would underwrite viability (the Bank of North Dakota would underwrite applications and may use sector associations, such as the Long Term Care Association, to assist review). Witnesses said the program would typically be structured as blended financing so private lenders participate and the 2% public loan funds reduce the blended cost of capital.

Testimony noted that the fund’s revolving structure is intended to make money available for future projects when repayments are received and that, with a $10 million cap per project, a $100 million appropriation could support multiple major projects in the near term. No committee vote on HB 16-19 was recorded during the segment.