The House Appropriations Committee on Friday advanced House Bill 10‑20, the Department of Water Resources budget and a multi‑biennium funding strategy that would accelerate a slate of water projects through a combination of trust‑fund cash, a proposed $200 million strategic line of credit from the Bank of North Dakota and a $100 million bonding package dedicated to the Southwest Pipeline.

Representative Swantek introduced the bill and a public presentation that outlined a 14‑year needs assessment the department compiled. Department director Reese (self‑identified as director of the Department of Water Resources during the hearing) and Bank of North Dakota officials described a model that would use existing cash on hand in the Resources Trust Fund more aggressively to fund projects now and hedge against inflation and construction‑cost escalation.

Reese told the committee that water projects typically take multiple years — sometimes close to a decade — to complete and that appropriated trust‑fund dollars are often obligated early but spent over extended timelines. "With all that goes into constructing water infrastructure ... in some cases it could take closer to a decade to complete the project," Reese said, explaining the department reimburses sponsors as costs are incurred and therefore holds cash for long periods.

Bank of North Dakota Chief Business Development Officer Kelvin Hollitt described modeling that used oil‑tax revenue forecasts to show the trust‑fund balance could be drawn down from roughly $450 million toward $200 million over a multi‑biennium program while accelerating about $100 million per year in project spending under the bank’s “most likely” revenue scenario.

The strategy presented to the committee included three main elements:
- A $200 million strategic line of credit from the Bank of North Dakota to provide temporary acceleration of project funding (described to the committee as a cash‑management “overdraft” to be used only if needed).
- A $100 million bond package dedicated to the state‑owned Southwest Pipeline project, using its capital‑repayment stream as the debt service source.
- Reallocation and targeted use of Resources Trust Fund cash to accelerate high‑priority projects (examples cited: Red River Valley Water Supply and Mouse River Valley projects).

Bank staff also proposed adjustments to how the trust fund’s cash is invested and how matching and loan programs are structured to increase returns and provide additional lending capacity for local sponsors. Kylie Merkel of the Bank of North Dakota walked the committee through the Water Infrastructure Loan Fund’s recent history (a merger of two loan funds), its remaining commitments, and its capacity to support local cost shares with long‑term, low‑interest loans.

Committee members asked for operational details including whether bonding terms could be extended beyond 30–40 years (the Department said 40 years is the common requested term tied to useful life), how the proposed line of credit would be phased out over time, and whether the cash‑management approach had been coordinated with other state cash‑management efforts. Bank and agency officials said the plan had been shared with leadership and the governor’s office and characterized it as the first concrete example of applying cash‑management tools at the agency level.

The committee adopted amendment 25.0164.0.01011 and then voted to recommend passage of House Bill 10‑20 as amended. Committee roll call was read in public; the amendment vote and the final do‑pass recorded a majority in favor and one abstention on the final passage roll call. The committee praised the collaboration between the Bank of North Dakota and the Department of Water Resources and noted the package’s potential to accelerate major regional projects while reducing inflation exposure.

Why it matters: The approach would front‑load construction of multi‑year, high‑cost projects — including the Red River and Mouse River regional systems — by converting a portion of the Resources Trust Fund’s cash into near‑term project financing and using the bank credit line and targeted bonding to preserve long‑term fund solvency. Accelerating projects could reduce overall construction costs but also carries implementation and revenue‑risk if oil‑tax receipts deviate from forecasts.

What’s next: The committee recommended HB10‑20 do pass as amended; the bill will be scheduled for floor consideration. Agency and Bank staff committed to provide additional repayment schedules, fund‑flow models and pump‑replacement / replacement‑schedule details at follow‑up requests from committee members.