A BILL for an Act to create and enact a new chapter to title 6 of the North Dakota Century Code, relating to a nursing and basic care facility loan guarantee program.
Summary
HB 1550 would create a new chapter in Title 6 of the North Dakota Century Code establishing a nursing and basic care facility loan guarantee program administered by the Bank of North Dakota. The program would authorize the Bank to guarantee loans used to construct or renovate nursing homes and basic care facilities, determine which loans and projects qualify, and accept property or other assets to support the program. It also sets out procedures for handling guaranteed loans, including lender reimbursement when a loan defaults and collection authority for the Bank.
The bill would require the Bank of North Dakota to maintain a reserve fund for the guarantees and allow transfers from the state’s strategic investment and improvements fund to keep that reserve fully funded, up to a total of $100 million. The reserve fund would be used to reimburse lenders on defaulted guaranteed loans, and interest, earnings, and certain fees would be deposited back into the fund. The bill also authorizes the Bank to charge participating lenders fees to cover administrative costs.
Impact
If enacted, HB 1550 would have added a state-backed financing tool for long-term care infrastructure by shifting some construction and renovation lending risk from private lenders to the Bank of North Dakota and, indirectly, the state reserve structure. It would have affected the Bank’s statutory duties, the strategic investment and improvements fund, and the legal framework governing loan guarantees, defaults, and collections for nursing and basic care facility projects.
Sentiment
The bill appears to have had limited support and ultimately failed on House second reading by a wide margin, with only 3 yeas and 89 nays. With no committee transcript available, the recorded vote is the main indicator of sentiment, and it suggests the proposal did not gain broad legislative backing despite its targeted focus on health care facility financing.
Contention
The main likely point of contention was the use of state resources to backstop private loans, especially the potential transfer of up to $100 million from the strategic investment and improvements fund to support the reserve account. Supporters likely viewed the measure as a way to improve access to capital for nursing and basic care facilities, while opponents may have been concerned about fiscal exposure, the size of the state commitment, and whether a loan guarantee program was the best use of public funds. The absence of committee discussion makes it difficult to identify specific arguments beyond the strong negative floor vote.