AN ACT to amend and reenact section 6-09-47 of the North Dakota Century Code, relating to a medical facility emergency operating loan program under the medical facility infrastructure loan fund; to provide an appropriation; to provide a transfer; to provide an effective date; and to provide an expiration date.
SB2403 expands and extends North Dakota’s medical facility infrastructure loan law by adding a new medical facility emergency operating loan program alongside the existing infrastructure loan program. The bill keeps the Bank of North Dakota as the administrator and authorizes it to make low-interest loans for qualifying nonprofit hospitals and other medical facilities for construction projects that improve health care infrastructure or access to nonprofit providers. It also creates a separate emergency operating loan program for local nonprofit hospitals in cities under 2,500 population, with applications due by March 31, 2026, and requires applicants to submit financial information, updated operating plans, and cash-flow projections showing feasibility after restructuring.
Under the bill, infrastructure loans may not exceed the lesser of $15 million or 75% of project cost, must carry a 2% interest rate, and must be repaid over no more than 25 years. Emergency operating loans may not exceed $5 million per applicant, must have an interest rate of no more than 2%, and generally may not exceed an 11-year term, with the first year eligible for interest-only payments. Borrowers must complete financed construction within 24 months or risk forfeiting the loan. The bill also makes the loan fund a continuing revolving fund, allows administrative costs and audits to be paid from the fund, and requires loan repayments to be deposited back into the fund.
The bill appropriates $5 million from the general fund and directs the Office of Management and Budget to transfer that amount to the medical facility infrastructure loan fund for the emergency operating loan program. This is designated as one-time funding available through June 30, 2027. Section 1 of the act sunsets on June 30, 2037, while the act itself takes effect immediately upon filing with the Secretary of State.
The overall sentiment reflected in the voting history is strongly supportive. The Senate passed the bill unanimously, 46-0, and the House approved it by a wide margin, 80-12. No committee transcript was provided, so there is no recorded floor or committee debate to indicate detailed support or opposition arguments.
The main policy focus appears to be stabilizing rural and small-town nonprofit hospitals and improving access to health care infrastructure through state-backed financing. Any contention likely centers on the use of general fund dollars for hospital operating support, the narrow eligibility for small-city nonprofit hospitals, and the risk to the state if borrowers cannot complete projects or repay loans. However, the recorded votes suggest those concerns did not prevent broad bipartisan approval.
SB2403 amends North Dakota Century Code section 6-09-47 to expand the Bank of North Dakota’s authority over the medical facility infrastructure loan fund and to add a new emergency operating loan program for qualifying nonprofit hospitals in small cities. It creates a continuing appropriation structure for loan proceeds and repayments, authorizes administration and audit costs to be paid from the fund, and adds a $5 million general fund transfer for one-time emergency operating loans. The bill affects nonprofit hospitals, medical facilities, and the Bank of North Dakota, while also imposing application, eligibility, repayment, and project-completion requirements that shape how state-backed health care financing can be used.
The bill appears to have enjoyed broad bipartisan support and little visible opposition in the recorded votes. It passed the Senate 46-0 and the House 80-12, indicating strong overall agreement that the state should provide targeted financial assistance to medical facilities, especially rural nonprofit hospitals facing operating stress or infrastructure needs. Because no committee transcripts were provided, there is no detailed record of debate, but the vote totals suggest the measure was viewed favorably as a health care stabilization tool.
The likely points of contention are the use of $5 million in general fund money for hospital operating support, the risk that loans may not be repaid, and whether the program is narrowly tailored enough by limiting emergency operating loans to nonprofit hospitals in cities under 2,500 population. Another possible concern is the bill’s low-interest, long-term financing terms and the possibility of loan forfeiture if construction is not completed within 24 months. Even so, the recorded votes show that any such concerns were not strong enough to generate substantial opposition.