Summary — SB 2097 (North Dakota): Rural Community Endowment Fund
Status: Introduced March 7, 2025; Second reading — failed to pass (yeas 20, nays 72).
Purpose
- Establish a permanent state endowment — the Rural Community Endowment Fund — to generate ongoing grant support for projects that strengthen very small rural cities in North Dakota (housing, workforce, business recruitment/commerce, infrastructure, and other community needs).
Key provisions
- Creates a new special fund in the state treasury administered by the Department of Commerce (the “department”).
- Fund composition: legislative transfers plus gifts, donations, and bequests. Principal may not be expended; only investment earnings are available for grants.
- Spending threshold (amendment adopted): the department may not expend fund moneys until the fund principal reaches at least $10,000,000, of which at least $5,000,000 must come from nonstate sources (gifts/donations/bequests). State-source funding may only be used if appropriated by the Legislature.
- Investment oversight: investments under the State Investment Board (chapter 21‑10). Investment earnings are credited to the fund.
- Grant restrictions: grants may not be used for routine operating costs of local entities; the committee shall prioritize capital projects supporting long-term prosperity, safety, health, and quality of life.
- Administration: Department may contract with a nonprofit focused on rural housing/small business to assist administration and may expend up to 10% of distributable funds for program administration.
- Governance: a Rural Community Endowment Fund Committee appointed by the commerce commissioner — committee includes the commissioner (chair), nine residents of rural communities, and a nonprofit representative. Staggered terms (initially four one‑year and five two‑year appointments; thereafter two‑year terms).
- Definition: “Rural community” defined in amended versions as a city with fewer than 1,200 residents (earlier drafts used 1,000).
- Reporting: annual status report to Legislative Management by July 1 each year and additional status reports to appropriations committees during sessions.
Appropriations and transfers (draft history)
- Early draft: one-time transfer of $50,000,000 from the General Fund to the endowment and a $5,000,000 appropriation from the fund to the Department of Commerce for grants/administration (biennium 2025–2027).
- Later/Amended versions: reduced to a one‑time $5,000,000 transfer from the General Fund (biennium 2025–2027) with the transfer explicitly labeled one-time; other drafts retained a $5,000,000 appropriation for grants/administration.
Who is affected
- Small rural cities (population threshold per final amendments: <1,200) and their residents — potential recipients of capital and community development grants.
- Department of Commerce — fund administrator and contracting entity.
- State Investment Board — investment oversight.
- Nonprofit partners — potential contractors/administrators and advisory representatives.
- Legislature — appropriations authority, oversight via required reports.
Legislative action highlights
- Multiple committee referrals and amendments across Political Subdivisions, Appropriations, and other committees.
- Amendment changes included funding amount reductions, a nonstate-funding threshold, expanded population cutoff, and a shift to prioritize capital projects.
- Ultimately failed to pass on second reading (April 2025).
Note: The repository of documents included an unrelated SB 2097 (Illinois) text; this summary covers the North Dakota SB 2097 concerning the Rural Community Endowment Fund.
