Senate approves $397M package to implement federal Rural Health Transformation program

The North Dakota Senate unanimously approved House Bill 16-23 on Jan. 27 to accept federal Rural Health Transformation program grant funds and to create state-level mechanisms to deploy them. The bill passed on a final tally of 46 ayes, 0 nays and 1 absent.

Senator Deaver, the bill sponsor, told the chamber the legislation sets out an appropriation structure, a Bank of North Dakota loan program to provide gap financing, authority for line-item transfers among agencies and reporting requirements to legislative management. "Section 1 of the bill is the appropriation… we're getting $198,000,000 per year and the appropriation is $397,000,000," Deaver said on the floor, describing timing constraints and the need to move the first-year allocation between now and October.

Under the bill sponsors’ description, the program permits providers to make expenditures and receive reimbursement, with Bank of North Dakota loans available for providers that cannot front costs. Sections in the bill limit use for construction beyond small remodels, reference an exemption tied to section 54-27-12 for projects that would otherwise exceed legislative authority, and require periodic reports from the Department of Human Services to legislative management.

Deaver emphasized sustainability: "When this grant funding runs out in 5 years, sustainability is an important part of the criteria… we're not planning to create future financial obligations," he said, adding that the bill authorizes contingency increases in appropriation authority should circumstances change. The bill also establishes criteria and reporting to produce legislative oversight as applications for the federal funds come in.

Senators discussed program flexibility — possible transfers to other agencies including the Department of Public Instruction — and committee oversight. The Senate adopted the measure without recorded opposition.

Because the governor called the special session to act on rural health transformation funding, Senate leaders said the governor will sign bills shortly after adjournment and that the signed bills will take effect immediately. Legislators urged stakeholders to register on the department’s website for updates and application periods.

Next steps: With passage, administrative rules and application processes will be developed per the bill’s criteria; reporting to legislative management and future appropriations will govern sustainability once federal funds conclude.