Members of the North Dakota House of Representatives participate in a special session of the Legislature on Jan. 22, 2026. (Photo by Michael Achterling/North Dakota Monitor)
BISMARCK, N.D. (North Dakota Monitor) — The community hospital in southwest North Dakota in financial distress is one step closer to solvency after the Legislature voted to pass emergency legislation this week.
Senate Bill 2403 authorizes the state-owned Bank of North Dakota to issue a low-interest loan of up to $5 million to nonprofit hospitals in small communities in financial distress.
Jacobson Memorial Hospital in Elgin, which is operating “payroll to payroll” and in danger of shutting down, is the only institution in the state that meets the program’s eligibility requirements, according to the North Dakota Hospital Association.
“Once a rural hospital closes, reopening it is extraordinarily difficult, if not impossible,” said bill co-sponsor Rep. Karen Rohr, R-Mandan, whose district includes the hospital.
Hospitals must meet strict criteria to be eligible for a loan, including submitting financial documents to prove the business plan is sustainable.
Jacobson Memorial Hospital provides care to residents of Grant, Morton, Sioux, Hettinger and Adams counties. Those residents could face drives of 45 minutes or more to the nearest medical facility if the hospital closes.
“Critical access hospitals are not optional infrastructure in North Dakota,” Rohr said. “When minutes matter, there is no substitute for a nearby staffed facility of professionals who know their community.”
The bill largely sailed through the Senate on Thursday 46-0. But it was the subject of vigorous debate in the House on Friday morning as skeptics questioned whether the hospital would be able to return to solvency.
“This is a facility that has been operating in the red for a few years, and so far what I haven’t heard is what they plan to do better,” said Rep. Matthew Ruby, R-Minot, who ultimately voted in favor of the bill. “Aside from poisoning the water, how do you get more people sick to get them to come in?”
The hospital’s administrator and a member of the board testified to lawmakers Wednesday that the hospital has worked with consultants to develop a strategic plan. The hospital has already begun implementing cost-cutting measures, collecting additional revenue by taking full advantage of a federal drug pricing program, and parted ways with the former CEO in November.
“This is going to work,” said House Majority Leader Mike Lefor, R-Dickinson. “This is a big deal for rural health care.”
Other representatives expressed concerns the bill, designed for a single hospital as the intended recipient, may violate the state constitution’s prohibition on gifting. Rep. Keith Kempenich, R-Bowman, said there is no constitutional question because it’s a loan, not a grant, and open to any hospital to apply. Rep. Ben Koppelman called it a “shell game.”
“It seems a little disingenuous to say it’s open to everybody, but really only funded for the amount we want for that one hospital,” said Koppelman, R-West Fargo.
The bill originally authorized $10 million and capped an individual loan at $5 million. It was amended in committee, cutting the funding to $5 million, enough for a single loan at the maximum amount.
Other legislators pointed out this wouldn’t be the first time the Legislature has authorized a loan with a particular target in mind.
“Fifteen years ago, we were in a special session and we gave loans for flood victims in Minot under similar terms,” said Rep. Scott Louser, R-Minot. “So I would encourage a yes vote.”
Rep. Alisa Mitskog, D-Wahpeton, said a loan application would be scrutinized by the Bank of North Dakota.
“We cannot allow entire communities or regions of our state to face limited or delayed access to care,” Mitskog said.
The House passed the legislation 80-12.
The Bank of North Dakota will examine how the hospital arrived at this point and review comprehensive financial documentation, said Kelvin Hullet, an executive with the state-owned bank.
“We’ll be going in depth with them through an application process. It will be treated like any other loan that we would review at the Bank of North Dakota,” Hullet said.
Sen. Michelle Powers, R-Fargo, emphasized the hospital’s dire situation is the result of poor management in recent years and not because of fraud.
Sen. Sean Cleary, R-Bismarck, said the situation in Elgin should serve as notice to hospitals across the state. The boards, often composed of local community members, should check to ensure their business model is sustainable.
“They should be asking tough questions because we’re not gonna be able to bail out every single hospital in the state,” Cleary said. “There’s only so many dollars we have available, and frankly in a situation like this, if this plan fails, that’ll cast a pretty long shadow on other entities that are looking for support.
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