BISMARCK – Fargo officials streamed into the Capitol on Friday to make their case for $120 million in state funds to bolster the city’s interior flood protection and prevent steep increases in flood insurance costs on some 2,300 homes and other structures.

House Majority Leader Al Carlson, R-Fargo, the prime sponsor of House Bill 1415, stressed that the funding request isn’t tied to the proposed Fargo-Moorhead diversion project.

“No matter what happens to that, it’s going to take a long time for that to be built, and we need to address the needs of our city within that period of time,” he testified to the House Energy and Natural Resources Committee.

The bill would appropriate $60 million to the State Water Commission in 2015-17 to reimburse Fargo for flood protection projects within city limits.

Eligible costs would include engineering and legal fees, right of way acquisition, land purchases, home buyouts and construction of levees and floodwalls. The bill also includes legislative intent to provide another $60 million in 2017-19.

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City Engineer April Walker said the $120 million would cover half of the $240 million needed to finish the 13.4 miles of levees and road raises that remain to substantially complete Fargo’s comprehensive flood protection plan developed after the record Red River flood of 2009.

The additional flood protection would remove the majority of 2,300 new homes and other buildings from the 100-year floodplain after they were pulled into the at-risk category when a new floodplain map released by the Federal Emergency Management Agency took effect Jan. 16, Walker said.

Without it, those with federally regulated mortgages would have to carry flood insurance, with rates expected to rise sharply due to recent changes in the National Flood Insurance Program.

“If we don’t address Fargo very quickly, we’re going to have a community that can no longer support living there,” said Rep. George Keiser, R-Bismarck, a committee member.

Doug Restemayer, board chairman of the Fargo Moorhead West Fargo Chamber of Commerce, said the community needs the certainty of permanent flood protection to attract new businesses, residents and employees.

“We need to be able to tell them that they can buy a house and not be faced with a $6,000 annual flood insurance premium,” he said.

The $120 million would come from the state’s Resources Trust Fund, which receives 20 percent of the state’s oil extraction tax collections. The fund had a balance of over $555 million as of Jan. 1, according to the state treasurer’s office.

The money would be on top of $450 million that the 2013 Legislature agreed to commit to the $1.8 billion diversion project, which would protect Fargo-Moorhead from a 500-year flood. Lawmakers appropriated $45 million in 2009, $30 million in 2011 and $100 million in 2013, with the intent to provide the remaining $275 million over the next four biennia.

“We believe that this is money well-spent to protect an economic engine that’s pretty darn vital to the state of North Dakota,” Carlson said of the $120 million.

Speaking in opposition to the bill because neutral testimony wasn’t allowed, Bruce Engelhardt, director of water development for the State Water Commission, said the additional money may speed up Fargo’s flood protection project over the next four years, “but it may also impact funding of other projects” proposed in the commission’s budget.

“And it would reduce the commission’s flexibility to fund projects when the cost share is required and when they’re ready to be constructed,” he said.

Engelhardt said the bill is unclear on what, if any, local cost share will be required, and he suggested language consistent with the commission cost-share policy be inserted into the bill. He also raised concern about the bill’s language stating the commission “may not deny an application” from Fargo for interior flood protection funding – regardless of what the cost share might be.

Carlson said the cost-share will come in the form of the other $120 million in work that will be funded locally.

“We can only collect special assessments and sales tax so fast, and these projects need to be done now,” he said.

The bill is proposed as an emergency measure, meaning if it receives two-thirds approval from the Legislature, the funding could become available as soon as the governor signs it into law.