The State Revolving Fund Program (SRF) was established in 1990 to enable North Dakota to receive federal capitalization grants as authorized under the Clean Water Act. In 1998, the SRF was amended to enable the State to receive capitalization grants as authorize under the Safe Drinking Water Act. The SRF grants, received from the United States Environmental Protection Agency, are to be used to make below-market interest rate loans to political subdivisions for the purpose of financing authorized projects, to establish reserve funds, and for other purposes allowed under the Clean Water and Safe Drinking Water Acts. Authorized projects under the SRF include wastewater treatment facilities, non-point source pollution control projects, and public water systems. The North Dakota Department of Environmental Quality and the Authority jointly administer the SRF.
The interest rates on the SRF loans are set by the Department of Environmental Quality in consultation with the Authority. The current effective rate for SRF loans is 2.0 percent, which includes a 0.5 percent administration fee. The effective interest rate for eligible recipients that do not qualify for tax exempt financing is 3.0 percent, which includes a 0.5 percent administrative fee. The interest rates are fixed for a term up to 30 years, depending on the useful life of the project.
The SRF Program has been assigned ratings of "Aaa" by Moody's Investor's Service, Inc. and "AAA" by Standard & Poor's Ratings Services.