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BISMARCK, N.D. (AP) — Republican-sponsored legislation has been drafted that would tap part of North Dakota’s big oil tax piggy bank to provide low-interest loans for communities facing large and expensive infrastructure projects.

It’s the first time Republicans, who control both chambers of the Legislature, have seriously eyed the principal of the Legacy Fund approved by voters eight years ago. It now holds more than $5.2 billion.

Backers of the legislation want to use up to 15 percent of the fund’s principal every two years for loans at 1.5 percent interest. They would be administered by the state-owned Bank of North Dakota for projects such as flood protection and water systems. Cities, counties and other political subdivisions such as townships would be eligible for the loans that have a $10 million minimum and 50-year maximum term.

School districts, which have a separate state funding mechanism, would not be eligible.

Loans of more than $200 million would need approval by the Legislature.

Minot Republicans Sen. David Hogue and Rep. Roscoe Streyle, the bill’s primary sponsors, said creating a revolving loan fund from the state’s oil tax savings account would help complete projects sooner and save in interest and inflation costs. It also would help grow the state’s economy and spur additional tax revenue, they said.

“We need a funding mechanism now to help communities fund critical infrastructure,” said Streyle, a banker. “If we do this down the road, we know it is going to cost hundreds of millions more.”

Minot is one town that could benefit from the legislation. A multimillion dollar flood protection project was proposed following a 2011 flood that damaged or destroyed more than 4,000 buildings, displaced more than 11,000 people and caused about $700 million in damage.

Fargo Mayor Tim Mahoney said he has not seen the legislation but “loves” the concept. He said it would help greatly in funding such things as the $2.2 billion Red River diversion project meant to protect Fargo and Moorhead, Minnesota, from a frequent spring flood threat. A legal challenge has held up the project; some of the ideas aimed at resolving that would add significant expense.

Mahoney said it could turn decades-long projects into those that could be funded and done in a few years.

“It would really give us the ability to fund infrastructure,” he said. “And what do people want? They want infrastructure.”

In 2010, North Dakota voters endorsed a constitutional amendment that requires setting aside 30 percent of state tax revenues on oil and natural gas production in the fund.

The amendment barred the Legislature from spending any of the fund’s assets until June 2017. Currently, a two-thirds vote of the North Dakota House and Senate is needed to spend any of the fund’s principal. Lawmakers may not withdraw more than 15 percent of the principal every two years.

The measure would need a two-thirds vote of both chambers to pass. Republicans have supermajorities in both chambers that exceed that threshold.

Hogue, the bill’s primary sponsor, said the draft bill will be a big topic at the GOP convention next month. “There isn’t anybody we’ve talked to who doesn’t fully support the measure,” he said.

GOP Gov. Doug Burgum said in his State of the State address in January that lawmakers shouldn’t touch the principal on the Legacy Fund and should use the interest not “just to fund basic services” but for programs he called transformative.

Lawmakers last year included $200 million of the fund’s earnings to balance the state budget over the next two years.

Burgum may be supportive of the legislation, saying in a statement that he does not endorse spending the principal but he’s “open to investing the principal in North Dakota.”

Democrats have unsuccessfully eyed the Legacy Fund as a source of money for higher education tuition breaks and to make up for shortfalls to state programs and salaries.

Democratic Senate Minority Leader Joan Heckaman of New Rockford worried the low-interest loan idea would unfairly benefit North Dakota’s largest cities, and not smaller ones like hers. And she thought the $10 million minimum would be unrealistic for most towns.

Backers said smaller communities have been taken into account; the legislation would let them tap the fund to refinance debt. The minimum would be $1 million.