It is legal for the Department of Commerce to borrow up to $50 million to fund Gov. John Hoeven's Centers of Excellence initiative, according to an opinion released by Attorney General Wayne Stenehjem on Friday.

Rep. Bob Skarphol, R-Tioga, said he wasn't surprised by the opinion.

"We're actually borrowing money from ourselves," Skarphol said.

Skarphol was one of the legislators who had asked for an attorney general's opinion during the organizational session of the Legislature in December on whether borrowing from the bank violated state laws concerning deficit spending.

Hoeven has proposed using up to $50 million from the Bank of North Dakota and to have the Department of Commerce pay the money back.

The amount of money actually needed for the initiative depends on how many applications are approved.

In Stenehjem's opinion, the proposal does not violate the state's constitutional debt limit because language in Senate Bill 2018 states that the loan would be contingent upon receipt of sufficient biennial appropriations of the Legislature.

The Centers of Excellence concept is to leverage the $50 million with private money on a 2-to-1 match to be used at colleges and universities across the state to create hubs of research and development. The idea is to commercialize ideas into products, skills and services that will result in higher-paying, skilled jobs.

Rep. Ken Svedjan, chairman of the House Appropriations Committee, said a number of proposals will be considered on how to fund the program.

"I really think something will happen with this," Svedjan, R-Grand Forks, said. "Just how it will happen, we've got a lot of groundwork to do."

Earlier this week, Lt. Gov. Jack Dalrymple made a recommendation to the Senate Appropriations Committee that interest earnings from the Student Loan Trust Fund be considered as a possible funding source.

Svedjan said legislators also will consider simply appropriating money from the general fund for the program.

Skarphol said that before more money is spent on Centers of Excellence, legislators will have to decide exactly what the program will do and if it is worthwhile.

"I don't think we have a good enough definition of what it means," Skarphol said.

(Reach reporter Tom Rafferty at 223-8284 or tom.rafferty@bismarcktribune.com.)