The bill establishes a new "water infrastructure development fund" in South Dakota, which will be funded through legislative appropriations, federal grants for specific rural water projects, and interest from investments and loans. The fund is designated for the construction, planning, and development of water projects that are included on the Bureau of Reclamation's rural water projects list from 2025 onward or have received congressional authorization. Expenditures from this fund will require special appropriations from the Legislature.

Additionally, the Board of Water and Natural Resources is authorized to award grants and loans from the fund. Grants can cover up to ten percent of the estimated construction costs, while loans can cover up to fifty percent, with the requirement that loans be secured by the best available security. The board is also empowered to create rules for selecting projects eligible for funding and to outline the terms and conditions for the loans and grants.