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

Additionally, the Board of Water and Natural Resources is empowered to administer the fund, which includes the ability to award grants up to ten percent of a project's estimated construction cost and provide loans not exceeding fifty percent of the same cost. Loans must be secured by the best available security, which can include a pledge of assets and project revenues. The board is also authorized to create rules for selecting projects eligible for funding and for managing the terms and conditions of the loans and grants.