FARGO, N.D. - North Dakota should quit spending money from a tobacco lawsuit settlement on water projects, and finance them with Bank of North Dakota profits instead, Democratic governor candidate Joe Satrom said.

Satrom and Republican Gov. John Hoeven squared off about water development, gay marriage, the death penalty and Devils Lake water management Friday during the last of three campaign debates between the two men.

North Dakota has erred in devoting a substantial chunk of a lawsuit settlement with the nation's largest tobacco companies to water projects, Satrom argued. At the same time, health programs and anti-smoking efforts have gone begging, he said.

Six years ago, North Dakota was one of 46 states to reach a $206 billion settlement of claims against the companies, mostly for medical costs and violations of consumer protection laws. North Dakota is slated to get more than $770 million over 25 years, including $46 million in the current two-year budget period.

The Legislature has established a formula earmarking 45 percent of the tobacco collections to water projects, 45 percent to aid to education and 10 percent to community health initiatives.

On Friday, Satrom said tobacco funds should not be spent on water projects, suggesting instead that profits from the state-owned Bank of North Dakota be a permanent source of water project financing.

Hoeven said the change would deprive important water projects of money, and said Satrom wants to rely on the state-owned bank to pay for a number of initiatives. Satrom has also proposed setting aside $100 million in bank profits over five years for equity investments in business projects.

"He's spent (bank profits) three or four times already," Hoeven said.

The debate, held at a Fargo hotel, was sponsored by the North Dakota Associated Press Broadcasters Association. Hoeven and Satrom have had three face-to-face debates during the campaign, all sponsored by media organizations; Hoeven has rebuffed Satrom's appeals for more debates.

Satrom, who opposes the death penalty, said he would not support executing Alfonso Rodriguez Jr. if he is convicted of kidnapping former University of North Dakota student Dru Sjodin. Hoeven said he favored the death penalty in the case.

"I feel that this case deserves the death penalty. I think it's a terrible, heinous act," Hoeven said. "We must do everything we can to prevent this type of violent sexual crime."

Rodriguez, who has a record of sexual assaults, faces federal charges of kidnapping the 22-year-old Pequot Lakes, Minn., woman from a Grand Forks mall parking lot last November. Her body was found last April near Crookston, Minn.

Attorney General John Ashcroft will decide whether federal prosecutors seek the death penalty for Rodriguez. Neither North Dakota nor Minnesota has the death penalty in their state courts.

Satrom said Rodriguez, if convicted, should never be released from prison. He supports tougher prison sentences for sex offenders, and closer supervision of those who have been paroled, he said.

Satrom and Hoeven also differed on a proposed constitutional amendment, which North Dakota voters will decide next month, to limit marriage rights to man-woman couples. Hoeven said he would vote for the amendment, while Satrom intends to vote no.

North Dakota already has state laws defining marriage as between a man and a woman, and refusing to recognize same-sex marriages performed in other states, Satrom said.

"This issue has arisen in a number of states," he said. "Many people believe it has political underpinnings, rather than social underpinnings."

Hoeven said North Dakota voters, rather than judges, should have the last word on the meaning of marriage. In Massachusetts, the state's highest appeals court has ordered the Massachusetts legislature to recognize gay marriage.

"Who should make the decisions on an important issue like marriage? Should the courts make that decision, or should the people make that decision?" Hoeven said. "Every time, I say, the people should make the decision."

On a question about a floodwater outlet from Devils Lake to the Sheyenne River, Satrom said Hoeven has done a poor job in working cooperatively with Canadian officials.

Manitoba's premier and other top Canadian politicians have fought the outlet, saying it could introduce new organisms and pollution into Canadian waters.

The outlet would drain water into the Sheyenne, a tributary of the northward-flowing Red River, which flows into Lake Winnipeg. It is being built, and Hoeven said he expected it to be operating next spring.

"We should be working much more aggressively to network with our Canadian neighbors on a broad suite of issues that deal with water as well as other questions," Satrom said. "We need a governor who will commit to being a partner with Canada."

Hoeven said Canadian officials have "played politics with this issue up in Winnipeg for years, for decades."

"We have bent over backwards to work with the Canadians and everyone else," Hoeven said. "At some point ... real leadership says we need to move forward. North Dakotans will decide the future of our state, not Canadians."