Soil Erosion Control Fund bill aims to help HOAs and communities pay for bank stabilization, committee hears

Representative Colin Wellenkamp (105th District, St. Charles City) told the House Committee on Conservation and Natural Resources that erosion is an increasing cost to homeowners and local infrastructure and asked the panel to report House Bill 14-61, the “Soil Erosion Control Fund Act,” favorably.

Wellenkamp said erosion currently costs the nation tens of billions annually and that urban and suburban neighborhoods are now seeing acute erosion after increased extreme rain events. The bill would create a department-administered fund to provide loans and assistance to homeowners associations incorporated as nonprofits for bank stabilization and other erosion-control projects. The sponsor said plans would be reviewed by the department; natural infrastructure solutions would be prioritized before larger structural fixes.

The bill includes a cap on program interest rates to keep loans within “municipal bond territory.” Wellenkamp said he discussed terms with banks and set a maximum interest limit of 3.5 percent to make loans affordable for HOAs. He described the fund as intended to create a revolving loan program in which repayments would be available for future projects and said loans would be governed by existing state fiscal statutes.

Committee members raised implementation and equity questions. Representative Burton asked whether unincorporated neighborhoods could access the program; Wellenkamp replied that HOAs could incorporate as nonprofits to qualify and that incorporation provides a mechanism for fiscal accountability. Members pressed the sponsor on enforcement, collateral and how smaller HOAs would obtain loans; witnesses said private-bank loans often run 6.25 to 6.5 percent and that many small HOAs lack access to conventional lending.

Support testimony came from community-association services and the Missouri Coalition for the Environment. A representative of a community-association lender said banks typically offer fixed-rate loans “anywhere from 6 and a quarter to 6 and a half percent for terms of 5, 7, 10, and sometimes 15 years,” and said the bill would create another financing option for small HOAs that otherwise cannot obtain loans. Melissa Vatterat of the Missouri Coalition for the Environment backed the bill and said it would help protect property values, water quality and soil health in residential developments.

Members and witnesses discussed program details: eligible project types, prioritization of natural solutions (grass, trees) over impermeable structures, possible use of riprap in combination with vegetative measures, and the department’s role in approving plans. Committee members asked for clarity on loan terms, collateral and the mechanics of HOA assessments; the sponsor said loan repayment mechanics could include liens and that program design requires HOA incorporation, quorum, bylaws and other governance safeguards.

No committee vote was recorded on the Soil Erosion Control Fund Act during the hearing; the item remained in committee pending further consideration and possible drafting changes requested by members.