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Committee hears House Bill 8 to reauthorize and issue loans for regional water projects, including St. Mary’s/Milk River
Summary
House Bill 8 would authorize loans for renewable resource water projects, reauthorize previously approved loans and request coal severance tax bond authority; DNRC and stakeholders told senators projects are proceeding but contractor shortages have delayed work on some large items such as the Saint Mary’s/Milk River project.
Representative John Fitzpatrick, House District 76, presented House Bill 8 to the Senate Finance and Claims Committee as the Renewable Resource Loan Program administered by the Department of Natural Resources and Conservation (DNRC). Fitzpatrick said House Bill 8 would appropriate funds and reauthorize loans funded by coal severance tax bonds, and described loan terms and repayment by water users.
Autumn Coleman, deputy administrator at DNRC, explained that public loans in the program are backed by coal severance tax bonds and are available to public entities that demonstrate benefit to renewable resources and the ability to repay. She told senators loan interest rates and terms are set in the bill and that public loan applications are accepted by DNRC in even‑numbered years. Coleman said the bill includes reauthorization of $84,600,000 in previously authorized loans, and requests authority for new loans and a bond reserve; the bill text lists a $40,000,000 beneficiary share for the Saint Mary’s/Milk River project that project beneficiaries can borrow for any part of the project.
Stakeholder witnesses including Montana Water Resources Association, Montana Rural Water Systems and the Montana League of Cities and Towns testified in support. Ben Rigby, executive director of Montana Rural Water Systems, said the loans paired with grants are often the only way small communities can finance long‑term upgrades, and described how his organization helps municipalities plan rate structures to repay loans. Coleman told senators many regional projects have also received federal Bureau of Reclamation funds and in some cases have not needed state loans in recent biennia; she said delays on some projects have been caused by contractor shortages rather than lack of authorization.
Senators asked for status updates on large projects and how repayment is structured. Fitzpatrick and DNRC staff said projects are moving but large undertakings such as Saint Mary’s may not be completed within the coming biennium; DNRC explained loan repayment is structured with local rate payers and DNRC evaluates rate structures and the borrower’s ability to repay before closing loans.
Ending: The committee took testimony and closed the hearing on House Bill 8 without a vote; sponsors indicated DNRC and fiscal staff will provide any needed follow‑up on loan reauthorizations and contractor timing.
