Committee hears bill to broaden and speed water-conservation grants, reduce grant-match requirement

On April 24, 2025, the Senate Committee on Natural Resources and Wildfire held a public hearing on House Bill 3364A, which would revise the Water Conservation, Reuse and Storage Program and the Water Supply Development Account administered by the Water Resources Department.

House sponsors and witnesses told the committee the bill seeks to make the grant programs quicker and easier for applicants while providing the department better tools to evaluate and prioritize projects. Representative Ken Helm provided legislative history of the program and Representative Mark Owens described recent appropriations and the program's role in leveraging federal and other funds. Rep. Owens told the committee the program has distributed roughly $95.8 million since 2016 and that the Legislature has appropriated amounts in multiple packages (including a $15 million allocation in 2019-20 and $30 million in later sessions), drawing additional federal funds into projects.

Brynn Hudson, legislative coordinator for the Water Resources Department, provided a technical overview. She said the bill makes changes in two linked programs: feasibility-study grants (used to evaluate project feasibility before construction) and water-project grants and loans (capital construction and implementation).

Major changes described in committee testimony include:

- Feasibility-study grants: broaden eligible study activities (for example, water management and conservation plans, seasonal-flow analysis for storage, dam-safety evaluation and analysis of environmental justice impacts); remove the current statutory $500,000 maximum grant cap; reduce the required cost match from 50% to 25%; and allow the department or commission to set a maximum award or increase the required match if demand outstrips available funds. The bill also removes an outdated reference to a statewide water assessment no longer in use.

- Water-project grants and loans: add an eligible expense category for improved compliance with seasonally varying flows; fix a technical enforcement issue for below-ground storage and aquifer storage and recovery (ASR) projects so seasonally varying-flow conditions can be enforced; allow applicants to submit water-management conservation plans with applications rather than require plan approval before application (plans would still have to be approved before an award); shorten each public-comment period in the twice-yearly funding cycle from 60 days to 30 days; permit the department to tailor application information requirements to project type; and clarify the award process so the interagency technical review team makes recommendations to the department and the department, after considering public comment, makes recommendations to the commission. The bill also adds a legislative reporting requirement requiring the department to evaluate several related funds and programs at least once every eight years.

During questioning, the committee confirmed that some of the program's appropriations have been made with lottery bonds. Witnesses listed recent grantee counties and example projects that included canal and lateral piping, irrigation modernization projects and pumping-efficiency improvements. Committee members asked technical clarifying questions and the department said it was not taking a position on the bill but provided the overview.

No members of the public provided in-person testimony in committee on HB 3364A during the April 24 hearing, and the committee closed the public hearing without taking a vote.