Subcommittee adopts amended HB6 after daylong hearing on dozens of Montana water, wastewater and irrigation grant requests

Rep. John Fitzpatrick, House District 76, told a Montana legislative subcommittee that he was moving House Bill 6 to its amended form and that the committee would use the amended bill recommended by the governor as the working document.

The bill, which funds the Renewable Resource Grant and Loan (RRGL) program administered by the Department of Natural Resources and Conservation (DNRC), originally listed dozens of individually authorized projects and several smaller grant programs. The amended version trims several line items after the budget office identified an erroneous revenue estimate that left the bill roughly $6.3 million over what the state can afford, Fitzpatrick said.

Why it matters: The RRGL program provides small, targeted grants — typically capped at $125,000 — to local governments, irrigation districts and private landowners for projects that conserve, develop or protect Montana’s renewable resources. The amended HB6 reduces the number of discrete projects that would receive full funding this biennium and lowers the amount available for planning, non‑point‑source and irrigation grants, meaning some projects will be funded, delayed, or moved down the ranked list.

The amendment and numbers Rep. John Fitzpatrick said the governor’s adjusted amendment (HB6.001.001) reduces planning grants from $2,000,000 to $1,000,000 and trims the nonpoint‑source grant line from $1,000,000 to $500,000. The larger project lines were cut steeply: infrastructure project funding was reduced from $5,250,000 to $2,500,000 and the irrigation district total was cut from about $3,500,000 to $2,500,000. Fitzpatrick said, "We obtained in the bill as immediately drafted an amount of roughly $6,300,000 [overestimate]. The budget office only became aware of that after the bill had been basically sent to printing."

DNRC overview, scoring and the funding line Autumn Coleman, deputy administrator for the DNRC Conservation and Resource Development Division, told the committee that the amended bill creates a funding line: projects ranked 1 through 20 in each category receive awards under the amended amounts; projects below the funding line remain authorized but unfunded and can move up if funded projects fail to meet startup conditions.

Michelle McNamee, RRGL program manager at DNRC, described the program, scoring and the department’s review process. She said RRGL project grants must show both a renewable resource benefit and a public benefit and that the maximum project award in this program is $125,000. On scoring, McNamee said DNRC uses statute‑based criteria to rate natural‑resource benefits, project benefits and technical and financial feasibility, with multiple internal and external reviewers applying statistical reconciliation to reduce reviewer bias.

Match and eligibility Committee members asked about matching funds. Autumn Coleman explained that DNRC evaluates an applicant’s total project budget and then examines the likelihood that the listed funding sources — loans, grants, local cash or in‑kind labor and equipment — are secured. "We also consider in‑kind match," Coleman said, noting examples such as local labor and equipment on irrigation projects. DNRC requires documentation that match is committed or likely to be received before awarding project grants.

Testimony and project examples More than two dozen local governments, water and sewer districts, and nonprofit watershed groups testified in person or by Zoom about specific projects. Speakers described aging infrastructure, groundwater infiltration into collection systems, failing lift stations and public‑health risks, and they framed RRGL funding as a key component of multi‑source financing packages (often paired with SRF, USDA, MSEP, CDBG or ARPA funds). Examples included:

- Nicole Rediski, representing the Arlee Lake County Water and Sewer District, asked for $125,000 toward a roughly $655,000 project to repair lagoon aeration, replace irrigation pump components, extend a gravity collection main across Highway 93 and install locking manhole rims. Rediski said reclassifying the lagoons to aerated status after new aeration equipment would increase the system’s legal capacity and avoid far costlier full‑system replacement.

- Terry McCarty, chair of the Harrison Water and Sewer District, described a proposed $3.9 million Phase 2 system upgrade to address groundwater infiltration and lift‑station reliability for a system serving about 68 households, a school, post office and other town services. McCarty said the district’s board raised monthly rates from $35 to $60 to qualify for SRF funding and projected a future increase to about $89 per month with anticipated grants and loans; he added that Harrison has a waiting list of 25 people who cannot build because the district is at capacity.

- Sam Sykes, city administrator for Libby, said two‑thirds of the city’s sewage currently flows through a single lift station with components dating to the 1930s and 1980s. He sought RRGL funds as one element of a package that includes CDBG and MSEP to replace the wet well and pumps, add grinders and backup generation and reduce the risk of overflows.

DNRC and other projects testified by representatives from Whitehall, Deer Lodge, Missoula County (Missoula Public Library green roof/stormwater project), Alder, Twin Bridges, Malta, Roundup, Darby, Dutton, Manhattan, Cooke City and many other towns and districts. Several speakers described their communities as low or moderate income, noted user‑rate pressure, and described multi‑source funding strategies that depend on RRGL awards to minimize rate impacts.

Votes at a glance - Motion: Move House Bill 6 (as amended) into the record and proceed with hearings using the amended text (HB6.001.001). Mover: Rep. John Fitzpatrick. Outcome: Amendment substituted and bill moved forward; committee proceeded to hear project testimony using the amended version (voice vote recorded as "Aye"). Note: no roll‑call vote tally was recorded in the transcript; the chair stated, "All in favor say aye." The committee then proceeded on the amended basis.

Discussion vs. decisions Most of the hearing was applicant testimony and DNRC program explanation (discussion). The committee took the formal procedural step to substitute the amended version of HB6 and to move the bill and amendment; that substitution is a formal decision and changed the funding baseline for all ensuing testimony. No final appropriations were adopted in the hearing; the subcommittee proceeded with the hearing on the substituted text.

What the amendment changes for applicants Because the governor’s amendment reduced the overall appropriation and specific program lines, DNRC said the amended bill as adopted for hearings funds roughly 20 of the 42 listed water/wastewater projects and 20 of 28 irrigation projects on the printed list. DNRC staff emphasized that ranked projects that fall out can move up in order if higher‑ranked projects fail to meet startup conditions, but the immediate effect is that several projects will not be funded under this biennium’s amended appropriation.

Next steps and context The subcommittee will continue hearings using the amended HB6 text and accept additional testimony. DNRC staff asked applicants to keep testimony focused and brief, to highlight problem, proposed solution and how a $125,000 award would be used. Funding decisions require final legislative appropriation and, for many projects, additional external awards (SRF forgiveness, USDA, MSEP, Bureau of Reclamation, CDBG) or local match before construction can proceed.

Ending Committee members repeatedly pressed applicants on rate impacts, local cash reserves and the source and security of project match commitments. DNRC staff and applicants told the committee they would follow up with written details (e.g., reserve balances or SRF/loan terms) where committee members requested them. The hearing record will serve as the basis for ranking and later appropriation decisions as HB6 proceeds through the legislative process.