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Committee reviews HB8, a $133 million loan authorization for regional water projects and irrigation loans
Summary
House Bill 8 would authorize loans backed by coal severance tax bonds for irrigation and regional water projects, including $36.6 million in new irrigation loans, reauthorization of $84.6 million, a 3% interest rate and a 10% bond reserve; DNRC and supporters said loans help small communities finance large projects though contractor availability has delayed implementation.
Representative John Fitzpatrick told the Senate Finance and Claims Committee that House Bill 8 would appropriate funds to DNRC for loans to fund water projects, using proceeds of coal severance tax bonds. Section 1 contains $36,600,000 in new loans for irrigation projects at a 3% interest rate for up to 30 years, and section 2 reauthorizes $84,600,000 in previously authorized loans; the bill requests a total of about $133,000,000 including a 10% bond reserve.
Autumn Coleman of DNRC explained how the Renewable Resource Loan Program operates, including statutory limits, the role of coal severance tax revenues to subsidize interest and DNRC’s bonding capacity. She said loan applicants must demonstrate renewable resource benefits and the ability to repay; public loans are limited to amounts that the applicant can reasonably repay and are backed by coal tax revenues.
Proponents (including the Montana Water Resources Association, Montana Rural Water Systems and the Montana League of Cities and Towns) told the committee that low-interest loans paired with grants are essential tools for small and rural systems to finance upgrades to treatment plants, wastewater systems and distribution infrastructure. Senators asked for status updates on large reauthorized projects and about repayment: DNRC and stakeholders said projects are moving but many have been delayed by contractor shortages and that ratepayers or project beneficiaries are typically responsible for loan repayment.
Committee members also asked whether some regional projects had accessed federal funding instead of state loans; DNRC said some projects received Bureau of Reclamation funding or State Revolving Fund loans and that reauthorizations were included in HB8 to preserve flexibility. Representative Fitzpatrick closed the hearing and offered to provide introductory statements for senators who wish to carry bills to the floor. No committee vote was recorded.
