Missouri utilities committee hears narrow pilot to let unserved Jefferson County parcels detach from water districts amid James Hardie dispute

Representative David Casteel told the House Utilities Committee that House Bill 1917 would create a limited, county-level path for property owners to detach from a public water supply district when the district does not provide water or infrastructure to the parcel. Casteel said the measure is driven by a dispute over a planned James Hardie Building Products manufacturing facility near Crystal City and said the company’s project represents roughly $400 million in investment and would require treated water at scale.

Casteel said the bill applies only in Jefferson County and only to single properties that meet narrow criteria: the parcel is not currently served by the district, the district has no infrastructure at the site, and there are no other voters on the parcel. He described the proposal as an alternative to lengthy litigation for landowners who cannot obtain service and said the bill also would require a district to accept an unconditional payment offered to reduce federal debt that otherwise gives the district territorial protection.

Brad Bryant, district manager for Public Water Supply District No. 12, testified in opposition. He said the contested property lies fully inside District No. 12 and that the district does not currently have mains or capacity to supply the roughly 1,200,000 gallons per day the company has requested. Bryant said the district attempted to negotiate with the company and Crystal City and was largely shut out of some discussions. He also described a federal loan and territorial protections tied to USDA-guaranteed debt under federal law and said the district returned an unsolicited payment because the loan agreement allowed the district, not a third party, to prepay the loan. Bryant warned that HB 1917 would remove local control, force boards to accept payments or detach property, and could set a precedent harmful to small rural utilities.

Mackenzie Smith Lidday, testifying for James Hardie Building Products, said the company first announced the Crystal City project in 2022 and has been unable to finalize who will supply the specific quality and quantity of water the plant requires. Lidday said the local district returned a payment that James Hardie made to extinguish the district’s federal debt; she described the bill as a narrow pilot that would not apply if other voters were present on the parcel or if the district already provides service.

Technical witnesses and local officials described tradeoffs. Jim McClish, an engineer retained by Crystal City and James Hardie, said the plant needs lime-softened water and that some product testing failed with harder water. McClish said Crystal City has some treatment capacity, that initial phases could need about 600,000 gallons per day and later phases up to roughly 1,200,000 gpd, and that distribution upgrades would be costly and take years. Jefferson County administration director David Courtway emphasized public infrastructure commitments and urged a timely resolution to avoid delaying jobs and local investment.

Opponents representing rural water associations and water districts told the committee that territorial protections in 7 U.S.C. §1926(b) exist to protect small nonprofit utilities’ ability to repay federal loans and that a fast-track detachment process risks a ‘‘death by 1,000 cuts’’ for rural systems. Witnesses said the USDA-backed loan and its territorial protection are the reason the district can deny third-party prepayment and that paying off the loan does not always mean the district must then consent to detachment without further review.

Committee members asked detailed questions about the bill’s limits, whether it should be piloted, how judicial discretion would weigh public opposition at a hearing, and what the long-term impacts on district bond ratings or future borrowing might be. Several members suggested safeguards or a pilot approach; others pressed proponents for documentation of prior negotiations and the technical details of required water treatment.

No vote was taken at the hearing. The committee recessed and then adjourned after hearing alternating testimony from opponents and proponents and receiving informational statements from economic-development groups and technical consultants. The bill’s sponsor and company representatives said they would pursue HB 1917’s pilot option if the measure becomes law; water districts and associations urged the committee to preserve existing federal territorial protections and local board authority.

The hearing record includes disputes of fact that are now in litigation: James Hardie and Public Water Supply District No. 12 are litigating detachment in district court, and witnesses gave differing accounts of whether the district was given adequate notice or opportunity to negotiate. The committee invited additional written materials and documentation; no formal committee action on HB 1917 occurred during this session.