Bond authority for natural resources districts stalls

A bill authorizing natural resources districts (NRDs) to use bonds to pay for water management projects stalled in the Legislature March 7.

As introduced by Sen. Rick Kolowski of Omaha, LB344 would have authorized natural resources districts to issue general obligation bonds to pay for water management projects provided that two-thirds of the district’s board of directors approve. The bonds would be retired using the district’s tax revenue.

A Natural Resources Committee amendment, adopted 25-2, would have required a district to meet several requirements before issuing bonds, including submitting an application for funding from the Water Sustainability Fund. The fund was created by the Legislature in 2014 to help fund improvements in water supply infrastructure and water management projects.

Kolowski said the $32 million allocated thus far to the Water Sustainability Fund is not enough to support the more than $50 million in projects proposed to date. LB344 would allow NRDs to supplement the fund with bonds so that more projects could be built, he said, adding that the fund will begin to approve projects later this year.

“This legislation is essential to ensure that water needs all across our state can receive funding,” Kolowski said.

Sen. Curt Friesen of Henderson supported the bill, saying that it would give natural resources districts another way to raise money for projects that manage the state’s water resources. He said bonding is a tool most districts would not use but should have in case it later becomes necessary.

Sen. David Schnoor of Scribner opposed the bill, saying it would allow NRDs to increase taxes at a time when many Nebraskans are asking for property tax relief. As introduced, the bill would not have given voters a chance to approve the issuance of the bonds, he said.

Schnoor added that the Legislature should not extend natural resources districts’ taxing authority before the Water Sustainability Fund has been tapped.

“We haven’t even given [the fund] time to see if it works and now we’re going to authorize the levying of more money,” he said.

Kolowski introduced an amendment, adopted 28-3, that would have required a majority of a district’s voters to approve a levy increase of more than 1 cent to pay off bond debt.

Sen. Dave Bloomfield of Hoskins said the amendment improved the bill but that it still would be a mistake to allow districts to increase their tax levies when farmers and ranchers are struggling with falling commodity prices.

“The idea of doing that during an economic downturn when you should be cutting taxes—not increasing spending—just makes absolutely no sense to me,” he said.

After several hours of debate, Kolowski filed a motion to bracket the bill until April 20, the last day of the session. Senators obliged without objection, making the bill unlikely to be debated again.