Compromise reached on water, environmental funds

The Water Resources Cash Fund would receive funds from the Nebraska Environmental Trust Fund under a bill amended on general file March 30, but less than half of the amount initially proposed. The remainder would be appropriated by the Legislature.

LB229, introduced by Valentine Sen. Deb Fischer, originally would have provided for annual transfers of $7 million from the Environmental Trust Fund to the Water Resources Cash Fund for 10 years. The Water Resources Cash Fund is used by the state Department of Natural Resources primarily to aid water management actions taken by natural resource districts in overappropriated and fully appropriated basins bound by an interstate compact, decree or agreement.

Fischer said the bill would provide a dedicated revenue stream for water projects. If the state does not meet its obligations for projects like the Platte River Recovery Implementation Program, Fischer said, it could face lawsuits and large financial losses.

An amendment offered by Schuyler Sen. Chris Langemeier would use the existing application process for trust fund grants to provide $3.3 million annually to the Water Resources Cash Fund for three years. The state Department of Natural Resources would submit an application to the trust and the application would be awarded 50 points in the project ranking process if the Legislature would provide matching $3.3 million annual appropriations for three years.

The amendment would provide two appropriations of $600,000 from the general fund to the Water Resources Cash Fund. It also would direct the department to apply to the trust for another three-year grant if certain criteria are met.

Langemeier said the Legislature already provides $2.7 million annually to the Water Resources Cash Fund, so an increase of $600,000 provided in his amendment would be needed to meet the matching requirement. He also said his amendment would avoid potential constitutional problems regarding allocation of Environmental Trust Fund monies by relying on the trust fund’s established grant process.

Ogallala Sen. Ken Schilz spoke in support of the amendment and the bill, calling it the Legislature’s first commitment to fund water issues long-term.

Omaha Sen. Brenda Council commended senators for coming to a compromise in Langemeier’s amendment but still opposed the idea, saying the bill would require the Environmental Trust to engage in unconstitutional conduct. A constitutional amendment adopted in 2004 removed the authority of the Legislature to determine the distribution of lottery funds, she said.

The trust receives 44.5 percent of Nebraska lottery profits, which are used to carry out the provisions of the Nebraska Environmental Trust Act. It has netted $13.2 million to $14 million annually since fiscal year 2007-08.

“No compromise can trump or override the will of the people of the state of Nebraska as evidenced by their vote on [the 2004 constitutional amendment] that dictated how lottery funds were to be distributed in this state,” Council said.

Nebraska’s constitution states that the Environmental Trust Fund shall be used as provided in the Nebraska Environmental Trust Act, Fischer said, which is a state law that has been amended several times. Therefore, the Legislature has the authority to direct trust fund monies to the Water Resources Cash Fund, she said.

Ellsworth Sen. LeRoy Louden spoke in opposition to the bill, saying an ethanol excise tax would be a better source of funding for the Water Resources Cash Fund than the Environmental Trust Fund.

After adopting Langemeier’s amendment 41-2, lawmakers adopted a Natural Resources Committee amendment 33-0 to prohibit transfers from the Water Resources Cash Fund to the General Fund and provide for a technical change.

LB229 was advanced from general file on a 41-3 vote.