Loans for streamflow enhancement projects proposed

The Appropriations Committee heard testimony Feb. 1 on a bill that would provide state assistance to implement streamflow projects.

LB185, introduced by Imperial Sen. Mark Christensen, would authorize loans to Natural Resources Districts (NRDs) with an integrated management plan that have entered into contracts to construct or implement streamflow enhancement projects.

Christensen said the bill would loan money to projects that assist in state compliance with compacts and agreements that cannot proceed with bonding authority until a current lawsuit is settled.

Four NRDs pooled their resources to purchase land in Lincoln County to pipe water to the Republican River, Christensen said, but a subsequent lawsuit has stalled their ability to bond the project.

Under the bill, $40 million dollars would be transferred from the Cash Reserve Fund to the Water Contingency Cash Fund, and the state Department of Natural Resources (DNR) would then loan the funds upon request by the NRDs.

LB185 requires that any loan made would be repaid by June 30, 2018.

Christensen said the bill is similar to legislation passed in 2008, which loaned $9 million to NRDs to pay water right holders who agreed to lease and forgo water use to assist in meeting state compliance with the Republican River Compact. NRDs had been unable to use their bonding authority to pay the water right holders due to a lawsuit, he said.

Authorizing a similar measure now would ensure that Nebraska remains in compliance with its interstate agreements, Christensen said, and is a better alternative to paying another large fine for not doing so.

“If we fall out of compliance … the obligation falls upon the state,” he said.

Sen. Tom Carlson of Holdrege testified in support of the bill, saying the state’s cash reserve is a rainy day fund and that the current situation fits the criteria for using it.

“This is a loan that’s going to get paid back,” Carlson said, “and it’s going to be done with the occupation tax. This is not a grant request.”

Jasper Fanning, general manager of the Upper Republican NRD, also supported the bill. If the project currently on hold could go forward in spite of the lawsuit, he said, it would allow the NRDs to better manage irrigation in their districts and ensure continued compliance with Nebraska’s water compacts.

“We’re trying to minimize the economic impact of the state’s obligations while serving the needs of our district,” he said.

No opposition testimony was given and the committee took no immediate action on the bill.