House Bill No. 31

Introduced By heavy runner

By Request of the Department of Natural Resources and Conservation

A Bill for an Act entitled: An Act Allowing a Federally Recognized Tribal Government to Participate in the Renewable Resource Grant and Loan Program; defining "tribal government"; providing additional grant and loan conditions; amending sections 85-1-102, 85-1-601, 85-1-602, 85-1-605, 85-1-611, and 85-1-613, MCA; and providing an effective date.

Be it enacted by the Legislature of the State of Montana:

Section 1.  Section 85-1-102, MCA, is amended to read:

"85-1-102.  Definitions. Unless the context requires otherwise, in this chapter, the following definitions apply:

(1)  "Administrative costs" means costs incurred by the department:

(a)  for the purpose of protecting the department's properties and assets;

(b)  to oversee the operation and maintenance of the projects;

(c)  to administer contracts and receivables;

(d)  to maintain project financial records;

(e)  to provide technical assistance for operating, maintaining, and rehabilitating the projects; and

(f)  to assist in securing funds for operating, maintaining, and rehabilitating the projects.

(2)  "Cost of operation and maintenance" means the costs of operation, maintenance, and routine repairs and the costs incurred by the water users' association or the department in the distribution of water from the project, excluding the department's administrative costs.

(3)  "Cost of works" means:

(a) the cost of construction, including any rehabilitation or alteration of the project;

(b)  the cost of all lands, property, rights, easements, and franchises acquired that are considered necessary for the construction;

(c)  the cost of all water rights acquired or exercised by the department in connection with the works;

(d)  the cost of all machinery and equipment, financing charges, and interest prior to and during construction and for a period not exceeding 3 years after the completion of construction;

(e)  the cost of engineering and legal services, plans, specifications, surveys, estimates of cost, and other expenses necessary or incident to determining the feasibility or practicability of any project;

(f)  administrative expense; and

(g)  other expenses that are necessary or incident to the financing authorized in this part and the construction of the works and the placing of the works in operation.

(4)  "Department" means the department of natural resources and conservation provided for in Title 2, chapter 15, part 33.

(5)  "Owner" means all individuals, irrigation districts, drainage districts, flood control districts, incorporated companies, societies, or associations that have any title or interest in any properties, rights, easements, or franchises to be acquired.

(6) (a) "Private person" means any individual, association, partnership, corporation, or other nongovernmental entity that is not eligible for loans and grants under 85-1-605.

(b) The term does not include a governmental entity, such as an agency, local government, or political subdivision of the state, the United States, or any agency of the United States, or any other governmental entity.

(7)  "Project" means any one of the works defined in this section or any combination of works that are physically connected or jointly managed and operated as a single unit.

(8)  "Public benefits" means those benefits that accrue from a water development project or activity to persons other than the private grant or loan recipient and that enhance the common well-being of the people of Montana. Public benefits include but are not limited to recreation, flood control, erosion reduction, agricultural flood damage reduction, water quality enhancement, sediment reduction, access to recreation opportunities, and wildlife conservation.

(9) "Renewable resource grant and loan program state special revenue account" means a separate account created by 85-1-604 within the state special revenue fund of the state treasury for the purposes of the renewable resource grant and loan program as set forth in 85-1-604.

(10) "Renewable resource loan debt service fund" means a separate fund created by 85-1-603 within the debt service fund type of the state treasury, to be used as provided in 85-1-619.

(11) "Renewable resource loan proceeds account" means a separate account created by 85-1-617 within the state special revenue fund of the state treasury to:

(a) finance loans under the provisions of the renewable resource grant and loan program to agencies, local governments, and political subdivisions of the state, to private persons, and to any other eligible recipients; and

(b)  purchase liens and operate property, as provided in 85-1-615, from proceeds of bonds issued under part 6 of this chapter.

(12) "Tribal government" means the officially recognized government of an Indian tribe, nation, or other organized group or community that is located in Montana, that exercises self-government powers, and that is recognized as eligible for those services that are provided by the United States to Indians because of their status as Indians.

(12)(13) "Water development activity" means an action or program to protect and enhance water-based recreation or to protect or enhance water resources for the benefit of agriculture, flood control, or other uses, including but not limited to the promotion of efficient use of water in agriculture, the improvement of water quality in agriculture and other nonpoint source uses, the protection and enhancement of water-based recreation, the control of erosion of streambanks and control of sedimentation in rivers and streams, and the provision of greater local and state control of Montana's water resources. Water development activities may provide any combination of marketable and nonmarketable benefits.

(13)(14) "Water development project" means a project as defined in subsection (7), except that water development projects:

(a)  are not limited to projects owned or operated by the department; and

(b)  for purposes of the renewable resource grant and loan program, must include water development activities.

(14)(15) (a) "Works" means all property and rights, easements, and franchises relating to property and considered necessary or convenient for the operation of the works and all water rights acquired or exercised by the department in connection with those works.

(b)  The term includes:

(i) all means of conserving and distributing water, including but not limited to reservoirs, dams, diversion canals, distributing canals, waste canals, drainage canals, dikes, lateral ditches and pumping units, mains, pipelines, and waterworks systems; and

(ii) all works for the conservation, development, storage, distribution, and utilization of water, including but not limited to works for the purpose of irrigation, flood prevention, drainage, fish and wildlife, recreation, development of power, watering of stock, and supplying water for public, domestic, industrial, or other uses and for fire protection."

Section 2.  Section 85-1-601, MCA, is amended to read:

"85-1-601.  Purpose and policies. (1) The legislature finds and declares that in order that the people of Montana may enjoy the benefits of the state's water and other renewable resources, the state must shall establish this long-term renewable resource grant and loan program providing financial and administrative assistance to private for-profit, private, nonprofit, local government, and state government, and tribal government entities for renewable resource grant and loan projects.

(2)  The purpose of the renewable resource grant and loan program is to further the state's policies, set forth in 85-1-101, regarding the conservation, development, and beneficial use of water resources and to invest in renewable natural resource projects that will preserve for the citizens of Montana the economic and other benefits of the state's natural heritage.

(3)  The legislature recognizes the value of Montana's renewable resources; therefore, it is appropriate that a portion of the taxes and other revenue from nonrenewable resources be invested in the replacement of nonrenewable resources with the development of renewable resource projects that will continue to provide tax and other revenue and will preserve for the citizens the economic and other benefits of the state's natural heritage.

(4)  The conservation, development, management, and preservation of water and other renewable resources are high priorities because a large portion of Montana's present and future economy is based either directly or indirectly on the wise use of these resources.

(5)  Developments supported by this part may not significantly diminish the quality of existing public resources, such as land, air, fish, wildlife, and recreation opportunities.

(6)  This renewable resource grant and loan program supports, in part, the implementation and development of the comprehensive, coordinated, multiple-use water resources plan known as the "state water plan". In making funding recommendations for grants and loans, the department shall give preference to projects that will implement state water plan priorities if, in all other respects, the proposed projects are equal in public benefit and technical feasibility."

Section 3.  Section 85-1-602, MCA, is amended to read:

"85-1-602.  Objectives. (1) The department shall administer a renewable resource grant and loan program to enhance Montana's renewable resources through projects that measurably conserve, develop, manage, or preserve resources. Either grants or loans may be provided to fund the following:

(a)  feasibility, design, research, and resource assessment studies;

(b)  preparation of construction, rehabilitation, or production plans; and

(c)  construction, rehabilitation, production, education, or other implementation efforts.

(2)  Projects that may enhance renewable resources in Montana include but are not limited to:

(a)  development of natural resource-based recreation;

(b)  development of offstream and tributary storage;

(c)  improvement of water use efficiency, including development of new, efficient water systems, rehabilitation of older, less efficient water systems, and acquisition and installation of measuring devices required under 85-2-113; and development of state-tribal, state-federal, and state-tribal-federal state, tribal, and federal water projects; and

(d)  advancement of farming practices that reduce agricultural chemical use.

(3)  The renewable resource grant and loan program is the key implementation portion of the state water plan and must be administered to encourage grant and loan applications for projects designed to accomplish the objectives of the plan."

Section 4.  Section 85-1-605, MCA, is amended to read:

"85-1-605.   Grants, loans, and bonds for state, and local, or tribal government assistance. (1) The department may recommend to the legislature that grants and loans be made from revenue deposited in the renewable resource grant and loan program state special revenue account, that loans be made from renewable resource bond proceeds deposited in the renewable resource loan proceeds account established in 85-1-617(5), and that coal severance tax bonds be authorized pursuant to Title 17, chapter 5, part 7, to provide financial assistance to a department, agency, board, commission, or other division of state government, or to a city, county, or other political subdivision or local government body of the state, or to a tribal government. The legislature may approve by appropriation or other appropriate means those grants and loans that it finds consistent with the policies and purposes of the program.

(2)  Nothing in this part creates or expands the state's or a local government's authority to incur debt, and the legislature may authorize loans only to state and local government entities otherwise structured to incur debt.

(3)  Loans may not be authorized except to a state, or local, or tribal government entity that agrees to secure the authorized loan with its bond.

(4)  In addition to implementing those projects approved by the legislature, the department may request up to 10% of the grant funds available and up to $1 million for loans from the renewable resource grant and loan program state special revenue account and the renewable resource loan proceeds account in any biennium to be used for emergencies. These emergency grant projects or loan projects, or both, may not be made because of the gross negligence of the state, or local, or tribal government applicant, must be approved by the department, and must be defined as those projects otherwise eligible for either grant funding or loan funding, or both, that, if delayed until legislative approval can be obtained, will cause substantial damages or legal liability to the project sponsor. In allocating the funds, the department shall inform the legislative finance committee of the legislature.

(5)  The grants and loans provided for by this section may be made for projects that enhance renewable resources in the state through conservation, development, management, or preservation; for assessing feasibility or planning; for implementing renewable resource projects; and for similar purposes approved by the legislature.

(6) Grant and loan agreements with tribal governments in Montana entered into under this part must contain, in addition to other appropriate terms and conditions, the following conditions:

(a) a requirement that in the event a dispute or claim arises under the agreement, state law will govern as to the interpretation and performance of the agreement and that any judicial proceeding concerning the terms of the agreement will be brought in the district court of the first judicial district of the state of Montana;

(b) an express waiver of the tribal government's immunity from suit on any issue specifically arising from the transaction of a loan or grant; and

(c) an express waiver of any right to exhaust tribal remedies signed by the tribal government."

Section 5.  Section 85-1-611, MCA, is amended to read:

"85-1-611.  Department to solicit views. The department shall solicit and consider in its evaluation of proposed projects the views of interested and affected departments, boards, agencies, commissions, and other subdivisions of the state, including local political subdivisions, of a tribal government, of the federal government, and of other interested and affected persons."

Section 6.  Section 85-1-613, MCA, is amended to read:

"85-1-613.  Limits on loans. (1) A loan to a private person for a renewable resource grant and loan program project may not be made from the renewable resource grant and loan program state special revenue account or the renewable resource loan proceeds account if the loan exceeds the lesser of $200,000 or 80% of the fair market value of the security given for the project. In determining the fair market value for the security given for a loan, the department shall consider appraisals made by qualified appraisers and other factors it considers important.

(2)  A loan to the state, or a local government, or a tribal government for a renewable resource grant and loan program project may not be made by the department from the renewable resource grant and loan program state special revenue account or renewable resource loan proceeds account if the loan exceeds the lesser of $200,000 or the project sponsor's remaining debt capacity.

(3)  The period for repayment of loans may not exceed 30 years.

(4)  The interest rate at which loans may be made under this part must be sufficient to:

(a)  cover the bond debt service for a loan; and

(b)  establish and maintain a loan loss reserve fund to be used for bond debt service if a loan loss occurs."

Section 7.  Notification to tribal governments. The secretary of state shall send a copy of [this act] to each tribal government located on the seven Montana reservations.

Section 8.  Effective date. [This act] is effective July 1, 1997.

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