House bill NO. 6

INTRODUCED BY M. Hopkins, J. Fitzpatrick

By Request of the Department of Natural Resources and Conservation, Office of Budget and Program Planning

A BILL FOR AN ACT ENTITLED: "AN ACT IMPLEMENTING THE RENEWABLE RESOURCE GRANT AND LOAN PROGRAM; APPROPRIATING MONEY TO THE DEPARTMENT OF NATURAL RESOURCES AND CONSERVATION FOR GRANTS UNDER THE RENEWABLE RESOURCE GRANT AND LOAN PROGRAM; PRIORITIZING PROJECT GRANTS AND AMOUNTS; ESTABLISHING CONDITIONS FOR GRANTS; PROVIDING FOR A TRANSFER OF FUNDS FROM the STATE GENERAL FUND TO THE NATURAL resources PROJECTS STATE SPECIAL REVENUE ACCOUNT; APPROPRIATING MONEY FOR a contingent loan for milk river repair PROJECTs; providing for coordination of funding; and PROVIDING AN EFFECTIVE DATE.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:

Section 1. Appropriations for renewable resource grants. (1) For the biennium beginning July 1, 2023, there is appropriated to the department of natural resources and conservation from the natural resources projects state special revenue account established in 15-38-302 up to:

(a) $300,000 for emergency projects grants to be awarded by the department over the biennium;

(b) $3,500,000 for planning grants to be awarded by the department over the biennium;

(d) $500,000 for watershed grants to be awarded by the department over the biennium;

(e) $100,000 for private grants to be awarded by the department over the biennium; and

(f) $2,500,000 for nonpoint source pollution reduction grants to be awarded by the department over the biennium.

(2) The amount of $6,350,000 is appropriated to the department of natural resources and conservation from the natural resources projects state special revenue account established in 15-38-302 for the biennium beginning July 1, 2023. The funds referred to in this subsection must be awarded by the department to the named entities for the described purposes and in the grant amounts listed in subsection (4), subject to the conditions set forth in [sections 2 and 6] and the contingencies described in the renewable resource grant and loan program January 2023 report to the 68th legislature titled: "Governor's Executive Budget Fiscal Years 2023-2025 Volume 6".

(3) Funds must be awarded up to the amounts approved in subsection (4) in the following listed order of priority until available funds are expended. Funds not accepted or used by higher-ranked projects must be provided for projects farther down the priority list that would not otherwise receive funding. If at any time a grant sponsor determines that a project will not begin before June 30, 2025, the sponsor shall notify the department of natural resources and conservation. After all eligible projects are funded, remaining funds may be used for any renewable resource project authorized under this section.

(4) The following are the prioritized infrastructure grant projects:

RENEWABLE RESOURCE INFRASTRUCTURE GRANT PROJECTS

Applicant/Project Amount

Cooke City

Cooke City Wastewater Treatment and Collection System $125,000

West Yellowstone, Town of

West Yellowstone Wastewater Treatment Plant Project $125,000

Red Lodge, City of

Red Lodge Wastewater System Improvements $125,000

Superior, Town of

Superior Wastewater System Improvements Project $125,000

Choteau, City of

Choteau Water System Improvements $125,000

Cascade, Town of

Cascade Wastewater System Improvements $125,000

Sand Coulee, Town of

Sand Coulee Wastewater Improvements $125,000

Kalispell, City of

Kalispell Morning Star Court Water and Wastewater Improvement Project $125,000

Saco, Town of

Saco Wastewater System Improvements $125,000

Drummond, Town of

Drummond Wastewater Treatment Facility Upgrade $125,000

Craig County WSD

Craig Wastewater System Improvements $125,000

Gallatin Canyon County Water Sewer District

Gallatin Canyon County Water Sewer District Gallatin Canyon Sewer Project Phase 1.2 $125,000

Thompson Falls, City of

Thompson Falls Water System Improvements Project $125,000

Corvallis County Sewer District

Corvallis Wastewater Collection System Improvements $125,000

Helena, City of

Helena Red Mountain Flume Repairs Project #22-05 $125,000

Havre, City of

Havre Water System Improvements Project $125,000

Bigfork County Water and Sewer District

Bigfork County Water and Sewer District West Trunk Sewer Replacement and Collection Basin Rehabilitation Project $125,000

Belt, Town of

Belt Water System Improvements $125,000

Lincoln County

Lincoln County Libby Creek Community Water and Wastewater Improvements $125,000

Richey, Town of

Richey Water Main Replacement Phase 2 $125,000

Geraldine, Town of

Geraldine Water System Improvements $125,000

Victor Water and Sewer District

Victor Wastewater Collection and Treatment Improvements Project $125,000

Forsyth, City of

Forsyth Water System Improvements $125,000

Townsend, Town of

Townsend Water System Improvements Project $125,000

Martinsdale Water and Sewer District

Martinsdale Water and Sewer District Water System Improvements $125,000

Twin Bridges, Town of

Twin Bridges Water System Improvements $125,000

Dodson, Town of

Dodson Water System Improvements $125,000

Sunburst, Town of

Sunburst Wastewater Distribution and Treatment Project $125,000

Philipsburg, Town of

Water Main Replacement Alley between Broadway and Stockton (Duffy-Sansome)$125,000

Missoula, City of

Missoula Comprehensive Stormwater Plan $125,000

Denton, Town of

Denton Wastewater System Upgrades Phase 1 $125,000

Dutton, Town of

Dutton Water System Improvements $125,000

Circle, Town of

Circle Waterline Replacement Project Phase 4 $125,000

Clancy Water and Sewer District

Clancy Water and Sewer District Water System Improvements $125,000

Basin County Water and/or Sewer District

Basin Water System Improvements Project $125,000

Wolf Point, City of

Wolf Point Wastewater Project Phase 1 $125,000

Hideaway Community County Water & Sewer District

Hideaway Court Community Sewer Project (HCCWSD) $125,000

Chester, Town of

Chester Wastewater Improvements Project $125,000

Troy, City of

Troy Water System Improvements Project $125,000

Lockwood Water and Sewer District

Lockwood Water and Sewer District Mid Zone Reservoir $125,000

Hot Springs, Town of

Hot Springs Sewer Lagoon Rehabilitation Project $125,000

Hingham, Town of

Hingham Wastewater System Improvements Project $125,000

Chester, Town of

Chester Water System Improvements Project $125,000

Shelby, City of

Shelby Wastewater Improvements Project $125,000

Conrad, City of

Conrad Storm Water Project $125,000

Absarokee Water and Sewer District

Absarokee Water and Sewer District Water System Improvements $125,000

North Cut Bank Glacier County Water and Sewer District

North Cut Bank Glacier County Wastewater Lift Station Improvements $125,000

Yellowstone Boys and Girls Ranch County Water and Sewer District

Yellowstone Boys and Girls Ranch County WSD Wastewater System Improvements $125,000

Judith Gap, Town of

Judith Gap Wastewater Water Line and Meter Upgrade Project $125,000

Boulder, City of

Boulder Drinking Water System Improvements $125,000

Anaconda - Deer Lodge County

Water & Sewer Planning Project $100,000

(5) The amount of $2,560,000 is appropriated to the department of natural resources and conservation from the natural resources projects state special revenue account established in 15-38-302 for the biennium beginning July 1, 2023. The funds referred to in this subsection must be awarded by the department to the named entities for the described purposes and in the grant amounts listed in subsection (7), subject to the conditions set forth in [sections 2 and 6] and the contingencies described in the renewable resource grant and loan program January 2023 report to the 68th legislature titled: "Governor's Executive Budget Fiscal Years 2023-2025 Volume 6".

(6) Funds must be awarded up to the amounts approved in subsection (7) in the following listed order of priority until available funds are expended. Funds not accepted or used by higher-ranked projects must be provided for projects farther down the priority list that would not otherwise receive funding. If at any time a grant sponsor determines that a project will not begin before June 30, 2025, the sponsor shall notify the department of natural resources and conservation. After all eligible projects are funded, remaining funds may be used for any renewable resource project authorized under this section.

(7) The following are the prioritized irrigation grant projects:

RENEWABLE RESOURCE IRRIGATION GRANT PROJECTS

Applicant/Project Amount

Greenfields Irrigation District

Greenfields Irrigation District Pishkun Inlet Hydroelectric Project $125,000

Lower Yellowstone Irrigation District #1

Lower Yellowstone Irrigation District #1 Thomas Point Pumping Plant Rehabilitation $125,000

Lower Yellowstone Irrigation Project

Lower Yellowstone Irrigation Project Critical Structures Rehabilitation Project $125,000

Helena Valley Irrigation District

Helena Valley Irrigation District Regulating Reservoir Preservation & Bypass Project $125,000

Buffalo Rapids Irrigation Project 2

Shirley Main Canal Rehabilitation Phase 2 $125,000

Pondera County Conservation District

Pondera County Conservation District Birch Creek Diversion Automation Project $125,000

Madison County

Madison County Big Hole River Restoration Design and Permitting $125,000

Ruby Valley Conservation District

Ruby Valley CD Upper Jefferson Channel Restoration Project $125,000

Newlan Creek Water District

Newlan Creek Water District Newlan Creek Dam Safety Improvements $125,000

Savage Irrigation District

Savage Irrigation District Pump Station Rehabilitation $125,000

Pondera County Conservation District

Pondera County Conservation District PCCRC C-Canal Headworks Automation $125,000

East Bench Irrigation District

East Bench Irrigation District Carter Creek Lining & Headgate Automation $125,000

Buffalo Rapids Irrigation Project 1

Eiker Reach Canal Rehabilitation Project $125,000

Hill County

Hill County Beaver Creek Dam Tailwater Channel Restoration $125,000

Granite Conservation District

Granite Conservation District - Allendale Ditch Rehabilitation $125,000

Blaine County

Blaine County NCIA North Chinook Reservoir Dam Outlet Rehabilitation Project $125,000

Paradise Valley Irrigation District

Paradise Valley Irrigation District Hillside Ditch Pipeline Conversion Phase 2 $125,000

Huntley Project Irrigation District

Highline Discharge Pipeline Rehabilitation $125,000

Tin Cup Water and Sewer District

Tin Cup and Mill Ditch Improvements $125,000

Billings, City of

Rim Tunnel Rehabilitation Project $125,000

Clinton Irrigation District

Schoolhouse Lateral Pipeline Conversion $60,000

Section 2. Coordination of fund sources for grants to political subdivisions and local governments. A project sponsor listed under [section 1(4) or section 1(7)] may not receive funds from both the reclamation and development grants program and the renewable resource grant and loan program for the same project during the same biennium.

Section 3. Milk River repair and maintenance fund. (1) There is an account in the state special revenue fund established in 17-2-102 to be known as the Milk River repair and maintenance fund.

(2) Interest earned must be retained by the fund.

(3) Eligible uses include long-term operations and maintenance of the Milk River project, and the authorization of loans specified in [section 4].

Section 4. Authorization. (1) The amount transferred in [section 10] shall be held in escrow for loans to the Milk River project.

(2) The interest rate for the loan made to the Milk River project from proceeds from subsection (1) must be negotiated with department of natural resources and conservation at a rate and term consistent with loan financing available from other federal and private sources.

(3) Loan repayment may be interest only.

(4) The interest repaid must be placed in the state special revenue account established in [section 3] for use by the Milk River project for long-term operation and maintenance of the Milk River project.

Section 5. Loan contingency. (1) The approval of the loan in [section 4] is contingent on the following:

(a) the receipt of federal cost share that addresses the financial capability of the Milk River project contracting entities as cited in the Milk River project ability-to-pay study by the U.S. department of the interior, bureau of reclamation, dated September 2022, or the budget director adopting a repair plan from the Milk River joint board of control. The department of natural resources and conservation shall develop the required contents of the repair plan. The Milk River joint board of control shall submit its repair plan to the department of natural resources and conservation. If the budget director does not adopt the repair plan, the Milk River joint board of control may resubmit a revised repair plan to the department.

(b) the Milk River joint board of control demonstrating to the satisfaction of the department of natural resources and conservation its technical, managerial, and financial capacity, through water user fees or other available sources of funding, to pay the annual costs of the loan repayment over the term of the loan.

Section 6. Condition of grants. Disbursement of funds under [section 1] is subject to the following conditions that must be met by the project sponsor:

(1) A scope of work, schedule, and budget for the project must be approved by the department of natural resources and conservation. Any changes in scope of work or budget after legislative approval may not change project goals and objectives. Changes in activities that would reduce the public or natural resource benefits as presented in department of natural resources and conservation reports and applicant testimony to the 68th legislature may result in a proportional reduction in the grant amount.

(2) The project sponsor shall show satisfactory completion of conditions described in the recommendation section of the project narrative of the program report to the legislature for the biennium ending June 30, 2025, or, in the case of planning grants issued under [section 1(1)(b)], completion of conditions specified at the time of written notification of approved grant authority.

(3) The project sponsor must have a fully executed grant agreement with the department.

(4) Any other specific requirements considered necessary by the department must be met to accomplish the purpose of the grant as evidenced from the application to the department or from the proposal as presented to the legislature.

Section 7. Appropriations established. There is appropriated to any entity of state government that receives a grant under [section 1] the amount of the grant upon award of the grant by the department of natural resources and conservation. Grants to entities from prior bienniums are reauthorized for completion of contract work.

Section 8. Approval of grants -- completion of biennial appropriation. The legislature, pursuant to 85-1-605, approves the renewable resource programs grants listed in [section 1]. The authorization of these grants constitutes a biennial appropriation from the natural resources projects state special revenue account established in 15-38-302.

Section 9. Notification to tribal governments. The secretary of state shall send a copy of [this act] to each federally recognized tribal government in Montana.

Section 10. Transfer of funds. By July 1, 2023, the state treasurer shall transfer $26 million from the general fund to the natural resources projects state special revenue account established in 15-38-302.

Section 11. Appropriation -- contingency. Contingent on satisfaction of the conditions in [section 5], there is appropriated $26 million from the natural resources projects state special revenue account established in 15-38-302 to the department of natural resources and conservation for the biennium beginning July 1, 2023, for a loan to the Milk River joint board of control for the project stakeholder cost share for the Milk River repair projects.

Section 12. Coordination instruction. (1) If both [this act] and an act that provides additional funding for renewable resource grant and loan program grants from a source other than the natural resources projects state special revenue account established in 15-38-302 are passed and approved, the projects listed in [section 1(4) and section 1(7) of this act] that do not receive funding from the appropriations in [section 1(2) and section 1(5) of this act] may receive funding from the appropriation in the other act designated for renewable resource grant and loan program grants in the order of completion of the conditions of [section 6 of this act] and to the extent that there is appropriation authority available.

(2) Appropriations made in [section 1(1)(a) through (1)(f) may be adjusted within [section 1(1)(a) through (1)(f)] within the biennium based on demand or emergencies.

Section 13. Severability. If a part of [this act] is invalid, all valid parts that are severable from the invalid part remain in effect. If a part of [this act] is invalid in one or more of its applications, the part remains in effect in all valid applications that are severable from the invalid applications.

Section 14. Effective date. [This act] is effective July 1, 2023.