2006 Legislation
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HOUSE BILL NO. 546 – Water project costs, loan approval


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Bill Status

H0546.........................................by RESOURCES AND CONSERVATION
IDAHO WATER RESOURCE BOARD - Amends existing law relating to the Idaho
Water Resource Board to revise conditions under which the board may approve
a loan for certain water project costs.
02/02    House intro - 1st rdg - to printing
02/03    Rpt prt - to Res/Con
02/22    Rpt out - rec d/p - to 2nd rdg
02/23    2nd rdg - to 3rd rdg
03/01    3rd rdg - PASSED - 67-0-3
      AYES -- Anderson, Andrus, Barraclough, Barrett, Bastian, Bayer,
      Bedke, Bell, Bilbao, Black, Block, Boe, Bolz, Brackett, Bradford,
      Cannon, Chadderdon, Clark, Collins, Crow, Deal, Denney, Ellsworth,
      Eskridge, Field(18), Field(23), Garrett, Hart, Harwood, Henbest,
      Henderson, Jaquet, Kemp, Lake, LeFavour, Loertscher, Martinez,
      Mathews, McGeachin, McKague, Miller, Mitchell, Moyle, Nielsen,
      Nonini, Pasley-Stuart, Pence, Raybould, Ring, Ringo, Roberts, Rusche,
      Rydalch, Sali(Sali), Sayler, Schaefer, Shepherd(2), Shepherd(8),
      Shirley, Skippen, Smith(30), Smith(24), Smylie, Snodgrass, Stevenson,
      Wills, Wood
      NAYS -- None
      Absent and excused -- Edmunson, Trail, Mr. Speaker
    Floor Sponsor - Wood
    Title apvd - to Senate
03/02    Senate intro - 1st rdg - to Res/Env
03/14    Rpt out - rec d/p - to 2nd rdg
03/15    2nd rdg - to 3rd rdg
03/16    3rd rdg - PASSED - 35-0-0
      AYES -- Andreason, Brandt, Broadsword, Bunderson, Burkett,
      Burtenshaw, Cameron, Coiner, Compton, Corder, Darrington, Davis,
      Fulcher, Gannon, Geddes, Goedde, Hill, Jorgenson, Kelly, Keough,
      Langhorst, Little, Lodge, Malepeai, Marley, McGee, McKenzie, Pearce,
      Richardson, Schroeder, Stegner, Stennett, Sweet, Werk, Williams
      NAYS -- None
      Absent and excused -- None
    Floor Sponsor - Pearce
    Title apvd - to House
03/17    To enrol
03/20    Rpt enrol - Sp signed
03/21    Pres signed - To Governor
03/22    Governor signed
         Session Law Chapter 126
         Effective: 07/01/06

Bill Text

  ]]]]              LEGISLATURE OF THE STATE OF IDAHO             ]]]]
 Fifty-eighth Legislature                   Second Regular Session - 2006
                              IN THE HOUSE OF REPRESENTATIVES
                                     HOUSE BILL NO. 546
  1                                        AN ACT
  7    Be It Enacted by the Legislature of the State of Idaho:
  8        SECTION 1.  That Section 42-1756, Idaho Code, be, and the same  is  hereby
  9    amended to read as follows:
 11    -- REPAYMENT -- STATEMENT -- FILING -- DEFAULT. (a1) Any irrigation  district,
 12    canal  or irrigation company, water users' association, municipal corporation,
 13    municipality, private corporation, or, in special cases approved by the board,
 14    an individual may file an application with the  board  for  a  loan  from  the
 15    revolving account for the purpose of financing project costs. Such application
 16    shall be filed in such manner, and shall be in such form and be accompanied by
 17    such  information  as  may be prescribed by the board; provided, however, that
 18    any such application filed with the board under the provisions  of  this  act,
 19    shall:
 20        (1a)  Describe the nature and purpose(s) of the proposed project.
 21        (2b)  Set  forth  or  be accompanied by a plan for development of the pro-
 22        posed project, together with such  engineering  and  economic  feasibility
 23        data and estimated costs of construction as may be required by the board.
 24        (3c)  State whether money other than that for which application is made to
 25        the board will be used for project costs, and whether such money is avail-
 26        able or has been sought for this purpose.
 27        (4d)  Show  that  the applicant holds or can acquire title to all lands or
 28        has the necessary easements and rights-of-way for the project and  related
 29        lands, and has or can acquire all water rights necessary for the construc-
 30        tion,  operation  and  maintenance  of the proposed project, or that there
 31        exists sufficient water available for appropriation by proof of  a  permit
 32        issued by the director of the department of water resources.
 33        (b2)  Upon  receipt of an application, the board shall evaluate and, if it
 34    deems it to be necessary, investigate all aspects of the proposed project  and
 35    the  proposed construction thereof. As a part of such investigation, the board
 36    shall determine whether the plan for development of the project  is  satisfac-
 37    tory. If the board determines that the plan is unsatisfactory, it shall return
 38    the  application  to  the  applicant  and may make such recommendations to the
 39    applicant as are considered necessary to make the plan satisfactory.
 40        (c3)  The board may approve a loan for project costs if  after  investiga-
 41    tion (if this is deemed necessary,) and evaluation it finds that:
 42        (1a)  The plan does not conflict with any extant Idaho state water plan;
 43        (2b)  The  proposed project is feasible from an engineering standpoint and
  1        economically justified, with studies showing a favorable benefit  to  cost
  2        ratio;
  3        (3c)  The plan for development of the proposed project is satisfactory;
  4        (4d)  The applicant is qualified and responsible;
  5        (5e)  There  is reasonable assurance that the borrower can repay the loan;
  6        and
  7        (6f)  That money in the revolving account is available for the loan; and
  8        (7)  That  the  loan  does  not  exceed  five  hundred  thousand   dollars
  9        ($500,000) unless legislative approval has been obtained.
 10        (d4)  If  the board approves a loan, the board and the applicant or appli-
 11    cants shall enter into an agreement for repayment to the revolving account  of
 12    money  loaned therefrom, together with interest thereon at reasonable rates as
 13    determined by the board. The agreement shall further provide that repayment of
 14    the loan, together with interest thereon, shall commence no later than one (1)
 15    full year after construction of the project is completed, and  that  repayment
 16    shall  be  completed  within  the time period specified by the board; provided
 17    that repayment to reserve accounts or guarantee funds shall be  made  as  pro-
 18    vided  by order of the board. The repayment period shall not exceed sixty (60)
 19    years, except that the board may extend the time for making repayment  in  the
 20    event  of  emergency  or  hardship. Such agreement shall also provide for such
 21    assurances of, and security for, repayment of the loan as are considered  nec-
 22    essary by the board.
 23        (e5)  The  state  shall  have a lien upon a project constructed with money
 24    from the revolving account for the amount  of  the  loan,  together  with  the
 25    interest thereon. This lien shall attach to all project facilities, equipment,
 26    easements,  real  property  and property of any kind or nature associated with
 27    the project and all water rights associated in any way with the  project.  The
 28    board  shall file a statement of the loan, its amount, terms and a description
 29    of the project with the county recorder of each county in which the project or
 30    any part thereof is located. The county recorder shall record the  lien  in  a
 31    book  kept  for  the recording of liens and it shall be indexed as other liens
 32    are required by law to be indexed. The lien shall be valid until paid in  full
 33    or  otherwise  discharged.  The  lien  shall  be foreclosed in accordance with
 34    applicable state law governing foreclosure of mortgages and liens as set forth
 35    in chapter 1 of title 6, Idaho Code, chapter 13 of title 45, Idaho  Code,  and
 36    related provisions of the statutes of this state.
 37        (f6)  If  an  applicant  fails  to comply with the repayment contract, its
 38    interest in the project may be conveyed to a successor upon  approval  by  the
 39    board,  which  may  contract  with  the qualified successor in interest of the
 40    original obligor for  repayment  of  the  loan,  together  with  the  interest
 41    thereon, and for succession to its rights and obligations in any contract with
 42    the board.
 43        (g7)  The  state  shall have a lien on any or all projects which the board
 44    improves or renovates with money from the revolving  account,  and  such  lien
 45    shall be valid and continue in effect until such funds, together with interest
 46    thereon,  have been paid in full and the lien discharged. The board shall file
 47    a statement of the lien, and the lien shall be  foreclosed  upon  all  project
 48    property and rights as provided in subsection (e5) above of this section.
 49        SECTION  2.  That  Section 42-2042, Idaho Code, be, and the same is hereby
 50    amended to read as follows:
 51        42-2042.  AUTHORIZATION -- FINANCING. Pursuant to  section  42-1756(c)(7),
 52    Idaho  Code,  the  Idaho  water resource board is authorized to plan, finance,
 53    construct, acquire, operate, own, maintain, and be the project sponsor and de-
  1    veloper of a water resource development project as provided in the  provisions
  2    of  the  Carey  Act  and to use the water resource board revolving development
  3    fund and revenues or other additions thereto from any source,  including,  but
  4    not limited to, proceeds from loans secured by project revenues, to finance or
  5    guarantee  the  funding  of  said project. Said project is known as the Indian
  6    Hills Pproject, which is located in Owyhee Ccounty approximately two (2) miles
  7    southwest of Hammett, Idaho. The Idaho water resource board is  authorized  by
  8    this  act  to proceed with the project on the basis identified and approved by
  9    the Idaho water resource board in the proposal submitted, pursuant to  section
 10    42-1734(m11),  Idaho  Code, to the governor of Idaho on November 25, 1974; and
 11    the Idaho water resource board is further authorized to proceed in  accordance
 12    with  and  exercise the authority for issuance of revenue bonds as provided in
 13    section 42-1734(s17), Idaho Code. The Idaho water resource  board  is  further
 14    authorized  to  own,  sell, convey, mortgage, pledge or incumber the lands for
 15    said project and do all things necessary for the construction  and  completion
 16    of  said  project including the acquisition of all necessary real and personal
 17    property in connection therewith, together  with  all  necessary  pumping  and
 18    water  distribution works and facilities at the site of such water project and
 19    all other necessary and related structures and equipment, and, in addition  to
 20    the powers conferred elsewhere on the Idaho water resource board, to issue and
 21    sell  revenue  bonds under the provisions of sections 42-1739 through 42-1749,
 22    Idaho Code, pledging thereto the revenues which the board  shall  derive  from
 23    such  water  project,  and  such  other  revenues  as  may come into the water
 24    resource board revolving development fund from any source whatsoever,  includ-
 25    ing,  but  not  limited  to,  any  tax funds pledged or dedicated to the water
 26    resource board revolving development fund, in order to pay the costs of  plan-
 27    ning,  financing,  acquiring,  construction, operation and maintenance of such
 28    water project. The water resource board is further authorized  to  charge  and
 29    collect  such fees and assessments necessary for payment and reimbursement for
 30    all the costs of said project and the water resource board shall have a  first
 31    and  prior lien upon all lands of the project and water rights now appurtenant
 32    or to become appurtenant to said lands and water distribution facilities; said
 33    lien shall be in all respects prior to any and all other liens no  matter  how
 34    created  or  attempted  to be created by the owner or possessor of the project
 35    lands or by law, and shall remain in full force  and  effect  until  the  last
 36    deferred  payment  for  water  rights and project facilities is fully paid and
 37    satisfied according to the terms of the contract under which water is acquired
 38    for said project by persons making entry upon said lands.

Statement of Purpose / Fiscal Impact

                       STATEMENT OF PURPOSE

                             RS 15809

The purpose of this legislation is to amend Section 42-1756 Idaho
Code to delete former subsection (c) paragraph (7) to allow the
Water Resource Board to facilitate loans from the revolving loan
fund in excess of $500,000.  Since this statute was passed in the
1970's, the costs of construction of water projects for
irrigation facilities and municipal projects have increased
dramatically. The size of loans, and the amount approved from
this fund, are now limited by the loan fund balance and approval
of the Board. Also, during the period of time that the
legislature is not in session, the Board needs the ability to
approve loan requests and move projects forward in a timely
manner. The legislation also makes technical corrections to
update the numbering of sub-sections and paragraphs in Sections
42-1756 and 42-2042.

                           FISCAL NOTE

No impact to the general fund.

Name: Hal Anderson, Water Resources, Dept. Of 
Phone: (208) 287-4800
Reps. John A. Stevenson, Dell Raybould
Senator Charles Coiner

STATEMENT OF PURPOSE/FISCAL NOTE                         H 546