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Bill allowing extension of water contracts OK’d

Capitol news bureau – Baton Rouge Morning Advocate
April 13, 2012

A Louisiana House panel Wednesday advanced legislation that would allow the state to extend contracts for selling surface water.

The legislation would allow the state Department of Natural Resources, which oversees surface water contracts, to extend an agreement’s terms to match incentive deals a company has made with the state Department of Economic Development.

House Bill 532, sponsored by state Rep. Jim Morris, R-Oil City, was approved without objection by the House Committee on Natural Resources and Environment. It now goes to the full House for consideration.

Before approving the measure, several legislators said the state needs to get a handle on all the various state agencies that have authority to peddle water.

“Water is going to be a commodity that’s going to be extremely important to us in the years to come,” said state Rep. Jack Montoucet, D-Crowley.

He said the issue became more focused by recent controversies, such as the one in which many people living and working around Toledo Bend sought to block the Sabine River Authority of Louisiana from entering a 99-year contract to sell fresh water to a private company that would pipe it to Texas. Opponents of the deal complained that the state agency’s efforts to realize a large profit from the sale of water would hurt their businesses and reduce the value of their lakeside properties.

“I don’t want another runaway department,” Montoucet said. “I’m concerned about the lack of coordination” between state agencies.

Morris said HB532 is designed only to address DED’s efforts to attract companies wanting to locate or expand facilities in Louisiana that need longer guarantees to water access than is currently allowed.

Water is an important asset that Louisiana has and other states do not. State government can use water in negotiations with private companies, said Scott Angelle, secretary for the Department of Natural Resources.

Angelle said HB532 enhances a procedure that recently developed for removing water from bayous and rivers for private use.

Initially, companies could use the water as they please, he said. As more and more companies started needing more water, particularly contractors using “fracking” when drilling for energy, local governments became concerned, Angelle said. Hydraulic fracking is a technique that injects water into rock to help release natural gas.

At the request of some local governments, the state attorney general issued opinions finding that surface water is a resource of the people of Louisiana that cannot be taken without compensating state government, he said. DNR set up a system for companies to contract with the state for the use of surface water for a 10-year period, Angelle said.

“I am aware of several companies wanting to locate here, for which water is important,” Angelle said. “If they look at the A.G. opinions and they look at the risk (of losing access to the water), it could become a problem for them locating in Louisiana.”

DNR would retain the right to suspend the sale of water during times such as the drought last year in northwest Louisiana, he said.