senate

Statement to the Senate Natural Resources Committee
by
Rick Perry
Commissioner of Agriculture
March 11, 1997

Thank you, Mr. Chairman and senators. I appreciate the opportunity to appear before this committee today to discuss Senate Bill 1 and some proposals I have to complement its initiatives.

Before I talk about my proposed legislative initiatives, I want to commend you Sen. Brown and your fellow committee members for addressing this important issue. I was glad to see several provisions in the substitute that address topics that are important to agriculture. These issues include: expanding funding through the Texas Water Development Board for such projects as brush control and precipitation enhancement; increasing water conservation education for local residents through the Texas Agricultural Extension Service; emphasizing water planning on a regional basis; enhancing the activities and flexibility of the Water Development Board to more actively pursue market-based water initiatives; and finally, adding definitions to the Water Code for "livestock," "conserved water" and "beneficial use." These provisions will help ensure that agriculture will be an active partner in whatever legislation is passed this session.

Of course, agriculture must be part of any legislation that involves water. Our future as an economically competitive state is tied to how we handle our water resources. And no industry has a greater stake in conserving and making the most out of every drop of water than Texas agriculture, which is this state’s second-largest industry.

That’s why I request that you seriously consider three additional initiatives to complement the pending legislation. Let me repeat, the legislative proposals are designed to complement, not replace, existing provisions in this bill. These initiatives also require no appropriation of state revenue.

The first initiative addresses loans for both water conservation irrigation equipment and for water conservation projects. The Texas Agricultural Finance Authority currently administers the Linked Deposit Program, and one part of that program lends money to farmers who want to convert to more efficient irrigation equipment.

However, few applicants have taken advantage of this aspect of the program. This legislative proposal is designed to bring in more loan applicants by expanding the projects eligible for financing. Along with irrigation equipment, farmers and ranchers under this proposal will be able to borrow money to build and renovate stock tanks and remove water-thieving brush from pastures. They also may borrow money to buy specialized tillage equipment that barely disturbs the earth and keeps soil moisture locked in the ground.

The proposal also will streamline the Linked Deposit Program and allow borrowers to refinance existing debt if that debt is connected to the financing of water conservation projects or equipment. This was identified by many producers during last year’s drought as a major need in dealing with the drought.

Because we expect an increased demand for these loans, I also ask that the program’s current 5 million dollar limitation be increased by 10 million dollars. This additional 10 million dollars would be used only for water conservation equipment and projects. I want to emphasize here that the state carries no liability for loans that go into default under this program. That’s because Linked Deposit is an interest buy-down program, and local banks assume all the risks with these loans. Under the program, once a local bank agrees to make a loan, state investment funds managed by the Comptroller’s office are deposited at a reduced rate of interest for the loan amount in the participating bank.

I believe the state would come out a winner with the increased water savings that could be gained. Local communities also would win with this program. That’s because individuals who borrow from Linked Deposit for a maximum 250,000 dollar loan would save more than 27,300 dollars in interest costs over the 15-year life of the loan. That’s 27,000 extra dollars that can be reinvested in other farm equipment or be used to carry out additional land improvements.

The second initiative involves giving local governments the flexibility and authority to offer property tax credits for urban and rural water conservation projects. If the cities of San Antonio, Austin or Corpus Christi or the counties of Potter and Wichita want to give property owners a tax break for landscaping with native Texas plants, clearing cedar or installing low-flush toilets, this legislation would provide them that option. This legislation also allows local governments to decide exactly what water conservation projects they want to reward with property tax credits. This proposal provides local control and is entirely voluntary.

The third and final initiative involves the creation at the Texas Department of Agriculture of a Native Texas Landscape Certification Program for homes, businesses and state agencies. The state has already recognized the importance of landscaping with drought-tolerant plants. It did this through legislation passed in 1993 that says state agencies must give preferences to xeriscaping new landscapes.

This proposal takes that legislation one step further by urging state agencies that create new landscapes to give preferences not just to xeriscaping, but also to native Texas plants. This proposal not only helps save the state water and maintenance costs, but it also can increase business for Texas nurseries, which make up the fourth largest agricultural sector ($2.5 billion annual income) in our state. The TDA certification program will encourage the maintenance and creation of these native Texas landscapes for both the public and private sectors.

And finally, I want to talk briefly about brush control. I am pleased the substitute now includes a potential funding source for brush control. While these proposed initiatives do not address this issue in a legislative framework, I want to inform you about my plans to develop a source of private funding for large-scale brush control projects.

With a mature cedar tree drinking up about 33 gallons of water each day, we’ve got hundreds of thousands of water thieves spread across the countryside of this great state. The number of these water thieves needs to be reduced. And they can be reduced with a well-planned, cost-effective and ecologically sustainable brush control program conducted over an entire watershed, such as the Edwards Aquifer recharge zone.

Research has shown that such a program could eventually provide long-term water savings of up to 40,000 acre feet of water each year in the Edwards Aquifer region. That’s a lot of water when you consider that 40,000 acre feet could provide a year’s supply of water to a city of 225,000 people or almost a quarter of San Antonio’s population.

Excellent brush control programs have already been developed by Texas A&M University, the Texas Soil and Water Conservation Board, the Texas Agricultural Extension Service and the National Resource Conservation Service. However, long-term funding has yet to be secured. To finance large-scale brush control, I propose joining in partnership downstream users, such as cities, industries and river authorities, with landowners.

We haven’t worked out the details yet, but I believe bringing together these two interest groups can provide the financing needed to put brush control and other water conservation projects in place.

The recent program in which farmers who agreed to commit to dry-land farming were compensated by downstream users is a perfect example of how this can be successfully implemented.

Thank you for your time. You have a difficult task ahead of you, and again, I commend you for tackling this issue. I stand ready to be an active part of your deliberations and decisions. I will try to answer any questions you have of me at this time.