Lincoln County legislator takes on big challenge

A Lincoln County legislator has jumped into the deep end of the public policy pool. Rep. Mike Cuffe of Eureka has undertaken a project that has gone from the state capitol in Helena to the U.S. State Department and into the realm of international relations.

Cuffe’s proposal, which he admits is a long-shot, could result in the influx of millions of dollars into Lincoln County coffers.

“It’s a big rock to roll,” Cuffe said. “But should it be successful Lincoln County could easily achieve several millions of dollars either through a one-time endownment or in annual payments.”

Cuffe’s proposal stems back to the 1962 Columbia River Treaty between the United States and Canada. The treaty called for the construction of four dams, three in Canada and one in the United States. The Mica, Keenleyside and Duncan dams were built in British Columbia and the Libby Dam was built in Lincoln County. The reservoirs created by the four dams flooded thousands of acres of valuable land, as well as town sites. All told, more than 2,000 people were displaced by the dams.

The four dams store and regulate the release of water into the Columbia and Kootenai rivers, which allows for not only reliable management of water flows to prevent flooding, but also maximize hydroelectric power generation at a number of smaller dams built along the Columbia River. The power generated by the American dams is distributed by Bonneville Power Authority, a quasi-governmental non-profit agency. In Canada, the power is distributed by British Columbia Hydro and Power Authority, known as BC Hydro.

Pursuant to the treaty, Bonneville Power Authority and BC Hydro split the revenue generated from the distribution of power generated on the Columbia River. Cuffe estimated the revenue to be in the hundreds of millions of dollars annually.

In 1995, after three years of negotiations, the Canadian government passed the Columbia Basin Trust Act. The act created a trust to compensate residents of the Columbia River Basin in British Columbia for the negative effects of the loss of land resulting from the construction of the dams.

Specifically, the trust received a starting endowment of $295 million. The bulk of the endowment, $250 million, was committed to financing the development and construction of power projects in the basin. The remaining $45 million was set aside for investments to benefit basin residents through short-term cash investments, revolving business loans and venture capital projects in the basin. The trust also received annual payments of $2 million each from 1996 until 2012.

An additional $250 million was transferred to the Columbia Power Corporation, the trust’s joint venture partner for in-basin power projects. Half of the corporation’s net profits are given back to the trust for use on social, economic and environmental projects that benefit the basin and its residents.

The trust is the inspiration behind Cuffe’s plan.

“What brought it all together was the meetings held for the Columbia River Treaty reconsideration,” Cuffe said. “Beginning a few years before the 2014 notification deadline, a sovereign review committee was called to evaluate the treaty. It was from those meetings and my testimony at them that the idea of compensation came together.”

The construction of the Libby Dam cost Lincoln County thousands of acres of productive land, including the towns of Rexford and Warland. Unlike the towns on the Canadian side of the border, however, nothing has been done to compensate Lincoln County for the loss of taxable land.

Cuffe hopes to change that. During the 2015 legislative session, he pushed two pieces of legislation, the first steps in the process.  

House Resolution 3 is a non-binding resolution passed only by the House of Representatives which expresses the House’s support for compensation for Lincoln County’s losses.

“Now, therefore be it resolved by the House of Representatives of the State of Montana: That the House of Representatives of the State of Montana supports the payment of compensation to Lincoln County for the decreased real property tax revenues, the loss of timber sales and wildlife and fish habitat, and other losses due to the construction of the Libby Dam,” the resolution reads. It passed the House of Representatives April 22 on a 96-4 vote.

The second, more tangible step, came in the form of House Bill 590, which passed both the House and Senate. The bill created a special state fund, to be known as the Columbia River Treaty Account, to be administered by the Department of Natural Resources and Conservation. The bill calls for 80 percent of the monies deposited into the account to be disbursed to Lincoln County to be used at the county’s discretion.

“Lincoln County must use the funds received from the account for schools, roads, general operations and to establish a trust fund with interest made available for projects and programs that promote social, economic and environmental well-being in Lincoln County,” Cuffe wrote into the bill.

Cuffe said he has discussed the creation of this trust and the matter of compensation with officials from both the U.S. Department of State and the Canadian government. He is going to Washington, D.C., next month to meet with members of Congress to push it forward. The process, he said, will be a long one, with a minimal chance of success, but the potential benefit to Lincoln County makes the effort worthwhile.

“I have dedicated a good piece of my life to this already,” he said. “I will be in D.C. in October in hopes of pushing congressional legislation into a final form.”