Zach Wending
LINCOLN — The Nebraska Association of Resources Districts and key ag leaders were among those who threw cold water this week, at least for now, on an idea from Gov. Jim Pillen to merge two state agencies.
Legislative Bill 317, by State Sen. Tom Brandt of Plymouth and introduced at the request of Gov. Jim Pillen, would fold the Nebraska Department of Natural Resources into the Nebraska Department of Environment and Energy. Pillen has said his goal is to enhance the state’s focus on water.
The combined agency would be the Nebraska Department of Water, Energy and Environment, effective July 1, if adopted by the Legislature this spring.
Pillen has also set his sights on creating a Water Quality and Quantity Task Force, eyeing 15-18 members likely to be appointed by the governor, which he said would seek proactive solutions and possible policy help to proactively protect the state’s water resources.
‘We need to take a scalpel’
Jasper Fanning, general manager of the Upper Republican Natural Resources District, testifying on behalf of the association for the state’s 23 NRDs, argued against the merger for now.
Fanning described the Department of Natural Resources as very collaborative and problem-solving, urging a more surgical and refined approach to merger conversations. He said carving out only water-related structures, if that’s the goal, could be a focus.
The task force could help frame those conversations, Fanning said.
“This is probably a terrible analogy, but you don’t arrange for and conduct a shotgun wedding and then make the first step after that wedding looking at what the [pregnancy] test result is,” Fanning said.
He continued: “We need to take a scalpel and a very refined approach as opposed to just kind of a broad, sweeping approach to [the] discussion.”
The merger would replace the director of the Natural Resources Department with a “chief water officer” as a division leader below the new merged agency’s director.
The water position would require legislative approval and, at a minimum, require at least five years’ experience in a position of responsibility in irrigation work. Multiple testifiers said the chief water officer should be required to be a licensed professional engineer, as currently required.
Brandt and others said that requirement would return in a future amendment.
The Perkins County Canal
Fanning said Jesse Bradley, interim director of both of the agencies proposed to merge, needs to continue to be focused on the “most important water issue and project governance in the history of the State of Nebraska.”
For the NRD general manager, that is the Perkins County Canal, a 100-year interstate compact that former Gov. Pete Ricketts, now U.S. senator, unearthed and passed on to Pillen.
The canal would capture water in Keith County in western Nebraska from Colorado. Lawmakers have already appropriated funds for such construction, which Colorado officials have criticized as a “canal to nowhere.”
“Some might disagree with that, but I think the Perkins County Canal, and the South Platte [River] Compact, is the most important thing in Nebraska’s water future,” Fanning said.
Fanning said Environment and Energy focuses on federal mandates, pass-through funding and “a lot of check-the-box things, not really asking the question every day, ‘How do we best serve Nebraskans and what can we do to help Nebraska grow?’” He said that would take up necessary staff time.
“Anything that takes Mr. Bradley’s efforts and his staff’s efforts away from focusing on ensuring Nebraska’s water future, which has significant impacts on Lincoln and Omaha’s water supply, it’s a big deal,” Fanning said.
Bradley has been interim director of Natural Resources since August 2024, and he assumed the top role at Environment and Energy on Wednesday, as Pillen eyed the merger.
The interim director said the merger would improve focus on long-term issues, such as nitrogen management, water utilization and soil health. He said it would also help streamline the process for planning and permitting.
He said he supports the merger and told the committee he believes staff are excited to work together and break through existing silos. Both agencies are already co-located at the same office building in northwest Lincoln.
Natural Resources has a budget of more than $104 million, largely in cash funds, and has about 112 employees. Environment and Energy has a budget of nearly $99 million, split in half roughly between cash and federal funds, and has 252 employees.
‘Double down’ on water enhancement
Pillen told the Natural Resources Committee, which Brandt chairs, that water is the “lifeblood” of Nebraska and that future innovations will lead to an “economic boom” in the state.
He noted new hydrogen plants, companies based around biofuels and biobased products, animal processing plants and data centers are looking to locate in the state and will need water.
“Moving forward, we need to double down on our efforts to protect and enhance this valuable resource,” Pillen testified. “Combining DEE and DNR sets the foundation for water quantity and quality under the same leadership.”
Pillen, who is 69 years old, grew up on a farm in Platte County where he raised pigs with his father. In 1993, he started Pillen Family Farms and later added DNA genetics, which has grown into a massive hog operation.
Much of the state has high nitrate levels, which has landed criticism at Pillen and his family operation in recent years as he ascended to the governor’s office.
Pillen and lawmakers commissioned a study in 2023 to recommend viable solutions for nitrate-affected drinking water. They also allocated $500,000 annually for one-time income tax credits, up to $1,000, for reverse osmosis systems to help filter out nitrates and other chemicals from drinking water.
The governor testified that it is “no secret” that the state has faced elevated nitrate levels for 60 years, which he said the merger and his task force would help combat.
“This has to stop. It cannot continue,” Pillen said of nitrate contamination. “We need to get aggressive and address these issues.”
Uncertain cost savings
He described the merger as “simply good governance” that would lead to cost savings over time.
Fiscal estimates provided by the Natural Resources and Environment and Energy Departments showed no immediate savings but projected $100,000 in rebranding costs in the next fiscal year.
Jacob Leaver, deputy state budget administrator, said the merger wouldn’t impact any current obligations or projects for either agency. He said, if merged, that cost savings might come in the 2027-2029 fiscal years.
State Sen. Danielle Conrad of Lincoln said she was surprised there were no specific savings identified. Pillen and Leaver said that was intentional.
“To be able to go out and say exactly what that is,” Pillen told the committee of potential savings, “I just don’t think it’s fair to the public servants who are part of those agencies to do that today.”
Timothy McCoy, director of the Nebraska Game and Parks Commission, also supported the proposal, limiting his comments to a small section in the 446-page bill that would return authority for determining the boundaries of state game refuges to his commission from Environment and Energy. McCoy, like Fanning, said he anticipated coordination with the sister agencies would continue either way.
Much of the bill is limited to correcting references if the agencies are merged, with roughly only 30 of the 393 sections in the bill offering substantive new or modified legal changes.
Many are limited to eliminating “obsolete” provisions that haven’t been used in years, Bradley explained, such as a specific soil survey fund and repealing the Low-Level Radioactive Waste Disposal Act. Nebraska withdrew from a related waste disposal interstate compact in 1999.
Environmental leaders voice concerns
LeRoy Sievers, who serves on the board of directors of the Nebraska State Irrigation Association, which has been around since 1893, argued that based on his experience, mergers don’t save money.
“Prior mergers did not save money and only created additional bureaucratic barriers,” he said. “This proposed merger will do the same.”
Sievers said he is a former assistant attorney general and legal counsel for what was previously the Nebraska Department of Water Resources and became Natural Resources in the 2000s.
He said that having a dedicated agency for water is critical in interstate litigation, which could include the Perkins County Canal, for example. Sievers said large bureaucracies hurt other states in those lawsuits while Nebraska had a leg up.
Al Davis, on behalf of the Nebraska chapter of the Sierra Club, opposed the merger, pointing to the environmental disaster in Mead, Nebraska, which he said was exacerbated by a slow response at Environment and Energy.
Davis, a former state senator from the Sandhills, said that the merger of the state’s energy functions atrophied potential energy innovations at a time when the state could be strengthening and diversifying its energy grid.
Kurt Bogner, vice chair of the Nebraska Environmental Quality Council, which adopts rules and regulations for Environment and Energy and also vets candidates for the agency director, also opposed the move.
Bogner, testifying in his individual capacity, said the council has received no information or updates on selecting a director since former director Jim Macy resigned in April 2024.
LB 317 would remove the Council’s advisory role to vet candidates for the governor, a responsibility that Bogner suggested should be carried over.
Bruce Rieker, for the Nebraska Farm Bureau, and John Hansen, for the Nebraska Farmers Union, also testified in opposition to the change.
Merger wouldn’t be ‘oil and water’
Among Brandt’s committee members, many appeared open to the merger.
State Sen. Barry DeKay of Niobrara, committee vice chair, noted it’s not as if Natural Resources and Environment and Energy are “oil and water,” because both already work together.
State Sen. Mike Moser of Columbus voiced what he described as the “elephant in the room” to Brandt: balancing the use of water for agriculture, cities and industry.
Moser told Fanning that, whatever moves forward, he hopes local NRDs will embrace the changes and make it work well.
“That’s our goal,” Fanning said. “We’re always working to improve collaboration with both agencies, and that’s what we want on a daily basis.”
Brandt said he’s open to taking more time to meet with stakeholders and specify how the merger would work. He said he remains committed to getting his bill over the finish line this year.
“Everybody wants better water issues tomorrow than we have today,” Brandt told his committee. “I think we all share that goal in this room.”
History of the Nebraska Departments of Natural Resources, Environment and Energy
Current: Nebraska Department of Environment and Energy
- The Nebraska Department of Environmental Control is established (1971).
- The department is renamed the Nebraska Department of Environmental Quality (1992).
- Nebraska Energy Office is folded into the Environmental Quality Department, becoming DEE (2019).
- State-delegated environmental health programs from the U.S. Environmental Protection Agency, housed in the Nebraska Department of Health and Human Services, are moved over to DEE (2021).
Current: Nebraska Department of Natural Resources
- The State Board of Irrigation is established (1895).
- The board is renamed the State Board of Irrigation, Highways and Drainage (1911).
- The name changes again to the Department of Public Works, expanded to include the Bureau of Roads and Bridges; Bureau of Irrigation, Water Power and Drainage; and the Motor Vehicle Records Division (1919).
- The department is renamed the Nebraska Department of Roads and Irrigation (1933).
- The Nebraska Department of Water Resources is established as the prior department is divided into three separate state agencies, alongside the Department of Roads and the Department of Motor Vehicles (1957).
- The Natural Resources Commission merges with the Nebraska Department of Water Resources to become the Nebraska Department of Natural Resources (2000).
Nebraska is the only state with separate natural resources districts, which were created in 1972 as multipurpose, locally elected management bodies. There are currently 23 NRDs statewide.
Water management in the state is largely shared by the Department of Natural Resources, the Department of Environment and Energy and NRDs, with specific support from the Nebraska Department of Agriculture and the Nebraska Game and Parks Commission.