Court hears Republican River arguments
BY ART HOVEY / Lincoln Journal Star
Wednesday, Dec 03, 2008 - 05:03:42 pm CST
There are no gushing irrigation units in December and no recent
admonishments from Kansas to remind Nebraska of all the headaches
associated with the Republican River Compact.
But there was that “little old widow,” brought up again Wednesday by
McCook farmer Angus Garey, to give some human dimension to oral
arguments that had just been completed before the Nebraska Supreme
Court.
How can this poor woman who never used one drop of irrigation water
be forced to pay a higher property tax bill on her house to resolve
a dispute that’s all about irrigation?
The question makes complete sense to Garey, a non-irrigating
farmer from southwest Nebraska and part of the audience for a legal
battle pitting state government and three natural resources
districts against him and eight other property owners from the
Republican River basin.
Garey raised the question again Wednesday, as he did in May, when a
lower court struck down part of a new state law that authorized NRDs
to use local property taxes to pay farmers not to irrigate and to
use such conservation measures to achieve compliance with the river
compact.
Compact compliance is a state responsibility, said plaintiff
attorney Jeanelle Lust of Lincoln. One source of proof, according to
Lust: “It’s the state that would pay damages if we don’t comply with
it.”
Indeed, much more is at stake in this matter than higher property
tax bills. The tax lawsuit grew out of the Legislature’s 2007
attempts to stave off a lawsuit from Kansas by passing LB701 and its
means for NRDs to try to tax their way out of trouble.
Nebraska’s neighbor to the south claims that Nebraska has used more
than its share of Republican water over a period of years and
inflicted a $72 million hardship on Kansas.
The war of words between the two states has eased recently as they
try to use non-binding arbitration and a more private venue to
resolve their differences.
But it heated up again on the Nebraska side of the border Wednesday
as Justin Lavene, special council to the attorney general, and Don
Blankenau, attorney for the NRDs, squared off against Lust,
representing Garey and other unhappy property taxpayers.
Lavene said extra property tax collections are important to NRDs
because they can be used as financial backing for bonds that can be
used to pay for water conservation measures.
He was also careful to contend that residents of the three NRDs had
not been singled out and saddled with a unique obligation. Other
local taxpayers could face similar water conservation costs in
future compact disputes in other river basins.
The property-tax option is “just another tool in the tool box” that
NRDs can choose to avoid “draconian regulation” by the state, Lavene
said.
Lust said tax burden circumstances along the Republican River are
unlikely to be repeated because Nebraska is not likely to join any
new compacts.
Rod Confer, part of the same Lincoln-based legal team, elaborated on
that point afterward.
“The reason is because we’re in so much legal trouble with Kansas,”
Confer said. “It appears that the Legislature has also had a bad
experience with the interstate (nuclear) waste compact.”
Blankenau told the panel of judges that states in the Great Lakes
region and in the Southeast are examples of relatively new compacts.
But Confer said that was of little relevance. “If you look at where
the water disputes are at, they’re all in the arid west and not in
the east.”
Blankenau, who represented Florida in a recent compact agreement
with Georgia and Alabama, said that’s just not the case. “You only
need to look at the big flap that the city of Atlanta had last
summer … where they claimed to be running ouf of water.”
Blankenau was not going to give in either to the argument based on
“the little old widow.”
“I’m sympathetic to her plight,” he said, “but the fact is she lives
in the basin and she consumes water for her own uses.”
Beyond that, he said, the economic benefits that come with
irrigation aren’t confined to farms and farmers. They also flow to
communities where farmers do business.
“If it’s consumed in your area,” said Blankenau, “generally
speaking, there is local economic benefit.”
Lust said a court decision could take six months or longer.
Blankenau is predicting a quicker turn-around.
“The court sometimes sits on cases for a long time,” he said, “but
in recent years, they’ve been pretty fast. And I would expect about
two months.”
Reach Art Hovey at 473-7223 or
ahovey@journalstar.com.
High stakes water fight goes before high court
By NATE JENKINS / Associated Press Writer
Sunday, Nov 30, 2008 - 03:51:17 pm CST
LINCOLN, Neb. — The Nebraska Supreme Court will soon settle
whether additional property taxes can be imposed on landowners in
the Republican River basin to help ensure Nebraska’s compliance with
a three-state water compact.
On Wednesday, Nebraska Attorney General Jon Bruning is scheduled to
argue that a lower court was wrong to nix part of a state law that
gave local irrigation boards in the heavily irrigated basin the
ability to levy property taxes.
In May, Lancaster County District Judge Paul Merritt ruled that the
property tax authority amounted to unconstitutional “special
privileges” because it allowed just three of the state’s Natural
Resources Districts — all in the Republican basin — to set property
taxes, and not other districts.
Merritt agreed with plaintiffs’ assertions that it was improbable
that the state would ever again enter into a compact similar to the
one with Kansas and Colorado that would allow other Natural
Resources Districts to set property taxes.
The state argues that Merritt’s ruling improperly relied on
statements made at the time the water law was being considered by
the Legislature in 2007. Statements made during legislative
proceedings, Bruning’s office argues, don’t predetermine actions
that future legislative bodies take.
“A slippery slope toward unreliability begins when a court converts
an opinion from a single senator, or a statement made during
committee hearings, into a reliable forecast of the actions the
current Legislature may take,” Bruning’s office wrote in court
briefs.
Bruning’s office goes on to say that the 2007 law, commonly known as
LB701, doesn’t forever exclude other districts from gaining taxing
authority. And “additional NRDs, with jurisdiction that includes
parts of the South Platte, the North Platte, Missouri or Niobrara
rivers, may at some point enter the challenged class,” now made up
of the NRD’s in the Republican River basin.
But attorney Rodney Confer, who represents the landowners, argues
there’s no way another NRD will gain taxing authority.
“The events that would have to coincide before another basin’s NRD
would be given taxing authority under LB701 ... will never occur,
and artful drafting cannot change this reality,” Confer wrote in his
brief.
To support their case, the landowners cited comments made by Sen.
LeRoy Louden of Ellsworth. Louden was chairman of the legislative
committee that helped pass the water law.
The law, Louden said in 2007, “was strictly focused and drafted ...
to solve the problems that are going on in the Republican River
area.”
Attorneys for the landowners also refer to comments made by David
Cookson with the Attorney General’s office that “no Legislature in
its right mind would ever enter into a compact again in this day and
age.”
The money from property taxes assessed under the law was to be spent
on measures to help the state comply with the water-use compact,
including buying water from farmers to send to Kansas via the
Republican River.
The law passed in 2007 at the same time Kansas officials were
complaining of Nebraska’s overuse of Republican River water and lack
of a plan to comply with the three-state compact in the future.
Colorado is also part of the Republican River compact.
In 2005 and 2006, Nebraska used billions of gallons more than
allowed under the compact, prompting Kansas to demand more than $72
million and the shutdown of wells that irrigate nearly half of the
1.2 million acres in Nebraska’s portion of the river basin.
The two states failed to resolve the dispute, and the issue is now
in arbitration. If that fails, Kansas officials have said they would
take it back to the U.S. Supreme Court, which issued a decree in
2003 that governs use of Republican River water.
Should the Nebraska Supreme Court reverse the lower court’s ruling
that LB701 gave special, unconstitutional privileges to the
Republican basin NRD’s, the property tax authority could still be in
jeopardy.
In addition to their position that the property taxes amounted to
unconstitutional special privileges, landowners made two other
arguments to the district court.
The district court judge thwarted the two arguments in his ruling,
but the landowners are cross-appealing and making them again to the
high court: That the property taxes were for state purposes, which
is unconstitutional; and that they amounted to an illegal
commutation of taxes that some pay, others don’t, even though they
are for a state purpose.
A lawsuit filed recently poses another threat to the 2007 water law.
It argues that another tax authorized by the law — a per-acre tax on
irrigated land — is unconstitutional.
On May 20, Judge Merritt ruled LB 701 unconstitutional.
He ruled that the provision that caused the tax to apply
only to three of the Republican River Basin NRDs violated
the closed class section of the Nebraska Constitution. He
also imposed an injunction on the collection of the property
tax portion of the bill. The occupational tax, which is the
bulk of the money, remains in place.
There were three primary questions the Court addressed.
The first dealt with - is the tax a State obligation that
the State should fund and not the tax payers of the
Republican River Basin? The Court ruled that it was
acceptable to place the tax on the property tax payers of
the Basin because it was of primary benefit to the local
people while at the same time it happened to help the State
in its obligation.
The second dealt with - is the transfer of tax obligation
from the State to the local district legal? The Court ruled
that it is legal.
The third dealt with - is the limit on who can be taxed
constitutional? The tax was only placed on the property tax
payers and the irrigated land of three NRDs to the exclusion
of all others. The Court ruled that this was
unconstitutional as it unfairly targeted one segment of the
population.
The Court has ruled that the tax on the irrigated land is
acceptable but any tax on non-irrigated property in the
Basin is not acceptable.
Court Order LB701 Unconstitutional
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