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 the Net:
Nebraska Supreme Court:
