Effect of Court ruling on LB701
What are the consequences of the District Court ruling parts of LB701 unconstitutional? In the short term – not much.
The State has already loaned the NRDs the money to pay for the 2007 water purchase, with repayment due when the Court approves the law.
The NRDs have no water purchases in mind nor any public augmentation plans in place for 2008. As a result, there is no immediate need for money. Because of the large rains in 2007, the State expects that it will be in compliance for 2008, even if it doesn’t do anything. That happens because the rains of 2007 will not be credited to Nebraska until the water is released from the reservoirs in 2008.
The 2009 Legislature can easily solve the constitutional problem by permitting all NRDs in the State to levy taxes for resolving water issues. This will solve two problems at the same time. It will provide funding for the Republican River Basin, and it will provide funding for the Platte River Cooperative Agreement requirements that will soon kick in.
Under LB701, the NRDs were to collect about $9.7 million to pay an $8.5 million bill. The judge’s ruling specifically said that it was unconstitutional to collect the $2.5 million that came from the property taxes, but he did not address the money that was to come from the occupation tax (the per irrigated acre tax). If the Court upholds the ban on the property tax but permits the occupation tax, then the current law allowing up to $11 million a year to be collected from the irrigated acre fee is about double what the State and NRDs anticipate needing.
The State and NRDs plan on using the money to comply via two different methods. They hope to use a combination of surface water purchases and stream augmentation. The State recently gave the NRDs a $500,000 grant to engineer an augmentation plan that will put water in the river near Guide Rock.
The matter is likely to be tied up in Court for at least another year, which means that the Legislature will need to act to address the issue. As the Court bluntly stated, this is a State obligation. While that State can force the local community to help pay for the solution, it is still the obligation of the State to honor the Compact and there are multiple ways it can do that.
In short, because the State doesn’t feel that it needs to purchase water for 2008, the State will have time to take Legislative action in the 2009 session to address the Court’s ruling.