Recent Developments and the Future of Water Law in Nebraska

1. Recent Developments and the Future of Water Law in Nebraska 2018 Case Law Update David J. A. Bargen

2. NRD Regulatory authority

3. NRD Regulatory Authority Prokop v. Lower Loup Natural Resources District, 302 Neb. 10 (2019) • At issue: • Interpretation of NRD regulations to require crop yield data • Deference to agency interpretation? • That doctrine applied to political subdivisions? • Authority/requirement of NRD to adopt penalty of restricting groundwater access by regulation under the GWMPA • Procedural due process: prior notice of hearing evidence • Takings claim • Cross appeal: 4-year irrigation suspension

4. NRD Regulatory Authority • Interpretation of NRD regulations to require crop yield data • “Actual crop yield data” not specifically required under regs • NRD said “other field operations” covered it • Use plain language unless open to construction/interpretation • Court used doctrine of deference to “agency” interpretation of its own regs, but applied it to LLNRD, a political subdivision • Defer “unless plainly erroneous or inconsistent” • Court said LLNRD interpretation was not plainly erroneous or inconsistent • Relied on LLNRD testimony and forms

5. NRD Regulatory Authority • Interpretation of NRD regulations to require crop yield data • Concurrence focuses on doctrine of deference to agency interpretation • Refers to LLNRD as “administrative agency” • But larger issue may be applying doctrine to political subdivisions • NRDs • Cities • Counties • CRAs • Concurrence likely irrelevant to this case

6. NRD Regulatory Authority Statutory interpretation Regulatory interpretation Defer to agency’s own interpretation unless plainly erroneous or inconsistent Rely on testimony of agency • Give effect to legislative intent • Objectives, purpose to be served • Reasonable construction that achieves purpose • Examine legislative history

7. NRD Regulatory Authority • Authority/requirement of NRD to adopt penalty of restricting groundwater access by regulation under the GWMPA • Court said language of Neb. Rev. Stat. § 46-746(1) sufficient for NRDs to suspend irrigation access without similar regulation • Procedural due process: prior notice of hearing evidence • Court said Prokop had sufficient notice of claims, and no requirement for NRD to provide evidence to adverse party

8. NRD Regulatory Authority • Takings claim • Confused analysis • Court concluded that in exercising its police powers, state can take property • Very broad • Prior cases have limited the property taken to being injurious to public welfare • Was irrigation pumping injurious? That was the taking claimed. • Problem of “tailoring” a penalty to removing injury to the public welfare • Procedural due process: prior notice of hearing evidence • Court said Prokop had sufficient notice of claims, and no requirement for NRD to provide evidence to adverse party

9. NRD Regulatory Authority • Cross appeal: 4-year irrigation suspension • Court upheld reduction of 4-year suspension to 1-year suspension • District court’s decision perhaps reflection of potential problem with the “tailoring” of the penalty for purposes of police power?

10. Public purpose of land used by nrd for regulation

11. Public Purpose—Tax Exempt Upper Republican Natural Resources District v. Dundy County Board of Equalization, 300 Neb. 256 (2018) • At issue: • Whether land purchased by URNRD for Rock Creek augmentation operation was used for a public purpose and thus tax exempt

12. Public Purpose—Tax Exempt • URNRD retired irrigated acres and used groundwater when needed for Republican River streamflow augmentation • Converted to grassland • Leased grassland for grazing

13. Public Purpose—Tax Exempt • Dundy County Board of Equalization found that surface of land was used for non-public use, so taxable • At TERC, URNRD argued that ownership of the overlying land was essential to use of the groundwater, so surface was used for public purpose • Also asserted surface used for soil conservation and wildlife management • Grazing was better management of grassland than mowing

14. Public Purpose—Tax Exempt • Supreme Court looks at dominant use of property, not incidental uses, for public purpose • Court looked to all public uses of the land, not just a purpose for which land was originally purchased • Court agreed that • Ownership of overlying land required to use groundwater for public use • URNRD used surface for soil conservation and wildlife habitat • Leasing of land for grazing was incidental to dominant public purposes

15. Environmental, Water, and Natural Resources David J. A. Bargen 1128 Lincoln Mall, Ste. 300 dbargen@remboltlawfirm.com