Archived Story

Lawmakers question legality of water tax suspension
Posted on July 18

By JENNIFER BYRD of the Associated Press

HELENA - Republicans questioned the legality of Gov. Brian Schweitzer's proposal to suspend the so-called "water tax" and issue refunds to those who have paid it in sums under $400, saying the selective rebate could break equal protection laws.

Lawmakers on the Environmental Quality Council grilled David Ewer, the governor's budget director, about the proposal Tuesday.

Several Republicans and the council's co-chairman, Rep. Christopher Harris, D-Bozeman, expressed concern about a potential lawsuit.

"If there's a lawsuit, that'll be just another major expense," Harris said.

Schweitzer announced earlier this month that he wanted to repeal the tax as part of his "Square Deal with Montanans."

The fee passed last year has resulted in thousands of bills for individuals and organizations who claim rights to water from Montana streams. The Montana Department of Natural Resources and Conservation has received about 90,000 payments, averaging $45 each, and uses the money to examine claims and gather information for the Montana Water Court.

The Montana Constitution requires a system for adjudicating all claims to water. Of 220,000 claims filed over the years, tens of thousands remain unexamined.

Schweitzer wants to set aside $20 million from the general fund to work on water-rights claims. The money would come from the state's projected budget cash surplus.

Residents who pay a tax of more than $400, big corporations and nonresident homeowners would be excluded from the governor's proposed rebate.

Those exclusions concerned some members of the council, who thought if the administration kept with its current plan, the state would be sued.

In response, Ewer said he would share the lawmakers' concerns with administration attorneys.

Council co-chair Rep. Debby Barrett, R-Dillon, said she was troubled that small farmers and ranchers who have more than 10 water rights on their property - and therefore have to pay more than $400 in tax - would not get a refund.

She said large companies that continue paying the tax could pass it onto customers with higher rates, but small farmers and ranchers would be stuck.

Barrett asked Ewer to bring information on the number of small farmers and ranchers who would have to continue paying the tax to the council's next meeting in September.

Harris said he would like the governor to provide a formal proposal of the plan to the council before its next meeting. He said several members of the council have a lot of experience with the issue, having studied it in 2003 before it was passed.

"If the council endorses it, passage would be much easier," Harris said.

Ewer wouldn't commit to either request.

The issue has become increasingly partisan, with Democrats and Republicans locked in an election-year battle for control of the Legislature. Schweitzer's announcement came at the start of the campaign season for legislative seats. He said he needs "a like-minded Legislature of Democrats" to remove the water fee and provide refunds.

Schweitzer blamed Republicans and lobbyists for passing the tax during the 2005 session. Republicans appointed the 2003 study committee that advanced the fee proposal, but it was a Legislature largely controlled by Democrats that passed the fee measure.

Republicans responded to Schweitzer's claims by saying they advocated reversing the water fee when legislators met late last year for a special session, but Democrats had resisted it at the time.


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