Judges: DUANE WOODARD, Attorney General
Filed Date: 9/10/1985
Status: Precedential
Modified Date: 7/5/2016
Jeris A. Danielson State Engineer Division of Water Resources 1313 Sherman Street, Rm. 818 Denver, CO 80203
Dear Dr. Danielson:
This opinion letter is in response to your letter of July 24, 1985, in which you inquired about the application of House bill 1070, section 6, which amends article 81 of title 37, Colorado Revised Statutes to add a new section
QUESTION PRESENTED AND CONCLUSION
Your request for an attorney general's opinion presents the question:
To what exports of water does the following statutory provision apply?
To effectuate the purposes of this article, the general assembly hereby authorizes a fee of fifty dollars per acre-foot to be assessed and collected by the state engineer on water diverted, carried, stored, or transported in this state for beneficial use outside this state measured at the point of release from storage or at the point of diversion.
House bill 1070, § 6 (May 23, 1985) (to be codified at section
My conclusion is that the above fee cannot be assessed on any water exported from Colorado because: (1) Colorado is not entitled to impose a fee on any export that is authorized by an interstate compact or judicial decree or is credited as a delivery by Colorado to another state pursuant to a compact or decree; and (2) in any event, such an export fee violates the Commerce Clause, art.
ANALYSIS
a. Can Colorado impose a fee on water exports that areauthorized by an interstate compact or judicial decreeor are credited as deliveries by Colorado to anotherstate pursuant to a compact or decree?
Colorado is bound by nine interstate compacts 1 and two United States Supreme Court decrees 2 that equitably apportion the waters of interstate streams. "Equitable apportionment is the doctrine of federal common law" developed by the United States Supreme Court in Kansas v.Colorado,
In Kansas v. Colorado, Colorado argued that, as the upper state, it was entitled to use all the waters of the Arkansas River flowing within its boundaries, regardless of injury to Kansas. The Supreme Court rejected that argument. Colorado made the same contention in Wyoming v.Colorado,
It is clear from the above cases that Colorado is not entitled to assert a superior claim to all the waters of an interstate stream that flow through the state simply because the waters originate in Colorado and Colorado can physically cut off the flow to downstream states. It follows from this that, under federal common law, Colorado has no right to charge another state, or its water users, a fee for the delivery of that state's equitable share of water. Therefore, no fee can be charged for any water delivered to another state pursuant to a court decree equitably apportioning the waters of an interstate stream.
The same result obtains for water delivered to another state pursuant to an interstate compact. Interstate compacts are agreements between states, ratified by Congress, that allocate the waters of interstate streams. Such compacts are intended to make an equitable apportionment by consent, rather than litigation. See, e.g., the Colorado River Compact, section
This may seem self-evident as to waters that flow out of Colorado in a natural stream channel, but it is equally true for water that is diverted before it leaves the state, if the delivery of water to another state is expressly authorized by compact or otherwise credited as a compact delivery by Colorado. For example, the South Platte River Compact, section
Colorado waives any objection to the delivery of water for irrigation of lands in Nebraska by the canals mentioned in paragraph one (1) of this Article, and agrees that all interests in said canals and the use of waters carried thereby, now or hereafter acquired by owners of lands in Nebraska, shall be afforded the same recognition and protection as are the interests of similar land owners served by said canals within Colorado. . . .
For Colorado to assess a fee on water delivered to Nebraska by those canals when no fee was assessed on Colorado uses would violate this compact provision. See also section
There may also be circumstances where the delivery of water for use in another state, although not expressly authorized by an interstate compact or judicial decree, is credited as a delivery to the other state by Colorado. Colorado's export statute, article 81 of title 37, C.R.S. (1973), requires this in many situations. Under the 1983 amendments to article 81, it is unlawful for any person to export water from Colorado without first obtaining approval from a water judge, the state engineer, or the ground water commission, as appropriate. See
section
For the reasons set forth above, I conclude that, since federal common law precludes Colorado from charging for the delivery of another state's equitable share of the waters of an interstate stream, Colorado may not impose a fee on water exported from the state which is authorized by an interstate compact or judicial decree or is credited as a delivery by Colorado to another state pursuant to a compact or decree. Consequently, section
b. Does the imposition of an export fee by Colorado violatethe Commerce Clause of the United StatesConstitution?
In light of my answer to the first question posed, I do not know if there is or will be water exported from Colorado that is neither authorized by an interstate compact or judicial decree nor credited as a delivery by Colorado to another state pursuant to a compact or decree, and so is subject to the imposition of a fee under section
The Commerce Clause empowers Congress to regulate commerce among the states. The purpose of the Commerce Clause is to ensure that "our economic unit is the Nation"; the "corollary" of this principle is "that the states are not separable economic units."Philadelphia v. New Jersey,
The United States Supreme Court has applied two different standards in determining the validity of state legislation that burdens interstate commerce. If the challenged statute applies evenhandedly to both in-state and out-of-state commerce and its effects on interstate commerce are only incidental, the Court has applied a flexible test that balances the local interest against the incidental burden on commerce in determining the law's validity. Pike v. Bruce Church, Inc.,
The Court has repeatedly struck down protectionist statutes that sought to conserve scarce natural resources for the use of a state's own inhabitants. In West v. Kansas Natural GasCompany,
In subsequent Commerce Clause challenges to state regulation of exports of natural resources, the analysis employed in the early natural gas cases emerged as the "dominant approach."Hughes v. Oklahoma,
Hughes v. Oklahoma,
Until the Supreme Court decided Sporhase v. Nebraska,
The Supreme Court concluded, as a threshold matter, that ground water is an article of commerce, to which the negative implications of the Commerce Clause apply. The Court then upheld the first three conditions because they advanced the state's interest in conservation and preservation of ground water, because there were similar limitations upon intrastate transfers, and because the Court was "reluctant to condemn as unreasonable, measures taken by a State to conserve and preserve for its own citizens this vital resource in times of severe shortage."Id. at 956. The Court took a different view of the reciprocity requirement, noting that, since Colorado law then forbade the exportation of ground water, it operated as an explicit barrier to commerce between the two states. The Court stated that Nebraska "bears the initial burden of demonstrating a close fit between the reciprocity requirement and its asserted local purpose." Id. at 957. The Court then ruled that Nebraska had failed to meet its burden of proof because there was "no evidence that this restriction is narrowly tailored to the conservation and preservation rationale." Id. at 957-958.
The Court concluded:
We therefore are not persuaded that the reciprocity requirement — when superimposed on the first three restrictions in the statute — significantly advances the State's legitimate conservation and preservation interest; it surely is not narrowly tailored to serve that purpose. The reciprocity requirement does not survive the "strictest scrutiny" reserved for facially discriminatory legislation. Hughes v. Oklahoma, supra, at 337.
Id. at 958 (emphasis added). After determining that Congress had not authorized the states to impose otherwise impermissible burdens on interstate commerce in ground water, the Court held that the reciprocity requirement of the Nebraska statute violated the Commerce Clause.
While Sporhase and the other natural resources cases discussed above involved laws that restricted interstate commerce, Commonwealth Edison Company v.Montana,
There is no question that section
The Court in Sporhase indicated that it is reluctant to condemn measures taken by a state to conserve and preserve its water resources for a number of reasons: first, a state's power to regulate the use of water in times and places of shortage to protect "the health of its citizens — and not simply the health of its economy — is at the core of its police power"; second, the legal expectation that under certain circumstances each state may restrict water within its borders has been fostered over the years by the Supreme Court's equitable apportionment decrees and by the negotiation and enforcement of interstate compacts; third, a state's claim to public ownership of its waters may support a limited preference for its own citizens; and, fourth, a state's conservation measures which keep water available may give water some indicia of a good publicly produced and owned in which a state may favor its own citizens in times of shortage. Id. at 956-957. While these reasons contributed to the Court's concluding that the three conservation and preservation conditions of the Nebraska statute were constitutional, they were not sufficient to save the reciprocity requirement. The Court stated that the reciprocity requirement could stand only if the state proved that it was narrowly tailored to the conservation and preservation rationale, as by showing that the state as a whole suffered from a water shortage, that the intrastate transportation of water from areas of abundance to areas of shortage was feasible regardless of distance, and that the importation of water from adjoining states would roughly compensate for any exportation to those states. The Court went so far as to say, "A demonstrably arid State conceivably might be able to marshal evidence to establish a close means — end relationship between even a total ban on the exportation of water and a purpose to conserve and preserve water." Id. at 958.
I conclude that Colorado cannot meet this burden for the export fee provision. Section
(1) (a) The general assembly hereby finds and declares that the location and availability of water in this state varies greatly from place to place and that the state as a whole suffers a shortage of water. The general assembly further recognizes that because of Colorado's unique location at the headwaters of four of the nation's major western rivers and because all the major river systems in Colorado flow out of the state, and that in order to insure the availability of these scarce water resources for the use of citizens of the state of Colorado, compacts have been entered into with the downstream states on all the major rivers originating in Colorado.
(b) It is also recognized that it has been the continuing historical policy of the state of Colorado to conserve and prevent waste of its water resources to provide adequate supplies of water necessary to insure the continued health, welfare, and safety of all of its citizens. Accordingly, the general assembly hereby determines that, for the purpose of conserving the scarce water resources of this state and to thereby insure the continuing health, welfare, and safety of the citizens of this state,. . . .
The proffered justification bears a close relationship to the criteria for approving exports set forth in sections
SUMMARY
You have asked to what exports of water the fee of $50 per acre-foot applies. I conclude that the fee cannot lawfully be assessed on any water exported from Colorado. First, Colorado is not entitled to impose a fee on any exports that are authorized by an interstate compact or judicial decree or are credited as a delivery by Colorado to another state pursuant to a compact or decree. Second, the imposition of a fee on water diverted, carried, stored, or transported in Colorado for use outside the state, when no fee is charged for use within the state, would violate the Commerce Clause of the United States Constitution.
Very truly yours,
DUANE WOODARD Attorney General
WATER AND WATERWAYS INTERSTATE COMMERCE FEES TAXATION AND REVENUE
H.B. 1070, § 6 (May 23, 1985)
NATURAL RESOURCES Engineer St. Wtr Resources
Application of water export fee authorized by House Bill 1070, § 6 (May 23, 1985) (to be codified at section
Carr v. Altus , 385 U.S. 35 ( 1966 )
Wyoming v. Colorado , 42 S. Ct. 552 ( 1922 )
Foster-Fountain Packing Co. v. Haydel , 49 S. Ct. 1 ( 1928 )
Wyoming v. Colorado , 353 U.S. 953 ( 1957 )
State of Wyoming v. State of Colorado , 43 S. Ct. 2 ( 1922 )
Nebraska v. Wyoming , 66 S. Ct. 1 ( 1945 )
Kansas v. Colorado , 27 S. Ct. 655 ( 1907 )
H. P. Hood & Sons, Inc. v. Du Mond , 69 S. Ct. 657 ( 1949 )
Commonwealth Edison Co. v. Montana , 101 S. Ct. 2946 ( 1981 )
Sporhase v. Nebraska Ex Rel. Douglas , 102 S. Ct. 3456 ( 1982 )
Pike v. Bruce Church, Inc. , 90 S. Ct. 844 ( 1970 )
Complete Auto Transit, Inc. v. Brady , 97 S. Ct. 1076 ( 1977 )
Colorado v. New Mexico , 103 S. Ct. 539 ( 1982 )
Colorado v. New Mexico , 104 S. Ct. 2433 ( 1984 )
Geer v. Connecticut , 16 S. Ct. 600 ( 1896 )
Hudson County Water Co. v. McCarter , 28 S. Ct. 529 ( 1908 )
Connecticut v. Massachusetts , 51 S. Ct. 286 ( 1931 )
City of Philadelphia v. New Jersey , 98 S. Ct. 2531 ( 1978 )
Hughes v. Oklahoma , 99 S. Ct. 1727 ( 1979 )