Kentucky River Authority v. City of Danville

Decision Date16 February 1996
Docket NumberNo. 95-CA-000064-MR,95-CA-000064-MR
Citation932 S.W.2d 374
PartiesKENTUCKY RIVER AUTHORITY; Phillip J. Shepherd; Charles W. Carr; Tom Dorman; Judge W. Neal Cassidy; Dr. Donald C. Haney; Martin Howard Lowry; Edward Foree; Greg Ginter; Thomas M. Jones; Ralph E. McClanahan; and Betty F. Whitaker, Appellants, v. CITY OF DANVILLE, Kentucky, Appellee.
CourtKentucky Court of Appeals

Donald S. Dott, Jack B. Bates, Susan Rose Green, Jack B. Bates, Frankfort, for Appellants.

Edward D. Hays Danville, for Appellee.

Before LESTER, C.J. 1 , and DYCHE and EMBERTON, JJ.

OPINION

EMBERTON, Judge.

The appellants, Kentucky River Authority and its members, appeal from a judgment entered by the Boyle Circuit Court holding that the appellee, City of Danville, received no benefit from the Authority, and therefore, the Authority is constitutionally precluded from collecting water use fees from Danville.

The controversy in this case arises from the Authority's interpretation of its enabling statute Ky.Rev.Stat. (KRS) 151.720, which was enacted in response to continuing problems and potential depletion of a valued natural resource, the Kentucky River. In 1990, the General Assembly enacted KRS 151.720 which mandates that the Authority protect the Kentucky River basin through watershed management. In 1993, the Authority enacted administrative regulations to implement the statutes including a two-tier fee schedule by which it charged the users of water from the river basin. Tier II fees are collected from entities withdrawing water directly from the main stem of the Kentucky River and are used by the Authority to finance specific capital construction projects designed to enhance the water available for the basin. Tier I fees, which Danville is designated to pay, apply to entities withdrawing water from anywhere in the Kentucky River basin, whether from groundwater or tributaries. These fees are used for projects benefiting the entire basin and are assessed at a uniform rate based upon use of the Kentucky River basin. They are not used for the general fund but only for Kentucky River basin management.

Danville withdraws no water directly from the Kentucky River but does from Lake Herrington on the Dix River which is a Kentucky River tributary. It also discharges water from its waste water treatment plant into a Kentucky River tributary.

Danville maintains that in order to assume jurisdiction over the Kentucky River basin the Authority must: (1) assume ownership of all U.S. Army Corps of Engineers property on or adjacent to the Kentucky River; and (2) publish a legal notice for ninety days of its intention to assume ownership. In 1982, when the Kentucky River Task Force was created in conjunction with the Natural Resources and Environmental Protection Cabinet, there was concern that the Corps would fail to maintain and operate the Kentucky River locks and dams. In such event, the legislature established a procedure, including a ninety-day notice requirement, for the Commonwealth to assume ownership. KRS 151.700(2).

There is no dispute, that pursuant to the original version of KRS 151.700(2), the Commonwealth did not assume ownership of the Kentucky River locks and dams. However, in 1990, the statute was amended by House Bill 920 and no longer requires ownership of the locks and dams to activate the authority of the Kentucky River Authority. It was the legislature's intent to enlarge the powers of the Authority and render it responsible for the conservation of the Kentucky River basin waters. Although criticized by the trial court as a practice subject to abuse, it is well established that the legislature is vested with the power to amend its statutes in a budget bill. Commonwealth, ex. rel. Armstrong v. Collins, Ky., 709 S.W.2d 437 (1986). Under current law, ownership of the locks and dams of the Kentucky River is not a statutory prerequisite to the implementation of the Authority's powers.

Danville apparently has a well functioning water system with adequate water supplies and leakage controls. It also has various programs in place to provide continuing conservation education. Arguing its self-sufficiency, Danville denies that it can benefit from the activities of the Authority and complains it should not pay the fees. The trial court agreed.

The parties have continually debated whether the fees assessed by the Authority are special assessments, taxes, or user fees. Obviously, if the fees are in effect taxes, the Authority is not a taxing district and any such delegation by the legislature would violate Sections 27 and 28 of the Kentucky Constitution. Long Run Baptist Association, Inc. v. Louisville and Jefferson County Metropolitan Sewer District, Ky.App., 775 S.W.2d 520 (1989); KRS 65.180. "A tax is universally defined as an enforced contribution to provide for the support of government, whereas a fee is a charge for a particular service." Id. at 522. Taxes are a means for the government to raise general revenue without regard to direct benefits which may inure to the payor or to the property taxed. Krumpelman v. Louisville & Jefferson County Metropolitan Sewer District, Ky., 314 S.W.2d 557, 561 (1958). The fees imposed by the Authority for the purpose of fulfilling the statutory mandates cannot be equated with taxes. The funds generated from the fees are to be used for the specific purpose of conserving and controlling the waters in the Kentucky River basin and are incidental to the statute.

The validity of special assessments and users fees depends on an analysis of the charge and the benefit received. Assessments and fees charged without a relationship to a benefit received by the payor are arbitrary and capricious and violate due process and the constitutional prohibition against the taking of private property without just compensation. See Skidmore v. City of...

To continue reading

Request your trial
5 cases
  • In re Water Use Permit Applications
    • United States
    • Hawaii Supreme Court
    • August 22, 2000
    ... ... Corporation Counsel, on the briefs, for Appellants City and County of Honolulu Planning Department and Board of ... (2) In excess of the statutory authority or jurisdiction of the agency; or ... (3) Made upon ... St. John's River Water Management Dist., 622 So.2d 520, 523 ... See Kentucky River Auth. v. City of Danville, 932 S.W.2d 374 ... ...
  • Hawaii Insurers Council v. Lingle
    • United States
    • Hawaii Supreme Court
    • December 18, 2008
    ... ... doctrine because the legislature lacked the authority to delegate its taxing power and because, by empowering the ... Bolt v. City of Lansing, 459 Mich. 152, 587 N.W.2d 264, 269 (1998) ... See, e.g., Kentucky River Auth. v. City of Danville, 932 S.W.2d 374, 377 ... ...
  • Cincinnati v. Campbell Cnty. Fiscal Court
    • United States
    • United States State Supreme Court — District of Kentucky
    • October 29, 2015
    ...was unconstitutional where enabling statute only authorized funding through use of property taxes); Kentucky River Authority v. City of Danville, 932 S.W.2d 374, 377 (Ky.App.1996) ("The fee in this case is based upon the actual use by the city of the Kentucky River water basin.") (emphasis ......
  • Com. Educ. & Humanities Cabinet Dept. of Educ. v. Gobert, 97-CA-0425-MR
    • United States
    • Kentucky Court of Appeals
    • April 3, 1998
    ...Research Commission by and through Prather v. Brown, Ky., 664 S.W.2d 907, 927-928 (1984). See also, Kentucky River Authority v. City of Danville, Ky.App., 932 S.W.2d 374 (1996) (holding that budget bill may amend existing statutes). Appellees' reliance on KRS 446.085 and Com., ex rel. Armst......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT