# Petition for Writ of Certiorari — City of Danville v. Kentucky River Authority > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386013_0275%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition for Writ of Certiorari - **Published:** January 1, 1997 - **Citation:** 520 U.S. 1186 ## Text ~ Supreme Court, U.8. i) FILED 961308 FEB 10 1997 No. 96- OFFICE ores 7" IN THE SUPREME COURT OF THE UNITED STATES October Term, 1996 CITY OF DANVILLE,KENTUCKY - -_ Petitioner versus KENTUCKY 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 - - - - # £=Respondents PETITION FOR A WRIT OF CERTIORARI TO THE SUPREME COURT OF KENTUCKY EDWARD D. HAYS Attorney at Law Counsel of Record SHEEHAN, BARNETT & HAYS, P.S.C. 114 South Fourth Street Danville, Kentucky 40422 (606) 236-2641 Counsel for Petitioner February 7, 1997 WESTERFIELD-BONTE CO., 619 W. KENTUCKY-P.O. BOX 3251, LOUISVILLE, KY. i QUESTIONS PRESENTED May the Kentucky River Authority, a watershed man- agement agency of the Commonwealth of Kentucky, impose a special assessment or fee upon water con- sumers, including the City of Danville and its resi- dents, without conferring special or peculiar benefits, the value of which are reasonably related or roughly proportional to the amount of the assessment? Does an absolute rule adopted by Kentucky’s highest court that persons residing within the watershed ba- sin of the Kentucky River are conclusively presumed to receive a benefit from the Kentucky River Author- ity, a watershed management agency of the Com- monwealth of Kentucky, violate the due process of law and equal protection clause of the 14th Amend- ment of the United States Constitution? Should the protection against the taking of property without due process of law of the 5th and 14th Amend- ments to the United States Constitution be extended to apply within the context of special assessments or fees imposed by state administered watershed man- agement districts? li TABLE OF CONTENTS PAGE Questions Presented. ...............cccccccsssscccccssscesescceeess i Table of Contents ...............scsccsscsrserescseescseressseerees ii-iii "Tee GE PTI nn ciniccinccccccccsccissksdscnbitvcseceacessies iv— v Citation to Previous Opinion and Opinions I vccstsssscsnsincectwetsoseianudietecicbenamasstadanenmmeteiaden 2 | TT TOE ETE EERE ee ET dee 2 Constitutional and Statutory Provisions | AUER TLS A SUPE TENS Ee CEN AAOLE SAE 2—- 3 Seaton GF Cw TS 6..iin skincare 3- 9 How the Federal Questions were Raised and TI SNE ici cinincecucrssdakensnocaderstrsebinmoaasanmmcyeve 9-10 Reasons for Granting the Writ .....................00cc000 11-24 1. The Decision Below Decided an Impor- tant Federal Question in a Way That Conflicts With Relevant Decisions of This Court, Including Norwood v. Baker, 172 U.S. 269, 19 S.Ct. 187, 43 L.Ed. 443 CO iia ES, ieee 11-17 This Case is Believed to be a Case of First Impression in the United States, Kentucky Being the First State Which has Attempted to Fund a Watershed Management District Through the Imposition of User Fees Upon Water Consumers as Opposed to Funding Through General Tax Revenues, Govern- mental Grants, or Assessments Against Property Owners Actually Affected and eI miteliiiicasssiniitiine savttcarnabeiacnntnlininiaticnicsnnns 17-19 . The Growing Proliferation of Special Assessment Districts Within this Country Has Created a Compelling Need for This Court to Extend and Clarify the Protec- tions Afforded Every Citizen Under the Fourteenth Amendment of the United States Constitution and the Broad Prin- ciples Enunciated in Norwood v. Baker... 19-24 CCM issiscsniesiicciciiiceietha nich aii caine 24-25 ill PAGE Appendix: Order Denying Discretionary Review entered No-ember 13, 1996 by the Supreme Court of Kentucky in City of Danville, Kentucky v. Kentucky River Authority, et al, 96-SC— BAG AP OA GA) a cbiah in cacsisccccccssecesckscescsessacse. la Opinion Reversing and Remanding entered February 16, 1996 by the Kentucky Court of Appeals in Kentucky River Authority v. City of Danville, (No. 95—-CA—000064—MR), Ky. App., 932 S.W.2d 374 (1996) .......ccccecccseeee 2a— 7a Opinion and Order Entered December 9, 1994 by the Boyle Circuit Court in City of Dan- ville, Kentucky v. Kentucky River Authority, AF ihs WENT acacia cncckccacessovdcdecersivcsooseecesess 8a—lla Kentucky Revised Statutes 151.700 through I ee ccacnesecen, 12a-23a 420 KAR 1:010 through 420 KAR 1:050 (Administrative Regulations Adopted by the Kentucky River Authority) ...............ccccc000. 24a—49a “User Fees in Lieu of Taxes: Avoiding Constitu- tional Limitations”, by Laurence J. Zielke, Urban Lawyer, Vol. 23, No. 3 a i A 50a-61la iv TABLE OF AUTHORITIES PAGE Cases: Alamo Rent-A-Car v. Sarasota—Manatee Airport Auth., 906 F.2d 519 (11 Cir., 1990)...............+4 22 Armstrong v. United ‘states, 364 U ~. 40, 49, 80 | S.Ct. 1563, 4 L.Ed.2d 1154 (1a 27: .......ccsseseeeees 16 | Associated Enter., Inc. v. Toltec Watershed Imp. Dist., 410 U.S. 748, 93 S.Ct. 1237, 35 L.Ed.2d O76 ORD. aititintieeeiciedinn 18 Barfield v. Gleeson, Ky., 63 S.W. 964 (1901)......... 7 Casey v. Richland County Council, 320 S.E.2d 442 CBC. TRIG) sicisecincsin wae intends ndadiiginen 7 Chicago, B. & Q.R. Co. v. Chicago, 166 U.S. 226, 239, 17 S.Ct. 581, 41 L.Ed. 979 (1897) ............ 16 Curtis v. Louisville and Jefferson County Metro- politan Sewer District, Ky., 311 S.W.2d 378 LE IED csvanistessstheiielchansianetelciediibialiiitceds naanciiat ceca deal 8, 9, 14, 15 Dolan v. City of Tigard, 512 U.S. 374, 114 S.Ct. 2309, 129 L.Ed.2d 304 (1994).............6+. 15, 16, 17, 24 Federal Deposit Ins. Corp. v. City of New Iberia, 921 F.2d. 610 (Sth Cir., 1991) .......cccccscccsccsceseee 22 Georgia R. & Electric Co. v. Decatur, 295 U.S. 165, 55 S.Ct. 701, 79 L.Ed. 1865 (1935) ...........ccccees 23 Hotel Emp. Ass’n of San Francisco v. Gorsuch, 669 F.2d LSOG CO Civ, LOE) scccsccescceesesvncesossceoceses 22 Long Run Baptist Ass’n v. Louisville & Jefferson County Metro. Sewer Dist., Ky. App., 775 Fe EE CIID anduicencinntdsincnnasinnduiesdauciinssoances 22 Norwood v. Baker, 172 U.S. 269, 19 S.Ct. 187, 43 Els SU EL BPI akacestncranigouhsasenuavelices T> Atle Bay by XO, 17, 19, 23, 24 Road Dist. v. Mo. Pac. R.R. Co., 274 U.S. 188, 47 BCe. GSS, 72 TB, Se Ces th isccceessesecccsssenesess. 15 Salyer Land Co. v. Tulare Lake Basin Water Stor. Dist., 410 U.S. 719, 93 S.Ct. 1224, 35 L.Ed. Dy RRR EEE MAR SE Ula ene RAO, BNR 18 Teter v. Clark County, 104 Wash. 2d 227, 704 P.2d EE FE Ceres SE sceashcsibelasntenseresincsunaineitianesins 23 PAGE Statutes: REP TR csv 7 ERGO ene Oar eo eta 2 Kentucky Revised Statutes (KRS) 151.700 through 151.730, 151.990 ........ceccccccccccee. 3, 4, 5, 6, 19 Kentucky Revised Statutes (KRS) 224.20-050..... 8 Constitutional Provisions: Kentucky Constitution §171 ......c.ccccccccsesessssesceece. 18 United States Constitution, Fifth Amendment 16, 17, 24 United States Constitution, Fourteenth Amend- REE ESN de NC TILTED 2,11, 14, 15, 16, 17, 18, 19, 22, 23, 24, 25 Other Authorities: 14 Eugene McQuillan, The Law of Muncipal Corporations §38.02 (1987 rev. 3rd ed.)........... 7 420 KAR (Kentucky Administrative Regulations) Fg | PERE SRT a ey ie ts ae ee 3, 4,5 “Political Science: The Past and Future of Water Resources Policy and Management:, by Dean E. Mann, Water Resources Administration in the United States, Martin Reuss ed., 1993...... 21 S. 1114, the Senate Clean Water Act reauthoriza- tion bill [103rd Cong., 1st Sess. §302 (1993)) .. 21 “The Watershed Protection Approach: Is the Promise About to be Realized?” by William E. Taylor and Mark Gerath, NR&E, Fall Eo ee Nae E EEE oR OR LAUT LURES a 21 “User Fees in Lieu of Taxes: Avoiding Constitu- tional Limitations”, by Laurence J. Zielke, Urban Lawyer, Vol. 23, No. 3 (Summer 1991) 20 “Watershed as a Public Natural Resource on the Federal Lands”, by George Cameron Coggins, Virginia Environmental Law Journal, PR as I eras 21 “Watershed Management: Slogan or Solution?”, by William Goldfarb, Environmental Affairs, Vol. 21:483, pp. 483-509, 1994.00.00... cece. 19, 20, 21 No. —_—_—__ + IN THE SUPREME COURT OF THE UNITED STATES October Term, 1996 CITYOFDANVILLE,KENTUCKY - - - Petitioner versus KENTUCKY 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 og OO SS rr Respondents PETITION FOR A WRIT OF CERTIORARI TO THE SUPREME COURT OF KENTUCKY Petitioner, City of Danville, Kentucky, prays that a writ of certiorari issue to review the Order Denying Discretion- ary Review entered by the Supreme Court of Kentucky, which Order permitted to stand the Opinion Reversing and Remanding entered by the Kentucky Court of Appeals. 2 CITATION TO PREVIOUS OPINION AND OPINIONS BELOW (A) The Order Denying Discretionary Review entered November 13, 1996 by the Supreme Court of Kentucky, in City of Danville, Kentucky vs. Kentucky River Authority, et al, 96-SC-214-D (95-CA- 64), is reproduced in the Ap- pendix to this Petition at page 1a. (B) The Opinion Reversing and Remanding entered Feb- ruary 16, 1996 by the Kentucky Court of Appeals in Ken- tucky River Authority vs. City of Danville, (No. 95-CA-000064—MR), Ky. App., 982 S.W.2d 374 (1996) is reproduced in the Appendix to this Petition at 2a to 7a. (C) The Opinion and Order entered December 9, 1994 by the Boyle Circuit Court in City of Danville, Kentucky vs. Kentucky River Authority, C.A. #94—CI-00278 (hereinafter referred to as “Trial Court Opinion”) is reproduced in the Appendix to this Petition at 8a to 1la. JURISDICTION The Order Denying Discretionary Review was entered on November 13, 1996 by the Kentucky Supreme Court. This Court’s jurisdiction is invoked pursuant to 28 U.S.C. §1257(a). CONSTITUTIONAL AND STATUTORY PROVISIONS INVOLVED (A) This case involves the Fourteenth Amendment to the Constitution of the United States, which provides in pertinent part: No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws. 3 (B) This case involves Kentucky Revised Statutes (KRS) 151.700 through 151.730, 151.990, entitled “Kentucky River Authority”, the text of which is set out in the Appendix to this Petition at pages 12a to 23a. (C) This case involves those administrative regulations adopted by the Kentucky River Authority and contained in 420 KAR 1:010 through 420 KAR 1:050, the text of which is set out in the Appendix to this Petition at pages 24a to 49a. STATEMENT OF THE CASE The Kentucky River lies completely within the bound- aries of the Commonwealth of Kentucky. Historically, the locks and dams located on the Kentucky River were owned, operated, and maintained by the U.S. Army Corps of Engi. neers (Corps). In the late 1970s, the Corps began to lose interest in its continued operation of the locks and dams and indicated that in time its responsibility with regard to the river would be terminated. In 1982, the General As- sembly (legislature) of Kentucky created the Kentucky River Task Force, which in conjunction with the Kentucky Natu- ral Resources and Environmental Protection Cabinet (NREPC), undertook to insure the continued operation and maintenance of the locks and dams upon the Kentucky River. In 1986, the General Assembly enacted KRS 151.700 through 151.730, which legislation created the Kentucky River Authority (KRA), an agency of the Commonwealth of Kentucky. The statute was amended in 1988, 1990, 1992 (adding 151.725 and pertinent portions of 151.990), and again in 1996 (subsequent to the commencement of the subject litigation). The stated policy of the Kentucky General Assembly in the creation of the KRA is: . . » to protect the health and welfare of the citizens dependent upon this system (Kentucky River) of locks 4 and dams for their source of clean water, and to that end, the Commonwealth shall provide for the proper maintenance of the Kentucky River locks and dams through the Kentucky River Authority. (KRS 151.700) In order to carry out its purposes and objectives, the KRA was empowered generally to construct, repair, and main- tain the locks and dams on the Kentucky River; to issue revenue bonds payable from fees collected from all facili- ties using water from the Kentucky River or its tributar- ies; to promulgate administrative regulations; to coordinate activities of state agencies impacted by the Kentucky River resources; to develop p.ans for the protection, conserva- tion, and preservation of water within the Kentucky River basin; to develop recreational areas within the basin; and to “Exercise all other powers necessary to perform its pub- lic purpose...” [KRS 151.720(10)}. The watershed management district over which the KRA has authority includes all or part of 42 counties within Kentucky. The KRA is the Commonwealth of Kentucky’s pilot program for watershed based management initiatives. Kentucky has a total of 120 counties. Pursuant to the enabling statute, the KRA promulgated and adopted administrative regulations in December of 1993 (see Appendix). These regulations include a complex sys- tem of fees to be assessed against those who withdraw water from the Kentucky River and its tributaries. The regulations designate two distinct types of water withdrawal fees. “Tier I” fees provided for in 420 KAR 1:040, are as- sessed for the purpose of funding administrative expenses. “Tier II” fees provided for in 420 KAR 1:050, are desig- nated to effectuate provisions of KRS 151.730 relating to the payment of the principal and interest of revenue bonds issued by the KRA to construct and maintain dams, locks, and related capital projects. 5 At present, the KRA claims the authority to assess Tier I fees against all consumers of water (users) who with- draw water from any source lying within the Kentucky River basin; whereas, Tier II fees are assessed only against “main stem” users (those who draw water directly from the Kentucky River). However, there is no assurance that non- main—stem users will not be assessed Tier II fees in the future. At present, Danville is being assessed Tier I fees only. The original statute enacted by the Kentucky General Assembly did not prescribe the method or amount of as- sessments against those entities withdrawing and using water within the area of the Kentucky River basin, but vested that power in the directors of the KRA. The KRA’s adopted regulation 420 KAR 1:040, § 2(2) provides in part: - ++ @ person who withdraws surface water or ground- water from the Kentucky River basin shal] pay a Tier I fee based on gross withdrawal. In 1996 (subsequent to the trial court decision herein), the Kentucky legislature enacted KRS 151.723, entitled “Water Use Fees”, which provides in part: The rate of the water use fees collected by the author- ity shall be set for each year of the biennium based upon a total amount of funds necessary to carry out only those functions, projects, and expenses authorized by the General Assembly in the authority’s biennial budget. It is significant to note that the KRA determines the amount of the assessments by first determining the total amount of its annual budget and then simply funding that budget by charging the necessary amount for each unit (gallon of water) of usage. Such was the method of setting the assessment at the time this case was litigated and that method has now been codified by the 1996 amendment to the statute. 6 The City of Danville withdraws no water from the Ken- tucky River. The City of Danville withdraws water from Lake Herrington, formed by the damming of the Dix River, which is a tributary of the Kentucky River. The City of Danville owns its water plant and it sells water to residen- tial, commercial, and industrial consumers both inside and outside the boundaries of the City, and some of which con- sumers are geographically located outside the Kentucky River basin. From and since April 1, 1994, the City of Danville has been assessed fees by the KRA based upon the amount of its water withdrawal from Lake Herrington. Pursuant to KRS 151.720(5), all “facilities”, including Danville, are per- mitted to “pass on all or any part of the fee” so charged by the KRA against individual consumers of water. On July 12, 1994, the City of Danville filed a Com- plaint for Declaration of Rights (Complaint) in the Boyle Circuit Court, Civil Action #94—CI-278, challenging the constitutional authority of the Kentucky River Authority to impose assessments upon Danville under the enabling legislation and all regulations promulgated thereunder. Spe- cifically, in paragraph #20 and #21, the Complaint alleged: 20. The City of Danville and its inhabitants derive no benefits from the existence or operations of the KRA which are different from the general benefits enjoyed by the inhabitants of the entire Commonwealth of Ken- tucky. The effort of the KRA to impose upon the City of Danville and its citizens a special tax or assess- ment for which no benefits are conferred constitutes an unconstitutional exercise of power, violative of the constitutional guarantees of due procees of law, equal protection of the laws, and the prohibition against the taking of private property without just compensation. 21. In the alternative, the amount of the assessment against the City of Danville is in excess of any special benefits conferred upon Danville and its inhabitants 7 and consequently such action violates those constitu- tional protections enumerated hereinabove. Although challenged upon other additional grounds, the foregoing allegations constitute the central theme under which the case was pursued and decided by the lower courts. The case was tried before the trial court without jury. Extensive evidence was meticulously presented by Danville establishing the fact that Danville and its residents would receive no actual benefits from the activities of the KRA, or in the alternative, no benefits commensurate with or proportional to the assessments or fees imposed. The trial court stated in its Opinion and Order entered December 9, 1994 (at pages 1-2): ... KRA has imposed a fee upon all entities drawing water from the Kentucky River basin. This includes Danville. The fees imposed by KRA, if they can be sustained at all, must be sustained as user fees and not as a tax. To impose fees based on local improve- ments for the benefit of the public at large upon a select group of individuals, is not taxation but confis- cation. 14 Eugene McQuillan, The Law of Municipal Corporations Sec. 38.02 (1987 rev. 3rd ed.). In order for user fees to be sustained, there must be a reason- able relationship between the amount of money ex- tracted and the benefit conferred. Norwood v. Baker, 172 U.S. 269, 19 S.Ct. 187, 43 L. Ed. 443 (1898); Barfield v. Gleeson, Ky., 63 S.W. 964 (1901); Casey v. Richland County Council, 320 S.E. 2d 442 (S.C. 1984). Where no benefit is conferred, the user fees violate the constitutional constraints of due process of law, equal protection and the taking of property without just compensation. The trial court held (at page 3): Because no benefit is conferred upon Danville by the KRA then the fees charged are unconstitutional and _In violation of due process of law and equal protection 8 by taking property without just compensation. The KRA appealed the trial court decision to the Ken- tucky Court of Appeals, which by a 2-1 Opinion reversed and remanded. The Kentucky Court of Appeals stated (at pages 5-6): The validity of special assessments and users fees de- pends on an analysis of the charge and the benefit received. Assessments and fees charged without a re- lationship to a benefit received by the payor are arbi- trary and capricious and violate due process and the constitutional prohibition against the taking of pri- vate property without just compensation. .. Various fees exist and are used to implement pro- grams deemed desirable by the Commonwealth. Pur- suant to KRS 224.20—050, for instance, emission fees may be collected from entities emitting air pollutants and may be used to fund the Commonwealth’s air quality program. Although there may be no direct or immediate benefit to the payor of such fees, the use of the air and the contamination of it are sufficient to justify imposition of the fee. The fee in this case is based upon the actual use by the city of the Kentucky River water basin. Despite the city’s contention that it does not need the services of the Authority, the General Assembly recognized a potential depletion of one of this state’s most valued natural resources and took efforts to preserve the Ken- tucky River basin. The interest of the Commonwealth in protecting and regulating Eastern Kentucky’s larg- est water resource is beyond question. An adequate and clean water source is essential to all it serves. In Curtis v. Louisville and Jefferson County Metropoli- tan Sewer District, Ky., 311 S.W. 2d 378 (1958), the court rejected the contention that a statute was un- constitutional because it conclusively presumed that all land within a designated area would benefit from a surface drainage improvement. 9 We think that in the case of a surface drainage improvement area, any property that geographi- cally is a part of the watershed or drainage basin may properly be considered to be benefited by the project through the general improvement of con- ditions of health, comfort and convenience in the area and the resulting general enhancement of values in the area. Id. at 382. The Kentucky Court of Appeals, in reversing the trial court's opinion, held (at page 7): . . . Preservation of the Kentucky River basin is a benefit which obviously accrues to al] within its bound- aries. We therefore hold to be clearly erroneous the trial court’s finding that no benefit to the City of Danville exists. Following the decision of the Kentucky Court of Ap- peals, the City of Danville sought discretionary review be- fore the Supreme Court of Kentucky. On November 13, 1996, the Supreme Court of Kentucky entered an Order Denying Discretionary Review. HOW THE FEDERAL QUESTIONS WERE RAISED AND DECIDED BELOW The federal questions raised under the Fourteenth Amendment of the United States Constitution were raised initially by Danville in its Complaint for Declaration of Rights (as set forth above). The predominant theory under which the case was litigated before the trial court was that the imposition of an assessment or fee for which no ben- efits, or no commensurate or proportional benefits, were conferred, constituted an unconstitutional exercise of power, violative of the constitutional guarantees of due process of law, equal protection of the laws, and the prohibition against the taking of private property without just com- pensation. Danville argued the applicability of Norwood v. Baker, 172 U.S. 269, 19 S.Ct. 187, 43 L. Ed. 443 (1898), through- out the litigation before the trial court and again in the appeal taken by the KRA before the Kentucky Court of Appeals. The trial court, citing Norwood v. Baker, supra, held that no benefit was conferred upon Danville by the KRA and that “the fees charged are unconstitutional and in violation of due process of law and equal protection by taking property without just compensation.” Again, in the appeal taken by the KRA to the Kentucky Court of Appeals, Danville asserted its rights under the Fourteenth Amendment of the United States Constitution. The Kentucky Court of Appeals, though recognizing that the assessment of fees “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 com- pensation”, found that “(p)reservation of the Kentucky River basin is a benefit which obviously accrues to all within its boundaries” (emphasis added) and held the trial court’s finding of “no benefit to the City of Danville” to be clearly erroneous. The effect of the decision of the Kentucky Court of Appeals was to establish an absolute rule or conclusive presumption that a benefit was conferred by virtue of geo- graphic location alone. The City of Danville filed a Motion for Discretionary Review with the Supreme Court of Kentucky, but the mo- tion was denied by Order Denying Discretionary Review entered November 13, 1996. RL Te ee ee 11 REASONS FOR GRANTING THE WRIT 1. THE DECISION BELOW DECIDED AN IMPORTANT FEDERAL QUESTION IN A WAY THAT CONFLICTS WITH RELEVANT DECISIONS OF THIS COURT, INCLUDING NORWOOD V. BAKER, 172 U.S. 269, 19 S.Ct. 1987, ). The landmark decision on the subject of special assess- ments and fees is the United States Supreme Court case of Norwood v. Baker, 172 U.S. 269, 19 S.Ct. 187, 43 L.Ed. 443 (1898). The City of Norwood, Ohio, sought to assess adjacent property owners for the costs and expenses con- nected with condemnation proceedings related to the con- struction of a new road passing through the property. The City of Norwood enacted an ordinance assessing the adja- cent owners on a “per front foot” basis. The United States Supreme Court held under the Fourteenth Amendment of the United States Constitution that the assessment was unconstitutional because it failed to consider whether or not a benefit was conferred upon the property owners. Al- though the Court recognized that abutting owners may be subjected to special assessment if the owners enjoy special or peculiar benefits accruing from the public improvements, the powers of the legislative body are not unlimited. At pages 278-279, Mr. Justice Harlan, speaking for the U.S. Supreme Court, stated: But the power of the legislature in these matters is not unlimited. There is a point beyond which the leg- islative department, even when exerting the power of taxation, may not go consistently with the citizen’s right of property. As already indicated, the principle underlying special assessments to meet the cost of public improvements is that the property upon which they are imposed is peculiarly benefited, and there- fore the owners do not, in fact, pay anything in excess of what they receive by reason of such improvement... 12 In our judgment, the exaction from the owner of pri- vate property of the cost of a public improvement in substantial excess of the special benefits accruing to him is, to the extent of such excess, a taking, under the guise of taxation, of private property for public use without compensation. We say “substantial excess,” because exact equality of taxation is not always at- tainable, and for that reason the excess of cost over special benefits, unless it be of a material character, ought not to be regarded by a court of equity when its aid is invoked to restrain the enforcement of a special assessment. In the case at hand, Danville and its residents are being assessed a flat amount based solely on its geographic location within the area of the Kentucky River basin and without regard to any special or peculiar benefits derived from the activities of the KRA. The trial court found that “no benefit” was conferred upon Danville by the KRA. The Kentucky Court of Appeals assumed a benefit based upon Danville’s geographic location within the area drained by the Kentucky River. The Kentucky Court of Appeals sim- ply found “preservation of the Kentucky River basin is a benefit which obviously accrues to all within its bound- aries” (emphasis added) and then without explanation or any basis in fact held the trial court’s finding that no ben- efit derived to Danville was clearly erroneous. By refusing to grant discretionary review, the highest court in Kentucky, the Supreme Court of Kentucky, has denied Danville the right to “question” the existence of any peculiar benefits and has established an “absolute rule” that any person who uses water within a certain geographi- cal boundary is in fact benefited, without any right of the person to question the existence of a benefit or show the assessment is in excess of any benefits received. We are cognizant that this Court rarely grants a writ of certiorari when the asserted error consists of erroneous 13 factual findings or the misapplication of a properly stated rule of law. At first blush, it might be thought that such is applicable herein. We must acknowledge that the Kentucky Court of Appeals paid lip service and correctly stated some of the applicable principles of law. However, a closer analy- sis of the ruling of the Kentucky Court of Appeals, exam- ined in light of the specific directives of this Court in Norwood, supra, clearly reveals that the Kentucky court has misunderstood and has violated the specific directives of this Court. This Court expressly prohibited such action in Norwood, supra (p. 279): . . . But the guaranties for the protection of private property would be seriously impaired, if it were estab- lished as a rule of constitutional law, that the imposi- tion by the legislature upon particular private prop- erty of the entire cost of a public improvement, irre- spective of any peculiar benefits accruing to the owner from such improvement, could not be questioned by him in the courts of the country. (Emphasis added) This Court went on to say at p. 279: It is one thing for the legislature to prescribe it as a general rule that property abutting on a street opened by the public shall be deemed to have been specially benefited by such improvement, and therefore should specially contribute to the cost incurred by the public. It is quite a different thing to lay it down as an abso- lute rule (emphasis added) that such property, whether it is in fact benefited or not by the opening of the street, may be assessed by the front foot for a fixed sum representing the whole cost of the improvement, and without any right in the property owner to show (emphasis added), when an assessment of that kind is made or is about to be made, that the sum so fixed is in excess of the benefits received. The Kentucky court has done precisely what this Court has stated it cannot do. The Kentucky court has estab- 14 lished an absolute rule or conclusive presumption based only upon geographical location that all residents of Danville are in fact benefited and the alleged recipients of such benefits have no right to question the matter. The Kentucky Court of Appeals made no effort to find any spe- cial benefit, or to quantify or measure the benefit, or to compare the value of the benefit against the amount of the assessment. Instead, the Kentucky Court held that the benefit is “obvious”. Such an arbitrary declaration effec- tively denies Danville its rights under the Fourteenth Amendment of the United States Constitution and without question is a taking of private property without due pro- cess of law. In the case at hand, the quotation from the Opinion of the Kentucky Court of Appeals as set forth above clearly reveals that the Kentucky court has established an abso- lute rule or conclusive presumption and has denied affected persons the right to question the assessment of fees in the state courts of Kentucky. This attitude of the Kentucky court is underscored in its adherence to the 1958 case from the Kentucky Court of Appeals (then the highest court in Kentucky) of Curtis v. Louisville and Jefferson County Met- ropolitan Sewer District, supra, noting the Curtis court had “rejected the contention that a statute was unconstitu- tional because it conclusively presumed that all land within a designated area would benefit from a surface drainage improvement” and then going on to cite Curtis at page 382: We think that in the case of a surface drainage im- provement area, any property that geographically is a part of the watershed or drainage basin may properly be considered to be benefited by the project through the general improvement of conditions of health, com- fort and convenience in the area and the resulting general enhancement of values in the area. Pursuant to its rights under the Fourteenth Amend- ment of the United States Constitution, as enunciated and 15 amplified in Norwood v. Baker, supra, the City of Danville had sought to question the right of the KRA to impose an absolute rule under which it imposed an assessment re- gardless of special benefits inuring to Danville. The trial court performed an exhaustive analysis of the evidence in the case and concluded that “no benefits” had been shown to inure to Danville. Without any effort to weigh or evalu- ate the benefits, if any, the Kentucky Court of Appeals simply stated that the benefit was obvious, that geographi- cal location in and of itself was sufficient, and that it was permissible to “conclusively presume” that all land within a designated area would benefit from the improvement (citing Curtis at page 382). More recent decisions of the United States Supreme Court have followed the holding in Norwood. The general principle that special assessments to meet the cost of pub- lic improvements must be commensurate with or propor- tional to the benefits received has been applied by this Court in various situations. In Road Dist. v. Mo. Pac. R.R. Co., 274 U.S. 188, 47 S.Ct. 563, 71 L.Ed. 992 (1927), the state of Arkansas had imposed assessments against prop- erty owners, including a railroad company, for improve- ments made to a public road. The railroad company brought suit to annul the-assessment on the grounds, among oth- ers, that it was arbitrary and unreasonably discriminatory and thus in violation of the due process and equal protec- tion clauses of the Fourteenth Amendment to the U.S. Con- stitution. This Court held that although some benefits were shown to accrue to the railroad, the assessments against the railroad were so excessive as to constitute a violation of the due process clause of the Fourteenth Amendment. However, the Court held that a reduced assessment based upon actual benefits received would be appropriate. In Dolan v. City of Tigard, 512 US. 374, 114 S.Ct. 2309, 129 L.Ed. 2d 304 (1994), this Court held that the City of Tigard had failed to show “rough proportionality” 16 between the exaction demanded by the city and the petitioner’s proposed development. Whereas that case in- volved a planning and zoning “taking” under the Fifth Amendment of the United States Constitution, certain prin- ciples enunciated therein are instructive and applicable to the case at hand. The Court stated in Dolan at pages 315— 316: The Takings Clause of the Fifth Amendment of the United States Constitution, made applicable to the States through the Fourteenth Amendment, Chicago, B. & Q.R. Co. v. Chicago, 166 U.S. 226, 239, 41 L.Ed. 979, 17 S.Ct. 581 (1897), provides: “[NJor shall pri- vate property be taken for public use, without just compensation.” One of the principal purposes of the Takings Clause is “to bar Government from forcing some people alone to bear public burdens which, in all fairness and justice, should be borne by the public as a whole.” Armstrong v. United States, 364 US 40, 49, 4 L.Ed. 2d 1554, 80 S.Ct. 1563 (1960). In the case at bar, the citizens of Danville are being forced to bear a public burden which, in all fairness and justice, should be borne by the public of the Commonwealth of Kentucky as a whole. It is unfair to arbitrarily create geographical boundaries within the state and then require the taxpayers within those boundaries to foot the bill for improvements or services which benefit the state at large (even if we assume actual services are rendered). The Ken- tucky River impacts the state of Kentucky as a whole. Danville residents do not enjoy an equal protection of the laws when they are forced to financially support the Ken- tucky River basin, while residents of other river basins within the state of Kentucky have no similar obligation. All other water sources throughout Kentucky are protected through the Kentucky NREPC which is funded from the general revenues of the state. General improvements must be funded through general revenues and not by special assessments. 17 In the absence of clearly definable benefits and ser- vices to particular recipients, the cost of providing general governmental services must be borne by the populace at large. These types of services have historically been paid from the general revenues of the Commonwealth. It is ar- bitrary and unfair to assess fees against certain residents simply because they live within a particular geographic location. This Court stated in Dolan, supra, at page 320: ... We think a term such as “rough proportionality” best encapsulates what we hold to be the requirement of the Fifth Amendment. No precise mathematical cal- culation is required, but the city must make some sort of individualized determination that the required dedi- cation is related both in nature and extent to the im- pact of the proposed development. The “rough proportionality” test adopted in Dolan, supra, is not unlike the “peculiar benefits” or “substantial excess” tests enunciated in Norwood, supra. Unfortunately, the Kentucky court subscribes to none of these tests. The Kentucky Supreme Court has arbitrarily established an “absolute rule”, a “conclusive presumption”, which cannot be scrutinized or questioned by any citizen. The Kentucky court has denied the people of Danville their right to the protection of the Fourteenth Amendment of the United States Constitution. MANAGEMENT DISTRICT THROUGH THE IMPOSITION OF USER FEES UPON WATER CONSUMERS AS OPPOSED TO FUNDING THROUGH GENERAL TAX REVENUES, GOVERNMENTAL GRANTS, OR ASSESSMENTS AGAINST PROPERTY OWNERS ACTUALLY AFFECTED AND BENEFITED. 18 This case is believed to be a case of first impression in the United States. Although the watershed management concept has been present for a number of years, the state of Kentucky is believed to be the first state or watershed agency to attempt to fund its operations by the imposition of user fees or assessments against the consumer. Conse- quently, we can find no recorded cases, federal or state, where the validity of user fees and assessments for the funding of a watershed management agency have been litigated or judicially determined. Watershed management agencies are typically funded through the genera! revenues of the state, governmental grants, or assessments against the landowners in proportion to the benefits actually re- ceived. Salyer Land Co. v. Tulare Lake Basin Water Stor. Dist., 410 U.S. 719, 93 S.Ct. 1224, 35 L.Ed.2d 659 (1973); Associated Enter., Inc. v. Toltec Watershed Imp. Dist., 410 U.S. 743, 93 S.Ct. 1237, 35 L.Ed.2d 675 (1973). The City of Danville has complained and asserted from the beginning that the KRA impacts generally the citizens of Kentucky and it should be funded from the genera! tax revenues of the state at large. As an example, proposed walking trails and recreational facilities would be open to the general public visiting from outside the state. If this court does not issue a writ of certiorari, Ken- tucky will have succeeded in ushering in a system of “taxa- tion” which is repugnant to both the Constitution of Kentucky and the Fourteenth Amendment of the United States Constitution. The Kentucky Constitution §171 re- quires that taxes “be levied and collected for public pur- poses only and shall be uniform... and all taxes shall be levied and collected by general laws.” If Kentucky is permitted to impose user fees for the funding and financial support of the KRA, without being required to meet any specific standard (other than geo- graphical location) to test the actual benefits received, other states can be expected to follow a similar course. 19 The denial of fundamental fairness under the due pro- cess clause of the Fourteenth Amendment of the United States Constitution could not be more amply demonstrated than by the fact that many consumers of waier from the Danville waterworks system do not even reside within the Kentucky River basin! Some residents of Boyle County (of which Danville is the county seat) reside within other river basins, including the Salt River basin and the Chaplin River basin. Nevertheless, these private citizens purchase water from the City of Danville and under the statute in question herein, KRS 151.700 et. seq., those citizens are subject to the imposition of the assessment upon their wa- ter bills. Without question, these residents enjoy “no ben- efits” from the KRA. In the situation of these residents, a more graphic demonstration of the denial of due process would be difficult to envision. 3. THE GROWING PROLIFERATION OF SPECIAL CLARIFY THE PROTECTIONS AFFORDED EVERY CITIZEN UNDER THE FOURTEENTH AMENDMENT OF THE UNITED STATES CONSTITUTION AND THE BROAD PRINCIPLES ENUNCIATED IN NORWOOD V. BAKER. The concept of watershed Management enjoys an in- creasing presence within this country. The creation of the KRA represented its entrance into Kentucky. Although the term “watershed management” creates a praiseworthy vi- sion or image, giving rise to such notions as conservation, preservation, and environmental protection — ideas uni- versally accepted as good and beneficial to everyone — the words watershed management, constitute a vague term or concept. “The natural resources management field is re- plete with terms that carry powerful prescriptive and hortatory meanings but lack descriptive specificity” (“Wa- tershed Management: Slogan or Solution?”, by William 20 Goldfarb, Environmental Affairs, Vol. 21:483, pp. 483-509, 1994). “Watershed management” is being utilized as a de- vice which permits state or local governments to exact money from the citizenry without adherence to certain con- stitutional limitations. It is akin to other types of assess- ments and user fees which have allowed governmental units to enhance revenues without adhering to the constitutional restrictions against the imposition or increase of taxes. An excellent article by Laurence J. Zielke, a partner in a law firm in Louisville, Kentucky, entitled “User Fees in Lieu of Taxes: Avoiding Constitutional Limitations” can be found in the Urban Lawyer, Vol. 23, No. 3 (Summer 1991). This article is reproduced in the Appendix herein at pages 50a to 61a. In his article, “Watershed Management: Slogan or So- lution?”, supra, Prof. Goldfarb provides a comprehensive analysis of the complexity of watershed management and the proliferation of watershed agencies throughout the United States. Goldfarb discusses the transboundary na- ture of most watersheds, commonly defined as the drain- age basin of a receiving body of water, and the intermunicipal, interstate, or international implications arising therefrom. Watershed management transcends many subjects or concerns, including water resource devel- opment, water pollution control, wetlands protection, and water conservation and allocation. These geographical varia- tions and differing goals and objectives, which are some- times competing, give rise to diverse constituencies and conflicting or overlapping jurisdictions “at the international, federal, interstate, state, substate regional, and local lev- els of government” (Goldfarb, at page 485). To illustrate the complexity and diversity of water resource issues, Goldfarb states: On the federal level, thirteen congressional commit- tees and subcommittees, eight cabinet agencies, six independent regulatory agencies, and two Whitehouse 21 offices are involved in establishing water policy. “An estimated 100,000 water-related entities exist locally; states have over 300 departments having water and water-related resources functions.” (Citing Dean E. Mann, “Political Science: The Past and Future of Wa- ter Resources Policy and Management”, in Water Re- sources Administration in the United States, Martin Reuss ed., 1993) To illustrate the variety of persons and entities inter- ested in watershed management, Goldfarb reveals that within the past few years, at p. 498: . . . Systematic initiatives for implementing watershed management have been proposed by the Association of Metropolitan Sewerage Agencies (AMSA), the Wa- ter Quality 2000 group, EPA, and the drafters of S. 1114, the Senate Clean Water Act reauthorization bill. [103rd Cong., 1st Sess. § 302 (1993)] Despite the vast amount of attention which has been given in recent years to watershed management, it has not inspired “definite legal rules”. “Watershed as a Public Natu- ral Resource on the Federal Lands”, by George Cameron Coggins, Virginia Environmental Law Journal, Vol. 11:1, 1991, at page 1. However, Prof. Coggins confirms that le- gal interest in watersheds is growing, that “many recent lawsuits and other disputes have revolved around water- shed values, and even more are likely to arise in the fu- ture” (at page 2). The growth and proliferation of watershed management agencies is further illustrated in an article entitled “The Watershed Protection Approach: Is the Promise About to be Realized?” by William E. Taylor and Mark Gerath, NR&E, Fall 1996, wherein it is stated at page 18: Most states are rapidly moving to a watershed based approach and many hundreds of citizen groups are becoming directly-involved in those efforts. EPA has published a number of watershed protection guidance 22 documents in the last year and maintains a site on the World Wide Web to discuss the approaches differ- ent states are adopting. EPA has even established a Watershed Academy to educate state managers on wa- tershed protection strategies. In the case at hand, both the City of Danville and the KRA have agreed from the beginning that the money to be extracted by the KRA from Danville and others is a special “assessment” or “user fee” for which a commensurate or proportional benefit must be conferred. It has never been claimed by the KRA that the money to be extracted was a “tax”. As an apparent afterthought, subsequent to the trial court opinion, the KRA maintained that the assessment was nothing more than a regulatory fee under the state's exercise of a valid police power. Whereas the KRA never explained what was being “regulated” or what police power was being exercised, it is not really important. Regardless of whether it be called a special assessment, user fee, or regulatory fee, the Fourteenth Amendment of the United States Constitution requires that a proportional or reason- able benefit be conferred, that the fee charged must reflect the approximate value of the thing being used, or that the regulatory fee be reasonably related to the costs incurred by the regulating authority. Alamo Rent-A-Car v. Sarasota- Manatee Airport Auth., 906 F.2d 516 (11th Cir., 1990); Federal Deposit Ins. Corp. v. City of New Iberia, 921 F.2d. 610 (5th Cir., 1991). A “rational basis” must exist between the system of (sewer) service charges and the costs in- curred by the governmental authority. Hotel Emp. Ass’n of San Francisco v. Gorsuch, 669 F.2d 1305 (9th Cir., 1982). “A tax is universally defined as an enforced contribu- tion to provide for the support of government, whereas a fee is a charge for a particular service.” Long Run Baptist Ass'n v. Louisville & Jefferson County Metro. Sewer Dist., Ky. App., 775 S.W.2d 520 (1989), at page 522. The Ken- tucky court ruled in Long Run Baptist, supra, that the 23 revenues could not be excessive to support the service; that user fee revenues must be limited to the reasonable cost of providing the services; and that the process of es- tablishing the fee and the actual fee itself must bear a relationship to the service or benefit provided. Otherwise, the fee is arbitrary, capricious, and violates the rights of equal protection and due process. In distinguishing between a “fee” and a “tax”, the ap- pellate Court in the state of Washington has stated that if charges are intended to raise money, they are actually taxes. Conversely, if the charges are primarily tools of regu- lation, they are not taxes, Teter v. Clark County, 104 Wash. 2d 227, 704 P.2d 1171 (Wash. 1985). These principles and applications of the Fourteenth Amendment of the United States Constitution are consis- tent with the rulings of the United States Supreme Court in Norwood v. Baker, supra; and Georgia R. & Electric Co. v. Decatur, 295 U.S. 165, 55 S. Ct. 701, 79 L.Ed. 1365 (1935). The area of watershed management is an expanding phenomenon in the United States. Whereas the purposes and objectives of watershed management are laudatory, the method of funding such agencies present an important Fourteenth Amendment question. The funding mechanism employed by the state of Kentucky clearly violates the pro- tections of the Fourteenth Amendment. The simplicity of the Kentucky user fee system makes it an attractive mecha- nism for other jurisdictions. Undoubtedly, if permitted to go unchecked, it will be utilized increasingly as watershed management districts spread further throughout the coun- try. It is of compelling importance that this court require a test, a set of criteria, or a standard for the imposition of fees which comports with the due process protections af- forded under the Fourteenth Amendment. Whether the test 24 be that of “rough proportionality”, “rational basis”, “pro- portional benefit”, “substantial excess”, or some other simi- lar standard, the urgency for some equitable test or standard is indisputable. The state of Kentucky has adopted “no test”. The state of Kentucky has adopted an absolute rule that geographical location is a singularly sufficient criteria, a conclusive presumption not subject to question or scrutiny. It is of critical importance that this Court expressly declare that states cannot “tax” their citizens under the guise of “user fees”, and that if user fees are to be imposed, they must bear a relationship to the service or benefit provided. The imposition of user fees or assessments must be included within the protections of the Fourteenth Amend- ment of the United States Constitution. The same prin- ciples which were applied by this Court in Norwood v. Baker, supra, must be applied to the funding mechanisms within the area of watershed management agencies. CONCLUSION The Supreme Court of Kentucky has denied those per- sons within the Kentucky River basin, including Danville, the protections of the due process clause of the Fourteenth Amendment of the United States Constitution. The Su- preme Court of Kentucky has established an absolute rule or a conclusive presumption, not subject to judicial chal- lenge, that anyone located within a certain geographical boundary may be assessed a special fee without regard as to whether or not the amount of the fee is reasonably re- lated, roughly proportional, or substantially in excess of any actual benefit conferred upon the payor. This result is squarely in conflict with the principles enunciated in Norwood v. Baker, supra, Dolan v. City of Tigard, supra, and the Fifth and Fourteenth Amendments of the United States Constitution. 25 With the recent explosion of the watershed manage- ment concept throughout this country, and the prolifera- tion of watershed management agencies created by the states, it is of critical importance that this Court grant this Petitioner’s Writ of Certiorari, not only for the purpose of requiring Kentucky to comport to the law, but for the pur- pose of extending the protections of the Fourteenth Amend- ment to the growing field of watershed Management districts throughout this nation. Respectfully submitted, Epwarp D. Hays Counsel of Record SHEEHAN, BARNETT & Hays, P.S.C. 114 South Fourth Street Danville, Kentucky 40422 (606) 236-2641 Counsel for Petitioner APPENDIX la SUPREME COURT OF KENTUCKY 96-SC-214-D (95-CA-64) Cr7y OF DANVILLE, KENTUCKY - - - - - Movant v. KENTUCKY River AutHority, Et Al. - - - Respondent ORDER DENYING DISCRETIONARY REVIEW The motion for review of the decision of the Court of Appeals is denied. Stephens, C.J., would grant discretionary review. ENTERED: November 13, 1996. /s/_ Robert F. Stephens Chief Justice Be Re een ee 2a RENDERED: FEBRUARY 16, 1996; 2:00 P.M. ORDERED PUBLISHED: JULY 5, 1996; 2:00 P.M. COMMONWEALTH OF KENTUCKY COURT OF APPEALS NO. 95-CA-000064-MR KENTUCKY RIVER AUTHORITY; PHILLIP J. SHEPHERD; CHARLES W. Carr; Tom Dorman; JUDGE W. NEAL Cassipy; Dr. DonaLp C. Haney; MARTIN HowarbD Lowry; EDWARD FOoREE; GREG GINTER; Tuomas M. JONES; Ra.pH E. McCLANAHAN; we Betty F. WHITAKER” - - - - + + Appellants v. Crry or DANVILLE, KENTUCKY - - - - - Appellee Appeal From Boyle Circuit Court Honorable Stephen M. Shewmaker, Judge Action No. 94-CI-00278 OPINION REVERSING AND REMANDING BEFORE: LESTER, Chief Judge; DYCHE and EMBERTON, Judges. EMBERTON, JUDGE. The appellants, Kentucky River Authority and its members, appeal from a judgment en- tered 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) | 3a 151.720, which was enacted in response to continuing prob- lems and potential depletion of a valued natural resource, the Kentucky River. In 1990, the General Assembly en- acted KRS 151.720 which mandates that the Authority protect the Kentucky River basin through watershed man- agement. 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 Ken- tucky River and are used by the Authority to finance spe- cific 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 Ken- tucky River but does from Lake Herrington on the Dix River which is a Kentucky River tributary. It also dis- charges 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). 4a There is no dispute, that pursuant to the original ver- sion of KRS 151.700(2), the Commonwealth did not as- sume 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 Au- thority. It was the legislature’s intent to enlarge the pow- ers of the Authority and render it responsible for the con- servation 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 emend its statutes in a budget bill. Common- wealth, 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 sys- tem 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 Dis- trict, Ky. App., 775 S.W.2d 520 (1989); KRS 65.180. “A tax is universally defined as an enforced contribution to pro- vide 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 with- out regard to direct benefits which may inure to the payor or to the property taxed. Krumpeiman v. Louisville & Jefferson County Meiropolitan Sewer District, Ky., 314 ne kanal ‘ 5a S.W.2d 557, 561 (1958). The fees imposed by the Author- ity 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 conserv- ing and controlling the waters in the Kentucky River basin and are incidental to the statute. The validity of special assessments and users fees de- pends on an analysis of the charge and the benefit re- ceived. Assessments and fees charged without a relation- ship 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 Elizabethtown, Ky., 291 S.W.2d 3 (1956); Portwood v. Falls City Brewing Company, Ky., 318 S.W.2d 535 (1958); Woolsley v. Big Reedy Creek Watershed, Ky., 383 S.W.2d 135 (1964). Sewers, lighting and street improvements are, if used by adjoining property owners, benefits which directly accrue to the real property. Casey v. Richland County Council, 282 S.C. 387, 320 S.E.2d 443 (1984), relied on by the trial court, involved a county surcharge on water and sewer. The plaintiff, however, received no water and sewer services from the city. Since no benefit was received by the plaintiff, the court held that the surcharge violated the state constitu- tion and was, in fact, a tax. Id. at 444, Various fees exist and are used to implement programs deemed desirable by the Commonwealth. Pursuant to KRS 224.20-050, for instance, emission fees may be collected from entities emitting air pollutants and may be used to fund the Commonwealth’s air quality program. Although there may be no direct or immediate benefit to the payor of such fees, the use of the air and the contamination of it are sufficient to justify imposition of the fee. The fee in this case is based upon the actual use by the city of the Kentucky River water basin. Despite the city’s contention that it does not need the services of the Author- ity, the General Assembly recognized a potential depletion of one of this state’s most valued natural resources and ae 6a took efforts to preserve the Kentucky River basin. The interest of the Commonwealth in protecting and regulat- ing Eastern Kentucky’s largest water resource is beyond question. An adequate and clean water source is essential to all it serves. In Curtis v. Louisville and Jefferson County Metropolitan Sewer District, Ky., 311 S.W.2d 378 (1958), the court rejected the contention that a statute was uncon- stitutional because it conclusively presumed that all land within a designated area would benefit from a surface drain- age improvement. We think that in the case of a surface drainage im- provement area, any property that geographically is a part of the watershed or drainage basin may properly be considered to be benefited by the project through the general improvement of conditions of health, com- fort and convenience in the area and the resulting general enhancement of values in the area. Id. at 382. Danville’s primary contention is that it can, and has, taken care of the concerns of the General Assembly through its own efforts. While Danville’s initiative is to be com- mended, the General Assembly believes that only state intervention and a uniform approach can assure the future of the Kentucky River basin. Perhaps, with the implemen- tation of the new services provided by the Authority, Danville can divest itself of some of the responsibilities it has assumed. Preservation of the Kentucky River basin is a benefit which obviously accrues to all within its bound- aries. We therefore hold to be clearly erroneous the trial court’s finding that no benefit to the City of Danville ex- ists. Yount v. Calvert, Ky. App., 826 S.W.2d 833 (1991). The Tier I fees imposed by the Authority are desig- nated for the payment of administrative costs while capi- tal improvement projects are financed with Tier II fees. The language of KRS 151.720-730 provides that fees are to be collected from all facilities using the Kentucky River or its tributaries. In the 1994-96 Budget Bill, the General Assembly provided that Tier I fees shall be used for the 7a establishment of an administrative staff for the Authority and contractual services for water supply and quality stud- ies. Although contained in the Budget Bill, it is an effec- tive and lawful amendment. Armstrong, supra. We find no merit in Danville’s contention that the Commonwealth cannot claim ownership to the waters of the Kentucky River because of the Supremacy Clause and the Commerce Clause of the United States Constitution. A state has the power to control and conserve its water resources, and unless Congress expressly invokes reserved rights or the navigation servitude, the state has authority to control its internal waters. City of Trenton v. New Jer- sey, 262 U.S. 182, 43 S.Ct. 534, 67 L.Ed. 937 (1923); Cali- fornia v. United States, 438 U.S. 645, 662, 98 S.Ct. 2985, 57 L.Ed.2d 1018 (1978). The judgment is reversed and the case is remanded for entry of a judgment consistent with this opinion, including the award of past fees owed with interest at the statutory rate. We find no basis, however, for the imposition of a penalty. LESTER, CHIEF JUDGE, CONCURS. DYCHE, JUDGE, DISSENTS. BRIEF FOR APPELLANTS: Donald S. Dott Jack B. Bates Susan Rose Green Frankfort, Kentucky ORAL ARGUMENT FOR APPELLANTS: Jack B. Bates Frankfort, Kentucky BRIEF AND ORAL ARGUMENT FOR APPELLEES: Edward D. Hays Danville, Kentucky 8a COMMONWEALTH OF KENTUCKY 50TH JUDICIAL DISTRICT BOYLE CIRCUIT COURT Civil Action No. 94-CI-00278 Crry oF DANVILLE, KENTUCKY, - - - - - Plaintiff, v. KENTUCKY RIVER AUTHORITY, - - - - Defendant. OPINION AND ORDER This cause is before the . ourt pursuant to a Complaint for Declaration of Rights filed by the Plaintiff, City of Danville, Kentucky, (Danville). The Defendant is the Ken- tucky River Authority (KRA). Danville is a Kentucky Municipal Corporation of the third class located in Boyle County, Kentucky. KRA is an agency of the Commonwealth of Kentucky created by the Kentucky General Assembly pursuant to KRS 151.700, et seq. Danville challenges the constitutionality of KRA, KRS 151.700 - 151.730 and any and all regulations promul- gated therefrom. KRA has imposed a fee upon all entities drawing water from the Kentucky River basin. This in- cludes Danville. The fees imposed by KRA, if they can be sustained at all, must be sustained as user fees and not as a tax. To impose fees based on local improvements for the benefit of the public at large upon a select group of indi- viduals, is not taxation but confiscation. 14 Eugene McQuillan, The Law of Municipal Corporations Sec. 38.02 (1987 rev. 3rd ed.). In order for user fees to. be sustained, there must be a reasonable relationship between the amount of money extracted and the benefit conferred. Norwood v. Baker, 172 U.S. 269, 19 S.Ct. 1987, 43 L. Ed. 443 (1898); Barfield v. Gleason, Ky., 63 S.W. 964 (1901); Casey v. Richland County Council, 320 S.E. 2d 442 (S.C. 9a 1984). Where no benefit is conferred, the user fees violate the constitutional constraints of due process of law, equal protection and the taking of property without just compen- sation. KRA plans to provide benefits to Danville. Danville draws its water from Herrington Lake. KRA claims they will provide information and do studies of the quality of the water in Herrington Lake. The Natural Resources and Environmental Protection Cabinet, Division of Water, has already contracted with the U.S. Environmental Protec- tion Agency to study the water quality in Lake Herrington specifically with regard to phosphorus concentration. Taste and odor is not a problem for Danville. There is no algae problem and thus no need for a charcoal filtration system. KRA provides no benefit for Danville under any plan of study of water quality. KRA further claims they will provide services to dis- cover leaks in the water systems of Danville. Danville’s water line is already better than the subscribed limits that KRA finds acceptable. Further, Danville is already a mem- ber of the Kentucky Rural Water Association which pro- vides a service of water leak detection for no more charges than are presently paid by Danville. KRA also provides training and education. All of the above comes for the sum of $300.00 per year. KRA further claims they will provide information and instruction concerning a commercial//industrial retrofit au- dit program. This would be helpful if Danville had a water usage problem. Danville has no water usage problem and in fact, uses only 40% of capacity for water usage. KRA further indicates that they will provide tourism assistance for recreational use at Herrington Lake. Tour- ism in Frankfort already takes care of and addresses the recreational needs of Herrington Lake. KRA further indicates that they will provide continu- ing education concerning conservation of our precious re- source of water. Danville is already deeply involved in an extensive education program concerning conservation. 10a After examining all the benefits KRA claims they may provide Danville, the bottom line is Danville has already covered those areas and there is no resulting benefit from the money extracted pursuant to this user fee. Because no benefit is conferred upon Danville by the KRA then the fees charged are unconstitutional and in violation of due process of law and equal protection by taking property without just compensation. Not dispositive of the issue, but as interesting aside, KRS 151.700 - 151.730 has been amended and the Com- monwealth of Kentucky is no longer required to acquire ownership of the locks and dams on the Kentucky River as a prerequisite to the functioning of the Kentucky River Authority. Of great concern to this Court and greater concern to the legal community as a whole, is the amendment of stat- utes through the budget bill by the legislature. Statutes limiting the ability of the legislature to amend Kentucky Revised Statutes in the budget bill have now been repealed. See the old KRS 446.085 (repealed effective July 15, 1994) and the old KRS 48.310 (amended in 1990). The Kentucky Supreme Court has affirmed the ability of the legislature to amend statutes in the budget bill in Commonwealth ex rel Armstrong v. Collins, Ky., 709 S.W.2d 437 (1986). The problem created by this process is the budget bill is not published and disseminated to the practicing bar as a whole. Further, there are no notations explaining such danger in by the budget bill other than a notation under the affected section of the statute indicating it was ad- dressed in that budget bill. Because attorneys have no ready access to the budget bill this seems to set a danger- ous precedent of changing the law without sufficient notifi- cation, or education of those charged to interpret this for the public as a whole. It seems in these days of distrust of systems by the public, our legislature and our court sys- tem permitting such a hidden methodology for the amend- ment and change of the laws of the Commonwealth of Ken- tucky may contribute to and justify such cynicism. The detriments of this system seem to outweigh any benefits. — 4 lla WHEREFORE, IT IS HEREBY ORDERED the City of Danville receives no benefit from the fees collected by the Kentucky River Authority and consequently, the Kentucky River Authority is constitutionally precluded from collect- ing such fees from the City of Danville. : Given under my hand this 9th day of December, 1994. /S/ Stephen M. Shewmaker Stephen M. Shewmaker Circuit Judge iil [EXCERPTS FROM KENTUCKY RIVER AUTHORITY] 151.700 Declaration of Policy (1) The general assembly declares that based upon an implied contract between the Commonwealth and the U.S. government through the secretary of the U.S. army and his predecessors, the validity of which is evidenced by over one hundred (100) years of performance by the federal gov- ernment, it is the responsibility of the U.S. Army Corps of Engineers, and the U. S. Congress to operate and main- tain the locks and dams on the Kentucky River and there- fore urges the congress and the corps to provide the funds necessary to properly maintain the locks and dams, the condition of which the general assembly finds is deterio- rating. 12a (2) The general assembly recognizes the historic im- portance of the Kentucky River locks and dams in provid- ing a source of clean water supply for several hundred thousand citizens of the Commonwealth. Therefore, if the congress and the corps fail to fulfill their responsibility for the Kentucky River locks and dams as stated in subsection (1) of this section and the Commonwealth thereby must assume ownership of the locks and dams, it shall be the public policy of the Commonwealth to protect the health and welfare of the citizens dependent upon this system of locks and dams for their source of clean water, and to that end, the Commonwealth shall provide for the proper main- tenance of the Kentucky River locks and dams through the Kentucky River Authority. It shall be the public policy of the Commonwealth that should the U.S. Army Corps of Engineers and the United States Congress fail to fulfill ; their responsibility to maintain and operate the Kentucky ‘ River locks and dams, and should all efforts on the part of the Commonwealth fail to force the corps and congress to fulfill their responsibility, then the Commonwealth shall assume ownership of all U.S. Army Corps of Engineers property, both real and personal, on or adjacent to the Kentucky River after ninety (90) days from the date on which the corps obtains final authority to dispose of such 13a property. During that ninety (90) day period, the Com- monwealth shall publish legal notice of its intention to assume ownership of the property. HISTORY: 1988 c 295, § 1, eff. 7-:15-88 1986 c 383, § 1 151.710 Kentucky River Authority (1) The Governor shall appoint members to the Ken- tucky River Authority, created to carry out the essential public purpose of protecting the health and welfare of the people of the Commonwealth as declared in KRS 151.700. (2) The Governor shall appoint the secretary of the Natural Resources and Environmental Protection Cabinet and ten (10) other persons as the members of the author- ity. The secretary may designate an alternate. Of the ten (10) persons, one (1) shall be a registered engineer, on (1) an expert in water quality, one (1) a mayor, and one (1) a county judge/executive. The mayor and the county judge/ executive shall be officers from counties which obtain the major portion of their water supply from the Kentucky River. Five (5) members shall reside in a county adjacent to the main stem of the Kentucky River, one (1) of the five (5) members residing in counties adjacent to locks and dams one (1) through four (4); and one (1) member shall reside in a county adjacent to either the North Fork, Middle Fork, or South Fork of the Kentucky River. (3) Of the ten (10) members first appointed, two (2) shall continue in office for terms of one (1) year, two (2) for terms of two (2) years, three (3) for terms of three (3) years, and three (3) for terms of four (4) years, as the Governor designates, At the expiration of the original terms and for all succeeding terms, the Governor shall appoint a successor to the authority for a term of four (4) years in each case. Members may be reappointed. A vacancy in an unexpired term shal] be filled for the unexpired portion of the term in the same manner as the original appointment to that term. l4a (4) Each member shall receive as compensation one hundred dollars ($100) per day for attending a meeting of the authority. (5) Any member who misses three (3) consecutive meetings of the authority shall be deemed to have vacated the office. The authority shall declare the office vacant and the office shall be filled as provided by subsections (2) and (3) of this section. (6) The authority annually shall elect one (1) of its members as chairman. A quorum for the transaction of business shall be six (6) members, and a majority of the members present at a meeting may take action on any matter legally before the authority. (7) Members shall be paid their necessary travel ex- penses incurred in attending meetings and in the perfor- mance of their official duties, in addition to the per diem compensation of one hundred dollars ($100). (8) The authority shall meet at least quarterly, and may meet upon the call of the chairman. (9) The chairman shall be paid necessary travel ex- penses and a one hundred dollar ($100) per diem compen- sation for conducting official business of the authority. (10) The authority shall be attached for administrative purposes to the Natural Resources and Environmental Pro- tection Cabinet, and the cabinet shall provide the neces- sary personnel to provide administrative services for the authority. (11) The necessary travel expenses and per diem com- pensation of the members of the authority in attending meetings and in the performance of their official duties shall be paid by the authority. (12) The authority shall promulgate administrative regulations necessary to carry out its duties, and shall report annually to the Governor and the Legislative Re- search Commission. HISTORY: 1996 c 229, § 1, eff. 7-15-96 1990 c 500, § 1, eff. 7-13-90; 1986 c 383, § 2 og, —_—___ 15a 151.720 Powers of authority The Kentucky River Authority is authorized and em- powered to: (1) Construct, reconstruct, provide for the major main- tenance, or repair the locks and dams on _ the Kentucky River and all real and personal property pertaining thereto, as well as maintain the channel; (2) Acquire by purchase, exercise of the rights of emi- nent domain, grant, gift, devise, or otherwise, the fee simple title to or any acceptable lesser interest in any real or personal property and by lease or other conveyance, con- tract for the right to use and occupy any real of personal property selected in the discretion of the authority as con- stituting necessary, desirable, or acceptable sites to fulfill its statutory authority and power; (3) Lease its real or personal property to other state agencies, political subdivisions of the Commonwealth, cor- porations, partnerships, associations, foundations, or per- sons as the authority deems necessary to carry out the purposes of this section; (4) Sell or otherwise dispose ofits real or personal property in accordance with KRS 56.463 and 45A.045; (5) Collect water use fees from all facilities using wa- ter from the Kentucky River basin, except those facilities using water primarily for agricultural purposes. Facilities charged such a fee may pass on all or any part of the fee; (6) Issue revenue bonds in accordance with KRS 151.730; (7) Employ persons to carry out the authority’s re- sponsibilities with revenue from the water use fees, in- cluding an executive defector who shall serve at the plea- sure of the authority; (8) Contract for services with other state agencies, po- litical subdivisions of the Commonwealth, corporations, partnerships, associations, foundations, or persons to per- form its duties; 16a (9) Promulgate administrative regulations providing for clean water, which shall not be less stringent than the state and federal regulations for clean water; (10) Exercise all other powers necessary to perform its public purpose to implement and enforce the plans devel- oped by the authority pursuant to this section, and to en- force administrative regulations promulgated by the au- thority. The long-range water resource plan and drought response plan shall be implemented for the basin upon the direction of the authority; (11) Develop comprehensive plans for the management of the Kentucky River within the basin, including a long- range water resource plan and a drought response plan. Each county within the basin shall develop a long-range water resource plan and submit it to the authority. The authority shall develop a unified long-range water resource plan for the basin. ‘The authority shall conduct a public hearing on the plan, and submit its final unified plan for the basin to the Natural Resources and Environmental Protection Cabinet. The cabinet shall act upon the plan within six (6) months and shall approve the plan, unless it objects for good reason shown. A drought response plan for the basin shall be developed by the authority, and this plan shall be implemented for the basin upon the direction of the authority; (12) Develop and promote a plan for the protection and use of groundwater within the basin. Administrative regu- lations may be promulgated implementing the plan, and these regulations shall not be less stringent than state and federal regulations protecting groundwater; (13) Develop recreational areas within the basin. These recreational areas may be operated and funded by the state Department of Parks, Kentucky State Nature Preserves Commission, or other governmental entity as specifically authorized or permitted within the biennial executive bud- get. There is hereby created the Kentucky River Park to be located as determined by the authority; ¥) 4 y 17a (14) Utilize funds provided for recreational purposes the biennial executive budget for major or minor mainte- nance if the authority certifies to the secretary of the Fi- nance and Administration Cabinet that a significant need exists for the repairs and no other funds are available for the maintenance; (15) Coordinate the Kentucky River basin water re- sources activities among state agencies; (16) Report quarterly on all of its activities to the legis- lative Committee on Appropriations and Revenue; (17) Receive reports from state agencies on litigation concerning the Kentucky River, which agencies are hereby directed to report to the authority; (18) Credit to the authority any income derived from the interest earned on the investment of the water use fees collected, which shall be available for the authority's ex- penditure; and (19) Accomplish the watershed management mission of the authority, which is to fulfill the provisions of this sec- tion for the Kentucky River basin, the boundary of which shall be defined by a hydrologic map promulgated in an administrative regulation. HISTORY: 1996 c 229, § 2, eff. 7-15-96 1992 c 453, § 1, eff. 7-14-92; 1990 c 500, § 2 c 496, § 44 31986 c 383, § 3 151.723 Water use fees (1) The rate of the water use fees ccllected by the authority shall be set for each year of the biennium based upon a total amount of funds necessary to carry out only those functions, projects, and expenses authorized by the General Assembly in the authority’s biennial budget. (2) At the time the authority submits its budget to the Governor's Office of Policy and Management, it shall certify to the General Assembly and the secretary of the Revenue Cabinet the total amount of water use reporied ; 18a for the preceding biennium by users subject to the water use fees. At least thirty (30) days prior to the effective date of the authority’s budget, the secretary of the Revenue Cabinet shall establish a rate for each water use fee based upon an amount of water use projected for each year of the biennium from the amount reported, calculated to gener- ate the amount of funds necessary to carry out the func- tions, projects, and expenses which have been authorized by the General Assembly. The rate shall be an amount for each one thousand (1,000) gallons of water use and shall - be effective for at least one (1) year. (3) The authority shall define by administrative regu- lation those uses of the Kentucky River or the waters of the Kentucky River basin subject to a water use fee. Wa- ter use fees shall not apply to facilities using water for agricultural purposes. The authority shall collect the fees on a quarterly basis and pay the collected fees into the State Treasury to the credit of a restricted rind for use by the authority. HISTORY: 1996 c 229, §4, eff. 7-15-96 151.725 Authority’s duty to bring action for penalties or injunctive relief; venue (1) The authority shall bring an action for the recov- ery of penalties provided for in KRS 151.990, the payment of fees provided for in KRS 151.720, or for a restraining order, or a temporary or permanent injunction for the pre- vention or correction of a condition constituting or threat- ening to constitute a violation of the administrative regu- lations promulgated by the authority, the long-range water resource plan, or a drought response plan developed by the authority. (2) All actions for penalties and injunctive relief for violations of the administrative regulations promulgated by the authority, the long-range water resource plan, or a drought response plan developed by the authority shall be brought by the authority in the: aetna 19a (a) Circuit Court having jurisdiction of the defen- dant; (b) Circuit Court of the county in which the con- dition constituting or threatening to constitute a vio- lation of the administrative regulations of the author- ity, the long-range water resource plan or a drought response plan developed by the authority is occurring; } or (c) In the Franklin Circuit Court HISTORY: 1996 c 229, § 6, eff. 7-15-96 1992 c 453, § 2, eff. 7-14-92 151.730 Revenue bonds (1) The authority is hereby authorized to provide, at one (1) time or from time to time, for the issuance of its revenue bonds for the purpose of paying all or any part of the cost of any one (1) or more projects undertaken pursu- ant to KRS 151.720. The principal of and the interest on such bends shall in each instance be payable solely from a special fund provided for the payment, with revenues de- rived from water use fees collected from all facilities using water from the Kentucky River basin, except those facili- ties using water primarily for agricultural purposes, pledged to be set aside and deposited in such special funds. The bonds of any issue may be, in one (1) or more series and any one (1) or more such series may enjoy equal or subor- dinate status with respect to the pledge of funds from which they are payable, shall be dated, suall bear interest, shall mature at such time or times not exceeding the thirtieth anniversary of their respective dates all as may be pro- vided by the authority, and may be made redeemable be- fore maturity, at the option of the authority, at such price or prices and under such terms and conditions as may be fixed by the authority prior to the issuance of the bonds. The authority shall determine the form of bonds including any interest coupons to be attached thereto, and shall fix the denomination or denominations of the bonds and the place or places for payment of principal and interest, which 20a may be at any bank or trust company within or without the Commonwealth. The bonds shall be signed by the facsimile signature of the chairman of the authority, and the seal of the authority or a facsimile thereof shall be affixed thereto and attested by the manual signature of the treasurer of the authority, and any coupons attached thereto shall bear the facsimile signature of the chairman of the authority. In case any officer whose signature or a facsimile of whose signature shall appear on any bonds or coupons shall cease to be such officer before the delivery of such bonds, such signature or such facsimile shall never- theless be valid and sufficient for all purposes the same as if he had remained in office until such delivery. All bonds issued under the provisions of this section shall have and are hereby declared to have all qualities and incidents of negotiable instruments under the uniform commercial code of the Commonwealth. The bonds may be issued in coupon or in registered form, or both, as the authority may deter- mine, and.provision may be made for the registration of any coupon bonds as to principal alone and also as to both principal and interest, and for the reconversion into cou- pon bonds of any bonds registered as to both principal and interest. The authority may sell such bonds at public sale, and for such price as it may determine will best effect the purposes of KRS 151.720. (2) The proceeds of the bonds of each issue shall be used solely for the payment of the cost of the project or projects for which such bonds shall have been issued, and shall be disbursed in such a manner and under such re- strictions, if any, as the authority may provide in the pro- ceedings authorizing the issuance of such bonds or in the trust indenture securing the same. If the proceeds of the bonds of any issue, by error of estimates or otherwise, shall be less than such cost, additional bonds may in like manner be issued to provide the amount of such deficit, and, unless otherwise provide in the proceedings authoriz- ing the issuance of such bonds or in the trust indenture securing the same, shall be deemed to be of the same issue and shall be entitled to payment from the same fund with- 2la out preference or priority of the bonds first issued. If the proceeds of the bonds of any issue shall exceed such cost, the surplus shall be deposited to the credit of the sinking fund or funds for such bonds or any account or accounts therein as the authority shall have provided in the pro- ceedings or trust indenture authorizing and securing such bonds. (3) Prior to the preparation of definitive bonds the authority may, under like restrictions, issue interim re- ceipts or temporary bonds, with or without coupons, ex- changeable for definitive bonds when such bonds shall have been executed and are available for delivery. The author- ity may also provide for the replacement of any bonds which shall become mutilated or shall be destroyed or lost. (4) The authority may issue revenue bond anticipa- tion notes. (5) Any holder of bonds issued under the provisions of this section or any of the coupons appertaining thereto, and the trustee under any trust indenture, except to the extent of the rights given in this section, may be restricted by such trust indenture or proceedings, may, either at law or in equity, by suit action, mandamus, or other proceed- ings, protect and enforce any and all rights under the laws of the Commonwealth or granted under this section or under such trust indenture or the proceedings authorizing the issuance of such bonds, and may enforce and compel the performance of all duties required by this section or by such trust indenture or proceedings to be performed by the authority or by any officer or employee thereof (6) Revenue bonds issued under the provisions of this section shall not be a debt, liability, or obligation of the Commonwealth or any political subdivision thereof and shall not be a pledge of the faith and credit of the Com- monwealth or any political subdivision thereof (7) Revenue bonds issued by the authority shall be subject to the jurisdiction and approval of the State Prop- erty and Buildings Commission and the Capital Projects and Bond Oversight Committee and shall be subject to 22a review by the Office of Financial Management and Eco- nomic Analysis. (8) The authority shall not be required to pay any taxes and assessments to the Commonwealth or any county, municipality, or other governmental subdivision of the Com- monwealth upon any of its property or upon its obligations or other evidences of indebtedness pursuant to the provi- sions of this section, or upon any moneys, funds, revenues, or other income held or received by the authority and the bonds or notes of the authority and the income therefrom shall at all times be exempt from taxation, except for death and gift taxes and taxes of transfers. (9) Contractual expenses to construct, reconstruct, pro- vide for the major maintenance, or repair the Kentucky River locks and dams, or to maintain the channel, or to acquire real or personal property pertaining thereto, or to construct, reconstruct, maintain repair such property, shall be paid from the proceeds of the revenue bonds. Expenses for administrative services and necessary travel expenses and per diem compensation of authority members, shall not be paid from the proceeds of the revenue bonds. Nor shall the cabinet’s cost of operating the locks be paid from the proceeds of the revenue bonds. HISTORY:1996 c 229, §3, eff. 7-15-96 1986 c 383, 84, eff. 7-15-86 23a 151.990 Penalties (1) Any person, city, county, or other governmental sub- (2) division who violates KRS 151.100 to 151.460 shall be liable to a civil penally of not more than $1,000 for said violation and in addition may be enjoined from continuing said violation. Each day upon which such violation occurs or continues shall constitute a sepa- rate offense. Any person who violates any determination, permit, administrative regulation, order, long-range water re- source plan, or drought response plan of the Kentucky River Authority shall be liable for a civil penalty not to exceed the sum of one hundred dollars ($100) for each day during which the violation continues, and, in addition, may be concurrently enjoined from any vio- lations as provided in KRS 151.725. HISTORY: 1992 c 458, § 4, eff. 7-14-92 1966 c 23, § 38 24a CHAPTER I KENTUCKY RIVER AUTHORITY 010. Definitions. 020. Administrative procedures of the authority. 030. Management of surface water and groundwater in the Kentucky River Basin. 040. Tier 1 water use fees. 050. Tier 11 water use fees. 420 KAR 1:010. Definitions. RELATES TO: KRS 151.100 to 151.600, 151.700 to 151.730,151.990,223.400 to 223.460,224.70,224.73 STATUTORY AUTHORITY: KRS 151.710,151.720,151.725, 151.730 NECESSITY AND FUNCTION: KRS 151.700 through 151.730 authorize the Kentucky River Authority to man- age the surface water and groundwater of the Kentucky River basin. The authority has the power and duty to develop and to implement programs relating to the locks and dams on the Kentucky River; to acquire, to sell and to lease property; to develop recreational areas; to issue rev- enue bonds; to assess fees for water use; to contract for services; to adopt administrative regulations protecting wa- ter in the Kentucky River basin to develop and to imple- ment comprehensive plans for protecting the water of the Kentucky River basin; and to collaberate with the Natural Resources and Environmental Protection Cabinet and other state agencies in coordinating Kentucky River basin water resource and water quality activities. This administrative regulation establishes definitions pertaining to those pow- ers and duties. Section 1. Definitions. (1): Administrative services means clerical assistance provided by the cabinet in accor- dance with KRS 151.710(10), including secretarial and book- keeping assistance. (2) “Annual report” means the report the authority submits annually to the Governor and to the Legislative Research Commission pursuant to KRS 151.710(12). 25a (3) “Best management practices” or “BMPs” means those practices which are effective and practical structural or nonstructural methods which prevent or reduce the move- ment of pollutants from the land to surface water or ground- water, or which otherwise protect surface water or ground- water from potential adverse effects of land use activities such as agricultural or silvicultural activities, stormwater run-off, spills or leaks, and land application or land dis- posal of waste. (4) “Cabinet” means the Natural Resources and Envi- ronmental Protection Cabinet created pursuant to KRS 224.10-010. (5) “County long-range water resource plan” means the county long-range water resource plan submitted by a county for the authority’s review pursuant to KRS 151.720(9) and 420 KAR 1:030. (6) “Discharge” or “discharge of a pollutant” means any addition of any pollutant or combination of pollutants to surface water or groundwater of the Kentucky River basin from any point source’ This includes additions of pollutants into waters of the Kentucky River basin from surface run-off which is collected or channeled by man; discharges through pipes, sewers or other conveyances whether publicly or privately owned; and discharges through pipes, sewers, or other conveyances leading into privately or publicly owned treatment works. (7) “Disposal” means the discharge, deposit, injection, dumping, spilling, leaking, or placing of any waste into or on any land or water so that the waste or any waste con- stituent may enter the environment or be emitted into the air or discharged into water. (8) “Diversion” means a nonconsumptive redirecton of all or part of the flow of a stream. (9) “Drought response plan” means the drought re- sponse plan for the Kentucky River basin developed by the authority pursuant to KRS 151.720(9) and 420 KAR 1:030. (10) “Effluent limitations” means any restrictions or pro- hibitions established by 401 KAR Chapter 5. 26a (11) “Fee” means a water use fee for protection of the surface water and groundwater of the Kentucky River ba- sin, paid to the authority by persons who use that water. (12) “Floodplain” means the normally dry area or wet- land adjoining a stream or lake that is inundated during a flood event. (13) “Floodway” means that area of a stream or water- course necessary to carry off flood water as determined by the cabinet or by the authority. (14) “Gross withdrawal” means the amount of water withdrawn. (15) “Groundwater” or “ground water” means all water which fills the natural openings under the earth’s surface, inducing all underground watercourses, artesian basins, reservoirs, lakes, and other bodies of water below the earth’s surface. (16) “Kentucky River Authority” or “authority” means the Kentucky River Authority created pursuant to KRS 151.710. (17) “Kentucky River basin” or “basin” means all geo- graphic areas of the Commonwealth contained within the watershed of the Kentucky River and its tributaries, in- cluding surface water and groundwater, and delineated as hydrologic unit code 0510020 in the document entitled “Hy- drologic Unit Map- 1974, State of Kentucky”, published in 1974 and reprinted in 1988, and incorporated by reference in Section 2 of this edministrative regulation. (18) “Leakage” or “leak” means the amount of water lost due to leaks in a water supply or water distribution system after it has been withdrawn by the water supplier or purchased by the water supply distributor. (19) “Long-range water resource plan” means the wa- ter supply plan described in 401 KAR 4:220, with the addi- tions required by 420 KAR 1:030. (20) “Mainstream Kentucky River” means the Kentucky River, including Pool 14, which extends from the North Fork of the Kentucky River at River Mile 261.6 above the 27a confluence of Walkers Creek the Middle Fork of the Ken- tucky River at River Mile 6.0 below the confluence of Coal Branch, and the South Fork of the Kentucky River at River Mile 4.0 below the confluence of Paw Paw Creek, to River Mile 0 at the confluence with the Ohio River at Carrollton. (21) “Map of poténtial sources of water pollution” means the map of potential sources of contamination described in 401 KAR 4:220, Section 6 with the addition required by 420 KAR 1-030. (22) “Net Withdrawal” means the difference between the amount of water withdrawn for noncontact cooling wa- ter and the amount of that water discharged. (23) “Noncontact cooling water” means surface water or groundwater withdrawn from the Kentucky River basin for the purpose of reducing the temperature of a product or equipment used in making a product, if the following con- ditions exist: (a) The noncontact cooling water does not come into contact with the product; (b) The noncontact cooling water is discharged in accordance with a Kentucky Pollutant Discharge Elimi- nation System (KPDES) permit that identifies the wa- ter as noncontact or once-through cooling water; (c) The noncontact cooling water is discharged in accordance with water quality standards;, (d) The noncontact cooling water is discharged within 300 linear feet of the withdrawal point or into the same pool of water; and (e) Net withdrawal is no greater than ten (10) percent. (24) “Nonpoint source pollution” means pollution caused by diffuse sources, including land run-off, atmospheric depo- sition, or percolaton through soils and rocks. (25) “Person” means an individual, trust firm, joint stock company, corporation (including a government corporation), partnership, association, federal agency, state agency, city, commission, political subdivision of the Commonwealth, interstate body, estate, or other entity. 28a a (26) “Point source” means any discernible, confined, and discrete conveyance, including but not limited to any pipe, ditch, channel, tunnel, conduit, well, discrete fissure, con- tainer, rolling stock, concentrated animal feeding opera- tion, vessel, or other floating craft, from which pollutants are or may be discharged. This term does not include return flows from irrigated agriculture. (27) “Pollutant” means dredged spoil, solid waste, haz- ardous waste, special waste, incinerator residue, sewage, sewage sludge, garbage, chemical materials, biological ma- terials, radioactive materials, heat, wrecked or discarded equipment, rock, sand, soil, industrial waste, munic.pal waste, silvicultural waste, agricultural waste, and any sub- stance resulting from the development, processing, or re- covery of any natural resource which may be discharged into water. (28) “Project” means a project authorized by KRS 151.700 to 151.730 and approved by the authority, includ- ing staff and overhead. (29) “Quarterly report” means the report the author- ity submits quarterly to the General Assembly’s Commit- tee on Appropriations and Revenue pursuant to KRS 151.720(14). (30) “Revenue bond” or “bond” means a revenue bond described by KRS 151.720(5) and KRS 151.730. | (31) “Semipublic water supplier” means any water sup- ' ply system that serves more than three (3) families, but is not a water supplier or distributor. (32) “Seven (7) day, ten (10) year low flow” or “7Q10” means that minimum average flow which occurs for seven (7) consecutive days with a recurrence interval of ten (10) years. (33) “Standard” or “water quality standard” means an administrative regulation adopted by the authority, or by the cabinet if the authority fails to adopt it, establishing the use to be made of a surface water or groundwater and the water quality criteria necessary to maintain and pro- tect that use. a ek a A aR i ca 29a (34) “Stream” means a river, creek or channel, having well-defined banks, in which water flows for substantial periods of the year to drain a given area, or any lake or other body of water. (35) “Surface waters” means those above-ground wa- ters having well-defined banks and beds, either constantly or intermittently flowing; lakes and impounded waters; marshes and wetlands; and any subterranean waters flow- ing in well-defined channels and having a demonstrable hydrologic connection with the surface. (36) “Tier I fee” means a fee: (a) Funding watershed management projects of benefit to the entire watershed of the Kentucky River basin and funding the authority’s general expenses; (b) Set by the authority based on the authority's budget; and (c) Paid by all persons who use surface water or groundwater of the Kentucky River basin. (37) “Tier II fee” means a fee: (a) Funding any project of benefit to a certain part of the Kentucky River basin; (b) Set by the authority based on the authority's budget; and | (c) Paid by all persons who use surface water or groundwater of the Kentucky River basin and who derive a direct benefit from that project. (38) “Transfer” means an interbasin diversion of sur- face-waters or groundwaters to or from the Kentucky River basin. (39) “Unified long-range water resource plan” or “uni- fied plan” means the unified long-range water resource plan for the Kentucky River basin developed by the au- thority pursuant to KRS 151.720(g) and 420 KAR 1:030. (40) “Use” or “using”, if referring to the use of water in the Kentucky River basin described in KRS 151.720(5), means the withdrawal of surface water from the Kentucky River or its tributaries, the withdrawal of groundwater 30a within the Kentucky River basin, the point source discharge of pollutants to the Kentucky River or its tributaries, the point source discharge of pollutants to groundwater within the Kentucky River basin, the use of surface water from the Kentucky River or its tributaries for generation of hy- droelectric power, the diversion or transfer of waters in the Kentucky River basin, and the use of the Kentucky River or its tributaries for navigation or recreation. “Use” or “using” shall not apply to those facilities using water pri- marily for agricultural purposes. (41) “Water” means all rivers, streams, creeks, lakes, ponds, impounding reservoirs, springs, wells, marshes and wetlands, and a!l other bodies of surface or underground water, natural or artificial, situated wholly or partly within or bordering upon the Kentucky River basin. (42) “Water conservation” means methods and appli- cations of passive and active water savings and reuse de- vices, components and processes to reduce demand for wa- ter supply. (43) “Water pollution” means the alteration of the physical, thermal, chemical, biological, or radioactive prop- erties of water in such a manner, condition, or quantity that will be detrimental to the public health or welfare, to animal or aquatic life or marine life, to the use of such waters as present or future sources of public water supply or to the use of such waters for recreational, commercial, industrial, agricultural, or other legitimate purposes. (44) “Water resources map” means the water resources map described in 401 KAR 4:220, Section 6, and required by 420 KAR 1:030. (45) “Water shortage emergency” means the authority's declaration that a significant number of citizens in the emergency area are served by water suppliers that are experiencing deficits in the amount of water available for use. 3la (46) “Water shortage response plan” means the water shortage response plan described by 401 KAR 4:220, Sec- tion 6 and required by 420 KAR 1:030. (47) “Water shortage warning” means the authority's declaration that some water suppliers in the warning area are experiencing deficits in the amount of water available for use. (48) “Water shortage watch” means the authority's dec- laration that hydrologic conditions exist in the watch area that indicate the potential for deficits in the amount of water available for use by water suppliers. (49) “Water supplier” means any system that provides water to the public for human consumption, has at least fifteen (15) service connections or regularly serves an aver- age of at least twenty-five (25) individuals daily at least sixty (60) days of the year, and withdraws more than fifty (50) percent of the water it distributes. (50) “Water supply distributor” means any system that provides water to the public for human consumption, has at least fifteen (15) service connections or regularly serves an average of at least twenty-five (25) individuals daily at least sixty (60) days of the year, and depends on a water supplier to provide fifty (50) percent or more of the water it distributes. (51) “Water supply plan” means the final plan docu- ment approved by the cabinet pursuant to KRS 151.110 through 151.118 and 401 KAR 4:220. (52) “Water supply protection area” means the desig- nated watershed of a surface water supply source, or the designated recharge area of a groundwater supply source, or a designated wellhead protection area. (53) “Water supply source” means a particular site or classification of site where water is withcrawn. (54) “Watershed” means all the area from which all drainage passes a given point downstream. (55) “Wetlands” means land that has a predominance of hydric soils and that is inundated or saturated by sur- 32a face or groundwaters at a frequency and duration suffi- cient to support, and that under normal circumstance does support, a prevalence of vegetation typically adapted for life in saturated soil conditions. Wetlands generally in- clude swamps, marshes, bogs, floodplains and similar ar- eas. (56) “Withdraw” or “withdrawal of water” means the actual removal or taking of water from any surface waters or groundwaters of the Kentucky River basin. Section 2. Incorporation by Reference. The document entitled “Hydrologic Unit Map - 1974, State of Kentucky”, published in 1974 and reprinted in 1988, is hereby incor- porated by reference. It is available for public inspection and copying, subject to copyright law, at the office of the Kentucky River Authority, 107 Mero Street, Frankfort, Ken- tucky 40601, between the hours of 8 a.m. and 4:30 p.m., Mondays through Fridays, excluding siate holidays. (20 Ky.R.873; Am .1619; 1792; eff. 12-17-93.) 420 KAR 1:020. Administrative procedures of the au- thority. RELATES TO: KRS 151.100 to 151.600,151.700 to 151.730, 151.990, 223.400 to 223.460, 224.70, 224.73 STATUTORY AUTHORITY: KRS 151.710, 151.720. 151.725, 151.730 NECESSITY AND FUNCTION: KRS 151.700 through 151.730 authorize the Kentucky River Authorize to man- age the surface water and groundwater of the Kentucky River basin. The authority has the power and duty to develop and to implement programs relating to the locks and dams on the Kentucky River; to acquire, to sell and to lease property; to develop creational areas; to issue rev- enue bonds; to assess fees for water use; to contract for services; to adopt administrative regulations protecting wa- ters in the Kentucky River basin to develop and to imple- ment comprehensive plans for protecting the water of the 33a Kentucky River basin; and to collaborate with the Natural Resources and Environmental Protection Cabinet and other state agencies in coordinating Kentucky River basin water resource and water quality activities. This administrative regulation establishes administrative procedures employed by the authority in implementing those powers and duties. Section 1. Election of Vice-chairman. In addition to electing a chairman as provided by KRS 151.710(6), the authority shall elect one (1) of its members as vice-chair- man. The vice-chairman may act for the authority in the absence or unavailability of the chairman. Section 2. Meetings of the Authority. Meetings of the authority shall be conducted in accordance with the Ken- tucky Open Meetings Law, KRS 61.805 through 61.850. Section 3. Inspection of Public Records. (1) Public records of the authority shall be made available for public inspection in accordance with the Kentucky Open Records Act, KRS 61.870 through 61.884. (2) The authority shall make available to a public li- brary located in each county contained in whole or in part within the Kentucky River basin copies of the following documents: (a) The authority's quarterly and annual reports; (b) The authority’s draft and final unified long- range water resource plans; (c) The authority's draft and final drought re- sponse plans; (d) The authority's letter approving a county long- range water resource plan; (e) A county’s draft and final long-range water resource plans; and (f) The authority's administrative regulations. Section 4. Mailing List. The authority shall maintain a list of members of the public, including members of the media, to whom copies of the public notices described by this administrative regulation may be provided. Any per- 34a _ son may request to be placed upon or removed from the authority's mailing list. The authority may periodically revise its list to remove the names of persons who do not respond to the authority's request to update the mailing list. Section 5. Public Participation. (1) Scope and applica- bility. This section applies to the following activites: (a) The authority's development of a drought re- sponse plan; (b) The authority's development of a unified long- range water resource plan. (2) Public notice. (a) Before the authority prepares a draft drought response plan or a draft unified long-range water re- source plan, it shall notify the public that it is seeking public participation in the preparation of those drafts. : The authority shall notify the public by publishing a notice in the Lexington Herald-Leader and in a local newspaper serving each county located in whole or in part within the Kentucky River basin; and by mailing the notice to the county judge-executive of each county located in whole or In part within the Kentucky River basin. The notice shall schedule public meeting or a series of public meeting. (b) After the authority prepares a draft drought | response plan a draft unified long-range water resource | plan, it shall notify the public by publishing a notice In the Lexington Herald-Leader and in a local news- paper serving each county located in whole or in part within the Kentucky River basin; and by mailing the notice to the county judge-executive of each county located in whole or In part within the Kentucley River basin. The public notice shall comply with KRS 424.130, shall state that a draft drought response plan | or a draft unified long-range water resource plan has been prepared, that cOpies are available for inspection in accordance with the Kentucky Open Records Act, - Le ee a _ 35a that copies have been delivered to local libraries, and that the public shall have thirty (30) days from the date of newspaper publication to comment and to re- quest a public hearing. (3) Public meeting. The authority shall hold a public meeting or a series of public meetings prior to preparing a draft drought response plan or a draft unified long-range water resource plan. (4) Public comment period. There shall be thirty (30) days from the data set in the newspaper publication pur- suant to KRS 424.130 for the public to comment upon a draft drought response plan or a draft unified long-range water resource plan. (5) Public hearing. If requested within the first fif- teen (15) days of the thirty (30) day public comment period described in subsection (4) of this section, the authority shall conduct a public hearing before the close of the public comment period on the draft drought response plan or the draft unified long-range water resource plan. The public hearing shall be conducted in Frankfort unless the author- ity determines it Is more appropriate to hold the public hearing in another county located within the Kentucky River basin. Any person may appear at the public hearing and offer written or oral comments. The authority may limit oral testimony to five (5) minutes or less per speaker. (6) Consideration of public comments. The authority shall consider all oral and written comments received dur- ing the public comment period described in subsecton (4) of this section. The authority may prepare a written re- sponse to those oral and written comments, and may dis- seminate copies of the response to commentors and to oth- ers requesting copies. (7) Final action. The authority shall not take final action on a draft drought response plan or a draft unified long-range water supply plan until it has completed its consideration of all public comments. The authority shall publish notice that it has taken final action by publishing 36a a notice in the Lexington Herald-Leader and in a local newspaper serving each county located in whole or in part within the Kentucky River basin, and by mailing the no- tice to the county judge-executive of each county located in whole or in part within the Kentucky River basin. Section 6. Advisory Committees. (1) The authority may appoint advisory committees to assist and to advise the authority. (2) In appointing advisory committees, the authority shall consider appointing representatives of the public, rep- resentatives of federal, state, county or municipal govern- ments; representatives of water resource and water qual- ity agencies; representatives of water-using industries; representatives of water utilities, representatives of groups interested in water-related issues;and representatives of labor and argiculture. (3) Any person who wishes to serve on an advisory committee may contact the authority in writing and so request.The authority shall consider each request Section 7. Request for Authority Action.(1) Any person may request that the authority consider any matter whhin its jurisdiction.The request shall be made In writing to the chairman of the authority and shall be submitted at least thirty (30) days in advance of a meeting of the authority in order to be considered at that meeting. (2) The chairman shall notify the remaining members of the authority of the request for considerabon of the mat- ter prior to the next meeting of tho authority. (3) The person making the request for consideration of a matter may appear before the authority at the next meeting and discuss that matter. The authority may limit the time spent on that person’s presentation or in consid- eration of the matter. (4) The authority may take final action at that meet- ing, defer final, action to a later meeting, or decline to consider the matter.(20Ky.R.877;Am.1794;eff 12-17-93.) 37a 420 KAR 1:030.Management of surface water and groundwater in the Kentucky River basin. RELATES TO: KRS 151.100 to 151.600, 151.700 to 151.730, 151.990, 223.400 to 223.460, 224.70, 224.73 STATUTORY AUTHORITY: KRS 151.710, 151.720, 151.725, 151.730 NECESSITY AND FUNCTION: KRS 151.700 through 151.730 authorize the Kentucky River Authority to man- age the surface water and groundwater of the Kentucky River basin. The authority has the power and duty to develop and to implement programs relating to the locks and dams on the Kentucky River; to acquire. to sell and to lease property; to develop recreational areas; to issue rev- enue bonds; to assess fees for water use; to contract for services; to adopt administrative regulations protecting wa- -ter in the Kentucky River basin; to develop and to imple- ment comprehensive plans for protecting the water of the Kentucky River basin; and to collaborate with the Natural Resources and Environmental Protection Cabinet and other state agencies in coordinating Kentucky River basin water resource and water quality activities. This administrative regulation explains certain powers and duties and imposes certain requirements relating to management of surface water and groundwater in the Kentucky River basin. Section 1 .Scope and Applicability. (1) Purpose. It shall be the purpose of this administrative regulation to manage the surface water and groundwater of the Ken- tucky River basin. (2) Compatibility. The authority's administrative regu- lations set forth in this chapter shall be interpreted to be compatible with the statutes and administrative regula- tions administered by the cabinet. Section 2. Collection and Dissemination of Information. The authority may conduct research, collect and interpret data, assemble a data base, and disseminate reports on water management issues. Those water management is- sues include: 38a (1) The relationship of water to other natural re- sources; (2) Wastewater treatment technology; (3) Groundwater movement and other hydrogeologic conditions; (4) The relationship between water price and water demand; (5) Hydrologic conditions; (6) Groundwater and surface water quality; (7) Water use; (8) Water resource planning needs; (9) Conservation and development issues; (10) Allocation of water resources; (11) Management, including operation, maintenance and replacement of locks and dams; and (12) Social, economic, demographic and political issues affecting water resources. Section 3. County Long-range Water Resource Plans. (1) Scope. Each county located in whole or in part within the Kentucky River basin shall develop and submit to the authority a long-range water resource plan. (2) Contents of the plan. Each long-range water re- source plan shall include the following: (a) A water supply plan; (b) A water shortage response plan for each wa- ter supplier and water supply distributor in the county that uses water withdrawn from the Kentucky River basin or serves customers in the Kentucky River (c) A water resources map providing coverage for the portions of the county that lie within the Ken- tucky River basin; and (d) A map of all potential sources of water pollu- tion for the portions of the county that lie within the Kentucky River basin, including potential sources of water pollution affecting the water supply protection 39a area of a water supplier, if the authority is able to provide the funding necessary for creating the map. (3) Deadline for submitting the plan. Each county shall submit to the authority its long-range water resource plan within thirty (30) days after the county obtains the cabinets approval of its water supply plan. Section 4. Unified Long-range Water Resource Plan. The authority shall prepare a unified long-range water resource plan for the Kentucky River basin, which shall at a minimum address the following: (1) Physical, chemical and biological conditions exist- ing in the surface water and groundwater of the Kentucky River basin; (2) The construction, acquisition, operation and con- trol of projects and facilities for the storage and release of water; (3) The regulation of flows and allocation of supplies of surface water and groundwater within the basin; (4) Protection of public health; (5) Means of controlling surface water and groundwa- ter quality; (6) Economic development; (7) Improvement of fisheries; (8) Development of recreational opportunities and rec- reational areas; (9) Abatement of water pollution; (10) The design, construction, operation and mainte- nance of projects and facilities for floodplain protection and flood damage reduction; (11) Control of run-off, erosion, and agricultural and urban nonpoint source pollution; (12) Stormwater management, (13) Encouragement and promotion of so [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386013_0275%3A1. Public record. Not legal advice.