County rescinds Resolution 21-20
LAKE COUNTY — The Lake County Commissioners voted on March 27 to rescind Resolution of Intent 21-20 regarding the handling of fees related to the Flathead Indian Irrigation Project.
R21-20, passed by the commission in 2021, determined that Lake County would cease billing, collecting, and distributing any fees or assessments related to the Flathead Indian Irrigation Project (FIIP), something the county had been doing since the origination of the FIIP.
In the resolution, the commission addresses that Montana Code 85-7-2133, annotated in 2021, stated that “the county treasurer is the custodian of all funds belonging to the (irrigation) district … and the county treasurer shall pay out the funds upon the order of the board of commissioners of the irrigation district.”
However, the resolution then points out that the Montana Water Rights Protection Act, signed into law on the federal level in 2020, designates the Secretary of the Interior as “the entity with legal authority and responsibility to operate the Mission Valley Division of the Flathead Indian Irrigation Project, and … provides that the irrigation districts may enter into an agreement with the Tribes (CSKT) to operate and maintain the FIIP.”
As no irrigation or the Tribes had requested or made an agreement to operate the FIIP, R21-20 determined that it was “no longer necessary or appropriate” for Lake County to facilitate the billing and collection of irrigation assessments. So, beginning 2022, the Lake County Treasurer ceased the handling of fees and assessments related to the FIIP.
However, R21-20 was the subject of debate within the county. According to the Lake County commissioners, part of the confusion with the resolution has been whether state statutes or federal statutes apply to the FIIP, as Lake County is the only county in Montana that collects tax for a federal Indian irrigation project.
Some of this confusion stemmed from Montana Code 85-7-2136, also annotated in 2021, which stated the Department of Revenue should be the one to put the assessments on the irrigators tax statements. Previously the Lake County Treasurer had been fulfilling this duty.
Another event that’s brought the nearly two-year-old resolution back to the forefront was the introduction of Senate Bill 461 by Senator Salomon of Ronan. SB 461 states that “if a county treasurer for any reason fails to levy or collect a special tax or assessment … the board of county commissioners shall provide for and pay the amount due to the district out of the county treasury.”
With SB 461 working its way through the state legislature, the commissioners held a public hearing March 27 to discuss with irrigators whether or not to rescind R21-20. The commissioners were divided on the subject: Commissioners Decker argued to keep the resolution in place, reasoning that the FIIP is a federal project, and the Bureau of Indian Affairs (BIA) has a mechanism in place to collect irrigation fees, so there’s no reason for the county to become involved in the process. Commissioners Barron and Stanley, however, argued that the state statute that obligates the Department of Revenue to put irrigation fees on tax statements and the county to collect and distribute them is still in effect until the county is told otherwise by the Attorney General or a court of competent jurisdiction.
“I agree with (Decker) on his perspective on this,” Commissioner Barron stated. “But it comes out of my law enforcement background – I think we have to go by the state law that’s on the books until a court or the AG tells us otherwise.”
The commissioners had sent the Attorney General last fall asking for either an opinion or letter of advice on the subject but heard nothing in response. The commissioners sent a follow up letter prior to the public hearing again asking for a reply to their original inquiry, but once again received nothing.
“Two other irrigation districts also sent letters to (the Attorney General) trying to get him to weigh in, and none of us heard from him,” Commissioner Barron commented. “We sent two notices to him trying to get help on this.”
Attorney General Knudsen did not respond to the Valley Journal’s request for comment.
As the majority of the commission voted in favor of rescinding R21-20, the resolution has been withdrawn. The county had also recently met with the Department of Revenue and the commissioners said the department agreed that they would put irrigator assessments onto the tax statements for them.
Going forward, Decker explained that if the Department of Revenue does what they’re statutorily required to do, they will upload the irrigation fees onto the irrigators tax statements. They’ll then come to the Lake County treasurer, who will then mail out all the tax statements, and the irrigators will pay their irrigation fees when they pay their taxes. The county treasurer will then sort it all out and send the money to the irrigation districts, who then forward the money to the BIA.
“Up until about five years ago, that’s the process that happened. Then about five years ago there were some changes and they decided they weren’t going to do this anymore,” Commissioner Barron said. “That was a big part for me in (rescinding R21-20), making sure the state does what they were supposed to.”