NOTE: As provided in LFC policy, this report is intended for use by the standing finance committees of the legislature.  The Legislative Finance Committee does not assume responsibility for the accuracy of the information in this report when used in any other situation.

Only the most recent FIR version, excluding attachments, is available on the Intranet. Previously issued FIRs and attachments may be obtained from the LFC office in Suite 101 of the State Capitol Building North.

(Parenthesis ( ) Indicate Expenditure Decreases)

Duplicates HB 764

SOURCES OF INFORMATION

Office of the State Engineer

Department of Game and Fish

Administrative Office of the Courts

SUMMARY

Synopsis of Bill

SB 538 grants authority to counties and to the state to pursue damage claims on behalf of their residents against a United States agency if the agency lists, declares habitat or issues a management plan in connection with an endangered species and the action is based on insufficient scientific data or credible studies and the action results in economic damage to a resident.

Significant Issues

Protecting the citizens of the State from economic harm relating to recovery actions under the Endangered Species Act is a reasonable goal. However, SB 538 does not serve this purpose. The bill ignores the existing sovereign immunity protections of the United States. Moreover, the bill is ambiguous and vague as to how to measure or evaluate economic (or monetary) damage incurred by individuals resulting from federal action and fails to describe the standards to be used to determine if scientific data is not credible or is insufficient.

PERFORMANCE IMPLICATIONS

According to the State Engineer, litigation involving the Endangered Species Act is a major cornerstone of the State Engineer's program for interstate stream compliance. To do this, the State Engineer and the Interstate Stream Commission are challenging federal government implementation of that Act in litigation for failure to follow applicable statutes such as NEPA and are providing habitat alternatives that properly balance state, local and federal interests (such as off-stream refugia in aquariums) which serve to counter unilateral actions taken by the United States to drastically modify the historic operations of our river systems. Thus, the State's efforts are to prevent economic damage to the State and its residents. Providing a questionable cause of action for damages which have resulted after federal action has been taken is not inconsistent with the agency's current focus but does not support or promote the agency's desire to remove, or greatly lessen the State's exposure, or those of its residents, in the first instance.

FISCAL IMPLICATIONS

SB 538 contains no appropriations. However litigation generated under SB 538 would end up before the Supreme Court, and appropriations to pursue these actions would be substantial.

CONFLICT/DUPLICATION/COMPANIONSHIP/RELATIONSHIP

SB 538 conflicts with Federal sovereign immunity and the Federal Tort Claims Act, 28 U.S.C. § 2671 et seq. SB 538 conflicts with the United States Constitution, which gives the Federal government authority to regulate endangered species, Article I, Section 8, clause 3 ("Commerce Clause"). SB 538 conflicts with the Endangered Species Act of 1973 which detail the processes and requirements for Federal agency decision making regarding endangered species, 16 U.S.C. §§ 1531-1544.

TECHNICAL ISSUES

The district courts referred to in the bill will have to be federal district court.

OTHER SUBSTANTIVE ISSUES

According to the State Engineer, the State Engineer and the Interstate Stream Commission will continue to focus efforts on ensuring federal actions comply with federal law and that balanced alternatives are made available to oppose and respond to unilateral federal actions taken involving the Endangered Species Act. If the Legislature believes that federal agency decisions are unsupported by sufficient scientific evidence, the State could take steps to appeal or otherwise challenge such decisions under existing federal law.

PD/ar/njw