Case Name: Platte Valley Public Power and Irrigation District, appellant, v. County of Lincoln et al., appellees
Court: Nebraska Supreme Court
Jurisdiction: Nebraska
Decision Date: 1944-04-11
Citations: 144 Neb. 584
Docket Number: No. 31554
Parties: Platte Valley Public Power and Irrigation District, appellant, v. County of Lincoln et al., appellees.
Judges: Heard before Simmons, C. J., Paine, Carter, Messmore, Yeager, Chappell and Wenke, JJ.
Reporter: Nebraska Reports
Volume: 144
Pages: 584–600

Head Matter:
Platte Valley Public Power and Irrigation District, appellant, v. County of Lincoln et al., appellees.
14 N. W. 2d 202
Filed April 11, 1944.
No. 31554.
M. E. Crosby, M. M. Maupin, R. H. Beatty, R. O. Canaday, P. E. Boslaugh and August Wagner, for appellant.
James G. McIntosh, Walter R. Johnson, Attorney General, Carl H. Peterson and Edwin Vail, contra.
Neighbors & Danielson, Dana VanDusen, C. A. Sorensen, Samuel O. Clark, Jr., Seiuall Key, Paul Freund, Bernard Chertcoff, Edward First, Alan Johnstone, C. Russell Shetterly and Alvin J. Rockwell, amici curise.
Heard before Simmons, C. J., Paine, Carter, Messmore, Yeager, Chappell and Wenke, JJ.

Opinion:
Wenke, J.
The action was brought by the Platte Valley Public Power and Irrigation District, as plaintiff and appellant herein, in the district court for Lincoln county, against the county of Lincoln and the members of its board of county commissioners, its county clerk, its county treasurer, and its county sheriff, defendants and appellees herein, to enjoin the levy and enforcement of a distress warrant issued for the purpose of collecting personal taxes levied and assessed against its property and which taxes it claims were illegally and unlawfully assessed. From an order finding generally for the defendants and dismissing its petition, the plaintiff has appealed.
By stipulation of the parties, the appellant being referred to herein as the district and the appellees as the county, it is agreed that the district is a public corporation organized under and by virtue of Senate File No. 310, as now amended, being section 70-701 to section 70-719, inclusive, Comp. St. Supp. 1941; that the district is engaged in the operation, management and maintenance of a system of diversion works, inlet and outlet canals, reservoirs, powerhouse, transmission lines, and other necessary works and equipment for the diversion and storage of waters from the North Platte River and the release of said stored waters for the purpose of the generation of electric current and the transmission and sale thereof for commercial purposes, and the sale, transportation, and delivery of said released waters for irrigation purposes; that the district in the years 1939 and 1940 owned certain automobiles and trucks which were necessary and being used by it in the operation of its irrigation and power system, upon which the county, by its proper officers, levied and assessed state, county, city and school district taxes for the year 1939 in the total sum of $159.38 for which there was issued and delivered to the sheriff of said county a distress warrant upon which the sheriff made demand of the district for payment. The question presented by this appeal is- whether or not the property of the district is, under the Constitution and statutes of the state, subject to taxation.
Two questions are presented by this appeal. The first is whether or not the district's property is exempt from taxation under the provisions of section 2, art. VIII of the Constitution, as amended in 1920, which is in part as follows: "The property of the state and its governmental subdivisions shall be exempt from taxation" because the district is a governmental subdivision of the state; and second, whether the property owned by the district is held by it in trust for the state, the state, in fact, being the real owner- thereof.
The question of whether or not the district in the use of its property used the same in a private or public capacity, often referred to as in a proprietary or governmental use, is not material here. Under section 2, art. IX of the Constitution of 1875, which was in force until the adoption of the amendment thereto in 1920, the provision with reference to tax exemption was in part as follows: "The property of the state, counties, and municipal corporations, both real and personal shall be exempt from taxation ." Under this section in the case of City of Omaha v. Douglas County, 96 Neb. 865, 148 N. W. 938, we held ownership to be the sole basis of tax exemption. Quoting from the foregoing opinion : "Under the Constitution of this state rightful ownership of property by a municipal corporation such as the city of Omaha is all that is required or necessary to extend to such property complete exemption and: immunity from assessment and taxation, whether located within the city or without." Under the provisions of section 2, art. VIII of the Constitution, as amended in 1920, which reads in part as follows: "The property of the state and its governmental subdivisions shall be exempt from taxation" and section 77-202, Comp. St. 1929, which reads in part the same, oionership and not use of the property is the basis of exemption. While the logic of requiring public agencies engaging in functions, of a private nature for a public purpose to pay taxes the same as private persons and corporations engaged therein may appeal to many, however, until the people of the state change the Constitution to make the use thereof rather than the ownership the basis of exemption we must follow the language of the Constitution, for as stated in Elmen v. State Board of Equalization and Assessment, 120 Neb. 141, 231 N. W. 772: "The words and terms of a constitutional provision are to be interpreted and understood in their most natural and obvious meaning, unless the subject indicates or the text suggests that they have been used in a technical sense, and while the Constitution, as amended, must be construed as a whole, still where the words em ployed in a constitutional provision are plain, direct, and unambiguous, no interpretation is necessary to ascertain their meaning, for courts may not supply what they deem unwise omissions, or add words, which substantially add to or take from the Constitution as framed."
Cases are cited from this jurisdiction involving the question of tort liability, Henry v. City of Lincoln, 93 Neb. 331, 140 N. W. 664; Cook v. City of Beatrice, 114 Neb. 305, 207 N. W. 518; of immunity from suit, Crete Mills v. Nebraska State Board, of Agriculture, 132 Neb. 244, 271 N. W. 684; of liability for goods purchased, Sorensen v, Chimney Rock Public Power District, 138 Neb. 350, 293 N. W. 121; and the sale of appliances, Neison-Johnston & Doudna v. Metropolitan Utilities District, 137 Neb. 871, 291 N. W. 558, wherein the general rule is. announced as stated in Sorensen v. Chimney Rock Public Poiver District, supra: " that, when a state, by itself or through its corporate creations, embarks in an enterprise, especially when commercial in character or which is usually carried on by individuals or private companies, its sovereign character is ordinarily waived, and it is subject to like regulations with persons engaged in the same calling." These cases do not involve the question of tax exemption nor are they applicable thereto. This rule applies generally to municipalities as well as to public corporations created by the state to carry on functions for a public purpose and if applied to the matter of tax exemption would create a different basis for tax exemption than provided in our Constitution and as stated in Elmen v. State Board of Equalization and Assessment, supra: "Courts' may not supply what they deem unwise omissions, nor add words which substantially add to or take from the Constitution as framed." Nor do- these corporations thereby lose the character of their corporate entity, for as stated in 1 McQuillin, Municipal Corporations (Rev. 2d ed.) 314: "And though a municipal corporation, in supplying public utilities, as water, light, power and heat, and acting generally as a private corporation, and competing with private corporations and individuals for gain and profit, is regarded as a private corporation as relates to its liability for its torts and the torts of its servants, it never loses its character as a public corporation." And as stated in City of Pasadena v. Railroad Commission, 183 Cal. 526, 192 Pac. 25, 10 A. L. R. 1425: "It is not true that a city is a private corporation when carrying- on a municipally owned public utility. No decision so holds. All the decisions on the subject recognize the fact that a city does not change its character by engaging in such enterprises. The distinction does not go to its- character as a corporation, but to its liabilities- in exercising one class of its powers, as compared to its liabilities- in the exercise of its functions as a local governmental agency."
While many jurisdictions, including those cited by the county, base the tax exemption of property owned by the public upon its use as being either private or public, often referred to as proprietary or governmental, however, these decisions are generally based upon the provisions in their Constitutions, or statutes, or both, making this classifica? tion. But until the people of this state change the basis of tax exemption of property owned by the state or its governmental subdivisions from that of ownership to one of use, we are not authorized or empowered to do so.
A public purpose has for its objective the promotion of the public health, safety, morals, security, prosperity, contentment, and the general welfare of all the inhabitants. That the purpose- for which the district has been created, being for irrigation and the development of power for the generation of electricity and its transmission, distribution and sale, is for a public purpose has already been determined by this court and is without question. Neal v. Van-sickle, 72 Neb. 105, 100 N. W. 200; Elliott v. Wide, 112 Neb. 86, 200 N. W. 347; State ex rel. Loseke v. Fricke, 126 Neb. 736, 254 N. W. 409. As stated in State ex rel. Loseke v.. Fricke, swpra: "Generally speaking-, it relates to the preservation and utilization, for the public welfare, of one of the natural resources of the state, to wit, the waters of its streams and rivers. This is a broad subject and includes all practical uses and benefits of which such.waters are susceptible, not only for irrigation, but canals for transportation, dams for power and production of electricity for purposes of light and power." And with reference to irrigation it is held in Neal v. Vansickle, supra, that the promotion and regulation thereof is among the most important of governmental powers, duties and functions.
For many years the proper taxing authorities did not levy or attempt to levy taxes upon the property of irrigation districts or other property owned by the public for a public purpose, either private or public, and this was true when the Constitutional Convention met and the amendments were drafted and adopted in 1920. At this convention, and in the amendments submitted and adopted, the provisions of the Constitution of 1875 as to section 2, art. IX, which read in part as follows: "The property of the state, counties, and municipal corporations, both real and personal shall be exempt from taxation " were not limited, but, as shown by the records of the convention and from the language used, were broadened to read,-section 2, art. VIII of the Constitution, as amended in 1920: "The property of the state and its governmental subdivisions shall be exempt from taxation." (Italics ours.) Therefore, in construing this section of the Constitution we should not overlook the following rules as announced in Laub v. Furnas County, 104 Neb. 402, 177 N. W. 749: "Long-continued practical construction of a statute by the officers charged by law with its enforcement is entitled to considerable weight in interpreting that law." And in Elmen v. State Board of Equalization and Assessment, supra: "Legislative construction of a constitutional provision, although not necessarily conclusive upon the judicial department, is entitled to great weight when deliberately given, and especially when adhered to consistently for a considerable period of time, and this is particularly true when an identical construction has also been placed thereon for a like period of time by the highest officers of the executive department of the government and by the administrative officers who may be affected thereby."
We have held with reference to irrigation districts that, "Irrigation districts organized under our laws are public, rather than municipal corporations, and their officers are public agents of the state. 'they are but mere agencies of the state in local government, without any powers except such as the legislature may confer upon them, and aré at all times subject to a revocation of such power, Board of Directors of Alfalfa Irrigation District v. Collins, 46 Neb. 411, 64 N. W. 1086. And in Lincoln & Dawson County Irrigation District v. McNeal, 60 Neb. 613, 83 N. W. 847, we held: "The defendant is solely a creature of statute, organized for a public purpose, to wit, to furnish water for irrigation purposes, to be usefully and beneficially applied to the lands within the district. It is, as is held in the case of Board of Directors v. Collins, 46 Neb. 411, a public- rather than a municipal corporation, and its agents are public agents of the state." And as stated in Elliott v. Calamus, Irrigation District, 120 Neb. 714, 235 N. W. 95: "An irrigation district is a public corporation and the powers of its officers and directors are limited by the terms of the statute under which the district was created." We can see no difference between these irrigation districts and the appellant power and irrigation district and what has been said in regard to the irrigation districts is true of the appellant power and irrigation district.
In a similar situation in the case of Lennox v. Housing Authority of City of Omaha, 137 Neb. 582, 290 N. W. 451, wherein the Housing Authority of the City of Omaha, created by an ordinance of the city but which authority was separate from the city and whose functions were for a public purpose, we held: "Public funds of the city may, with legislative sanction, be used to aid in the establishment of a housing authority, it being a governmental subdivision organized- for a public purpose." And further: "We are obliged to hold that a housing authority, created and operated under the legislation before us, is a governmental subdivision within the purview of the Constitution, and consequently its property and bonds are legally exempted from taxation." (Italics ours.)
From the reasoning of these cases it must follow that a public corporation, authorized by the legislature and organized pursuant thereto to carry out functions that have been determined to be for a public purpose and the general welfare of the people, is an arm or branch of the government for this purpose and under the plenary control of the legislature and therefore a governmental subdivision of the state within the terms of section 2, art. VIII of the Constitution, as amended in 1920. However, there is a particular reason why the appellant district is a governmental subdivision. The state of Nebraska is primarily agricultural and much of its lands can be benefited by irrigation and its principal source of power is the water of its natural streams. The framers of our Constitution, in order* to- leave no question or doubt that the use of the water of our natural streams for the purpose of irrigation and the development of power was for a public purpose and a matter that affected the general welfare of the people of the state, provided in section 5, art. XV of the Constitution: "The use of the water of every natural stream within the State of Nebraska is hereby dedicated to the people of the state for beneficial purposes, subject to the provisions of the following section." And in section 4, art. XV: "The necessity of water for domestic use and for irrigation purposes in the State of Nebraska is hereby declared to be a natural want." And in section 7, art. XV: "The use of the waters of the state for power purposes shall be deemed a public use and shall never be alienated, but may be leased or otherwise developed as by law prescribed." (Italics ours.)
When the state*, through its legislature, provides by statutory enactment the manner in which districts, such as the appellant, may be organized and operated for the purpose of using the waters of our natural streams for irrigation and the development of power for public use and such district is formed and part of the state's waters dedicated to its use for such public purposes, then the district is in fact a governmental subdivision under our Constitution. Therefore, all the district's property, both real and personal, is exempt from taxation.
In view of the foregoing it is not necessary to determine whether the property owned by the district is held 'by it in trust for the state.
For the reasons stated, the judgment of the lower court is reversed with directions to enter judgment for the district permanently enjoining the county and all of its officers from enforcing the distress warrant.
Reversed.