April, 2023
Lincoln — In advance of a May 4, 2023, public hearing, the Nebraska Environmental Trust is taking comments on its proposed Title 137 rules and regulations. I've followed the Trust closely for many years and previously been a plaintiff in successful litigation against illegal Trust procedures and actions. I will be filing the following comments.
The proposed NET Title 137 regulations are vague and confusing to potential applicants. Unfortunately, the ranking system invites gaming and will result in arbitrary and capricious decisions. The proposed regulations introduce new procedures, not based on statutory authority, which are almost certain to lead to increased conflicts of interest, politicization of the agency, and waste and abuse of taxpayer resources.It is not clear why the various changes are being proposed. Although the NET webpage makes reference to reports of the State Auditor and Department of Administrative Services, those reports are not linked for the public to review. An NET spokesperson recently suggested the changes were to eliminate duplication. An annotated version of the changes, identifying which provisions are being changed because they are duplicative, as opposed to those that introduce new content and procedures, would help the public understand and evaluate the new regulatory proposal. Without adequate explanation, the public may be led to believe that the proposals are an effort to reduce regulations when in reality they are making major changes.The new regulations should prescribe Open Meetings Act requirements, so that the public can know how members evaluate grant applications. Anonymity imbedded in the regulations must be removed from the process at all levels of award consideration, including subcommittees.The regulations should clearly separate the process for determining legal eligibility from evaluating merit, so that the two are not mixed improperly. Statutory legal eligibility standards are dichotomous while merit is a continuous variable. Combining the two without recognizing the difference is not statistically meaningful and can lead to ranking distortions and legal challenges.The regulations must not add new factors to the award process that go beyond statutory authority. A proposed new provision would require award "consistency...with other state policies...", without further identification of what those policies might be. Potentially this could include legislative or gubernatorial policy preferences through various communications that may or may not have the force of law and may cause violations of other required administrative procedures. The provision is not only vague, it invites abuse.Another proposed regulation would require that "grants for land purchases or easements shall not cause the elimination of the property tax liability." This is vague as to whether any or all amounts of liability would be eliminated and, more problematic, it is not based on statutory authority as witnessed by the fact that land purchases and easements have long been awarded as part of the mission of the Trust. They are among the most effective natural resource protection tools, often sought by farmers and others to protect their investments in essential conservation practices.The proposed regulations would eliminate the current language, "Members of the board shall comply with the conflict of interest provisions of the Nebraska Political Accountability and Disclosure Act." This is unwise to eliminate for any purpose and raises the question of whether the intention is to thwart another agency's statutory responsibilities.If anything, conflict of interest protections should be enhanced to address an actual situation that contributed to the aforementioned litigation. Unusually large political contributions to a governor, after an election, from within an industry with a pending NET award application, occurred simultaneously, whereupon the governor's appointees on the NET board voted to make the award. The award (for the benefit of for-profit businesses in the industry) was clearly illegal; only upon the filing of a lawsuit, and the potential for legal discovery, did the NET board withdraw it.State conflict of interest provisions, which deal with even the appearance of conflicts, must be applied to all parties involved, including the NET board. Clearly, the integrity of state government should not have to depend on citizens who take legal action at their own expense, prevail at court, and then request the court to reimburse attorneys fees from state taxpayers, which the court appropriately did in this case. It should never happen again.A proposed new provision that allows members to vote on awards to their own agency, if only half goes elsewhere, could be an invitation to abuse. The statute is clear that the award must be primarily for other purposes, not for the agency in question, so the share should be well less than half. The new regulations should not suggest the creation of matching fund programs for an agency and its clientele groups.A proposed new requirement that "No application receiving fewer than twenty-five percent (25%) of the maximum points will be funded" is vague as to purpose and could easily be gamed to distort rankings, awards, and Trust fund balances. Fund balances have recently become an issue as they are in danger of being transferred for purposes outside the mission and protection of the Trust.New regulations should be focused on assisting potential applicants understand the purpose and process of NET, and to increase public transparency and accountability. The proposed regulations should be withdrawn in their entirety and a new set presented to the public, after review by the Attorney General to ensure removal of the above-described problems, as well as many others too numerous to mention. NET was once smooth-running and non-controversial; that should be the goal again.
