River refund running slow

A bill to refund property taxes collected in the Republican River Basin, taxes later ruled illegal, is not exactly dead in the water but may have trouble going anywhere.

LB 898, introduced by Sen. Mark Christensen, called for refunding property or occupation taxes that have been declared unconstitutional and was heard in the Revenue Committee Jan. 29.

Additional property taxes allowed under the water bill, LB 701, were paid by property owners in the Republican River Basin. A lawsuit challenged the taxes as unconstitutional and Lancaster District Court and the Nebraska Supreme Court later agreed.

A similar lawsuit that challenges the occupation taxes on irrigated acres is pending in Lancaster County District Court.

Christensen said this morning at the McCook Area Chamber of Commerce Legislative conference call that the committee who heard the bill wants to wait out the issue, to see what kind of ruling comes from the district court.

The three natural resources districts in the basin that collected the property taxes have asked for a declaratory ruling concerning the refund, from Red Willow County District Court.

Other water bills from Christensen that were heard in committee included LB 932, that would forgive the $8.5 million loan Republican River Basin NRDs borrowed from the state, and

LB 862, which allows any NRD in a river basin, where a majority of NRDs use well metering controls, would be allowed to issue riverflow enhancement bonds that could be paid back with proceeds from the current occupation tax.

In the hearing for the loan forgiveness, Christensen summed it up as "There wasn't a lot of humor on the committee." Christensen said he stressed that without using property taxes or occupation taxes in LB 701, there is no mechanism for the NRDs to pay back the loan.

Although that hearing may not have gone as he wished, Christensen said there was excellent discussion during the hearing for LB 852, that changes the closed class language.

Christensen said committee members were understanding of the situation and asked questions to get a full grasp of the situation, but he added, "one way or another the state pays," if irrigation is shut down in the basin.

The state has given Republican Basin NRDs three options to use in years designated as water short, with Option 3 shutting down irrigators in quick response areas, those areas closest to the river and its tributaries.

The irrigation industry is vital in the Basin and Christensen said most of the wells under Option 3 are located near towns. This means the shut down would impact state and income taxes, even affecting state aid to schools in the area.

A hearing for another one of Christensen's bills, LB 1052, will be Friday, Feb. 19 and he encouraged those who were interested to come down and testify.

The bill is modeled after a bill that directs sales tax generated at Omaha's Qwest Center to be use to pay back debt. The same theory can be used to help the Republican River Basin in his district, he said.

LB 1052 would create the Agricultural Production and Economic Stability and Assistance Act and redirect the current state sales tax revenue generated within two and half miles of any river, stream, or tributary in the Republican River Basin to eligible NRDs.

These funds would be for managing water resources and the augmentation of water supplies for the economic stabilization of agricultural production.

Christensen said issues facing the Republican River Basin are just as important to the state as revenue from the Qwest Center.