Muddied waters: Landowners, officials testify on NCORPE proposal

McCOOK, Neb. — It was standing-room only at a hearing Thursday at McCook Community College, where state senators of the legislature’s Nebraska Natural Resource Committee heard testimony about NCORPE land in Lincoln County.

Five state senators on the Natural Resource Committee were present at the hearing, with three - Joni Albrecht, Dist. 17 Suzanne Geist, Dist. 25 and Mike Moser, Dist. 22 - absent. Senators attending Thursday’s hearing were Dan Hughes, chair, Dist. 44, Bruce Bostelman vice chair, Dist. 23, Tim Gragert, Dist. 40, Steve Halloran, Dist. 33 and Dan Quick. Dist. 35.

Several testified in favor of NCORPE; others citied lack of transparency and lost property taxes.

NCORPE stand for “Nebraska Cooperative Republican Platte Enhancement Project,” comprised of three area natural resource districts that purchased land in Lincoln County in 2012 for $83 million, as a way to ensure compliance with the Republican River Compact. The compact allocates a certain percentage of Republican River water to Colorado, Nebraska and Kansas.

The hearing Thursday was to hear support or criticism of NCORPE and pros and cons of selling the land, separate from its water underneath.

A bill introduced last year in the Nebraska legislature by Dist. 42 State Sen. Mike Groene of North Platte, LB 606, would have authorized NRDs to sell land originally acquired for a water augmentation project while retaining the right to use groundwater beneath that land. The bill was in response to landowners, county officials and taxpayers concerned about the lost economic activity, property tax income and groundwater when NCORPE bought the 19,000 acres of land in Lincoln county. Critics also allege that NCORPE is buying land as well as water rights.The bill stalled in committee.

Representatives of the Upper, Middle and Lower Republican and Twin Platte NRDs became partners as NCORPE. The acquired property was retired from irrigation and became pasture land, lowering the assessed property value. A network of about 30 wells were installed to pump water to the Republican River, via Medicine Creek and Harry Strunk Reservoir near Cambridge, every year since 2014, with the wells releasing and banking water when needed. Each NRD supplies the money for its share of N-CORPE operating expenses annually, by paying occupations taxes on irrigated land.

For some at the hearing on Thursday, selling the NCORPE land is a risky idea, including Sen. Dan Hughes, who said any changes are an “unnecessary risk.” Terry Martin of the URNRD agreed and said the rules of the bonding company used to buy the property don’t allow the sale of the land unless in extreme conditions and those conditions have not been met. A landowner in Dundy County said NCORPE was a good thing as it is now and there are too many unknowns in selling the land apart from its water.

A Lincoln County landowner testified in support of allowing NCORPE to sell its land and pointed out that Lincoln County was the only county among the three NRDs in NCORPE that lost property taxes when the land was purchased, as property taxes were lowered when the land changed from irrigated to pasture land.

Sen. Hughes said NCORPE has always paid taxes to the county, referencing his bill passed by the state legislature that allowed “in lieu of taxes” from an augmentation project to a municipal entity.

Jack Russell, director of the Middle Republican NRD, that includes irrigated land in Red Willow, Hitchcock, Frontier and Hayes Counties, as well as some in Lincoln County, said he would like to get NCORPE land back into private ownership. Selling the land is a viable option, as long as augmentation is continued, the price is right, and it makes sense, Russell said.

Lincoln County assessor Julie Stenger also testified and said most taxpayers are not opposed to NCORPE itself, but more concerned with the lack of transparency and how it’s managed.

Lack of communication was citied by another county official, this time from Dundy County Commissioner, Jerry Fries. He testified that his county has only received half of 2017 property taxes from NCORPE and nothing in 2018. He cited that Hughes’ law that allows NCORPE to pay “in lieu” of taxes uses the word “may,” meaning its voluntary and not required. In response to a question by Sen. Halloran, Fries said that “(NCORP) keeps saying they’ll pay it.”

Jasper Fanning, of the UPNRD, spoke immediately afterward and said an outstanding TERC case, where property valuations are challenged, caused NCORPE from legally making the payments and that Dundy County needed to designated the land as tax exempt before getting the payments. He emphasized that money for the county was being held in escrow, affirming Sen. Hughes’ comment that the payments are included in the budget to pay taxes to Dundy County.

That didn’t seem good enough for Sen. Halloran, who likened the situation to “muddy water.” “It looks good on paper, but they (still) don’t have the revenue,” he said, adding that counties have expenses, too.

The Natural Resource Committee, at the conclusion of its study, will make a report of its findings to the Legislative Council or Legislature.