Republican River tax proposal bogs down; pipeline bill withdrawn

Nebraska Capitol (Photo by Fred Knapp, NET News)
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January 24, 2018 - 5:04pm

A proposal to spread the cost of Nebraska’s compliance with the Republican River compact got bogged down in the Legislature Wednesday. And a bill aimed at tightening requirements on pipeline companies was withdrawn.

For years, Nebraska struggled to balance the water needs of farmers in the Republican River valley with its obligation to send enough water across the state line into Kansas. Recently, it has relied on two “water augmentation” projects, called NCORPE and Rock Creek. Those are projects in which previously-irrigated land was purchased, and the water, instead of being used for crops, is pumped into creeks leading to the Republican River.

For story on criticism of NCORPE, click here.

For story on NCORPE and Rock Creek projects, click here.

Sen. Dan Hughes represents southwest Nebraska, where Rock Creek is located. Hughes said the projects have been helpful. “We’re in a positive place now with Kansas and the Compact because of the flexibility and certainty that NCORPE and Rock Creek provide,” Hughes said. “Kansas has agreed to the terms of the resolution based on the fact that NCORPE and Rock Creek can flip a switch and get them their water when they need it.”

But one side effect of the projects is a hit to the local tax base. That is especially true in Lincoln County, where NCORPE, short for the Nebraska Cooperative Republican Platte Enhancement project, is located. Sen. Mike Groene, whose district includes NCORPE, says taking nearly 19,000 acres out of irrigation has cut property taxes paid on the land, at the expense of other taxpayers in the county. “One of my county commissioners said it best: We thought there was a compact between Kansas, Colorado and Nebraska. We have come to find out it was a compact between Kansas, Colorado and Lincoln County,” Groene said, adding sarcastically “You’re welcome, State of Nebraska, we bailed you out – my county did – with the loss of 7 percent of our irrigated acres, and our natural resource that is being pumped into a river.”

Groene said if the land were still irrigated, it would generate $730,000 in property taxes; now, it generates $196,000. And even that is in doubt, because the four natural resources districts that own NCORPE say while they want to continue paying, it is unconstitutional for a governmental organization to pay taxes.

Sen. Hughes’ bill would allow NCORPE and Rock Creek to make payments in lieu of taxes, to keep revenue flowing to local schools and other governmental units. But it ran into questioning from Sen. Burke Harr of Omaha. Harr said the courts have yet to rule on the constitutionality of the current payments. “I think this bill may have a good intent but it’s a little premature, in that we don’t know if in fact it is unconstitutional,” Harr said.

Then Omaha Sen. Ernie Chambers went after the bill, saying he is retaliating. Chambers moved to kill the bill, adding “I’ve got other motions and amendments I’m going to offer, to fix you all for what you did to me yesterday.”

That was a reference to the fact that senators, led by Hughes and others from rural areas, refused to advance Chambers’ proposal to repeal a state law on managing prairie dogs. Speaker Jim Scheer said debate on Hughes’ water projects’ tax bill will continue Thursday.

On another subject Wednesday, Sen. Bob Krist withdrew a proposal he made to limit the ability of pipeline companies like TransCanada to use eminent domain to force landowners to let pipelines go through their property. Krist thought the bill should be heard by the Judiciary Committee, but instead, it was referred to Natural Resources. Krist said that sends a bad message: “If you don’t want something to come out of committee, if you don’t want it heard on the floor, if you don’t want to debate about it, bury it in a committee that you can control and make sure that it’s not going to come out of.”

Sen. Tyson Larson, one of the Reference Committee majority who sent Krist’s bill to Natural Resources, defended that decision. “I appreciate the difference of opinions, but the bill was properly referenced. It’s dealing with an issue that the Natural Resources Committee deals with. I’ve dealt with this issue on Judiciary and thought it should go to Natural Resources at the time,” Larson said.

In addition to restricting eminent domain, the bill also would have required pipeline companies to post a $100 million bond to cover cleanup costs, give landowners ongoing lease payments rather than one-time easement payments, and remove the pipeline at the end of its life. Senators voted 40-7 to allow Krist to withdraw his bill, killing it for this year.

Wednesday afternoon, the Revenue Committee held a public hearing on Sen. Justin Wayne’s proposal for a 10 percent excise tax on the sale of ammunition, to fund both violence prevention and wildlife preservation. Scott Smathers of the Nebraska Sportsman’s Federation opposed the bill, saying it would burden groups like high school trap shooting teams by adding another tax on top of the federal 11 percent tax and state sales tax. Wayne says he introduced the bill as what he called a “conversation starter,” adding that he will not push for it this year.



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