NRD asks for guidance on tax refunds

On July 25, the MRNRD in the Republican River Basin filed a petition in Red Willow County District Court and asked for a declaratory judgement on whether the MRNRD has the authority to refund the taxes it collected under LB 701. Those taxes are being held by the MRNRD and were declared unconstitutional in February by the Nebraska Supreme Court.

The petition also asks that if the court finds that the MRNRD does not have the authority to refund those taxes, that it be allowed to use the funds for any purpose allowed by law.

Cited as the plaintiff in the case is Rich Turner of Maywood, on behalf and along with all other taxpayers situated in the MRNRD.

In the petition, the MRNRD said that it received a letter from Turner dated June 5 that asked for reimbursement/repayment of the taxes he paid under LB 701 and forewarned of legal action if the taxes were not refunded with 45 days of receipt of the letter.

The MRNRD encompasses all of Red Willow, Hayes and Hitchcock counties and parts of Frontier and Lincoln counties.

About $2.5 million in LB 701 property taxes were collected by the Upper, Middle and Lower NRDs in the Republican River Basin, with $700,000 from Red Willow County.

LB 701 was passed by the Nebraska Legislature in 2007 and allowed the Republican River Basin NRDs to lease or acquire surface and groundwater rights, and to pay for that by using bonds issued to outside investors. It allowed the NRDs to levy additional property taxes, up to 10 cents per $100 dollars of property valuation and an occupation tax on irrigated acres, up to $10 per acre, to pay back the bond.

A lawsuit filed by a group of property owners in the basin, called "Friends of the River," alleged that the LB7101 property tax was unconstitutional. In February, the Nebraska Supreme Court agreed and ruled it was a local tax set for a state purpose, in this case, compliance with a three-state water compact that allocates usage of the Republican River between Nebraska, Kansas and Colorado.

Another lawsuit is pending against LB 701, this time filed by owners in the basin with irrigated acres. Filed in District Court in Lincoln, that lawsuit contends that the occupation tax is unconstitutional.