Keep NCORPE land in public hands
Questions about Nebraska Cooperative Republican Platte Enhancement Project’s (N-CORPE) ownership of property have recently been raised by some Lincoln County residents who would like the property to be in private hands. We believe they and others who share their concerns deserve a response.
First, the N-CORPE board is comprised of four board members representing the four NRDs that make up NCORPE: There are three farmers, one of whom is a water resources engineer, and a farm manager/realtor. As land owners and managers, the N-CORPE board members have little to no desire for government ownership of land. Rather, they want to ensure that the multimillion dollar project paid for solely by irrigators via the occupation tax can continue to be operated to prevent largescale irrigation shutdowns and severe regulations to meet obligations on the Republican and Platte Rivers. They also feel obligated to obtain the lowest possible cost of financing for the project. Ownership of the property achieves both objectives in the following ways.
First, Nebraska common law has established a connection between the amount of land one owns and the amount of groundwater one can access. There’s not been much interest in legislation to disconnect the two because of the problems and questions associated with doing so. For instance, would severing land ownership from access to groundwater water allow entities outside Nebraska, such as cities on the Colorado Front Range, to obtain easements or ownership of small tracts of land to access large amounts of Nebraska’s water? How would disconnecting ownership and water access affect creditors who made loans based on the total value of property including value associated with access to groundwater?
In the case of N-CORPE, a bill before the Legislature attempting to force us to sell the land would possibly allow the new landowner(s) to eventually obtain the water rights. But they wouldn’t have to pay for them. Why would the irrigators in 16 counties who are paying for the project agree to give away the asset that contributes the most value to the land?
The common law connection between ownership and water access is established by court precedent, not statute, so a court decision could potentially decouple the two. We believe it would be a disservice - both to those paying for the project, and taxpayers across the State who would be liable for financial penalties associated with noncompliance with the Republican River Compact if the project couldn’t be operated - for NCORPE to expose itself to a possible lawsuit and risk not being able to operate the project if we lost.
The second primary reason we have decided to own the land is to lower financing costs for the benefit of those paying for the project: Irrigators in the Twin Platte, Upper Republican, Middle Republican, and Lower Republican NRDs. This is not so much a decision as a requirement. A mortgage on the land secures the debt issued in 2013 to finance the project. The occupation tax on irrigated land pays the debt, but the mortgage provides additional assurance the debt will be repaid. The added security the mortgage offers helped us obtain the lowest financing costs available.
Also, selling the land was not contemplated when the debt was issued to finance NCORPE. This means that if the land was sold, it could be viewed as impairing the contract rights of those who purchased NCORPE bonds.
The reason stated by some arguing NCORPE should sell the land is to guarantee property taxes are generated from the property. Unfortunately, there is not a legal mechanism for NCORPE to pay taxes. Yet Lincoln County has assessed them and we have paid all taxes charged to us. Recently, the Nebraska Tax Equalization and Review Commission (TERC) agreed with NCORPE that our uses of the land are for public purposes and therefore exempt from taxes. Lincoln County unsuccessfully argued that for tax purposes our surface use of the land wasn’t for public purposes and could be separated from our use of the water. The county has appealed the TERC decision.
Meanwhile, Lincoln County exempts government entities besides NCORPE from property taxes despite similarities they share with our project. The Village of Sutherland, for example, owns approximately 100 acres that hold wells that provide the village’s water, just as N-CORPE owns land that holds the wells that augment stream flow. Sutherland also leases the land for haying; just as N-CORPE leases some its land for grazing. Yet, Lincoln County does not attempt to assess taxes on Sutherland’s wellfield.
Our board is very aware of property tax issues, and in large part implemented the project to help protect property values. By meeting Republican and Platte River obligations, the project prevents a potentially widespread devaluation of irrigated land caused by shutdowns/regulations that we believe would dwarf property tax impacts caused by NCORPE’s continued ownership of the property. Jeopardizing the project by selling the land and potentially causing impacts it was designed to prevent would be irresponsible at this time.
Twin Platte NRD
Upper Republican NRD
Nelson F. Trambly
Lower Republican NRD