Tax refund bill dead in the water?

A bill that would refund property taxes found unconstitutional by a court ruling may be dead in the water.

That's because senators in the committee hearing LB 681 want some kind of guarantee that the nearly $9 million the Republican River Basin natural resources borrowed last year will be paid back.

"It's been an extreme battle," Sen. Mark Christensen said this morning at the Legislature Conference this morning, adding that he's been talking with the governor's office about it. "It's not looking good at the moment."

Another stumbling block facing LB 681, that Christensen has made his priority bill, is the fact that the state could recover its money due to language in an agreement the NRDs signed with the state when the $9 million was borrowed. According to Christensen, the agreement included the provision that the state has 15 days from the end of a final court ruling to collect money the NRDs have garnered under the tax, about $2.5 million in property taxes.

A lawsuit challenging the occupation taxes is pending in District Court in Lincoln. Occupation taxes collected so far amount to about $6.5 million, he said.

A motion to reconsider filed by the NRDs to the Nebraska Supreme Court ruling that found the property tax illegal has recently been denied.

So if the state decides to recoup their money according to language in the agreement, that could be sometime next week, Christensen said. The final decision would come from the governor's office, he said.

But Christensen said the money could also be paid back if the Legislature moves forward with his own bill, LB 651, that includes an amendment to open up the closed classes designation on occupation taxes.

The closed class designation was one of the reasons why the property taxes in LB 701 were declared unconstitutional, as it levied the taxes on only those in districts subject to an interstate compact, such as in the three Republican River Basin districts.

Christensen's amendment would open up occupation taxes on irrigated acres to all NRDs in the state.

This way, the occupation taxes could bypass a similar fate handed to the property taxes with the Supreme Court ruling and could be used to pay back the state.

The natural resources committee has taken no action on Christensen's LB 651.