$2.5 million in refunds in limbo

CURTIS -- About $2.5 million of property taxes collected by Republican River Basin natural resources districts under LB 701 remain in limbo, as no procedure is in place to repay the taxes.

The taxes were ruled unconstitutional by the Nebraska Supreme Court Legislature but as there are no legal means to return them, they remain with the NRD districts.

The dilemma will be discussed by board members of the Middle NRD at their regular meeting, 7:30 p.m, at the Community Center in Curtis.

Gov. Dave Heineman introduced a bill this Legislative session to repay the taxes, but it never made it to the floor for discussion as it was blocked by other senators who were concerned it would negatively affect other taxing entities.

Dan Smith, MRNRD general manager, said it is his understanding that guidance would be coming from the Attorney General's office on how to proceed at this point.

Smith said MRNRD board members stated at the May meeting the intent to repay all taxpayers who paid the tax.

"We want to make sure it goes back to everyone who paid," he said, regardless if tax protests were filed or not.

An offset from next year's property tax request from the NRD would be the easiest, he confirmed, but nobody knows how that can actually be done. Although the NRDs currently have the money, it is the counties who have a record of the amount paid and by whom.

There are a number of questions that still have to be resolved, Smith said.

About $700,000 of property taxes were collected from Red Willow County residents.

Occupation taxes on irrigated acres, also allowed under LB 701, have garnered about $6.5 million for the three NRDs.

A lawsuit challenging those taxes is still pending Lancaster District Court in Lincoln.