The $4 per-irrigated-acre occupation tax in the Upper Republican Natural Resources District (URNRD) will generate $1,740,000 in funds for water projects authorized under LB 701 passed in 2007.
This marks the third year the occupation tax has been levied by the URNRD.
The first year, the tax was set at $6.96 per acre. Last year, the URNRD set the tax at $4, which is the same level as this year.
The tax has only been levied for one year in each the Middle and Lower Republican NRDs. The Middle set the first tax at $7.10 per acre while the Lower set the fee at $5.20 per acre.
URNRD Manager Jasper Fanning said the amount of funds collected to date by the URNRD under LB 701 total $5.219 million. Of that, approximately $1.134 million came from the property tax later ruled unconstitutional.
Fanning said the URNRD owes the state $3.7 million for its share of a state loan to basin NRDs to pay for surface water purchases.
If some type of ruling is made to allow refund of the unconstitutional property taxes, coupled with repayment of the loan to the state, Fanning said the NRD would retain only about $300,000 in available occupation taxes.
In addition, about $700,000 in occupation taxes for the 2008-09 tax year remains delinquent.
Fanning said a $300,000 reserve would do little to fund any compact compliance water projects, which led the board to seek collection of the tax again this year.
Fanning said the trial on the constitutionality of the occupation tax is set for early December, with final briefs due by the end of the year.
With that kind of time line, Fanning doubted any decision would be made by the courts during next year’s legislative session.
Fanning said a closed class situation, where only the Republican Basin NRDs have the occupation tax authority, may pose the biggest constitutional threat to the occupation tax.
As a result, Fanning said getting the Legislature to open up the class by allowing other NRDs to use the occupation tax for water projects would address that situation.
However, that may be difficult with state senators who are running for re-election and a governor who has pledged to approve no new taxes.
Funding compact compliance projects in the Republican, Basin such as purchasing surface water in water-short years, remains key.
The state has said it will implement regulatory options in the basin to meet compliance if no money is available to fund compliance projects.
Just how stringent those regulations will be remains under wraps by the Department of Natural Resources.