Lincoln County taxpayers making up difference for loss of taxes on NCORPE property

In 2011, NCORPE was formed when four Nebraska Natural Resource Districts (Upper Republican NRD, Middle Republican NRD, Lower Republican NRD and Twin Platte NRD) agreed to create an inter-local entity to jointly administer statutory duties to aid Nebraska’s efforts to comply with the Republican River Compact. 

The Compact is an agreement involving the states of Nebraska, Kansas and Colorado created in 2003 as a result of litigation among the three states.

The Compact was designed to allocate water from the Republican River among the three Compacting States. Under the Compact, Nebraska is required to limit its consumption of water from the Republican River. 

The consumption is calculated through multi-year retrospective averaging. The Compact states are thus required to annually determine the cumulative volume of water that was or would have been flowing in the Republican River absent the activities of man in the prior year. 

Once the volume is determined, it is allocated among the Compact states and their consumptive use of surface water is calculated. To achieve compliance, each state must ensure that it does not consume more surface water than was allocated to it.

Each of the states is allowed to offset its allocated consumption through stream flow augmentation projects. 

The four NRDs created NCORPE as a vehicle to help achieve compliance by offsetting stream flow depletion in the Republican River. 

NCORPE, as an inter-local entity, purchased the subject properties in Lincoln County and initiated efforts to utilize them to comply with the Compact. 

We do not dispute that NCORPE is a governmental entity or that the primary use of the acquisition of this property was to utilize the underlying groundwater for purposes of stream flow into the Republican River, and thatNCORPE initiated construction of the augmentation project in September 2013. 

However, we do contend that NCORPE had the ability to possess only the rights to use the groundwater appurtenant to the purchased property. 

In other words, we assert that NCORPE acquired more interest than necessary to perform the stream flow augmentation project. Therefore, creating a situation where two dominant uses for the property were created—one for the land and one for the privilege of utilizing the groundwater under the land for augmentation purposes. 

We do not dispute that the privilege (underlying water rights) is for a public purpose and should be exempt from taxation. However, we do feel that the land (absent the water rights) was not needed for NCORPE’s augmentation project as it is not being used for a public purpose. 

We assert NCORPE was not required to purchase each property, but instead could have purchased only the water or the water rights. 

We feel that since there was another way to accomplish the NCORPE purpose of stream flow augmentation that any property right associated with this purchased property that was not necessary for augmentation is not a public purpose and should be taxed accordingly.

NCORPE asserts that it is entitled to an exemption for its entire interest in each of these properties because it has met its burden of proving that it is a governmental subdivision. 

That leaves every taxpayer in Lincoln County to make up the loss of property taxes on those 19,000 acres. 

This should not be another tax burden distributed amongst the property owners of Lincoln County. 

We urge you to support Senator Groene’s Legislative Bill 218 which would not only put these acres back onto the tax rolls, but also return it to the producer’s hands.