Senate committee passes tribal fuel tax bill

BOISE – A Senate committee Thursday passed legislation to impose a Dec. 1 deadline on negotiations between Idaho tribes and the governor over fuel taxes, despite objections and lawsuit threats from tribes.

The bill, House Bill 249, now heads to the full Senate for a vote; it earlier passed the House.

“This doesn’t really enhance the options of the governor with regard to settlement,” Sen. Joe Stegner, R-Lewiston, told the Senate Local Government and Taxation Committee. “I find this unhelpful to this process.”

Added Sen. David Langhorst, D-Boise, “I think if this law passes, we’re going to see an instant lawsuit that’ll tie this up longer than December.”

Sen. Diane Bilyeu, D-Pocatello, joined Langhorst and Stegner in opposing the bill; the other six members of the panel, all Republicans, voted in favor.

House Transportation Committee Chair JoAn Wood, R-Rigby, the bill’s lead sponsor, told the panel, “There are considerable other things that the state of Idaho does for our neighbors on the reservations. … This one is a matter of fairness.”

The bill says that if tribes haven’t reached agreement over fuel taxes with the governor by the cutoff date, they lose and the state imposes its state fuel tax on the reservations, which would garner the state an additional $3 million-plus a year. The state has failed in court in past attempts to impose the tax, but backers of the bill say a new U.S. Supreme Court ruling in a Kansas case suggests they could succeed this time.

At a hearing the day before, the Shoshone-Bannock Tribes said they’d sue if the state tried to impose its tax, and they expect to win.

The Sho-Bans also have passed a tribal resolution stating that if the state imposes its fuel tax on the reservation without an agreement with the tribes, the tribes will begin taxing agricultural products raised by non-Indians on their reservation, which lies in the heart of eastern Idaho’s potato country and includes thousands of acres leased to non-Indian farmers.

Langhorst said, “The need for funds is real, but part of that lays right on this body, that we haven’t found a way to sufficiently fund our highway maintenance. I don’t believe that should fall on the tribes.”

Committee Chairman Brent Hill, R-Rexburg, said, “The money, I guess, is one thing, but my obsession with fairness forces me to support this motion. … We’ve been working on this for years. … There has not been a resolution. It’s time to take a position.”

The committee took public testimony on Wednesday, though several committee members had to leave to present bills in other committees. On Thursday morning, the full panel heard only from the bill’s sponsors, Wood and Idaho Petroleum Marketers lobbyist Suzanne Budge Schaefer.

Bill Roden, lobbyist for the Coeur d’Alene Tribe, said afterward, “I’m amazed at the amount of misinformation that was given in the closing.”

Schaefer said non-tribal retailers are at a competitive disadvantage because tribes don’t have to charge the state tax. The two North Idaho tribes that sell gasoline, however, the Coeur d’Alenes and Nez Perce, both charge their own tribal fuel tax that’s equal to the state tax.

Roden said the amount of money involved is minuscule for the state but important to the tribes. “Three million in a $200 million budget – that’s a rounding error in most accountants’ language,” he said.

Chief Allan, chairman of the Coeur d’Alene Tribe, said at Wednesday’s public hearing, “We feel we’re close, but we also don’t like having a bill like this over our heads saying, ‘You have to get this done Dec. 1.’ “

Allan said the Coeur d’Alenes have serious concerns about details of the bill, and refuted rumors that they’ve dropped their opposition. “The main issue is it does not respect the tribal negotiations with the governor,” he told the committee. He said the Coeur d’Alenes plan to continue those negotiations.

The bill now moves to the full Senate. If it passes there, it goes to Gov. Butch Otter for his signature.