Sales tax turnback for sewer projects advanced

After extensive debate this week, lawmakers narrowly advanced a bill from general file April 7 that would offer state assistance to municipalities undergoing combined sewer overflow projects.

LB682, introduced by Omaha Sen. Heath Mello, originally would have offered state assistance to finance the construction, acquisition or improvement of sewer, natural gas and water cast-iron infrastructure. Assistance would have been calculated based on the amount of state sales tax collected from increased fees and charges to complete combined sewer overflow, natural gas and water projects.

A Revenue Committee amendment, adopted 34-0, restricted the scope of the bill to combined sewer overflow projects undertaken as part of a long-term control plan approved by the state Department of Environmental Quality.

According to the Environmental Protection Agency, combined sewer systems collect stormwater and sewage in the same pipe. While most of the wastewater is transported to a sewage treatment plant, wet weather events can increase the volume of wastewater, exceeding the capacity of the sewer system or treatment plant. Consequently, combined sewer systems are designed to overflow occasionally and discharge excess wastewater to rivers and streams.

The committee amendment also would require cities to dedicate any increased local option sales tax revenues generated from increased sewer fees to the combined sewer overflow project in order to receive state assistance.

First class cities, second class cities and villages could apply for state assistance beginning July 1, 2011, while metropolitan class cities and primary class cities would have to wait until July 1, 2013.

Mello said LB682 would provide a mechanism to help cities finance combined sewer overflow projects at a time when the Legislature has eliminated state aid to cities and limited their taxing authority. Omaha and Plattsmouth would benefit from the bill immediately, he said.

Papillion Sen. Jim Smith spoke in support of the bill, saying it would encourage metropolitan area businesses to remain in the state and would prevent a negative economic “ripple effect” across the state.

“Please do not put businesses and jobs in a crossfire between the Legislature and Omaha leadership,” Smith said.

LB682 advanced from general file on a 25-17 vote.