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l: jl. , 1 . . The Commission does not recommend adoption ot this ahernalive. We believe that this type of act must be applied equitably among all political subdivisions or not at all. Since the Act has a sunset clause as of December 31, 1984. changes in the Act might not substantially impact funding in any case. ALTERNATIVE #14 (Iormerly '18): Allowt... Increment financing by local governments for the purposes of funding the development of sup- plemental water prolects. (Amendment to the Constitution of Nebraska, Article VIII, Section 12) The Commission recommends adoption of this alter. native. Tax increment financing has been used to con. struct other revenue producing facilities such as lincoln's Cornhusker Square Project. We believe that extension of such a concept to water supply projects is sound. Because increased tax revenues from the project are actually used to finance the project we believe that this is an equitable method of financing construction. ALTERNATIVE #15 (formerly #19): Allow. general land tax on the capital gain (appreciation In the value of land) which can be attributed to an Irrigation project. Such 8 tax would require a constitutional amendment and subsequent enabling legislation. The Commission recommends that this alternative not be adopted. An attempt to "force" landowners to become part of a project through taxes would result in a great deal of opposition to the project's ever being built. We do not believe that this type of government pressure is desirable. AL TERN A TIVE #16 (tormerly nO): Authorize local governments to allow water suppliers to ch.rge a water-use fee as a method to produce revenue lor providing supplemental water. We interpret this ahernative to be a means of im. plementing a locally imposed water severance tax and the Commission recommends its adoption. If the general publiC is being asked to support water supply projects through our general tax structure, we believe it is appropriate to ask water users in local areas to bear an extra measure of water project costs. ALTERNATIVE #17 (tormerly #21): Authorize natural resources districts to levy a specific rate which could only be used by the district for plan- ning and capital construction on supplemental waler projects. (Amendment to Neb. Rev. Stat. ~2-3201 et seq.) - The Commission recommends that this alternative be adopted. This would give local areas additional project construction capability. 1t would allow districts to more eHectively utilize available state funding. It would also help place some major responsibilities for water supply projects in the hands of locally elected officials. ALTERNATIVE #18 (Iormerly #22): Authorize natural resources districts with voter approval to Issue general obligation bonds lor capital con- struction costs and administrative and Interest costs relating to supplemental projects. Such legislation would provide for tax authorization to secure adequate bond repayment revenue. (Amendment to Neb. Rev. Stat. ~2-3201 et seq.) The Commission recommends that this alternative be adopted. Due to voter approval requirements use of the bonds would ensure local support for a project before it was built. These types of bonds are issued for certain other types of publiC projects. We see no reason why they should not be used for water supply projects as well. ALTERNATIVE #19 (Iormerly #23): For pur. poses of the Resources Development Fund. establish economic feasibility so that a sup- plemental water project would not have to meet the criteria that Its primary costs do not exceed its primary and tangible benelits. For Instance, secondary benefits and costs could be con- sidered as well. This change could be made by the Natural Resources Commission and the Development Fund Advisory Board or it could be mandated by the Nebraska legislature. (Amend. ment to Neb. Rev. Stat. ~2-3263 et. seq,) The Commission does not support this alternative. The presenl policy of not using a discount rate tor Development Fund Projects provides considerable ad. vantage in calculating economic feasibility of projects using only primary benefits. Furthermore, a good analysis of secondary benefits and costs would be cost. ly Bnd time-consuming from an administrative standpoint. ALTERNATIVE #20 (Iormerly '24), Allow Resources Development Fund grants to be used for supplemental water projects that reduce revenue. (Amendment to Neb, Rev. Stat. ~2-3266) The Commission does not recommend adoption of this alternative. We believe that revenue producing projects should repay their costs to the degree possi- ble. The Development Fund already makes low cost loans available to such projects. VII