Fuel tax agreement near

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FORT HALL - Idaho Gov. C.L. ''Butch'' Otter is expected to sign an agreement Wednesday with the Shoshone-Bannock Tribes that would resolve the long-running debate over fuel tax.

In the agreement, the tribes will still keep tax money generated from gasoline sales, but the diesel tax will increase and those funds will be shared with the state, Tribal Attorney Bill Bacon said.

''It provides an avenue for the Tribes to continue to generate money to maintain roadways on the reservation not maintained by the state,'' Bacon said.

Currently the Shohone-Bannock Tribes collects a 15-to 25-cent-per-gallon transportation tax on gasoline. The tax pays for road maintenance on the reservation, which encompasses four counties.

A 1-cent tax is presently imposed on diesel fuel sales. Bacon declined to disclose the amount of the proposed increase.

The debate started, Bacon said, when out-of-state trucking firms applied for state tax refunds for diesel purchased in Fort Hall, the only Indian reservation in the state that sells diesel fuel.

''They were requesting tax refunds, but hadn't paid the tax. It was almost impossible for the state to deal with this dilemma,'' Bacon said. ''We understood the situation, but it was not of our making. We expected them to be good citizens and pay their tax, but they didn't.''

The 9th Circuit Court of Appeals ruled previously that a state gas tax could not be imposed on Shoshone-Bannock tribes. But when the U.S. Supreme Court upheld a Kansas case that allowed the state to tax fuel sold on Indian reservations there, Idaho adopted a similar policy.

Bacon said last year the Legislature gave Idaho tribes until Dec. 1 to negotiate revenue sharing plans with the state. If they failed to reach an agreement, the state tax would be imposed.

Last week, Coeur d'Alene tribe reached a deal allowing the tribe to charge its own 25-cent-per-gallon gas tax, equal to the state's fuel tax and to raise the tribal tax to match if the state gas tax goes up.

While gasoline prices on the Fort Hall reservation stay within pennies of fuel cost in the outlying counties, Bacon said the state's aim is to keep fuel sales competitive among sellers on and off the reservation.

Fort Hall Business Council Chairman Alonzo Coby will sign the agreement for the Tribes. Coby said the council has not yet discussed the final deal, but will issue a statement at a later date.

David Hensley, spokesman for Otter, declined to comment about the agreement and said the governor will issue a statement Wednesday.

Hensley said the state is still negotiating with the NezPerce, but an agreement is expected to be reached before the December deadline.

By Debbie Bryce

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