Idaho Gov. C.L. (Butch) Otter has signed a bill giving tribes until Dec. 1 to negotiate a deal with the state on the collection of fuel taxes at tribal filling stations.

The Nez Perce Tribe will continue to negotiate regardless of displeasure over the new law.

"He wanted to bring everybody to the table and is hopeful that dialogue can continue and there can be a resolution," said Jon Hanian, a spokesman for the governor.

The bill, pressed into law by House leaders, will shift sales taxes onto fuel distributors and off retailers. The change attempts to mimic a Kansas taxing system approved by the U.S. Supreme Court. The Kansas system passed muster because distributors had to pay the tax and were not required to pass the tax to tribal stations, which is unconstitutional.

Idaho's law will shift the tax burden to distributors on Dec. 1. If a tribe reaches an agreement with the governor between now and then, that agreement will stand. Since there are five tribes, all five tribes require separate deals. Tribes that don't reach an agreement will start paying more for fuel to cover the state taxes levied on the distributors.

Idaho tribes turned out in force to oppose the law, saying it gave the state an unfair advantage in negotiations.

"We're not happy, of course, about the bill being signed into law," said Rebecca Miles, chairwoman of the Nez Perce Tribal Executive Committee. "But, nonetheless, negotiations will proceed."

The governor's office contacted tribal leaders this week and Miles remains optimistic an agreement will follow.

"We will still sit down with the governor and work out some sort of agreement," Miles said. "Nothing has changed in terms of a respectful relationship with the governor or his office."

One of Idaho's five tribes, the Shoshone-Bannock Tribe headquartered on the Fort Hall Indian Reservation near Pocatello, has caused much of the angst among lawmakers. The tribe operates filling stations along Interstate 84 and competing non-tribal fuel stations say the tribe has an unfair advantage because it does not have to charge the state's 25-cent-a-gallon tax.

Sho-Ban officials had warned lawmakers they would file a lawsuit if the bill became law. The officials were unavailable for comment Friday.

The Nez Perce and Coeur d'Alene tribes are the only other tribes with fuel stations. Those tribes are less of a concern to lawmakers because they charge fuel taxes at the same rate as the state. The taxes collected by tribes pay for tribal government operations, with money going to maintenance of reservation roads.

Otter's spokesman had earlier said the governor's signature on the bill was not certain. Otter did not like the idea of having lawmakers press his hand on the issue.

"He has expressed his concern in person to members of the Legislature who crafted that thing (bill)," Hanian said.

But in the end, Otter felt the bill would help encourage the tribes to settle the matter.

---

Ferguson may be contacted at dferguson@lmtribune.com or at (208) 743-9600, ext. 274.