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Nez Perce, Kootenai sign gasoline tax pact with Idaho

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BOISE, Idaho (AP) - One day before a deadline that would have sent a simmering dispute back to court, Idaho and officials of two Indian tribes have signed a pact requiring that gasoline sold on reservations be taxed at the same rate as elsewhere in the state.

Nez Perce and Kootenai tribal officials reached agreements Nov. 30 for the collection and allocation of motor fuel taxes on their respective tribal lands, joining the Coeur d'Alene and Shoshone-Bannock tribes in agreeing to the settlement.

The agreement, signed by Gov. C.L. ''Butch'' Otter and tribal officials, resolves a long dispute over who should get tax money from gasoline sold at reservation stores. Idaho and the tribes have fought in the courts and in the Legislature over which government can collect gas taxes and set tax rates.

The agreements must still be ratified by the Idaho Legislature when it meets in January.

Dec. 1 was the deadline for the agreements, or else a new law would force the issue back into court.

''The sincere desire of all four tribes to settle things directly, government to government, rather than through the courts is a testament to a strong relationship that I'm confident will contribute to even greater cooperation and mutually beneficial agreements in the future,'' Otter said in a news release.

The Nez Perce and Kootenai tribes agreed to charge fuel taxes at the same rate the state charges, now 25 cents a gallon. The Nez Perce Tribe will continue to collect tax from tribal retailers on the reservation.

The Kootenai Tribe has no tribally owned fueling stations, but signed the sharing agreement to keep the option open should a tribal gas station be built.

The Shoshone-Bannock and Coeur d'Alene tribes agreed to the same deal earlier this fall.

If the deadline passed, the state would have started collecting sales taxes from fuel distributors delivering to Indian-owned gas stations. The U.S. Supreme Court upheld a similar taxing scheme in Kansas in 2005.

''Entering into the agreement was a difficult decision for the Nez Perce Tribe because of the issues created by the passage of the legislation during the 2007 session,'' Nez Perce Tribal Executive Committee Chairman Samuel N. Penney said in a news release. ''However, the agreement does protect the interest of both parties and prevents the need for more costly litigation on this issue in the future.''

The state collected about $212 million in fuel taxes in 2006, compared to about $850,000 collected by the Nez Perce Tribe, according to the governor's office.

Since 2001, Idaho has spent hundreds of thousands of dollars in legal costs in its bid to collect the tax, including a previous law that was overturned by the 9th U.S. Circuit Court of Appeals in August 2004, saying it violated tribal sovereignty.

Earlier this year, the Legislature passed a law based on a U.S. Supreme Court precedent in 2005, but delayed its effective date until Dec. 1 to give Otter and tribal lawyers time to reach a settlement.

According to the agreement, the tribe can use its revenue to build and maintain roads, build parking lots along waterways, fund search-and-rescue efforts, buy roadside land for preservation or enhancing scenic beauty, and pay for law enforcement as well as trusts meant to remediate gas-related water pollution, among other things.