April 12, 2019                                                        Legislative Report Archive 

In This Issue


April 18 Hearings Set for Property Tax Package

Tax Relief for Disaster Victims Advanced

Annexation Reporting Deadline Advanced

County Sales Tax Moves to Final Round

Right to Farm Debate Leads to County Zoning Discussion

Snapshots of County Issues


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 aprilApril 18 Hearing Set for Property Tax Package
The Legislature's Revenue, Education, and Retirement Systems Committees will hold a special joint hearing on April 18 at 1:00 p.m. to discuss a much-anticipated property tax plan. LB289, a shell bill introduced expressly for this purpose, will serve as the basis for the package.
Although no proposed amendments to LB289 have been filed, reports indicate that the plan would provide property tax relief by substantially boosting state aid to schools. The additional state funds would be generated through an increase in the state sales tax, removing sales tax exemptions for soda and candy, taxing additional services, and increasing cigarette taxes. The valuation of agricultural and horticultural land would be reduced to 65 percent of its value. Currently it is valued at 75 percent. Residential and commercial valuations would be set at 90 percent, rather than 100 percent.
The proposal has mixed support in the Revenue Committee and Governor Pete Ricketts has expressed opposition to the plan.

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disastTax Relief for Disaster Victims Advanced
Property owners who suffer losses from fires or natural disasters could have their real property valuation lowered to reflect the loss under LB512 that advanced from General File on Tuesday. An amendment by Senator Steve Erdman was adopted to allow the county board of equalization to make a prorated adjustment to the property's valuation to reflect the time when the property was destroyed. Erdman had introduced this language in LB482. LB512, a Department of Revenue clean-up bill, contained a similar concept when introduced but it was removed by a Revenue Committee amendment before the Erdman amendment was adopted.
Senators began debate on LB512 last week but its three-hour time allotment ran out before a vote to invoke cloture or advance the bill was taken. Senators took up the bill again on Tuesday and advanced it with an agreement to work out details before the second round of debate.
Discussion focused on the need to provide relief for Nebraskans after last month's storm and flood damage without reducing the tax base to a level at which the community could not generate enough funds to rebuild or adequately fund school operations. Proponents argued that the underlying land would continue to be taxed, regardless of whether structures were destroyed. Senators discussed adding a definition to distinguish between residences that are condemned and deemed uninhabitable due to damage and those with lesser concerns, such as damage to drywall or a furnace. Also under discussion was whether the property owner or the county assessor would be responsible for reporting the damages, the timeframe for making a reassessment, and whether the property value should be prorated from when the damage occurred.
A second attempt to provide flood relief came through a bill that would change appropriations for a business innovation program. LB334, as introduced, would terminate the Angel Investment Tax Credit and move $4 million to the Business Innovation Act. Senator Lou Ann Linehan offered an amendment to instead move the $4 million to the Governor's Emergency Cash Fund to be used flood relief efforts. The Fund typically contains $5 million but only $400,000 remains after recent emergency expenditures.
She withdrew the amendment after reaching an agreement to address the transfer of funds for a single year on Select File. The Appropriations Committee later discussed the timing of the transfer and replenishing the emergency funds from state general funds this year.
Before LB334 advanced from General File, an amendment was adopted that would change the boundaries for Nebraska's planning and development regions. Cass County would be moved from Region 6 to the Metro Area Planning Agency. A one-year moratorium would be enacted on future boundary changes to allow for the development of procedures for future transfers.

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annexdeAnnexation Reporting Deadline Advanced
Political subdivisions that annex property would need to report it to county clerks and assessors before July 1 if they want it to be included in the current year's certified valuation pursuant to LB524. Current law only requires that the annexation occur before August 1 in order to be included in the current year's valuation, and does not necessarily require notice to the county assessor. Senator Myron Dorn introduced the bill on NACO's behalf to create clarity in the process for notifying counties of annexations and provide more time to make changes to taxing district boundaries after an annexation. The bill carves out an exception for cities of the metropolitan class. LB524 was designated as a speaker priority and advanced from General File on Tuesday.
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 cosaleCounty Sales Tax Moves to Final Round
Counties could impose a half-cent sales tax to help pay for federal judgments pursuant to a bill that was advanced from the second round of debate this week. As introduced, the sales tax could be implemented upon a two-thirds vote of the county board. A first-round amendment clarified that the vote would be a two-thirds majority of all elected members.
Senator Myron Dorn, a former Gage County supervisor, introduced and prioritized LB472, the Qualified Judgment Payment Act, to help Gage County pay a $28.1 million federal judgment for the wrongful conviction of six Beatrice residents. With the addition of attorney fees and interest, the county must pay approximately $31 million. Last year, the county board increased the county's property tax levy by 12 cents to begin paying the judgment. The proposed sales tax would generate approximately $1.2 million and reduce the duration of the increased levy.
Senators considered an amendment to require voter approval to implement a county sales tax. Rural senators, who expressed concerns that agricultural land owners will disproportionately pay for the increased levy, argued that adding a countywide sales tax would spread the tax burden among all county residents, regardless of property ownership, and others who make purchases in the county. The amendment failed and the bill advanced from Select File.
Dorn also introduced LB473 and LB474 as other potential mechanisms to assist Gage County. LB473 would allow political subdivisions to obtain low-interest loans from the state to pay federal judgments. LB474 would allow political subdivisions to file a claim with the state for payment of federal judgments for damages arising from a violation of constitutional rights. Both bills remain in committee.

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rightRight to Farm Debate Leads to County Zoning Discussion
County zoning regulations became part of the General File debate on LB227, a bill to provide continued protections from nuisance lawsuits for existing farms and public grain warehouses. A cloture vote was used to end debate and advance the bill on Wednesday.
Under the Nebraska Right to Farm Act that was enacted in 1982, farms or public grain warehouses cannot be found to be public or private nuisances if the farm or grain warehouse existed before a change in the land use and if the earlier use was not considered a nuisance. The bill would expand the conditions under which a farm or grain warehouse is protected from liability as a nuisance.
The debate explored the rights of landowners to use their property for expanded agricultural purposes and the right of quiet enjoyment for neighbors who may experience additional odors, noise, or insects from expansions of livestock operations or other ag activities. Senators discussed the role of county zoning in regulating the expansion of livestock facilities, including the number of counties with zoning, the need for setbacks to maintain a distance from nuisances, and the effect of nuisances on property valuations.

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snapshotsSnapshots of County Issues
Bills Advanced from General File
A number of bills were advanced from General File (first round) debate this week.
County officials would no longer need to approve and certify the list of volunteers serving as active emergency responders, rescue squad members, or volunteer firefighters who qualify for a $250 income tax credit. Instead, under LB222, the certification manager from the volunteer's fire or rescue department would file the information directly with the Department of Revenue and send a copy of the list, either by mail or electronically, to the governing body of the county, city, village, or rural or suburban fire district. The volunteer would claim the credit by including a copy of the certification with their income tax return. The bill would become operative on January 1, 2020.
LB23 would recognize the Property Assessed Clean Energy Act (PACE) as an economic development tool. The bill would set minimum and maximum periods of time that energy efficiency improvements could be financed by a municipality through a PACE district. An Urban Affairs Committee amendment that was adopted before the bill advanced would eliminate retroactivity provisions in the bill as introduced and would allow municipalities to waive requirements for energy savings to exceed the cost of the project.
LB356, as amended, would create new wildlife conservation specialty license plates supporting sandhill cranes, bighorn sheep, and ornate box turtles. The distribution of proceeds between the Department of Motor Vehicles Cash Fund and the Highway Trust Fund would be standardized among types of specialty plates. The Department of Motor Vehicles would be allowed to cease issuance of certain specialty plates at the next issuance cycle if fewer than 250 plates were issued during the prior two-year period.
LB663 would make corrections to like-kind exchange laws adopted last year. Last year's laws were intended to retain Nebraska's tax policy allowing the exchange of similar kinds of equipment despite new federal tax cut laws. However, further revisions were needed this year to clarify the process.
LB616 would help speed up construction of the south beltway around Lincoln by authorizing the use of a build-finance method that would allow the Department of Transportation to make payments to the builder rather than issuing bonds.
LB6 would change residency requirements for spouses and children of active duty military personnel who are assigned to duty outside of Nebraska. The bill would allow postsecondary students to be considered as in-state residents for purposes of determining tuition rates.
LB698 would require the contents of commercial motor vehicles and trailers to be properly distributed and adequately secured to prevent cargo from falling out of the vehicle. Violations would be an infraction and could be subject to civil penalties.
Bills Advanced from Select File
Senators advanced the following bills from Select File by a voice vote on Wednesday.
LB212, as advanced from Select File, would harmonize publication deadlines in the County Budget Act and other budget sections to match requirements in the Nebraska Budget Act. When the Nebraska Budget Act was amended in 2017 to require publication of each governing body's proposed budget statement at least four calendar days, rather than five days, prior to the date of the hearing, several related sections were omitted. Language to harmonize these omitted sections was introduced in LB239 and LB191 and incorporated into LB212 by a Government, Military and Veterans Affairs Committee amendment. Other sections of the bill would expand the use of video and telephone conferencing by certain public entities that are already permitted to conduct meetings by those methods.
LR14CA is a proposed constitutional amendment that would extend the duration of tax increment financing (TIF) projects by five years in extremely blighted areas. Existing provisions limit TIF projects to 15 years. LR14CA would allow cities and villages to pledge taxes for up to 20 years if more than half of the property in the project area is designated as extremely blighted. An amendment was adopted to limit the designation of extremely blighted to areas with a high rate of unemployment combined with a high poverty rate as determined by law. The issue would appear on the November 2020 ballot.
LB390 would require agreements between schools and law enforcement agencies with officers serving as school resources officers (SROs). The parties would need a memorandum of understanding (MOU) delineating their roles and responsibilities. A sample agreement would be developed by the Department of Education. School districts would have to provide a copy of the MOU to the Department or post it on the district's website. The MOU would require each school resource officer or security guard and one school administrator to attend a minimum of 20 hours of training specific to school law, behavior, de-escalation techniques, and awareness of adolescent issues. Records would need to be maintained on student referrals for prosecution from SROs, including demographic information. The MOU would need to identify school policies about when parents would be notified, when a student would be advised of their constitutional rights, and other issues.
LB352 would track the testimony of jailhouse informants who provide statements about others in an effort to get their sentences reduced. When a suspect or defendant is charged with a felony, prosecutor's offices would undertake measurers to maintain a searchable record of cases when trial testimony is offered against a suspect's or defendant's interest or an informant's statement is used to obtain a criminal conviction. Benefits requested by or offered or provided to an informant in connection with the testimony or statement would also be tracked. The prosecution would be required to notify the defense of such information. If an informant receives leniency in connection with testimony against a suspect or defendant, the prosecutor would be required to notify the victims of the informant.
LB218, as introduced, would amend the definition of tangible personal property for sales and use taxes to exclude electric generation, transmission, distribution, and street lighting structures to make them exempt from sales and use tax. As amended during General File debate, the bill would rewrite the definition of real property to include these types of property. The bill was introduced in response to the Department of Revenue's determination that power lines and power poles are tangible personal property subject to sales tax.
LB320 would revise the Pesticide Act by updating federal regulations and clarifying product registration requirements.
Bills Passed by the Legislature
The following bills of interest were among the 10 measures passed by the Legislature on Thursday.
LB34 would eliminate the option for a member of the county or state retirement plans who has filed a grievance to receive a distribution from the plan during the grievance process. Existing law allow a $25,000 distribution but requires it to be paid back if the employee is reinstated. These provisions are out of compliance with Internal Revenue Service regulations. LB34 also contains provisions from three other bills. LB35 would clarify that a permanent county employee must be at least 18 years of age to participate in the county retirement plan. LB36 would make changes to the school retirement plan. LB565 would identify the current spouse of a retirement plan member as the beneficiary if the member dies without designating a beneficiary.
LB217 would make it illegal for an employer to discriminate against an employee who has inquired about, discussed, or disclosed information regarding employee wages, benefits, or other compensation.
LB269 would expand the use of school driver's permits to allow holders to drive to property used by the school he or she attends for purposes of school events or functions.
LB270 is the annual Department of Motor Vehicles clean-up bill. It updates and harmonizes statutes and implementation dates, addresses electronic certificates of title, and other issues.
LB348 would update references to the International Building Code.

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