April 5, 2019                                                        Legislative Report Archive 

In This Issue


Debate Continues on Priority Bills

County Sales Tax to Pay Judgments Advances

Valuation Changes Debated

Retirement Bill Advances from Select File

Tax Increment Financing Advances from First Round

Budget Publication Cleanup Advances from General File

Snapshots of County Issues


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gridlockDebate Continues on Priority Bills
Senators started their first week of full-day debate with gridlock -- advancing only two bills from Select File on Tuesday and spending nearly two hours on a third before adjourning. Most of the day was spent in a continuation of last week's battles over civility, social media, and legislative procedures.
By Thursday, substantive debate had returned and senators advanced bills from both General and Select File.
Next week, debate will continue on General File priority bills. On April 11, Speaker Jim Scheer will release a list of potential dates for late night debate.

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cosalestaxCounty Sales Tax to Pay Judgments Advances
Counties could impose a half-cent sales tax to help pay for federal judgments under LB472, a bill that was advanced from the first round of debate on Thursday. Senator Myron Dorn, a former Gage County supervisor, introduced and prioritized the Qualified Judgment Payment Act to help Gage County pay a $28.1 million 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 to the maximum 50 cents per one hundred dollars of valuation to begin paying the judgment. The sales tax would generate approximately $1.2 million and reduce the duration of the maximum levy by a year and a half.
As introduced, the sales tax could be implemented upon a two-thirds vote of the county board. Some senators questioned whether a vote of the people should be required to impose a county sales tax. Senator Dorn responded that unlike seeking sales tax revenue for a need or a want, the judgment was a court order that the county was required to pay. Property owners were not allowed to vote on the property tax increase.
The sales tax would apply county-wide, including areas already subject to a city sales tax. Counties already implementing a county sales tax for public safety services could not enact the sales tax created by the bill.
Two amendments were adopted before the bill was advanced. AM959 would require counties using the act to levy the maximum amount allowed. Only counties facing a federal judgment of $25 million or more could implement the sales tax and the entire act would terminate on January 1, 2027. The amendment was offered due to concerns from municipalities and others that a county sales tax could dilute the ability of cities to enact a sales tax and that it could be used for small judgments or extended periods of time.
The second amendment would clarify that the county board vote necessary to enact a county sales tax would be a two-thirds majority of all elected members. Thus five affirmative votes would be needed on a seven-member board like Gage County's.
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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 valuationValuation Changes Debated
On Thursday, senators debated LB483, a bill to value agricultural and horticultural land on a productivity basis, before adjourning for the day without a vote. Rather than using the current market approach, the value would be determined based upon the land's capitalized net earning capacity as established by county assessors using an agricultural land valuation manual developed by an Agricultural Land Valuation Board. For 2020, each county's discount rate would be set so that the total value would match the total assessed value of the same land for tax year 2019.
Senators discussed the impact on property tax collections, types of soil classifications, and cap rates. Some questioned whether the proposal would comply with the Nebraska Constitution's requirement for uniform and proportionate valuation. Senator Steve Erdman, who introduced and prioritized LB483, said that the bill was intended to be revenue-neutral and was not a mechanism for property tax relief.
Because no vote was taken after three hours of debate, it is possible that the bill could appear on the agenda again. According to the practice of the Speaker, if the introducer can show that they have 30 votes, the bill may be scheduled for debate again. Thirty-three votes are needed to invoke cloture, which would cease debate.
Likewise, no vote was taken on LB512, the Department of Revenue's annual cleanup bill that also contains language to allow for a reduction in the valuation of property destroyed by a major calamity. An amendment was offered by Senator Erdman to replace those sections of the bill with language from his bill, LB482. LB482 would allow for the pro-ration of values during the period that real property has been destroyed by fire or other natural disaster and the value of replacement property.
Debate focused on the need to make accommodations for property owners who have lost property in recent floods and blizzards. Some senators asked about the impact of reduced property valuations on school aid and local government budgets. Senator Erdman agreed to work with NACO to amend the effective date of the bill and the process for reporting destroyed property.

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retiremRetirement Bill Advances from Select File
LB34, a retirement omnibus bill, was advanced from the second round of debate on Tuesday, April 2, following the adoption of a technical amendment. As advanced, the bill would eliminate an option for an early disbursement of retirement funds for members of the County or State Employees Retirement Plan who file a grievance. Existing law allows up to $25,000 to be distributed to the employee during the pendency of the grievance. If the employee is reinstated, the money must be repaid. Although the withdrawal may have a short-term benefit to the employee who is without a paycheck, it can be challenging for the member to repay if they are reinstated. In addition, the withdrawal may violate IRS rules.
Three bills were amended into LB34 through a Nebraska Retirement Systems Committee amendment before the bill advanced from the first round of debate. LB35 would clarify that a full-time, permanent county employee must be at least 18 years old to be eligible to participate in the county retirement plan. The bill would add guidance for members who leave county employment and later return. LB36 would modernize language in the School Employees Retirement Plan. LB565 would specify that if a plan member has not designated a beneficiary at the time of his or her death, his or her spouse at the time of death would be the default beneficiary.

LB34 was introduced by Senator Mark Kolterman and was designated as a Retirement Committee priority bill.

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taxincrTax Increment Financing Advances from First Round
A proposal to put a constitutional amendment on next year's ballot that would extend the duration of tax increment financing (TIF) projects by five years in extremely blighted areas was advanced on a 40-0 vote on Thursday. 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.
Senators debated the issue for three hours last week, focusing on whether the definition of extremely blighted should be included in the constitution. Time ran out before a vote was taken and the measure was pulled from the agenda. Senator Justin Wayne, the introducer, showed that he had enough support to advance the measure and it was returned to the agenda this week.

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budclnBudget Publication Cleanup Advances from General File
Two bills to harmonize language about budget publication timelines were amended into a bill to change videoconference meetings provisions and advanced from General File on Tuesday. LB212 would expand the use of technology by certain public entities that are already permitted to conduct meetings by video or telephone conference.
A Government, Military and Veterans Affairs Committee amendment incorporated LB239 and LB191, two cleanup bills. LB239 was introduced by Senator Myron Dorn at NACO's request to harmonize language between the Nebraska Budget Act and the County Budget Act. When the Nebraska Budget Act was amended in 2017 to clarify that publication of each governing body's proposed budget statement must be made at least four calendar days, rather than five days, prior to the date of the hearing, no changes were made to the County Budget Act. LB239 would change the County Budget Act to match the Nebraska Budget Act.
LB191 would make similar changes to another section of statute, harmonize the definition of bonds, and delete obsolete language.

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snapshotsSnapshots of County Issues
Snapshots of County Issues
Special Hearing on Amendment to Income Tax Shell Bill
The Revenue Committee met on Wednesday for a special hearing on AM974, an amendment to LB288, an income tax placeholder bill. The amendment would set a threshold amount of $500,000 of business within the state in order to be subject to Nebraska income tax. The standard was likened to the criteria in LB284 that imposed income taxes on remote sellers. The amendment was modeled after legislation adopted in other states.
Bills Sent to the Floor by Committees
Committees continue to advance bills to the floor of the Legislature for debate by the full body. Among the bills advanced this week by the Government, Military and Veterans Affairs Committee is LB98, a measure to change the number of signatures needed to place a candidate's name on the ballot. Legislation enacted in 2016 set the number of signatures for partisan races at at least 10 percent of the registered voters entitled to vote for the office. LB98 would return the number of signatures to pre-2016 levels.
For partisan offices filled by voters in the entire state, at least 4,000 signatures would be needed with at least 750 from each congressional district. For county partisan races, signatures would be required from at least 20 percent of the total number of voters who cast a ballot in the last election for president or governor, not to exceed 2,000 signatures and not to exceed 35 percent of the voters who participated in the previous election for that office. For partisan races other than counties, the requirement would be 20 percent of the total number of voters who cast a ballot in the last election for president or governor, not to exceed 2,000 signatures.
Bills Advanced from General File
The testimony of jailhouse informants who provide statements about others in an effort to get their sentences reduced would be tracked under LB352. An amendment that would rewrite the bill was adopted before it advanced from General File. As advanced, prosecutor's offices would be required to undertake measures to create a searchable record of cases in which trial testimony is provided by jailhouse informants and whether a criminal conviction is obtained, as well as any benefit that was requested by or offered to the information in exchange for their statements or trial testimony. 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 victims of the informant.

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