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On Wednesday, March 27, the Revenue Committee will hear a bill to set the floor on the average wholesale price of gas used to calculate gas taxes. The average wholesale price is derived using data from the State Energy Office on a per gallon basis and is taken from gasoline sold over the previous six-month period. When a five percent tax on the wholesale price of gas was enacted in 2008, $2.44 was used as the basis for discussion, but was not set in statute. Shortly thereafter, gas prices dropped and counties, cities, and the state lost the anticipated revenue. By setting a floor, LB338 would assure that gas taxes would not fall below a specified level. Counties and cities would each receive 17 percent of the wholesale fuel tax and the Nebraska Department of Transportation would receive 66 percent. Similar legislation introduced in 2018 estimated that counties would receive over $6.5 million annually if a $2.44 floor was enacted.

 

The committee will also hear LB97 and LB601. LB97 would allow the state to issue up to $200 million highway bonds to accelerate completion of the projects identified in the Build Nebraska Act. The Highway Cash fund could be pledged for repayment of the bonds. LB601 would strike the 20-hour per week limitation on the sale of alcohol by non-profit organizations used exclusively for educational, religious, charitable, or cemetery purposes.

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On Monday, the Legislature advanced LB34, a bill that 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.

 

A Nebraska Retirement Systems Committee amendment that was adopted before the bill advanced from General File would add three other bills to LB34. 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. A technical amendment to the school retirement plan is pending on Select File.

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Hearings Held This Week

Government, Military and Veterans Affairs Committee

Counties and other governmental entities would have to prepare their budgets using generally accepted accounting principles (GAAP) under LB581. The State Auditor would include these principles within their minimum accounting standards applicable to reports filed with the state by political subdivisions. Most Nebraska governments currently use a cash basis method of accounting, rather than an accrual basis. A cash basis does not recognize capital assets or deferred obligations.

 

The Platte Institute testified at the Government, Military and Veterans Affairs Committee hearing on Wednesday that GAAP standards would make budgets more transparent and easier to compare to other counties. NACO, the State Auditor's office, and the League of Municipalities testified in opposition to the bill, citing the cost and questioning whether an accrual method would provide the information sought. The National Association of Counties and the Platte Institute have both issued reports on governmental accounting practices. If passed, LB581 would take effect on January 1, 2020.

 

Revenue Committee

This week the Revenue Committee heard two bills to change provisions of the Beginning Farmer Tax Credit Act. LB560 would limit beginning farmers to one successful lease agreement in the program. LB623 would limit tax credits for agricultural assets to three years. The committee also heard LB542 to provide gun owners who attend firearms safety classes with an income tax credit and LB605 to provide tax credits to producers of renewable chemicals made from agricultural products. The committee has not taken action on these bills.

 

Business and Labor Committee

LB363, which was heard by the Business and Labor Committee on Monday, would create the In the Line of Duty Compensation Act to recognize law enforcement officers, firefighters, and associated rescue squad and emergency medical services ambulance squad members who are killed in the line of duty or die within one year after an injury on the job. To be eligible, law enforcement officers would have to serve for more than 100 hours per year and be authorized to make arrests. The amount of compensation would be $50,000 in 2020 and would increase annually based upon the Consumer Price Index. The State Claims Board would consider claims and payment would be made by the state.

 

Judiciary Committee

LB324 would enhance liability protections for local governments, public safety agencies, and their employees involved in providing next-generation 911 service. These entities and individuals would be immune from liability or the payment of damages except for failure to use reasonable care. Forty-four other states provide similar protection.

  

Hearings Scheduled for Next Week

Appropriations Committee

The Legislature would appropriate $900,000 to local health departments under a bill introduced by Senator Dan Quick. LB480 would distribute $50,000 apiece to each of the 18 local public health departments to help improve preventive health and promote worksite wellness. The Appropriations Committee will hear LB480 on Monday, March 25.

 

On Tuesday, March 26, the committee will hear two bills to provide funding to the Youth Rehabilitation and Treatment Centers (YRTCs). LB226 would appropriate $3.9 million for hiring and training staff at the YRTCs in Kearney and Geneva. The goals of the bill would be to increase youth-staff ratios without using additional overtime, use evidence-based programming and mental health treatment for committed youth, and develop re-entry planning and transition supports for youth exiting the centers. A portion of the appropriation would be used for a study of the centers on the evidence-based spectrum.

 

The second bill, LB485, would appropriate $2 million to build a fence around the YTRC at Kearney.

 

At the same hearing, the committee will hear LB327, a shell bill to increase rates paid to behavioral health service providers.

 

Judiciary Committee

In addition to the hearings noted elsewhere in this newsletter, the Judiciary committee will hear LB369, a bill to require law enforcement agencies to notify their governing body before becoming a party to an agreement with another public agency to enforce immigration law or interrogate, detain, detect, or arrest persons for immigration enforcement purposes. If an agreement is already in place, the law enforcement agency or jail would have to notify the governing body in writing by October 15, 2019. Copies of the agreement and notices to the governing body would have to be submitted to the Crime Commission, along with a record of the public meeting, including a transcript of the testimony and statements of its members. Failure to provide the information could trigger an audit of the law enforcement agency, jail, or political subdivision. The hearing on LB369 will be held on the final day of hearings, Thursday, March 28.

 

Bills Advanced from Committees

Many of the bills sent to the floor by committees this week were also designated as priority bills or will be amended into priority bills. Below are some bills of interest to counties that were advanced to General File.

 

Property Taxes

LB483 would value agricultural land and horticultural land by its productivity based on the land's capitalized net earning capacity. The rates would be set by an Agricultural Land Valuation Board. Senator Steve Erdman introduced and prioritized the bill.

 

LB470 would make changes to the Nebraska Education Savings Plan Trust (NEST) and Achieving a Better Life Experience Program (ABLE). A Revenue Committee amendment contains concepts from LB444, a bill to create a homestead exemption for certain military housing and replace the property taxes with payments in lieu of taxes. Schools would receive payment for 100 percent of property taxes that would otherwise be due. Counties would receive payment in the amount of five percent of taxes that would otherwise be due to the county general fund. Counties could waive the funds. A new infrastructure maintenance fund would be based on 95 percent of taxes otherwise due which could be used only for capital repair, maintenance and improvement of the housing development. The bill was prioritized by Senator Andrew La Grone.

 

LB472 would allow counties to impose a sales tax to pay for a qualified judgment rendered by a federal court. The bill was introduced and prioritized by Senator Myron Dorn to help Gage County pay for a $28.1 million judgment to six people who were wrongly convicted of a 1985 homicide.

 

LB522 would require the county board in counties over 400,000 to appoint a human resources director to help carry out the County Civil Service Commission Act. A Government, Military and Veterans Affairs  Committee amendment would strike some of the areas in which the human resources director would make recommendations to the county board. The bill was not prioritized.

 

LB733 would change accessibility requirements for polling places by codifying numerous requirements from the Help America Vote Act and Americans with Disabilities Act. A committee amendment would remove most of the dimension and physical specifications and instead refer to the acts and require signage. The Secretary of State would provide accessibility training and an accessibility guidebook. The bill was not prioritized.

 

LB86 would increase the documentary stamp tax from $2.25 per $1,000 of value to $3.25 for properties in excess of $1,000,000 value. The additional funds would go to the Affordable Housing Trust Fund to be used in areas that are designated as extremely blighted. A Revenue Committee amendment would eliminate the documentary stamp tax increase but create a process for cities to designate an area as extremely blighted for purposes of tax increment financing for construction of workforce housing. Senator Justin Wayne has designated LB86 as his priority bill.

 

LB88 would provide a $5,000 income tax credit for individuals purchasing homes as a primary residence in areas designated as extremely blighted for purposes of tax increment financing. A Revenue Committee amendment provides the same process for a municipality to designate an extremely blighted area as is set out in the committee amendment to LB86. LB88 was not prioritized.

 

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 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. LB23 is a speaker priority bill.

  

Justice and Courts

LB231 would require all counties to provide counsel to juveniles when a juvenile court petition is filed. Currently only counties over 150,000 must provide counsel for juveniles. A $1 court fee would be used to provide grants to counties to help pay for costs. The Crime Commission would administer the funds. LB231 was not prioritized.

 

Motor Vehicles

LB138 would allow the Department of Motor Vehicles to design and issue Support our Troops specialty license plates. The plates would honor persons who are serving or who have served in the armed forces in Iran, Afghanistan, the Persian Gulf War, and the Vietnam War. A Transportation and Telecommunications Committee amendment would add a Global War on Terrorism plate and incorporate language from two other license plate bills.  LB696 would provide separate plates for Army National Guard and Air National Guard members and LB697 would make technical amendments to other specialty plates. Senator Carol Blood prioritized LB138.

 

LB356 would change the distribution of funds from license plates to raise awareness of childhood cancer. A Transportation Committee amendment would include elements from LB128 to add new wildlife plate designs, LB215 to provide for prostate cancer plates, and LB691 to provide for ornate box turtle plates. LB356 is a speaker priority bill. 

 

Much of the General File floor debate this week focused on bills to create a Paid Family and Medical Leave Insurance Act ( LB311) and eligibility for the Supplemental Nutrition Assistance Program ( LB169). Bills affecting county building codes were advanced from General File on Monday.

 

LB348 would update the state's building code from the 2012 version of the International Existing Building Code to the 2018 version.

 

LB405 would update the state energy code to the 2018 version. New language would require counties, cities, and villages to notify the State Energy Office if they amend or modify local building codes to delete certain portions of the state code. The notification must be given within 30 days after the amendment or modification. The bill would take effect on July 1, 2020.

 

LB130 would incorporate recommendations from the Radon Resistant New Construction Task Force into the state building code and require local building codes to adopt radon standards.

  

Bills Passed this Week

Nine bills were passed by the Legislature this week, including the following:

 

LB463 would create a checklist of items that must be submitted with an application for a treasurer's deed, including a title search by a registered abstracter. Property owners who owe back taxes would receive more targeted notice when a tax sales certificate investor applies for a treasurer's deed. If the property owner cannot be reached through other types of service, the bill would require publication in the newspaper designated by the county board for publication of notices.

 

LB141 would add suffocation to the offense of strangulation and enhances the penalties if offenses are committed against a pregnant woman.

 

LB354 would automatically seal juvenile criminal records if no charges are filed, the charges are dismissed, or the juvenile has successfully completed a treatment, rehabilitation, or diversion program ordered by the court or juvenile code.

 

Bills Signed by Governor Ricketts

Governor Ricketts signed a number of bills that were passed by the Legislature last week including the following:

 

LB284 requires online sellers with 1) a gross revenue from Nebraska sales of $100,000 or 2) 200 or more separate transactions in Nebraska to collect Nebraska sales tax beginning April 1.

LB8 allows physician medical directors to use rotating or flashing red or blue lights on their motor vehicles when traveling to an emergency requiring their service. The lights are identical to those available to volunteer firefighters and peace officers. Such physicians would have to successfully complete an emergency vehicle operator course and be authorized by the county sheriff to use the lights.

LB124 allows counties, cities, and villages to form joint clean energy assessment districts under the Property Assessed Clean Energy Act (PACE). PACE is a mechanism for municipalities to finance installation of energy efficiency improvements for renewable energy systems in exchange for the property owner's agreement to pay an annual assessment not to exceed the weighted average useful life of the project. PACE assessments are collected at the same time as property taxes unless a third-party lender agrees to make the collections. Copies of assessment contracts are filed with the assessor and register of deeds of the county where the property is located. The bill carries an emergency clause.

LB156 creates a process for the operation, titling, and registration of former military vehicles. A former military vehicle is defined as a vehicle that was manufactured for use in any country's military forces and is maintained to accurately represent its military design and marking but is no longer used, or was never used, by a military force.

LB16 allows the withholding public records related to the details of physical and cyber assets of critical electric infrastructure. The bill applies to assets for which incapacity or destruction would negatively affect security, economic security, public health or safety, or any combination thereof.

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