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 Forecasting Board Predicts Revenue Shortfall
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The Nebraska Economic Forecasting Advisory Board met on February 28 to provide projections on the state's revenue. At its October meeting, the Board projected a $69 million increase in tax revenues that would have automatically gone to the state's cash reserves. Under Thursday's projections, the reserves would not be increased and the state's revenue would drop by $110 million through the end of the next biennium. The Board will issue revised projections in late April after final individual income tax receipts have been reported.
The Appropriations Committee uses the projections as they develop the state budget for the 2019-21 fiscal years. The committee reviews the budget proposed by the governor and develops its own recommendations. The committee's
preliminary budget report is available on the Legislature's website.
Hearings on appropriations requests for state agencies began on Wednesday and will continue for several weeks. On March 6, the committee will hear the appropriations request from the Crime Commission that would provide $5,720,264 for juvenile justice funds through Community-based Juvenile Services Aid. The proposal would reduce current funding by 5.42 percent and eliminate Enhancement Based aid for juvenile justice in FY19-20. The Appropriations Committee's preliminary report would reduce the funding by four percent, a rate similar to other cuts to other programs in the Crime Commission.
At the same hearing, the committee will hear
LB703 to appropriate $2.5 million to the Crime Commission's program to aid in supporting alternatives to juvenile detention and
LB446 to appropriate $1 million to the Crime Commission for programming in county jails, particularly for inmates who are diagnosed as mentally ill.
On March 13, the committee will hear the Secretary of State's funding request. It includes $6 million for election equipment. County matching funds may be required.
The committee has until the 70th day of the long session, May 2 this year, to place the budget bills on General File. More information about the state budget process is available here.
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State Loan for County Judgments Proposed
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If a political subdivision is unable to budget sufficient funds to pay any judgment in its entirety, the governing body could apply for a loan from the state pursuant to
LB473. The bill is one of three measures introduced by Senator Myron Dorn to help Gage County pay a $28.1 million judgment to six people wrongfully convicted of a 1985 homicide.
Under LB473, the political subdivision would first have to pay the portion of the judgment that is available under constitutional and statutory limits. The State Treasurer would make the loan from funds available for investment in the state treasury at an interest rate of one-half of one percent. The State Treasurer would determine the repayment schedule. The governing body would be required to annually budget and levy a sufficient amount for repayment. The committee heard the bill on Thursday.
LB474 would allow wrongly convicted individuals or political subdivisions to separately or jointly file a claim with the state for repayment of amounts exceeding the political subdivision's available financial resources. It was heard by the Judiciary Committee last week.
LB472 has been referred to the Revenue Committee with a tentative hearing date of March 13. It would allow counties facing a federal court judgment to impose a half-cent sales and use tax on purchases in the county. The tax would terminate when the judgment was paid in full. A sales tax for federal court judgments could not be implemented if the county had already adopted a sales tax for public safety services.
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Nonpartisan County Election Bill Heard
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County voters could decide whether all county races should be nonpartisan in the primary election and partisan in the general election pursuant to a bill that was heard by the Government, Military and Veterans Affairs Committee on Wednesday. Under LB144, the issue could be placed on the ballot in counties under 15,000 by a county board resolution or a petition. The question would be submitted to voters at the first statewide general election held at least 60 days after the adoption of the resolution or verification of petition signatures. The issue could not be submitted to voters more than once every three years.
Senator Dan Hughes introduced LB144 to address elections that are often decided in the primary because all candidates belong to the same party. A former county supervisor and a representative of Civic Nebraska testified in support of the bill. NACO testified in a neutral capacity.
Another bill,
LB211, that would make all county elections nonpartisan in counties of all sizes, will be heard on March 6. An identical bill,
LB72, was withdrawn. The NACO Board has taken a neutral position on LB211.
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Valuation Change for School Bond Taxes Advances
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On Thursday the Legislature advanced
LB183, a bill to reduce the valuation of agricultural and horticultural land for school district taxes levied to pay the principal and interest on school bonds. The bill had been debated two weeks ago but was pulled from the agenda after a bracket motion was filed.
As introduced, LB183 proposed reducing the valuation of ag land from 75 percent of actual value to one percent. A Revenue Committee amendment proposed changing the rate to 30 percent. During the time that the bill was off the agenda, Senator Tom Briese negotiated a compromise with education groups and urban senators to set the rate at 50 percent of actual value. The amendment was adopted before the bill was advanced to Select File with the understanding that Speaker Jim Scheer will not place the bill on the Legislature's agenda again until the Revenue Committee has developed a property tax package. Committee Chair Lou Ann Linehan hopes to have a tax reform package ready for debate by mid-April.
Property Tax Hearings Held This Week
The committee heard two of Governor Ricketts' property tax relief proposals on Wednesday.
LB303 would set a $275 million floor on state appropriations for property tax relief, beginning in 2019. His budget proposal includes a corresponding $51 million each fiscal year to bring the appropriation for the Property Tax Credit Relief Fund to $272 million.
LR8CA would cap increases on property tax revenues at 3 percent of the prior fiscal year unless voters approve a higher rate. The limit would not apply to property tax revenue needed to pay the principal or interest on bonded debt.
The committee also took testimony on the following bills:
LB482 would require assessors to report destroyed real property to the county board of equalization. The county board of equalization would prorate the assessed value of the property based upon the portion of the year that the property was destroyed and when it was replaced. A similar concept was introduced as part of
LB512, the Department of Revenue's annual clean-up bill, but would be eliminated by a Revenue Committee amendment.
LB506 would limit the growth of property tax increases for schools to 2.5 percent or the Consumer Price Index increase. Adjustments could be made based on school funding and enrollment.
LB493 would require housing agencies to provide notice of certain exempt property to county assessors. A similar bill was introduced last year.
LB529 would create a property tax exemption for hospitals that permit licensed medical practitioners to use the hospital's facilities regardless of whether they are employed by the hospital. The exemption would be in proportion to the percentage of the hospital's services that are provided gratuitously.
LB710 would increase tobacco taxes by 64 cents per pack to pay for Medicaid expansion. Other funds would be earmarked for behavioral health provider rate stabilization, public health agencies, and other health needs.
LB162 would impose sales taxes on body piercing, tattooing, tanning and other services.
LB507 and
LB508 would impose sales taxes on certain services and credit the new funds to the Property Tax Credit Cash Fund.
LB614 would eliminate itemized deductions, repeal the personal property tax credit, implement consumption taxes, and increase tobacco and liquor taxes. The increased revenue would be distributed to school and an increase in the earned income tax credit.
Revenue Committee Hearings Next Week
On Wednesday, March 6, the committee will hear bills on the Nebraska Advantage Act (
LB419,
LB413,
LB417, and
LB613) and a proposed new incentive program, the ImagiNE Nebraska Act (
LB720). Senator Mark Kolterman has designated LB720 as his priority bill.
On Thursday, March 7, the committee will hear
LB279 to provide a sales tax exemption for food sold by veterans service organizations and
LB670 to encourage the support of scholarships for children enrolled in privately operated elementary and secondary schools.
Property Tax Bills Advanced from Select File
Senators advanced more than 30 bills from Select File by a voice vote with no debate on Friday, March 1.
LB4 would increase the minimum fee for filing an appeal with the Tax Equalization and Review Commission (TERC) from $25 to $40. Fees would increase based on the value of the property. Commissioners would be reimbursed for daily travel from their residences to the TERC's offices in Lincoln or the location of hearings.
LB185 would require the owner or lessee of land consisting of five contiguous acres or less to provide an IRS Schedule F to document a profit or loss from farming for two out of the last three years in order to qualify for special valuation. The bill would take effect on January 1, 2020.
LB372 would change land capability groups used to value agricultural land to the use applied by the Natural Resources Conservation Service. Currently these are based on dryland farming categories.
LB103 would require governing bodies to hold a public hearing and pass a resolution to set the amount of their property tax request if the levy rate increased from the prior year. The bill lists the information that must be included in the resolution or ordinance regarding tax requests and the change from the prior year.
Property Tax Bills Passed by the Legislature
The Legislature passed 31 bills on Friday, including
LB63 that would allow individual fire districts that are members of a mutual finance organization (MFO) to lower their levies if additional funds are not needed. Existing law requires all members of an MFO to levy the same rate. LB63 would allow a fire district to levy an amount below the agreed-upon rate for two of the three years of the agreement.
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Legislative Resolution Honors Jack Mills
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The Legislature honored former NACO executive director Jack Mills with a legislative resolution,
LR26, this week. He had served as a state senator from District 44 before becoming NACO's executive director, a position he held from 1978 to 2000. He passed away on February 14, 2019, at the age of 81.
Senator Steve Erdman, a former Morrill County commissioner and current representative of the area, read the following resolution into the record on February 26:
"WHEREAS, Jaclund "Jack" D. Mills was born to Dale and Fern Mills on August 22, 1937, in Holdrege; and
WHEREAS, Jack graduated from Superior High School, attended Kearney State College and the University of Nebraska, and earned a degree in Business Administration from Bellevue University; and
WHEREAS, Jack was an entrepreneur in the grain, fertilizer, and cattle business in Big Springs and a farmer and rancher in Deuel and Garden Counties; and
WHEREAS, Jack served his community as a member of the local Educational Service Unit board, the Big Springs School Board, and the local library board; and
WHEREAS, Jack was elected to the Nebraska Legislature in 1974, served District 44 until 1978 with dignity and integrity, and played a key role in landmark groundwater legislation; and
WHEREAS, Jack worked for twenty-two years as the executive director of the Nebraska Association of County Officials and will be remembered for his pioneering work on the formation of intergovernmental risk pools that have saved the counties and taxpayers millions of dollars; and
WHEREAS, in retirement, Jack served on the boards of directors for Blue Cross Blue Shield, where he earned the title of Chairman of the Board Emeritus, Prime Therapeutics, and the Spinal Research Foundation, and as president of the Villas at Island Club Condominium Association; and
WHEREAS, Jack served his community as a Shriner, a Mason, a member of the Scottish Rite and decorated as Knight Commander of the Court of Honour, and a member of St. Mark's United Methodist Church where he served on the Finance Committee; and
WHEREAS, Jack and his wife Norma raised four children and welcomed eleven grandchildren; and
WHEREAS, Jack, with his wife Norma by his side, spent a lifetime representing Nebraska honorably, competently, and diplomatically and will be remembered as a true statesman; and
WHEREAS, Jack Mills passed away February 14, 2019, at the age of 81.
NOW, THEREFORE, BE IT RESOLVED BY THE MEMBERS OF THE ONE HUNDRED SIXTH LEGISLATURE OF NEBRASKA, FIRST SESSION:
1. That the Legislature honors the life and service of Jaclund "Jack" D. Mills.
2. That the Legislature extends deepest sympathy to the family of Jack Mills.
3. That a copy of this resolution be sent to the family of Jack Mills."
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Snapshots of County Issues
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Hearings Held This Week
Government, Military and Veterans Affairs Committee
This week the Government, Military and Veterans Affairs Committee heard two bills, LB524 and LB414, that were introduced on behalf of NACO.
LB524 would set a June 30 deadline for annexations to be included in current year's certified valuation. Annexations occurring after that date would be part of the following year's valuation. Senator Myron Dorn offered an amendment at the hearing that would exempt cities of the metropolitan class from the date change. The bill would also add detail to the process for notifying counties of the annexation.
LB414 was introduced by Senator Tom Brandt to eliminate an annual report made by highway superintendents. The information is already included in the One-and-Six Year Plans and SSAR (Standardized System of Annual Reporting).
The committee also heard the following bills:
LB633 would restrict disclosure of names and residential addresses in numerical indexes maintained by registers of deeds, inventory statements, and other county records. Senator Anna Wishart, who introduced the bill, asked the committee to hold the bill for further research this summer.
LB583 would expand counties' ability to use design-build for roads.
LB522 would restructure the civil service program in Douglas County to be more like Lancaster and Sarpy counties where the county board appoints the human resources department director.
LB525 would allow county boards to sell property in fee simple to other political subdivisions rather than going through a surplus property process. Some political subdivisions have initiated condemnation proceedings against counties to acquire land, thus allowing negotiation of the sale under eminent domain statutes. The bill would also clarify how Lancaster County takes title to land within a plat which is dedicated to a public purpose.
LB736 would cap license fees and occupation taxes in counties and municipalities at $25.
Executive Board
LB636 would create a task force to determine whether the Legislature should develop a system for monitoring the financial condition of counties and municipalities. The task force would include the State Auditor, NACO executive director, League of Municipalities executive director, eight county and city officials, and others. LB636 would require the task force to present its finding by December 1, 2019. The Executive Board heard LB636 on Thursday, February 28.
Hearings Next Week
Transportation and Telecommunications Committee
Seat belts and texting while driving are the topics of hearings by the Transportation and Telecommunications Committee on Monday, March 4.
LB39 would change enforcement of seat belt laws to a primary offense. Currently enforcement of seat belt laws is a secondary offense.
LB40 and
LB620 would make texting while driving a primary, rather than a secondary offense.
On Tuesday, March 5, the committee will hear
LB611 that would require train crews to have at least two members.
Agriculture Committee
The Agriculture Committee will hear
LB45, a bill to outright repeal the Black-Tailed Prairie Dog Management Act, on Tuesday, March 5.
Government, Military and Veterans Affairs Committee
Counties of all sizes could apply to the Secretary of State to conduct elections by mail in one or more precincts in the county under
LB163. Existing law limits this process to counties under 10,000. The Government, Military and Veterans Affairs Committee will hear LB163 on March 6.
At the same hearing the committee will take testimony on
LB211, a bill to make all county offices nonpartisan. The committee will also hear
LB83 to restore voting rights to felons upon completion of their sentence and
LB711 that would allow all felons to vote, including those currently serving sentences.
On March 7, the committee will hear bills to expand
ยง 23-120 to allow funding to be used for structurally deficient or scour critical bridges (
LB267) and require a vote of the majority of the county board, rather than 75 percent, to exceed budget limits (
LB336).
Judiciary Committee
LB231 would require counsel to be appointed when a juvenile court petition is filed. In 2017, legislation was adopted to require counties over 150,000 to provide counsel for juveniles. This year's legislation would offset costs to counties by imposing a one-dollar court fee that would be distributed as grants to counties that could demonstrate that the county's per capita juvenile court costs have increased during the past fiscal year compared to the prior three fiscal years due to the bill. The Commission on Public Advocacy would administer the grant program. Senator Patty Pansing Brooks, the introducer, worked with NACO and counties to develop the funding source. The Judiciary Committee will hear the bill on Wednesday, March 6.
Urban Affairs
A constitutional amendment to allow the Legislature to extend the duration of tax increment financing (TIF) from 15 to 20 years in areas where more than one-half of the property is extremely blighted will be heard by the Urban Affairs Committee on Tuesday, March 5.
LB648, the constitutional amendment's implementing language, would provide details and definitions.
The Education Committee will also hear a bill on tax increment financing on March 5.
LB432 would include TIF valuations in adjusted valuations used for purposes of state aid and school district levy authority.
The Department of Revenue's annual report on tax increment financing was released this week and can be found
here.
Bills Debated on General File
A cloture vote was taken this week during General File debate on
LB399, a bill to set out civics requirements for school districts. A cloture motion can be offered by a bill's introducer after a period of full and fair debate as determined by the presiding officer. Thirty-three votes are needed to invoke cloture and allow the body move on to a vote to advance the bill. The motion was successful and LB399 advanced to Select File.
Senators spent several hours debating
LB309, a bill to increase the number of district court judges in Douglas County. Senator Andrew La Grone filed and withdrew two amendments that would require the state to annually reimburse counties for costs of operating county courts (
AM471) and strike a requirement for counties to pay wages for bailiffs (
AM477). He refiled AM471 for debate on Select File as part of a discussion of unfunded mandates.
Legislators also debated
LB155, a bill to prevent private persons from using eminent domain for transmission lines and related facilities. Senator Tom Brewer introduced LB155 and selected it as his priority bill in an effort to halt the development of a wind energy transmission line through the Sandhills. Senators debated local control, property rights, green energy, property tax relief, and decommissioning agreements, among other issues, but the bill failed to advance by two votes. Another bill to regulate wind energy,
LB373, remains in the Government, Military and Veterans Affairs Committee.
LB700, which would require persons owning, operating, or managing a wind energy conversion system to be responsible for decommissioning and reclamation costs, will be heard by the Natural Resources Committee on Wednesday, March 6.
Bills Advanced from Select File
In addition to the bills addressed elsewhere, the Legislature advanced the following bills of interest to counties from Select File on voice votes on Friday:
LB152 would grant certain National Guard members the same protection of their residential addresses in assessors' and registers of deeds' records as is authorized for law enforcement officers.
LB186 would authorize the use of online notaries. Registers of deeds or county clerks would have to provide one or more electronic recording services for accepting real estate documents for recording.
LB622 would authorize the use of a single-bank pooled collateral method for pledging collateral for government investments in excess of FDIC insured amounts.
Bills Passed by the Legislature
The Legislature passed the following bills of interest to counties on Friday:
LB82 would allow counties to certify completion of the One-and-Six Year road plans and other reporting documents to the state rather than submitting the entire document.
LB117 would revise the way contractors become prequalified to bid on projects let by the Nebraska Department of Transportation.
LB11 would allow counties and municipalities to enter into interlocal agreements for nuisance enforcement within the municipality's extraterritorial zoning jurisdiction.
LB32 would revise and modernize investment options for the County and State Retirement Plans.
LB56 would allow county board to create an expedited application process for special designated liquor licenses. The licenses could be issued 12 days, rather than 21 days, before the event.
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Schedule of Selected Hearings
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Every bill introduced by the Legislature is the subject of a public hearing. Following is a schedule of bills that are of interest to counties. Due to construction at the Capitol, the Judiciary and Transportation and Telecommunications Committees will meet in the Warner Chamber.
Note that bills not appearing on this list may be heard during the same hearing. A complete list of
hearings is available on the Legislature's website. For tips about testifying at a hearing, click
here.
Monday, March 4
Transportation and Telecommunications Committee
Warner Chamber 1:30 p.m.
LB39 (Hilkemann) Change provisions relating to occupant protection system enforcement and change certain violations from secondary to primary enforcement
LB40 (Hilkemann) Change provisions related to provisional operator's permits, LPD and LPE learner's permits, and interactive wireless communication devices
LB620 (Kolowski) Provide for enforcement of violations relating to use of handheld wireless communication devices as a primary action
Tuesday, March 5
Agriculture Committee
Room 1003 1:30 p.m.
LB45 (Chambers) Repeal the Black-Tailed Prairie Dog Management Act
Transportation and Telecommunications Committee
Warner Chamber 1:30 p.m.
LB611 (Brandt) Require train crews of at least two individuals
Urban Affairs Committee
Room 1510 1:30 p.m.
LR14CA (Wayne) Constitutional amendment to authorize municipalities to pledge property taxes for up to twenty years if more than one-half of the property in a redevelopment project is extremely blighted
LB648 (Wayne) Change the Community Development Law
Wednesday, March 6
Appropriations Committee
Room 1003 1:30 p.m.
LB446 (McDonnell)
State intent relating to appropriations for the County Justice Reinvestment Grant Program
LB703 (Vargas)Appropriate funds to the Nebraska Commission on Law Enforcement and Criminal Justice
Agency 78
Nebraska Commission on Law Enforcement and Criminal Justice
Agency 24 Department of Motor Vehicles
Government, Military and Veterans Affairs Committee
Room 1507 1:30 p.m.
LB211 (Crawford) Provide for nonpartisan nomination and election of county officers
LB163 (Hunt) Permit counties to conduct elections by mail
LB83 (Wayne) Provide for restoration of voting rights upon completion of a felony sentence or probation for a felony
LB711 (Cavanaugh) Change provisions relating to voting qualifications for any person convicted of a felony
Judiciary Committee
Warner Chamber 1:30 p.m.
LB179 (Hilgers) Authorize the appeal of certain motions as final orders
LB231 (Pansing Brooks) Change provisions relating to legal defense of juveniles
LB352 (Morfeld) Provide requirements relating to the use of jailhouse informants
LB377 (DeBoer) Provide for voidability of certain releases from liability
LB595 (Albrecht) Change Office of Dispute Resolution to Office of Restorative Justice and Dispute Resolution and change powers and duties of the office
LB690 (Cavanaugh) Adopt the Healthy Pregnancies for Incarcerated Women Act
Thursday, March 7
Government, Military and Veterans Affairs Committee
Room 1507 1:30 p.m.
LB267 (Bolz) Provide a duty for the county board relating to deficient bridges and authorize a tax levy
LB336 (Hansen, M.) Change the vote required to exceed certain budget limitations
Thursday, March 14
Judiciary Committee
Warner Chamber 1:30 p.m.
LB387 (Pansing Brooks) Change and modernize provisions relating to juries - NACO Bill
Friday, March 15
Judiciary Committee
Warner Chamber 1:30 p.m.
LB131 (Pansing Brooks) Change certain provisions relating to minimum sentences
Monday, March 18
Business and Labor Committee
Room 1003 1:30 p.m.
LB363 (Hansen, M.) Adopt the In the Line of Duty Compensation Act
Thursday, March 21
Judiciary Committee
Warner Chamber 1:30 p.m.
LB324 (La Grone) Change immunity from liability under the 911 Service System Act
Wednesday, March 27
Judiciary Committee
Warner Chamber 1:30 p.m.
LB455 (Arch) Change medical services payment provisions relating to jails
Thursday, March 28
Judiciary Committee
Warner Chamber 1:30 p.m.
LB369 (Vargas) Require jails, law enforcement agencies, and the Nebraska State Patrol to provide public notice before entering into agreements to enforce federal immigration law and to allow audits of noncomplying entities
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