A late-session opportunity to adopt a property tax relief package turned into a showdown over a tax incentive bill this week. Both bills ended up stalled on Select File after failed cloture votes.

 

On Wednesday, the Legislature spent three hours debating LB720, a bill to create the ImagiNE Nebraska Act to replace the Nebraska Advantage Act that will end in 2020. The new act would provide incentives to businesses that relocate or remain in Nebraska and develop new jobs. Senators had debated the bill for three hours last week but no vote was taken. Senator Mark Kolterman, the introducer, was able to show 33 votes in support, the amount needed for cloture, and it was placed on the agenda this week.

 

Much of the debate focused on whether businesses should be given tax breaks if property owners do not receive property tax relief. Speaker Jim Scheer and others encouraged members to vote in favor of LB720 and work for a reciprocal vote on LB183, a property tax relief measure that was scheduled for debate immediately after LB720. Because LB720 was on the first round of debate, senators would have an opportunity to stop it on Select File if the property tax bill was unsuccessful. In the spirit of compromise, 37 senators agreed, some with reservations, and a cloture motion was successful. LB720 advanced from General File.

 

Select File debate on LB183, the property tax relief bill, was also taken to a cloture vote but received only 23 votes, effectively killing the bill for this year. The original version of the bill would have reduced the valuation of agricultural and horticultural land to 50 percent of its actual value to pay for school bonds. The amendment that was debated on Wednesday pulled concepts from LB289, the Revenue Committee's property tax relief bill. It proposed eliminating the Personal Property Tax Relief Act and placing the program's $14 million in funding into the Property Tax Credit Cash Fund. A number of sales tax exemptions, including those on pop, candy, bottled water and some services, would be eliminated and the new funds earmarked for the property tax credit. A minimum of $275 million would be distributed through the credits and excess funds would be used for K-12 education funding. An earned income tax credit would be added to protect lower-income Nebraskans from the sales tax increases. The amendment would not increase the rate of sales or cigarette taxes and would not make changes to the school aid formula.

 

LB720 was debated on Select File on Friday. An amendment was adopted to cap incentives at $125 million with regular increases based on the General Fund's gross receipts and possible increases for individual applications approved by the Legislature's Executive Board. When the cloture vote was taken, an amendment was being debated that would provide additional incentives to applicants whose corporate boards of directors have at least 50 percent female members. The cloture vote failed, 30-18.

A number of bills were advanced from Select File and passed by the Legislature this week.

 

County Operations

LB525 would allow county boards to sell property in fee simple to other political subdivisions, rather than going through a surplus property process. Notice of the intent to sell, the legal description of the property, and its address would have to be published at least 30 days prior to the sale.

 

LB609 would allow counties to authorize employees to rent cars or use commercial charters rather than using their own vehicles for county travel and receiving reimbursement at the statutory mileage rate.

 

LB186 would create the Online Notary Public Act. It would allow registered online notaries to use technology to accept notarizations for acknowledgments, jurats, verifications or proofs, and oaths or affirmations. The Secretary of State would adopt and promulgate rules and regulations to create standards and ensure the integrity, security, and authenticity of online notarial acts. Online notaries would have to keep a secure electronic record for at least ten years. All counties would be required to accept electronic filings of real estate documents by July 1, 2020. Funds would be transferred from the Treasury Management Cash Fund to the state's General Fund to cover the implementation costs.

 

Taxation

LB512 would change the valuation of property destroyed by fire, earthquake, flood, or other natural events. The property owner would have to file a report of the destroyed property with the county assessor and clerk before July 15 of the current assessment year. The county board of equalization would adjust the assessed value of the destroyed real property to its assessed value on the date it suffered the significant damage. An amendment was adopted on Select File that made changes suggested in an April Attorney General's opinion.

 

LB218 would rewrite the definition of real property to include electric generation, transmission, distribution, and street lighting structures. 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.

 

LB86 would provide a $5,000 nonrefundable income tax credit for individuals purchasing a home in an area that has been designated as extremely blighted. The bill sets out a process for municipal governing bodies to declare areas extremely blighted after a study, consideration by their planning commission, and a public hearing with notice to affected taxing entities and neighborhood associations. The bill is intended to increase the number of affordable homes in north Omaha and to increase home ownership in historically impoverished areas. A one-time transfer from the Affordable Housing Trust to the state's General Fund would cover the costs of implementing the bill.

Roads

LB414 was introduced by Senator Tom Brandt on behalf of NACO. It would eliminate an outdated 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).

 

LB583 would allow counties over 150,000 and large cities to use design-build and alternative construction delivery methods for road projects under the Transportation Innovation Act.

 

LB462 would revise the One-Call Notification System Act. The One-Call system protects underground facilities, excavators, and the public by locating underground facilities prior to excavation so that proper precautions may be taken. The bill would require the board of directors to submit a report to the Governor and Legislature and allow them to review locator training materials.

  

Jails and Courts

LB686, which was introduced as a prison overcrowding bill, contains elements from other several bills. It would create an offense for bringing a cellphone or other electronic device into a state correctional facility ( LB233) and allow the Department of Health and Human Services to contract with outside providers for the treatment of defendants who are determined to be mentally incompetent to stand trial ( LB240). It would prohibit placing members of vulnerable populations in restricted housing after March 1, 2020. It would simplify the process and criteria used by judges to determine whether deferred judgment is appropriate.

 

LB690, the Healthy Pregnancies of Incarcerated Women Act, would prohibit state, county, and city detention facilities from using restraints on pregnant women during labor, delivery, recovery, and transport to medical facilities. The administrator of the facility could make an individualized determination that there are extraordinary circumstances such as a substantial flight risk that dictate that restraints are used.

 

LB532 would update procedures related to harassment, sexual assault, and domestic abuse protection orders. The court could treat petitions for one kind of protection order as a petition for a different kind of order if it appears that another kind of protection order is more appropriate.

  

LB630 would make the distribution of intimate images and videos without consent unlawful. The practice is often referred to as revenge porn. The bill would create an affirmative defense for children under 18 who consensually send images so that they would not automatically be considered felons and subject to the sex offender registry. A committee amendment based on LB510 that would have addressed the registration of juveniles adjudicated in another state was removed by AM1923.

 

LB680 would create civil penalties for revenge porn.

 

LB519 would extend the statute of limitations for human trafficking. It would allow law enforcement to apply for authorization to use wiretapping during investigations of human trafficking.

 

LB505 would require clerks of the district court to forward payments for child, spousal, or medical support to the State Disbursement Unit by electronic transfer. The State Disbursement Unit was created in 1999 to facilitate the statewide collection and disbursement of support order payments.

 

LB309 would increase the number of district court judges in Douglas County from 16 to 17 on July 1, 2021.

 

LB726 would require the Department of Health and Human Services, in consultation with the Department of Corrections, to develop protocols for assisting inmates in applying for Medicaid when they have been released on a medical parole. Because these individuals are often indigent, the costs for their end-of-life care often falls to counties as general assistance. The protocols would help them to become Medicaid-eligible before they leave the correctional facility.

  

Other Issues

LB492 would create the Regional Metropolitan Transit Authority Act to allow a municipality or group of municipalities within a metropolitan statistical area to create a regional transit authority. The bill is intended to provide flexibility for bus service in the Omaha metro area.

 

LB334 would eliminate the Angel Investment Tax Credit Act and redirect $4 million from the tax credit to the Governor's emergency program in FY20-21. The bill would shift Cass County from a more rural planning and development region into a more urban region composed of Douglas, Sarpy and Washington counties. It would prohibit regions from entering into negotiations to change regional boundaries until July 1, 2020. The moratorium would provide time for the regions to develop a process for changing boundaries.

LB657 would allow limited hemp farming and regulate its transportation. Law enforcement officers would be allowed to detain persons carrying or transporting hemp if they could provide the required documentation. Failure to present documentation would constitute probable cause to believe that the hemp could be marijuana or another controlled substance. Due to concerns about costs, an amendment was adopted to temporarily open the Noxious Weed Cash Fund and the Fertilizers and Soil Conditioners Administrative Fund to help cover the costs until the hemp program is self-supporting.

 

LB564 would modernize the Civic and Community Center Financing Act. Existing law allows grants made through the fund to be used to construct or improve community facilities such as libraries, recreation and wellness centers, convention centers and other spaces, as well as the conversion and rehabilitation of historic buildings. The bill would expand the types of facilities that are eligible for grants. Grants could be awarded to facilities owned jointly by municipalities and other political subdivisions, including counties, if the municipality has at least a 50 percent ownership interest.

 

LB315 would update inheritance tax proceedings. The bill would clarify that life insurance proceeds from trusts are not subject to inheritance tax because they are non-probate assets. This would codify the current practice in which such proceeds not payable to an estate are not subject to inheritance tax. The bill would clarify when notice of a determination of inheritance tax must be provided to the Department of Health and Human Services for decedents 55 years of age or older or having resided in a medical institution. Under LB315, this notice would only be required in an independent proceeding to determine inheritance tax in the absence of a probate proceeding.

Legislators continued to introduce interim study resolutions this week. Each study resolution is assigned to a legislative committee for research during the summer. The studies are prioritized by the committees and some have public hearings. The studies examine issues related to bills introduced this year or that might be addressed in the 2020 session. Selected studies of interest to counties are listed below by number, introducer, description, and committee assignment. A complete list of study resolutions of interest to counties will be included in the final 2019 Legislative Report.

 

County Operations

LR143 (Albrecht) Interim study to examine the laws for accounting and financial reporting in political subdivisions to determine a more uniform method of reporting. Government, Military and Veterans Affairs Committee

LR145 (Hunt) Interim study to examine the financing of energy efficiency and renewable energy improvements on single-family residential property under the Property Assessed Clean Energy Act. Urban Affairs.

 

Unfunded Mandates

LR148 (La Grone) Interim study to examine issues related to unfunded mandates to county governments for the administration of judicial proceedings. Judiciary

LR149 (Wayne) Interim study to examine the burden of unfunded mandates on county budgets. Government, Military and Veterans Affairs

 

Elections

LR247 (La Grone) Interim study to examine the long-term sustainability of recurring election technology replacement. Government, Military and Veterans Affairs

 

Property Tax

LR232 (McCollister) Interim study to examine the processes and procedures used in the assessment and valuation of real property and in appeals before the Tax Equalization and Review Commission. Revenue

 

Courts/Jails/Corrections

LR123 (Hansen, M.) Interim study to assess the readiness of correctional facilities to implement the provisions of LB258, 2018, by its operative date of July 1, 2020. Judiciary

LR144 (Hansen, M.) Interim study to examine the effectiveness of cash bail and cash bonds for misdemeanors and city and village ordinance violations. Judiciary

LR146 (Wayne) Interim study to examine the feasibility of introducing a Prosecutor Transparency Act in Nebraska. Judiciary

LR189 (Hansen, M.) Interim study to examine the effectiveness of 24/7 sobriety programs and determine potential standards for statewide implementation. Judiciary

LR223 (Cavanaugh) Interim study to carry out a comprehensive study of incarceration and mental health services in Nebraska. Executive Board

  

Juvenile Justice

LR127 (Hunt) Interim study to ensure youth in the foster care system and juvenile justice system understand their rights, to ensure their rights are being upheld, and to explore the need for additional rights. Judiciary

LR176 (Cavanaugh) Interim study to examine the metrics used in the juvenile justice system to track outcomes for youth who are under system supervision and after contact with the juvenile justice system. Judiciary

LR236 (Lathrop) Interim study to examine issues related to juvenile justice. Judiciary

 

Road Funding

LR167 (Friesen) Interim study to review the current model of collecting taxes to build and repair roads. Transportation and Telecommunications

LR174 (Cavanaugh) Interim study to examine the Highway Trust Fund and ways it can be used to increase transit infrastructure in areas with limited access. Transportation and Telecommunications

  

Other Issues

LR66 (Kolterman) Interim study to examine the public employees' retirement systems administered by the Public Employees Retirement Board. Nebraska Retirement Systems Committee

LR184 (Quick) Interim study to examine how to provide a sustainable and adequate stream of state funds to local public health departments to ensure they are able to meet their core responsibilities. Appropriations