Thank you for visiting my website. It is an honor to represent the people of the 1st legislative district in the Nebraska Unicameral Legislature.
You’ll find my contact information on the right side of this page, as well as a list of the bills I’ve introduced this session and the committees on which I serve. Please feel free to contact me and my staff about proposed legislation or any other issues you would like to address.
Sincerely,
Sen. Dan Watermeier
A good portion of this past week was spent debating the death penalty. LB 543 would change the maximum penalty for first degree murder in Nebraska from death to life imprisonment without the possibility of parole. Senator Ernie Chambers introduced similar legislation for more than 30 years until he left the Legislature in 2008. Back after a four-year break due to term limits, he again took up his fight to repeal the death penalty.
After eight hours of debate, Senator Chambers made a motion to invoke cloture, which immediately shuts off debate and allows a vote to be taken on the advancement of the bill. A cloture motion requires 33 votes. The motion fell short on a vote of 28-21. After an unsuccessful cloture motion, the bill is pulled from the agenda. It will not be debated again this year.
There are currently 11 people on Nebraska’s death row, including two who were sentenced to death for murders committed in Richardson County. The last execution in Nebraska was in 1997. In 2008, the Nebraska Supreme Court ruled that the electric chair as the sole means of imposing the death penalty constituted cruel and unusual punishment. The Legislature passed legislation in 2009 to change the method of executing the death penalty to lethal injection. The state has experienced difficulty in obtaining the lethal drugs, as pharmaceutical companies don’t want their products associated with executions. Thirty-two states, the U.S. Government, and the U.S. Military impose the death penalty.
Those opposing the death penalty emphasize the high cost, citing statistics that show the average number of appeals filed by someone on death row is 7.76 compared to 1.64 by those sentenced to life, with the average length of an appeal lasting more than 13 years for those on death row compared with almost 6 years for those sentenced to life in prison. Furthermore, the cost of a death penalty case is approximately $3 million compared to the cost of a life without parole case of just over $1 million. Opponents also emphasize the arbitrary nature of administering the death penalty.
Although no longer in the majority in the Legislature, but of sufficient number to block a vote on the advancement of the bill, senators supporting the death penalty argue that cost estimates are overstated and that the death penalty is an important and necessary factor in the sentencing process. They believe that it serves as a deterrent, especially for those already serving a life sentence. Proponents point out that the death penalty is reserved for those committing the most heinous of crimes. Statistics show that it is only sought in approximately 7% of all murders and actually imposed in less than 1%.
The Governor handed down his first veto of this session, returning LB 553 without his signature and with his objections. This legislation sought to address the shortfall in the school retirement plan. The Governor objected to the increase in the state contribution rate and felt that the long-term revisions should be studied further before implementing the changes. After some senators criticized the Governor for his absence when the Retirement Committee was studying this issue, the Legislature voted to override his veto on a 32-1 vote.
During these last several weeks of the legislative session, I still encourage you to contact me with your thoughts and opinions on the issues before us. I can be reached at District #1, P.O. Box 94604, State Capitol, Lincoln, NE 68509. My email address is dwatermeier@leg.ne.gov and my telephone number is (402) 471-2733.
Debate on the budget bills consumed most of this past week for the Legislature. The mainline budget bill, which contains the appropriations for the expenses of the Nebraska State Government over the next biennium, warranted the most discussion. A dozen amendments were offered to LB 195, but only the Appropriations Committee amendments, which became the bill, and two amendments offered by the Appropriations Committee chair were adopted. These amendments revised the amount appropriated to the state aid formula for K-12 school districts, based on the latest compromise on the state aid bill, and increased the revolving funds for the Nebraska Statewide Radio System, to allow for three additional towers to address necessary improvements and enhanced coverage. Unsuccessful amendments included efforts to reduce funding for the learning communities, for climate change studies, for the nurse visitation services program and for a railroad track inspector position, as well as attempting to increase funding for the property tax credit program. I was supportive of efforts to reduce the funding contained in the budget bill because if all bills pending are passed, it will result in a 5.5% increase in spending. The historical growth in revenue over the last 30 years is 5%. I do not think it is wise to increase spending by a greater percentage than the average increase in revenue.
In addition to advancing the budget bills to the second stage of debate, senators gave final approval to LB 553. This bill deals with the retirement system for school employees. Due to the recent recession, the plan has experienced a significant pension shortfall. Under LB 553, a new benefits tier is created for school employees hired on or after July 1, 2013, which averages the final salary over 5 years rather than 3 years and reduces the maximum cost-of-living adjustment from 2.5% to 1%. The sunset date on the increased employee contribution rate of 9.78% is eliminated and the state’s contribution rate is increased from 1% to 2% of total compensation. I support these efforts whereby the schools, teachers and the state share in resolving the shortfall. Furthermore, the legislation takes the initiative to adjust the current retirement system for future employees. However, I still have concerns about the sustainability of a defined benefit program.
Two years ago, legislation was passed to encourage companies to establish internships in an effort to retain our graduates in Nebraska, as research showed that interns tend to stay in the region after graduation. Under the Intern Nebraska program, grants are available to companies creating qualified new internships to help offset some of the cost and risk businesses incur when hiring interns. By the end of 2012, 229 companies had taken advantage of the program and had filled 361 positions. Of the interns who graduated and provided information about their future plans, over 50% were offered a full-time position with the company where they interned. An additional 25% were hired on full-time with another company.
LB 476, introduced this year by Senator Tom Carlson of Holdrege, amends the Intern Nebraska program. It opens eligibility up to any college student instead of just those in the upper classes. Grant amounts are increased to the lesser of 75% of the cost of the internship or $5,000, and can go up to $7,500, if the intern is a Federal Pell Grant recipient. The Department is to develop an action plan that will be marketed to high schools and higher education institutions, encouraging students to pursue internships. LB 476 was passed by the Legislature this past week.
We got our first taste of a late night session, adjourning at 11:05 p.m. on Thursday night. As we continue to work long hours, I encourage you to inform me of your thoughts and opinions. I can be reached at District #1, P.O. Box 94604, State Capitol, Lincoln, NE 68509. My telephone number is (402) 471-2733 and my e-mail address is dwatermeier@leg.ne.gov.
According to the legislative rules, the Appropriations Committee must place appropriations bills on General File by the 70th day in a 90-day session or the Legislature reverts to the Governor’s budget proposal. The budget bills were reported to the floor on May 1, which was the 70th day, and must be passed by the 80th legislative day, which falls on May 20.
The Appropriations Committee has proposed a budget of $3.8 billion the first year and $4 billion the second year of the biennium. This represents a 5.5% growth in the first year and a 4.8% growth in the second year, for an average of 5.2%. The primary differences between the Governor’s budget proposal, with an average increase of 4.9%, was that the committee recommended a higher level of state aid funding for K-12 schools and appropriated additional contributions to the defined benefit retirement plans for school employees, due to a projected actuarial shortfall.
At the end of the 2012 legislative session, a $619.4 million shortfall from the required minimum 3% reserve was projected for the 2013-2015 biennium. Since that time, the projected shortfall has switched to a positive $50 million, due to higher revenue forecasts by the Nebraska Economic Forecasting Advisory Board and lower spending projections, including proposed alterations to the state aid formula for K-12 schools. This means that approximately $50 million is available for new legislative proposals.
The cash reserve fund is projected to have a balance of $625 million at the end of the next biennium. This is the fund that allowed the state to recover from the recent recession without major damage to programs and services or the necessity of a tax increase.
The budget is broken up into 3 major parts. Approximately 34% of the budget is dedicated to the funding of agency operations. This includes funding for the University, State Colleges, the Department of Health and Human Services, the Department of Corrections, the State Patrol, the court system, and dozens of other agencies. Another 32% is for state aid to individuals, which includes funding for persons qualifying for Medicaid, child welfare, public assistance, and those with developmental disabilities. The last 34% of the budget is devoted to state aid to local governments, which includes school districts, special education, community colleges, and funding for the homestead exemption.
The Legislature gave first-round approval this past week to LB 93, which allows for the notation of the word “veteran” on a driver’s license or a state identification card. In order to implement this voluntary privilege, the Department of Veterans Affairs would create a registry to determine eligibility for use by the Department of Motor Vehicles. The intent is to make it more convenient for persons to identify themselves as veterans, as they must now show their discharge papers, which are cumbersome to carry and contain confidential information.
As advanced from the Transportation and Telecommunications Committee, LB 93 also proposed to create the Military Honor license plate. Unfortunately, Senator Ernie Chambers pledged to fight this provision, so due to time constraints in the remaining days of this legislative session, the proposal was amended out of the bill and will be taken up next year.
Senators gave second-round approval to LB 517, which would create a Water Funding Task Force. The task force would be charged with the development of a 20-year strategic plan for water sustainability. They are to present the recommended plan, along with a funding proposal, in time for the Legislature to discuss it during the 2014 legislative session.
As the Legislature discusses the budget and other bills of interest, I welcome your input. I can be reached at District #1, P.O. Box 94604, State Capitol, Lincoln, NE 68509. My e-mail address is dwatermeier@leg.ne.gov and my telephone number at the Capitol is (402) 471-2733.
The Legislature gave first-round approval this past week to a bill that overhauls the juvenile justice system in our state. The intent of LB 561, introduced by Senator Brad Ashford of Omaha, and prioritized by the Judiciary Committee, is to keep more kids out of the judicial system and in effective and appropriate community-based services.
Pre-trial diversion programs hold youth accountable, provide restitution to victims, and link youth and their families with appropriate services. LB 561 would establish a position within the Crime Commission to assist in the creation and maintenance of juvenile pre-trial diversion programs in counties across the state. Funding would be appropriated for the development of community-based care.
Under LB 561, as amended, the number of juveniles sent to the Youth Rehabilitation and Treatment Centers (YRTC) in Kearney and Geneva would be limited to the most severe cases for the protection of the individual or the public. The original version of the bill called for the closure of the facilities. Furthermore, a process would be created for juveniles leaving a YRTC to help youth more effectively reenter their communities with the involvement of their families.
LB 561 shifts responsibility for juvenile offenders from the Office of Juvenile Services within the Department of Health and Human Services to the Office of Probation Administration statewide. Probation officers have already assumed responsibility for offenders in Douglas County and the North Platte and Scottsbluff areas, through a successful pilot project.
Senators also debated tax incentives for wind energy this past week. As amended, LB 104, introduced and prioritized by Omaha Senator Steve Lathrop, amends the definition of “qualified business” for Tiers 2 through 5 of the Nebraska Advantage Act, to include businesses engaged in the production of electricity by using one or more sources of renewable energy to produce electricity for sale. This definition would include wind, solar, geothermal, and hydroelectric energy.
LB 104 was introduced in an effort to encourage the development of renewable energy. It specifically attempts to attract a Kansas company who has expressed interest in building a $300 million wind farm in northeast Nebraska. Nebraska ranks 4th in wind energy potential but lags behind other states in the development of wind farms. LB 104 provides for a refund of the sales tax paid on machinery and equipment at the project location, which will make us competitive with neighboring states regarding wind development. LB 104 was given initial approval on a 30-0 vote.
The formula that distributes state aid to K-12 school districts is a highly controversial issue. State aid to K-12 schools is the largest single recipient of state funds within the budget. The current formula would have resulted in an approximate 11% increase, which is unsustainable considering the other responsibilities of the state. The Education Committee worked on adjustments to the formula, bringing it down to an average increase of about 5% each year of the biennium, which approximates the growth in state revenues.
As debate began on LB 407, the larger districts argued that additional state aid should focus on the schools where most of the state’s students attend, whereas smaller schools feel that they should be awarded a greater portion, as they cannot offer the broad curriculum enjoyed by the larger schools. After it became apparent that there was no agreement on the amendments offered by the Education Committee, the bill was pulled from the agenda. Three days later, after a compromise was reached granting concessions to both the larger and smaller school districts, LB 407 received first-round approval on a 42-0 vote.
A major concern that I have with the present state aid formula is the number of school districts that no longer qualify for equalization aid. Of the 249 school districts, it is projected that 114 districts will receive no equalization aid, although they still receive some state aid, such as income tax rebates and net option funding. As valuations continue to increase, especially for rural landowners, the burden of funding rural schools is falling primarily on our agriculture sector.
Senators have begun to work into the evening most nights of the week. As we debate many issues affecting the citizens of the state, I encourage you to contact me with your thoughts and opinions. I can be reached at District #1, P.O. Box 94604, State Capitol, Lincoln, NE 68509. My e-mail address is dwatermeier@leg.ne.gov and my telephone number at the Capitol is (402) 471-2733.
The passage of the Affordable Care Act (ACA) by the federal government requires citizens to have health insurance or be subject to a penalty. As passed, the ACA required states to expand their Medicaid program to include adults between 19-65 years of age with incomes up to 138% of the federal poverty level (FPL). Currently, childless adults that are not disabled or elderly do not qualify for Medicaid. Parents of minor children with incomes above 56% of FPL also do not qualify. Last year, the U.S. Supreme Court upheld the federal law but ruled that the Medicaid expansion portion should be optional for the individual states.
To encourage states to expand their Medicaid program, the federal government has pledged to pay 100% of the expansion costs for the first 3 years, after which the reimbursement level will fall to 90%. Although senators agreed that this appears attractive on the surface, opponents also pointed out that the state must consider the burden that will be placed on taxpayers in future years, both on the state and federal level. The federal government’s budget is far from stable and going further in debt will place greater burdens on our children and grandchildren. As rules and regulations are still being developed, some senators expressed concern that the game plan could change once states have made the commitment to expand. An amendment was offered to address this concern, proposing language to allow the Legislature to reverse the expansion if federal reimbursement is decreased. This may not be a realistic option, as once Medicaid is expanded, it would be virtually impossible to reverse that trend. With the proposed expansion, approximately 1 in 5 Nebraskans would be on Medicaid and 1 in 5 tax dollars would be spent on Medicaid.
Senators discussed LB 577, which proposes to expand Medicaid in Nebraska, over several days this past week. This is probably one of the most important issues facing senators this session. Supporters of Medicaid expansion did not have the 33 votes necessary to cut off debate and vote on the advancement of the bill. Consequently, after more than 10 hours of debate, the Speaker of the Legislature pulled the bill from the agenda. Unless circumstances change and proponents of LB 577 can prove that they have the necessary votes, LB 577 most likely won’t be placed on the agenda again this year.
Senators had general concern for this group of Nebraska citizens that find it difficult to afford health insurance, but our state currently has commitments beyond its resources for other populations that are also in need of state assistance. Nebraska should not promise something that it may not be able to keep.
Medicaid benefits have no premiums or deductibles and minimal cost sharing. Medicaid expansion could cause some low-income workers to drop their job-based health coverage. The law addresses the lack of health insurance, but it will not necessarily result in better health care. Furthermore, studies have shown that Medicaid recipients use the Emergency Room more often than those without insurance, as there are no financial disincentives. Until these habits are changed, which the law does not address, we won’t see the reduction in costs that some are predicting. The shortage of primary care physicians could also result in more visits to the ER.
Considering all the uncertainty surrounding the expansion, enough senators felt that it was in Nebraska’s best interest to wait and see how the ACA plays out before committing our state and its citizens to a program that could be financially unsustainable in the future. I appreciate all the correspondence that I have received on this issue and I value your input.
Please continue to inform me of your thoughts and opinions on the issues that are before the Legislature. I can be reached at District #1, P.O. Box 94604, State Capitol, Lincoln, NE 68509. My telephone number is (402) 471-2733 and my e-mail address is dwatermeier@leg.ne.gov.
Legislation increasing the annual cost of a park permit from $20 to $25 was passed two years ago. This year, LB 362 was introduced by Lincoln Senator Bill Avery. It proposes to eliminate the park entry permit for residents and replace it with a $7 registration fee on most motor vehicles. Non-residents would still be required to purchase a park entry permit. As introduced, it would result in increased revenue for state parks of approximately $7 million a year, which would be used help offset the $43 million in backlogged deferred maintenance projects and ADA-compliance requirements at the more than 80 state parks and recreation areas in Nebraska. Proponents stressed that state support for parks has been flat for a number of years and that the current permit process can’t sustain the needs of the parks in the future.
Opponents to the measure emphasized that Nebraska already has one of the highest registration fees among the states. Senators stressed that motor vehicle fees should be dedicated to roads and should not be diverted for other purposes. Additionally, some senators felt it was unfair that all motorists would have to pay for state parks, regardless of whether they visit one.
Senators debated LB 362 for several hours, but came to no consensus, nor took any vote on pending amendments. Based on the number of senators having concerns, the introducer pledged to work on alternatives prior to further debate on the bill.
Last year, the U.S. Supreme Court ruled that the sentencing of juveniles to a mandatory sentence of life without the possibility of parole violated the Eighth Amendment of the U.S. Constitution, prohibiting cruel and unusual punishment. The court ruled that a life sentence could not be the only option for a judge when sentencing a juvenile charged with first-degree murder, as is the current law in more than two dozen states, including Nebraska and Iowa. The majority opinion noted that mandatory life without parole precludes consideration of such factors as the juvenile’s age, immaturity, impulsiveness, failure to appreciate risks and consequences, as well as the juvenile’s family and home environment. Twenty-seven inmates in Nebraska are currently serving life sentences for crimes they committed as juveniles.
The ruling recognizes scientific research that shows brains of juveniles are still developing, making them more prone to rash decisions and risk-taking, but giving them more opportunity for rehabilitation. Furthermore, researchers believe that many young offenders may suffer from mental illness, making them not fully capable of understanding the consequences of their actions.
As introduced, LB 44 did not list a minimum number of years as an alternative sentence to life without parole. As advanced from the Judiciary Committee, committee amendments proposed a possible sentence of 30 years to life for juveniles convicted of first-degree murder. Under our good time laws, a 30-year sentence would allow a juvenile to be eligible for parole after serving 15 years. Amendments were offered to increase the 30-year minimum sentence to 60 years, making the inmate eligible for parole after 30 years, and to provide for a 25-year mandatory minimum sentence. Neither amendment was successful. A compromise amendment providing for a 40-year minimum sentence (parole eligible after 20 years) was adopted.
The Legislature discussed LB 44 for more than 8 hours this past week before voting to advance the bill to the second stage of debate. Senators did not attempt a cloture vote due to the importance of the subject and the need to reach a compromise to assure that legislation is passed this year.
LB 589, a bill I introduced to clarify exemptions from the requirements of the One-Call Notifications System Act in the event of emergency conditions involving a natural gas pipeline leak, was given first-round approval this past week. LB 589 was designated as a speaker priority bill earlier this session.
As the Legislature begins the final 30 days of this legislative session, I encourage you to contact me with your thoughts and opinions on pending legislation. I can be reached at District #1, P.O. Box 94604, State Capitol, Lincoln, NE 68509. My telephone number is (402) 471-2733 and my e-mail address is dwatermeier@leg.ne.gov.
Cities are allowed to impose a local option sales tax on their communities. As of last year, approximately 200 communities had authorized a local option sales tax rate of up to 1.5 percent. This is on top of the state sales tax rate of 5.5 percent. Last year, legislation was passed, in spite of a Governor’s veto, to allow cities to increase their local option sales tax to a maximum of 2 percent. Three communities have voted to take advantage of this increase in local tax revenue – Alma, Sidney and Waterloo. Voters in Nebraska City and Bellevue rejected the proposed increase.
This year, Senator Ernie Chambers of Omaha introduced LB 266, which would repeal the increased tax authority for communities. The bill had a public hearing before the Revenue Committee in February but was not advanced to the floor of the Legislature. Late last month, Senator Chambers filed a motion to place LB 266 on General File. When discussing the motion this past week, the allotted time on the agenda expired before a vote was taken on the motion. Senators did mention that an amendment is pending on LB 613, the comprehensive tax study, that would place a moratorium on this increased taxing authority pending the outcome of the study.
Lawmakers voted to advance LB 216, a bill introduced and prioritized by Senator Amanda McGill of Lincoln. This bill proposes to establish the Young Adult Voluntary Services Act. Former state wards between the ages of 19 and 21 could voluntarily request continued services from the state. The primary costs associated with the bill would be for housing assistance and case management. In an effort to reduce the estimated $3.3 million dollar fiscal impact in each of the next two years to less than $1 million per year, an amendment was adopted to limit the program to foster children that were abused and neglected. Federal funds are available in addition to the state general funds. The bill aims to replace a current program that was not well-utilized for state wards that “age-out” of the system. To be eligible, youth would have to be enrolled in post-secondary education or working 80 hours per month. LB 216 provides a support system for vulnerable youth, in an effort to improve long-term outcomes in education, employment and housing stability.
This past week, the Legislature also discussed LB 637, which was introduced and prioritized by Senator Norm Wallman of Cortland. If the Nebraska Department of Environmental Quality intends to adopt a rule or regulation that would impose requirements different than federal regulations or increase costs on regulated persons or entities, the department would have to prepare a statement that describes the annual economic impact of the rule. I spoke on the floor regarding the significant effect more stringent state regulations can have on local entities, thus showing why I am supportive of the proposed additional requirements placed on DEQ.
Senators gave first-round approval to LB 57, introduced and prioritized by Senator Tyson Larson. Under LB 57, an applicant who uses grant funding from the Environmental Trust Fund to purchase real property, and subsequently seeks to transfer such property to a federal land management agency, which transfer would result in the removal of the property from the tax rolls, shall have such transfer approved by the Environmental Trust Board. The contract would also have to provide information on how the taxes to the county would be replaced.
The Clerk of the Legislature’s office coordinates an annual Unicameral Youth Legislature, which will be held June 9-12, 2013. The four-day camp is a legislative simulation for students, ages 14-17, in which they take on the role of lawmakers. Student senators sponsor bills, conduct committee hearings, debate legislation and discover the unique process of the nation’s only unicameral. The Unicameral Youth Legislature is jointly sponsored by 4-H and the University of Nebraska Big Red Summer Camps program. More information on the details can be found at www.nebraskalegislature.gov/education/unicamyouth.php.
The Speaker of the Legislature announced this past week that we will start working into the evening most nights in April, with even later nights expected in May, prior to adjournment in June. As we debate bills that have been prioritized, I encourage you to contact me with your thoughts and opinions. I can be reached at District #1, P.O. Box 94604, State Capitol, Lincoln, NE 68509. My e-mail address is dwatermeier@leg.ne.gov and my telephone number is (402) 471-2733.
It’s almost crunch time. Senators have begun meeting in full-day session. We’ve passed the 50-day mark of the 90-day legislative session. We’ve discussed only a handful of priority bills and we still have the budget to deal with in May. Furthermore, the Appropriations Committee has estimated that the budget will only allow for $16 million to $19 million in new spending. This figure sounded sufficient, until the sum was calculated for the fiscal impact of the priority bills and came to more than $150 million for the two-year budget period. Consequently, some senator’s priority bills will not pass or they will have to be amended to reduce the fiscal impact. Senators will have to decide which priority bills are the most important for the state, as the Nebraska Legislature is required to pass a balanced budget.
Senators learned of the fiscal imbalance while debating a bill that would adopt the Wildfire Control Act of 2013. The legislation would direct the Nebraska Forest Service to contract for two air tankers for fighting fires, to thin forests to reduce risk, to provide expanded training, to expand the federal excess property programs and to oversee forest rehabilitation. Based on predictions that the drought will be even worse this summer, it was easy to argue the need for the bill. However, the legislation has an annual $1.7 million fiscal impact. Despite the warning, senators gave LB 634 first-round approval.
The following are two more examples of bills with significant fiscal impacts. Both have been designated as priority bills but neither have advanced from committee at this time.
LB 553 amends the School Employee Retirement Plan to address both short-term and long-term funding obligations. The bill creates a new tier of reduced benefits for new employees, reducing the cost-of-living adjustment from 2.5% to 1% and increasing from 3 to 5 the number of years used to determine final average salary for purposes of calculating a member’s retirement benefit. Preliminary discussions by Retirement Committee members would keep the contribution rates required of teachers at the increased level rather than allowing them to sunset. Additionally, the bill proposes to increase the state’s contribution rate from 1% to 2% of compensation, creating a fiscal impact of approximately $17 million per year. In an effort to retain costs, committee members have proposed to delay the increase in the state’s contribution rate to the second year of the biennium. Due to the recession, the pension fund is currently facing a $108 million actuarial shortfall and LB 553 helps to ensure the sustainability of the School Employees Retirement System.
LB 625 would increase the maximum income level for families qualifying for the Child Care Subsidy Program from 120% to 185% of the federal poverty level. In 2011, 13 states set eligibility for child care assistance above 200% and an additional 22 states set eligibility above 150% of federal poverty level. Prior to 2002, the income limit for the child care subsidy was 185% of federal poverty guidelines, but this income level was never authorized in statute. Supporters testified that child care subsidies are critical to ensuring that children are safe and parents can work. Studies have shown that child care represents the largest portion of a family’s income. The fiscal note estimates that the cost to the state would be approximately $11 million per year. As I understand, negotiations are taking place on the percentage of increase in the income level.
The Legislature will have a tough job ahead. All of the bills that have been designated as priority bills have merit and are important to certain groups of Nebraskans. If you have any comments on the bills that have been prioritized, I value your input and encourage you to contact me. I can be reached at District #1, P.O. Box 94604, State Capitol, Lincoln, NE 68509. My telephone number is (402) 471-2733 and my e-mail address is dwatermeier@leg.ne.gov.
The Legislature spent the better part of the mornings this past week debating a bill calling for a comprehensive study of our tax system. As amended, LB 613 creates the Tax Modernization Committee, whose purpose is to review and study the state’s tax laws, including, but not limited to, sales taxes, income taxes, property taxes, and other miscellaneous taxes and credits.
The Tax Modernization Committee would be comprised of the Revenue Committee members and the chairs of the Appropriations, Health and Human Services, Education, Agriculture, and Planning Committees. The committee is to consider fairness, competitiveness, simplicity and compliance, stability, adequacy and the interrelationships of the tax systems within the state revenue system as a whole. The importance of public input is recognized in the legislation and the committee is authorized to hold public hearings.
A report is to be issued by December 15, containing recommendations to update state, county, and local tax policies and to identify areas of concern that require further in-depth analysis and study.
LB 613 gained steam after LB 405 and LB 406 were introduced at the request of the Governor. The legislation called for the elimination or the reduction of income taxes, as well as the repeal of certain sales tax exemptions granted to business, agriculture, hospitals and other nonprofit groups. Due to an outcry from the public, both bills were killed by the Revenue Committee and LB 613 was advanced to the floor of the Legislature by the Executive Board.
Senator Ernie Chambers filibustered LB 613 because he was upset that several bills were being advanced to alter current taxes in light of the pending study, but the Revenue Committee did not advance a bill that he introduced to repeal LB 357, which was passed last year allowing for a local option sales tax rate of up to 2 percent. He offered numerous amendments to LB 613, slightly changing the wording of the legislation. After eight hours of debate and a successful cloture motion, LB 613 was given first-round approval on a 47-1 vote.
I support LB 613 because I feel that it is time to review the tax system. Over the years, new taxes and fees have been put in place, other taxes have been repealed, rates have been adjusted, and exemptions have been granted, but no one has looked at the whole picture to determine how the different parts work together. Times have changed over the past decades and our tax system needs to reflect those changes, while remaining competitive with other states.
An amendment is pending for the second stage of debate that would place a moratorium until July 15, 2014 on the imposition of a local option sales tax in excess of 1 ½ percent, which was the maximum amount allowed prior to the passage of LB 357 last year. Any tax rate above 1 ½ percent that was approved by electors prior to the effective date of the legislation would be allowed to remain in effect. I assume the intent of the proposed moratorium is to prohibit additional towns from utilizing the increased rate while the comprehensive tax study takes place. The amendment also places a moratorium on any new occupation tax or any increase in the rate of an existing occupation tax.
The public hearing process has been completed for this year. Full day debate will begin on March 27th and continue through the last day of the legislative session, which is set for June 5th. During this time, senators will try to discuss as many priority bills as possible and must pass a biennial budget. If you have any comments on bills that have been given priority status, I encourage you to contact me. My address is District #1, P.O. Box 94604, State Capitol, Lincoln, NE 68509. My e-mail address is dwatermeier@leg.ne.gov and my telephone number is (402) 471-2733.
This past week marked the deadline for the designation of priority bills. Every senator may designate one bill as his/her individual priority bill. Every committee can designate two priority bills and the Speaker of the Legislature has the authority to designate twenty-five bills as speaker priority bills. After this point in the session, bills without priority status do not stand a good chance of being debated unless they are noncontroversial and meet the criteria for consent calendar. Consent calendar is a tightly structured process whereby noncontroversial bills without opposition have a chance at passage.
I selected LB 308 as my personal priority bill because it will provide tax relief. LB 308 proposes to repeal Nebraska’s alternative minimum tax (AMT). Nebraska is one of only nine states with its own AMT. This tax was originally designed to capture revenue from high-income earners, but over the last decade, it has been a threat to more middle class taxpayers. The AMT adds complexity to our tax code, due to its own set of rates and rules for deductions.
LB 308 was recently advanced from the Revenue Committee, with committee amendments that contain the provisions of LB 457. LB 457 addresses the Net Operating Loss (NOL) carry forward tax policy, which allows losses to be deducted against past and future profits to measure profitability over a period that more closely corresponds to a business’s investment horizon. The amendment would extend the carry forward deduction period for ordinary operating losses, lengthening the provision from 5 years to 20 years. All but 5 states have a NOL carry forward time-frame greater than 5 years. The committee amendments to LB 308 would bring Nebraska in line with the federal corporate income tax policy and the majority of states on loss carry forwards. This will help improve Nebraska’s business tax climate, allowing small businesses, new ventures, high-tech businesses and manufacturers additional time for investment and employment growth.
Other bills that have been given priority designation include: LB 96 exempts repair or replacement parts for agricultural machinery and equipment from the sales tax; LB 362 changes the fee for state park permits to a registration fee on motor vehicles; LB 393 repeals the helmet law for motorcyclists 21 years of age and older; LB 439 increases the cigarette tax; LB 543 repeals the death penalty; LB 561 restructures the juvenile justice system; LB 517 creates the Water Sustainability Project Task Force; LB 577 expands Medicaid as allowed under the federal Affordable Care Act; and LB 613 creates a committee to conduct a comprehensive study of our tax system, including sales, income and property taxes.
In February, I held open houses in several locations in the eastern portion of Legislative District #1. On Saturday and Sunday, March 23 and 24, I plan to hold open houses in the western part of the district. At 8:00 a.m. on Saturday, I will be at the Little Brown Jug Coffee Shop in Pawnee City; at 10:00 a.m. at Frazier’s Cafe in Tecumseh; and at 1:00 p.m. at Scott’s Cafe in Sterling. On Sunday, I will be at the Palmyra Activities Center at 1:00 p.m. I encourage you to stop by on March 23 or 24 so that I can get the chance to meet you and to hear your thoughts on issues that are before the Legislature.
My contact information is District #1, P.O. Box 94604, State Capitol, Lincoln NE 68509. My e-mail address is dwatermeier@leg.ne.gov and my office telephone number is (402) 471-2733.
