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The One Hundred Third Legislature, First Session has adjourned sine die. We passed approximately 200 bills. Three-fifths of the bills that were designated as individual senator priority bills were passed, along with 26 of the 30 committee priority bills and 20 of the 25 speaker priority bills. Of the six bills that I introduced, four were passed, along with my individual priority bill.
Some of the priority bills that did not become law include the expansion of Medicaid as envisioned in the federal health care reform law, including state park entry fees in motor vehicle registration fees, repealing the motorcycle helmet law for riders 21 years of age and older, repealing the death penalty, requiring health insurance plans sold in the state to provide coverage for the treatment of autism spectrum disorders, compensating surface water users when irrigation is limited in order to comply with an interstate compact or decree, increasing the tax on cigarettes and tobacco products, changing the Corn Checkoff program, exempting military retirement benefits from the income tax, and exempting repair or replacement parts for agricultural machinery and equipment from the sales tax. All bills pending at the end of the 2013 legislative session are automatically carried over to the 2014 session.
Legislation of importance that was passed during this session included LB 561, which revises the juvenile justice system, focusing on treatment for young offenders rather than incarceration; LR 155, creating the Tax Modernization Committee to study the equity of our current tax structure; LB 216, creating a program of extended support services for young adults as they age out of the foster care system; LB 44, replacing mandatory life without parole with a 40-year minimum sentence for those younger than 18 years, in response to a U.S. Supreme Court ruling; LB 530, increasing the reimbursement rate for foster children based on the recommendations of the Foster Care Reimbursement Rate Committee; LB 507, which seeks to bring accountability for the public funds invested in child care and early childhood education, by the development of a 5-step quality rating and improvement system; and LB 553, which attempts to address both long- and short-term funding issues associated with the school employees retirement system.
The Legislature successfully passed a balanced budget that increases spending by an average of approximately 5% each year of the biennium. It includes increased funding for higher education, in order to allow for a tuition freeze for the next two years. It also includes provider rate increases, more funding for persons with intellectual disabilities that are on the state waiting list, and funding to meet the requirements of the federal health care reform law. Furthermore, the budget builds up the cash reserve, in anticipation of the next recession. By having a healthy cash reserve, Nebraska was able to weather the recent recession better than most states and did not have to resort to a tax increase.
I was appointed to the Water Funding Task Force, which was created through the passage of LB 517. The task force will focus on the long-term sustainability of water resources in our state. We will meet this summer and fall, with the task of recommending a strategic plan which prioritizes programs, projects, and activities in need of funding and recommends a permanent funding structure. We are to submit a report to the Legislature by the end of the year.
With the adjournment of the Legislature, I will be spending more time back on my farm near Syracuse. I will be at the State Capitol for office work and meetings throughout the interim. However, if I am not in the office, my staff will be able to assist you. If you have any questions pertaining to state government or on legislation passed or pending, or if you need assistance with an issue, I encourage you to contact my office at District #1, P.O. Box 94604, State Capitol, Lincoln, NE 68509. My e-mail address is email@example.com and my office telephone number is (402) 471-2733.
The Legislature gave final approval to the budget bills this past week. Over the Memorial Day weekend, the Governor will decide whether to sign the bills or use his line-item veto authority.
The Legislature gave second-round approval to LB 507, which establishes the Step Up to Quality Child Care Act. Three-fourths of the children under the age of six have parents in the workforce. Approximately 43,000 children are in families that qualify for child care subsidies. The state spends $94 million on child care subsidies but currently there is little oversight to assure that the children receive high quality care. Quality child care has a direct correspondence on school readiness and later academic achievement.
LB 507 seeks to bring accountability for the public funds invested in child care and early childhood education, by the development of a 5-step quality rating and improvement system. The goal of the legislation is to encourage programs to improve and to help parents compare their options. The system would be available to all child care and early education programs voluntarily, but participation is required for programs that receive significant amounts of public funds. The ratings would be published online starting in 2017. Participating programs that meet quality standards would get bonuses and increased subsidy rates. Scholarships would be provided for child care staff to improve their education.
During the first-round of debate on LB 507, an amendment was adopted that increased the income eligibility requirements for families qualifying for the Child Care Subsidy Program from 120% to 130% of federal poverty guidelines. The increase in eligibility would cost the state approximately $1.7 million annually. I had some concerns regarding the fiscal impact of the proposal and offered an amendment to lower the increase in the eligibility requirements to 125% of the federal poverty level. However, my amendment was not successful.
LB 308, the bill that I designated as my priority bill, received first- and second-round approval this past week. The intent of LB 308 is to simplify Nebraska’s tax code, harmonizing state provisions with federal requirements, and to improve Nebraska’s economic competitiveness.
LB 308 seeks to repeal Nebraska’s alternative minimum tax (AMT), which is found in only 9 states. As created in 1969, it was intended to address the relatively limited number of high income individuals who paid no federal income tax because of investments in tax shelter partnerships. Federal legislation in 1986 effectively ended tax shelter investing. Today, the AMT continues to impact a growing number of middle income tax earners. The AMT has its own set of rates and rules which are less generous than regular Nebraska income tax rules and are very confusing. The only way a taxpayer truly knows if they owe the AMT is by filling out their income tax forms a second time using the AMT Revenue Ruling.
As amended, LB 308 also updates Nebraska’s net operating loss (NOL) carry-forward policy, conforming Nebraska state law with federal income tax policy and the majority of the states. Currently, Nebraska has only a 5-year NOL carry-forward policy. LB 308 would extend the NOL to 20 years, benefiting small businesses, agriculture and new ventures, by allowing them more than 5 years to recoup a significant net operating loss.
LB 104, which broadens the Nebraska Advantage Act to give wind facilities a sales tax exemption for the purchase of turbines, towers and other wind-farm components, was given second-round approval by the Legislature. It was introduced in an attempt to attract a wind project to Northeast Nebraska, prior to the scheduled expiration of a federal production tax credit by the end of the year.
Senator Ernie Chambers offered an amendment to LB 104 to repeal the extra one-half cent local option sales tax authority for the City of Omaha only. Under the amendment, other cities in the state would still have the ability to increase their local sales tax to 2 percent. Earlier this year, Senator Chambers had introduced legislation to repeal the extra half cent of taxing authority, but the bill remains stuck in the Revenue Committee. After an unsuccessful attempt to amend his proposal onto LB 308, my priority bill, he offered this altered version of his proposal on LB 104. This time, the amendment was successful.
As we begin the last two weeks of this legislative session, I still encourage you to contact me with your opinions on issues before the Legislature. I can be reached at District #1, P.O. Box 94604, State Capitol, Lincoln, NE 68509. My e-mail address is firstname.lastname@example.org and my telephone number is (402) 471-2733.
Earlier this month, the Appropriations Committee heard testimony on a bill that would transfer $40 million from the Cash Reserve Fund to Natural Resource Districts with integrated management plans that have entered into contracts to construct or implement streamflow enhancement projects. Under LB 185, the loan would be repaid by June 30, 2018 with proceeds of the occupation tax. The authority to levy an occupation tax was granted by the Legislature to NRDs several years ago.
Four NRDs (the Upper Republican in Imperial, the Middle Republican in Curtis, the Lower Republican in Alma, and the Twin Platte in North Platte) worked together and purchased 19,500 acres of land. The plan was to take some farmland out of irrigation and to pump water into the Platte and Republican Rivers, in order to remain in compliance with the Republican River Compact (a 1943 three-state compact with Colorado and Kansas) and the Platte River Recovery Implementation Program. The initial financing of the project was planned to be through the issuance of bonds with repayment being the proceeds of the occupation tax on irrigated lands collected by the four NRDs. However, a lawsuit was filed late last year by individual irrigators and two irrigation districts. Since the NRDs are unable to proceed with bonding authority while a lawsuit is pending, legislation was introduced to request a loan from the state.
After overwhelming opposition to the Governor’s proposal to fund the elimination of the individual income tax and the corporate income tax by repealing certain sales tax exemptions, Governor Heineman has asked the Revenue Committee to kill his proposal. This is a good example of the importance of input from the citizens of our state, showing that your opinions do have an impact on state government.
Amid all the opposition, the Governor did bring to light a topic that needs to be addressed. Since our tax code has not changed significantly in approximately 45 years, now is the time to have that discussion. LB 613, introduced by Senator Paul Schumacher of Columbus, was heard before the Executive Board this past week. It proposes to create a Tax Modernization Commission. The intent is to not only look at the income tax, but also study the sales tax, the property tax and other issues affecting state revenue, such as tax incentives. Under the proposal, a preliminary report is to be issued to the Legislature by December 15 of this year, in time for the introduction of legislation in the 2014 session. The legislation envisions an open process for the study, requiring the Commission to hold a tax summit, develop online questionnaires, and conduct public hearings across the state.
One of the bills that the Health and Human Services Committee heard this past week was LB 507, introduced by Senator Kathy Campbell, the chair of the committee. Under LB 507, the Step Up to Quality Child Care Act, the Nebraska Department of Education and the Department of Health and Human Services would be required to develop a quality rating and improvement system for child care and early childhood education programs. The purpose of the legislation is to bring accountability for the public funds invested in such programs. Under the proposal, the system would be available to all child care and early childhood education programs, but participation would be required for programs that receive significant amounts of public funds. In 2012, 43,000 children qualified for publicly-subsidized child care and licensed providers were paid more than $94 million in child care subsidy payments. It is imperative to ensure that the care the state supports is of high quality.
I encourage you to contact me with your opinions on legislation of interest. 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 email@example.com.