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The public hearing process has concluded. Every bill that was introduced was referred to a committee for a hearing, where the public was invited to testify. Committees are finishing the process of advancing the bills that they think should be discussed by the full Legislature. Beginning Monday, March 7th, senators will meet in full-day session.
Last year, I was elected as the chair of the Legislative Performance Audit Committee. This committee is responsible for overseeing the state’s performance audit process. Performance auditing is a systematic review of any aspect of agencies and their programs to evaluate an agency’s success in effectively implementing legislative intent. This function is carried out by the Performance Audit staff, under the direction of the Legislative Auditor.
The Legislative Performance Audit Committee is authorized to introduce legislation. This year, we introduced three bills and one legislative resolution. I personally introduced another bill pertaining to the jurisdiction of the Performance Audit Act.
LB 867 proposes to amend the Administrative Procedure Act, which sets forth the formal process for agencies to follow when adopting administrative regulations. This bill was introduced as the result of a 2015 audit, which found that the APA does not provide adequate guidance to agencies about what types of policies must go through the formal rulemaking process. LB 867 also puts in place a process for the adoption of emergency rules. LB 867 was designated as a Performance Audit Committee priority bill and is pending on the agenda for first-round debate.
The intent of LB 1022 is to provide the Legislative Audit Office with full access to the information they need in order to perform accurate and thorough evaluations of state programs. Last year, legislation was passed to require the Legislative Audit Office to conduct a performance audit of our tax incentive programs. However, when the auditors started the first audit, they found that they were not able to access necessary electronic files pertaining to the Nebraska Advantage Act in a timely fashion, nor were they given access to records for all tax incentive program projects. LB 1022, another committee priority bill, has received first round approval from the Legislature.
LB 756 would eliminate the Long-Term Care Savings Plan, which the committee recommended following a performance audit of the program. The audit found that very few people were participating in the plan and that the program was not meeting its goals of encouraging Nebraskans to save for long-term care or reducing the costs of Medicaid. LB 756 has not been advanced from the Revenue Committee at this time, but has been designated as a speaker priority bill, giving it a good chance for debate once it is advanced to the floor.
LR 413 is a legislative resolution that proposes to create the Task Force on Behavioral Health. The purpose of the task force is to provide legislative oversight to monitor the progress of the Department of Health and Human Services in conducting a statewide needs assessment and in the development of a strategic plan. Furthermore, the task force will study the infrastructure, provider rates, current workforce, delivery systems, and the number of qualified facilities within the state. The resolution was introduced as the result of a 2015 audit of the Behavioral Health System in Nebraska, which identified several gaps in services across the state. LR 413 was adopted by the Legislature earlier this week.
Finally, LB 1016, the bill that I introduced, amends the definition of “agency” in the Legislative Performance Audit Act, adding the Office of Probation Administration and the Office of Public Guardian to the list of governmental units that can be subject to a performance audit. LB 1016 was passed by the Legislature this past week on a 49-0 vote.
As we begin full-day debates, 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 email address is email@example.com and my telephone number is (402) 471-2733.
The question of whether term limits should be extended was debated by lawmakers this past week. As introduced, Legislative Resolution 7 is a proposal for a constitutional amendment to increase term limit provisions, so that a state senator could serve two consecutive six-year terms, rather than two consecutive four-year terms. LR 7 CA was prioritized and advanced by the Executive Board with committee amendments. The committee amendments would instead allow a state senator to serve three consecutive four-year terms. After the committee amendments were filed, Senator Paul Schumacher, the sponsor of LR 7 CA, offered an amendment to change the resolution back to the introduced version.
Term limits were adopted through the initiative petition process in 2000, after three previous attempts were struck down by the courts. Since that time, measures to repeal term limits or to lengthen them have not been successful in the Legislature in 2003, 2005 and 2009. In 2012, a proposed constitutional amendment to increase term limit provisions to three consecutive four-year terms was passed by the Legislature, but was not approved by voters.
Proponents of the measure stress the importance of experience and institutional knowledge. They bring up the difficult learning curve faced by new senators, who are inundated with an abundance of information. With term limits, it has become more common for committee chairs to be selected after just two years of service, not giving much time to fully understand the issues associated with their committee subject matter. Opponents point out that the people have already spoken on this issue. They oppose trying again so soon after a similar attempt was defeated. They also welcome the more frequent turnover in service, saying that it is an opportunity to bring in new ideas.
Some senators supported the two consecutive six-year option because running twice instead of three times would lower the amount spent on campaigns. It also would allow senators to focus on their service rather than raising money for their campaign. Opponents feared that the second six-year term is too long without being accountable to voters. The Legislature adjourned for the week prior to taking a vote on the amendments or the advancement of the resolution.
LB 47, a bill that I introduced that was chosen as a speaker priority bill, was debated by the Legislature this week. It would make the question mandatory, rather than optional, asking applicants for driver’s licenses whether they wanted to place their name on the Donor Registry. The purpose is to increase the numbers of donors in Nebraska, which will in turn save more lives. Senator Ernie Chambers led the filibuster arguing that free-speech rights should not require a person to answer this question. I offered an amendment for a third choice, allowing applicants to answer “yes”, “no”, or “elect not to answer”. I felt this was a suitable compromise and would still keep the intent of the bill intact. Many senators spoke in support of the bill, mentioning how the transplant program has saved or bettered the lives of people they know. However, a small number of senators still remained opposed, signaling many more hours of debate. It is unknown at this time if the bill will be up again. Since it is a speaker priority bill, the speaker has the discretion to make this decision.
LB 538, which requires performance audits of tax incentive programs, received first-round approval this past week on a 37-0 vote. LB 538 was introduced by the Legislative Performance Audit Committee, of which I chair. The primary goal of the legislation is to produce information that will allow lawmakers to draw clear conclusions about how well tax incentives are benefiting Nebraska’s economy and meeting program goals.
If you have any opinions on these issues or other issues before the Legislature, I encourage you to contact me. I can be reached at District #1, P.O. Box 94604, State Capitol, Lincoln, NE 68509. My email address is firstname.lastname@example.org and my telephone number is (402) 471-2733.
The Legislature is at the half-way mark of this 90-day session. This past week marked the priority bill designation deadline. Senators have the ability to designate one bill as their personal priority bill. Committees can designate two bills as committee priority bills and the Speaker of the Legislature is given the authority to designate up to 25 bills as speaker priority bills. After this point in the legislative session, generally only bills with priority status are debated by the Legislature.
I chose LB 106 as my priority bill. LB 106, the Livestock Operation Siting and Expansion Act, was recently advanced from the Government, Military and Veterans Affairs Committee. It directs the Nebraska Department of Agriculture, with advice from experts representing the Nebraska Association of County Officials, livestock production agriculture and the University of Nebraska, to develop an assessment matrix for use by county officials when determining whether to approve an application for a livestock operation siting permit. Nebraska’s agricultural industry has not grown in the past two decades at rates comparable to our neighboring states. LB 106 would provide for consistent standards, based on factual, objective criteria to be used by local governing bodies when granting permits, thereby allowing for more predictability and uniformity in the process.
As chair of the Performance Audit Committee, we chose LB 538 and LB 598 as committee priority bills. LB 538, introduced by the Performance Audit Committee, creates a process for ongoing evaluation of Nebraska’s tax incentive programs, in order to give legislators information to draw clear conclusions about whether tax incentives are benefitting Nebraska’s economy and meeting program goals. LB 538 requires the Legislative Audit Office to conduct a performance audit of each tax incentive program at least every three years.
LB 598, introduced by Senator Paul Schumacher, addresses the use of segregation in our prisons. Rules would be developed to guide the level of confinement, conditions, behavior, and mental health status of inmates. The legislation contains recommendations from an interim study conducted by the Department of Correctional Services Special Investigative Committee of the Legislature, which incorporated results from an audit conducted by the Performance Audit Committee.
Other bills designated as priority bills by individual senators include:
LB 350, introduced and prioritized by Senator Lydia Brasch, reduces the valuation of agricultural land for purposes of property taxation from 75% to 65%. As of this time, LB 350 has failed to advance from the Revenue Committee.
Another bill that was prioritized but has not advanced from the Revenue Committee was LB 357, introduced by Senator Jim Smith. It proposes to reduce the individual and corporate income tax rates and increase the amount of funding to the Property Tax Credit program. The tax relief would be funded through transfers from the cash reserve and reductions in spending.
LB 586 prohibits discrimination based upon sexual orientation and gender identity. This bill was introduced by Senator Adam Morfeld and designated as a priority by Senator Patty Pansing Brooks.
LB 610 was introduced by Senator Jim Smith and prioritized by Senator Curt Friesen. It would increase the gas tax by 1.5 cents every year for four years, with revenue being used by cities, counties and the state for road and bridge projects.
LB 643 proposes to legalize marijuana for medical use. It was introduced and prioritized by Senator Tommy Garrett.
Among the bills designated as priorities by committees include:
LB 259, which as amended by committee amendments, would exempt the first $15,000 worth of personal property value for each personal property tax return. This bill was designated as a priority by the Revenue Committee. Although this will provide some property tax relief, many senators were disappointed that the committee did not offer a more comprehensive solution.
LB 472 was prioritized by the Health and Human Services Committee. It is Senator Kathy Campbell’s third attempt at Medicaid expansion, which was ruled optional for states after the Affordable Care Act was challenged in court.
If you have any comments on the bills that have been given priority status, I 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 email address is email@example.com.
The Legislative Performance Audit Act was established in statute by LB 607 in 2003. It replaced the Legislative Program Evaluation Act. A performance audit is an objective and systematic examination of evidence for the purpose of providing an independent assessment of the performance of a government program. These audits assess how well a state program is functioning and provide answers to the following questions. Is the program doing what the Legislature intended it to do? Is the agency administering the program meeting statutory and regulatory requirements? Is the agency running the program effectively and efficiently?
The purpose of the Act is to provide for a system of performance audits to be conducted by the Legislative Audit Office, under the direction of the Legislative Auditor. The Legislative Performance Audit Committee is responsible for overseeing the state’s performance audit process. The committee is made up of seven senators. In January, I was selected to serve as chair of the committee.
This year, the committee adopted three new areas to work on. The first concerns issues relating to the current functioning of the behavioral health system in Nebraska. Committee members are interested in where there may be gaps in behavioral health services across the state. The second is an audit of agency regulations that may be adopted outside of the Administrative Procedure Act, which means the public and other stakeholders do not have the opportunity to comment on the proposed regulations. The final area is the utilization of the long-term care insurance and tax credit to find out if these tools are increasing the number of people who set money aside for long-term care.
The Performance Audit Committee is authorized to introduce legislation. By rule, the committee is granted the authority to designate two priority bills, resulting from a performance audit or involving the performance audit process.
LB 538 was introduced by the Performance Audit Committee this year. The public hearing was held earlier this week before the Revenue Committee.
LB 538 seeks to implement the recommendations of the Tax Incentive Evaluation Committee adopted during the 2014 LR 444 interim study. The interim study was introduced in response to a 2013 performance audit that found the goals of Nebraska’s tax incentive programs were too broad to permit meaningful program evaluation. The Tax Incentive Evaluation Committee was made up of the Performance Audit Committee, as well as the chairman and vice-chairman of the Revenue Committee, and one senator appointed by the Executive Board. Evaluation experts from the Pew Charitable Trusts worked with the committee to help craft recommendations for a tax incentive performance audit process tailored to Nebraska’s needs.
LB 538 creates a process for ongoing evaluation of Nebraska’s existing and future tax incentive programs enacted for the purpose of recruitment or retention of businesses in Nebraska. The bill creates an evaluation structure that will produce information needed for lawmakers to draw clear conclusions about whether tax incentives are benefitting Nebraska’s economy and meeting program goals. LB 538 requires the Legislative Audit Office to conduct a performance audit of each tax incentive program at least every three years, to evaluate whether the goals established by the Legislature are being met.
Additionally, legislative performance auditors will analyze the economic and fiscal impacts of the tax incentive programs taking into account effects on businesses and state and local governments, economic development strategies, and the specific emphasis of individual programs.
Over the years, there has been much discussion as to whether our tax incentives serve as a good investment for our state. One of the missing factors in the discussion is a means to evaluate our tax incentives. LB 538 seeks to provide the necessary information.
If you have any questions on LB 538, the Performance Audit Committee, or on any other issues before the Legislature, 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 email address is firstname.lastname@example.org and my telephone number is (402) 471-2733.
Legislative Resolution 444 was introduced by the Legislative Performance Audit Committee during the 2014 legislative session. I serve as the vice-chair of this committee.
LR 444 created the Tax Incentive Evaluation Committee, which was tasked with developing recommendations on specific and measurable goals for our tax incentive programs. Furthermore, the committee is to recommend a process for regular evaluation of tax incentives and determine who should conduct the evaluations, what type of metrics should be used, and how often the evaluations should be conducted. The committee is to issue a report to the Executive Board of the Legislature by December 15.
A report issued by the Audit Office in 2013 on Nebraska Tax Incentive Programs found that the program goals expressed by the Legislature were too general to permit a meaningful evaluation of whether the programs were accomplishing what the Legislature intended them to accomplish. The audit focused on the Nebraska Advantage Act, the Nebraska Advantage Rural Development Act, the Nebraska Advantage Microenterprise Act, and the Nebraska Advantage Research and Development Act. Furthermore, for two of the programs, the Legislature set no limit on the program’s costs. In response to the Audit’s findings, the Performance Audit Committee committed to work with the Revenue Committee to initiate a comprehensive review of Nebraska’s tax incentive programs to assess whether the programs are producing the results the Legislature intended and, if so, whether they are doing so at a cost the Legislature can support. As a result, LR 444 was introduced.
The LR 444 Tax Incentive Evaluation Committee met this past week. I was elected vice-chair of the committee, which is chaired by Senator John Harms of Scottsbluff. Robert Zahradnik, from the Pew Center of the States, developed a presentation, which was delivered by Martha Carter, the Legislative Auditor. Mr. Zahradnik will attend the next committee meeting in July.
The six tax incentive programs that LR 444 specifically addresses are:
+Angel Investment Act – provides refundable state income tax credits to qualified
investors that invest in qualified early-stage companies.
+Beginning Farmer Tax Credit Act – rewards agricultural asset owners for their contributions that assist starting farmers and ranchers.
+Nebraska Advantage Act – provides comprehensive economic development incentives for expanding or relocating businesses.
+Nebraska Advantage Rural Development Act – similar to the Advantage Act but aimed at businesses in less populated counties.
+Nebraska Advantage Microenterprise Act – provides persons actively involved in microbusinesses a refundable individual income tax credit based on demonstrated growth of their business over two tax years.
+Nebraska Advantage Research and Development Act – provides tax credits to business firms that incur research and experimental expenditures.
Although this past week’s hearing was limited to invited testimony, the LR 444 Tax Incentive Evaluation Committee plans to hold additional hearings where the public will be allowed to testify. The public hearings will be held in Kearney on August 27 from 1:30 to 4:30 p.m. and in Lincoln from 9:00 a.m. to noon on August 28. I encourage those interested in our state’s tax incentive programs to attend.
As vice-chair of the Legislative Performance Audit Committee, I introduced LB 836 this past week before the Revenue Committee. LB 836 proposes to add basic goal language to certain tax incentive programs, such as the Nebraska Advantage Act and the Angel Investment Tax Credit Act, that currently have limited or no goal language.
Of the tax incentive programs, the Nebraska Advantage Act has the largest impact on the state budget. This act provides benefits to companies that invest or create jobs in Nebraska.
Last year, the Performance Audit Committee, working with the Pew Center for the States, issued three reports on tax incentives. The committee found that an absence of clear, measurable goals for each tax incentive program made it difficult to assess whether the program is doing what the Legislature intended it to do.
The Pew Center recommended a process for legislators to follow in improving the evaluation of the state’s tax incentive programs, which included the development of goals, metrics, and benchmarks. LB 836 represents a first step in increasing accountability and improving the state’s evaluation of tax incentive programs. The Performance Audit Committee has designated LB 836 as its committee priority bill, assuring that it will be debated by the Legislature, if it advances from the Revenue Committee.
The Performance Audit Committee also introduced LR 444, which proposes to create a committee to develop an ongoing, regular review of tax incentive programs. The intent is to introduce legislation containing additional recommendations next year.
The Appropriations Committee has made some preliminary recommendations for the mid-biennium budget adjustments that must be presented to the Legislature by the 40th legislative day, which falls on March 10th this year. Included in their preliminary recommendations, is a $15 million transfer from the Cash Reserve Fund and a one-time $2.5 million transfer from the State Recreation Road Fund for State Park deferred maintenance and improvements statewide. The Game and Parks Commission has indicated that this level of funding would allow them to undertake capital projects at Ponca State Park, as identified in LB 874, and allow for priority capital projects at Arbor Lodge State Historical Park, in order to place existing facilities in a condition that would be conducive to transferring operating and management to a local partner, as identified in LB 1033.
I introduced LB 1033 to allow for the transfer of the operation and management of Arbor Lodge State Historical Park from the state to a local partnership. I believe a local partnership will be in a position to promote more utilization and offer greater stability of this important landmark in southeast Nebraska. I am grateful to the Appropriations Committee members for including this provision in their preliminary recommendations.
As the Legislature begins full-day debate, focusing on bills that have been designated as priority bills, I encourage you to contact me with your thoughts and opinions on the various issues. I can be reached at District #1, P.O. Box 94606, State Capitol, Lincoln, NE 68509. My email address is email@example.com and my telephone number is (402 471-2733.