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A bill that has generated many emails and telephone calls to my office is LB 176.
LB 176 narrows a restriction under the Competitive Livestock Markets Act that prohibits livestock packers from directly or indirectly owning or feeding livestock. The bill, in effect, would remove the restriction on packers owning hogs during the production stages.
The bill was prioritized last year by Sen. Schilz, but a filibuster leading up to a cloture motion failed to get the needed 33 votes to succeed. So, LB 176 was taken off the agenda for the rest of the legislative session. I supported LB176 last year and continue to do so this year.
During the interim, Sen. Schilz sought an Attorney General’s Opinion on the aspects of LB 176. When the opinion was received in October it stated three main points:
1) Packers that currently have no processing facilities within the borders of Nebraska can engage in production contracts under current law, even without the passage of LB 176;
2) Packers that currently have facilities in Nebraska can take advantage of current law by shuttering their Nebraska processing plants, and moving that production across the border to neighboring states allowing them to access Nebraska producers for vertical integration. It should be noted that if all three of the current packers in the state were to close down their facilities, Nebraska would stand to lose approximately 10,000 jobs. Beyond the job loss, the shuttering of processing facilities will result in hundreds of thousands of dollars in lost property tax revenue and would raise shipping costs for producers thus driving even more producers out of business.
3) Passage of LB 176 would serve to not only help keep these packers and their facilities in Nebraska, it would allow the state to put certain contract protections into place for producers, and would allow both Nebraska producers and Nebraska packers to grow their businesses, creating new valuation and stimulating job creation.
Sen. Schilz feels that, essentially, under current law we are preventing business from coming into the state and contributing to the growth and prosperity of our state. And by passing LB 176, we are fixing this unleveled playing field and encouraging these packers to remain and invest in upgrades in their ageing facilities in Nebraska.
Thus, Sen. Schilz elected to make LB 176 his priority bill for 2016 also.
As someone who was raised on a farm where we milked cows, raised hogs and chickens and grew corn I can’t say that I especially like this bill, but we had seen declining pork production in this state long before this bill was introduced and we will continue to lose producers in the future if we do nothing. LB 176 gives someone the option of contracting with a packer that is located in this state. Currently, packers that are located outside this state, can contract production in this state. Packers located in the state cannot directly own hogs in this state. No packers are allowed to own the land or facilities used to raise hogs. We currently have the capacity to slaughter more hogs than are raised in Nebraska so we currently send feeder pigs out-of-state to be fed and then ship them back into the state to be slaughtered. We have large privately-held companies located in other states that already operate in this state that contract with local producers to feed hogs. In return, they could be under contract with packers to supply hogs thus skirting our current laws on packer ownership and sending profits out-of-state. What packers want is a hog that is exactly the same weight, length and shape as the next. They are supplying a consumer that wants each piece of pork they buy to be exactly the same as the last one they purchased, so some of this vertical integration is consumer driven.
On another note, as of the beginning of 2016, Nebraska is the only state in the United States to prohibit this type of vertical integration. Processors are looking at the cost of major upgrades to their aging facilities in Nebraska or building new facilities where pork production is expanding. Not passing LB 176, effectively keeps Nebraska at a competitive disadvantage in pork production.
With a year of experience, and no longer a true freshman with the appointment of Nicole Fox replacing Senator Nordquist, I am feeling better prepared and ready to get this session underway. Summer seemed so short. Since this is the second session of the 104th Legislature, all of the ceremonial procedures such as electing chairpersons carry over from last year, except because of the resignation of Sen. Jeremy Nordquist who chaired the Retirement Committee an election was held and Sen. Mark Kolterman was elected to chair that committee.
Before the session even started, Speaker Hadley sent us a memo with some new procedures and outlined the first ten days of the session. As speaker, he ruled that “full and fair” debate under the cloture rule would be met after 6 hours of debate during the first round. This is a change from the current precedence of requiring 8 hours of debate. His reasoning was that with only 60 days to pass bills, getting hung up on filibusters would not get them very far. It seems we use this process more often than in the past, but that could also be because of term limits and the push from senators that are leaving after this session.
He also said that he would not allow any Speaker Priority Bill, to be amended unless he has agreed to it prior to its adoption. In the past Senators have tried to amend their bills into another Senator’s bill in order to get it through without a priority designation. The Speaker has promised to make sure all priority bills will be dealt with this session.
The first few days consisted of bill introduction, and debate on the rules that govern how the Legislature operates. Another attempt by Sen. Bill Kintner to do away with a secret ballot for election of speaker and committee chairs was turned down. Sen. Kintner tried and failed twice last session to get a roll call vote for election of committee chairs. He said it was a matter of transparency. The legislature operated under the open vote method until the early seventies when the secret ballot was initiated.
Debate began on 2015 priority bills left incomplete last session due to time constraints – LB 47 requires a person to indicate whether or not they wish to be an organ donor when applying for a state driver license or ID card. After six hours of debate the bill was advanced to the second stage of debate. LB 619 authorizes licensing for two types of poker games – draw and community card games. As this is being written we are still debating this bill. Bill introduction lasts for 10 days and hearings will start on the Tuesday the 19th. Some of the issues that I’m sure will be debated this year include cleanup issues on prison reform, mental health treatment, Medicaid expansion, and hopefully a number of bills dealing with property tax relief. The recent one hundred thirty million dollar shortfall in revenue projections will be a major factor in how we deal with any spending bills being considered.
As a member of the transportation committee one of the major issues that we will be looking at is how we can speed up the start time on road construction projects. The Governor has proposed an infrastructure bank that would be funded with money from the cash reserve and new ways to proceed with how we handle the design and bidding process on new road construction. I will follow up in a future column with the specifics on this bill. Bills I have introduced include LB814 which removes the one and one half mile restriction on obtaining a school permit, LB 785 which would allow the Department of Motor Vehicles to make changes that will provide cost savings and streamline functions of the department, and LB 735 which would allow for articulated buses to be operated by a transit authority.
The Governor gave his State of the State address on Thursday outlining his plan to address the approximately one hundred forty million dollar shortfall in the budget this year while still finding some dollars to add some beds to the Lincoln Correctional Facility. While not having much time to study his proposal I do think his approach to balancing the budget by transferring unspent department funds, cutting some spending and not needing to transfer large sums from the cash reserve is a solid plan. We will have another revenue projection by the end of February that could change things if revenue projections fall even further as I suspect they will. Any bills with a fiscal impact will wait for final approval until this projection is in.
My number one priority is to find a solution to lower property taxes across the state and especially to those who own agricultural land. Several proposals have been introduced using many different approaches. The Governor has worked with Senator Sullivan and Senator Gloor on proposals that will hopefully be coming out of the Revenue and Education Commitee’s. The long range goal of changing how we fund K-12 education hopefully can be addressed through other bills that are still being introduced. Hopefully by combining some of these proposals we can gather enough votes to get something done.
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