NEBRASKA LEGISLATURE
The official site of the Nebraska Unicameral Legislature

Sen. Curt Friesen

Sen. Curt Friesen

District 34

The content of these pages is developed and maintained by, and is the sole responsibility of, the individual senator's office and may not reflect the views of the Nebraska Legislature. Questions and comments about the content should be directed to the senator's office at cfriesen@leg.ne.gov

Weekly Column

February 19th, 2016

An issue that will soon be debated on the legislative floor is one that would call for a convention of the states to propose constitutional limits on the power of the federal government.

Legislative Resolution (LR 35) was introduced by Sen. Laura Ebke last session and designated as her priority bill this year.  LR 35 would limit the convention’s agenda to constitutional amendments to impose fiscal restraints, limit the power and jurisdiction of the federal government, and require federal term limits.

LR35 calls for Nebraska to join other states in passing an application that calls for an interstate convention for the purpose of proposing amendments to the U.S. Constitution. State legislatures are granted this power under Article V of the U.S. Constitution. The language of LR35 is verbatim to applications that have been filed in other states, as any interstate convention must have a foregoing, agreed upon scope and subject for which the convention is called.

The convention will only occur after two-thirds of the states (34 states) pass the same application. Currently, five state legislatures have approved a similar measure.  Once the requisite 34 states have passed the same application, Congress shall call the convention. After the convention is called, delegates (officially called commissioners) are chosen by the states – the process for choosing delegates is decided by the legislature in each state. Each state legislature may send as many delegates to the convention as it chooses, but each state is allowed only one vote at the convention. The delegates may be given instructions on how to vote by their state legislature and are legally bound to adhere to them.

Since the convention only has the power to propose amendments, ratification takes place  following the convention. While at the convention, any amendments proposed and/or passed must fall within the preordained scope specified in the 34 matching applications passed by the state legislatures. In the case of LR35, the scope is to impose fiscal restraints on the federal government, limit the power and jurisdiction of the federal government, and limit the terms of office for its officials and for members of Congress.

In order for a valid amendment to emerge from the convention, it must pass with a simple majority vote. After passing the convention, the amendments – before becoming part of the U.S. Constitution – must still be ratified by the legislatures of three-fourths of the states (38 states). Multiple legal safeguards are in place to prevent the ratification of any amendment that deviates from the scope of the convention.

Reports acknowledge a number of well-established facts about the operation of Article V’s Convention mechanism, including:

The founders of the Constitution included this process as a way for the states to bypass Congress in getting needed amendments passed;

The process is an alternative to federal deadlock;

Congress has a no authority to veto amendments proposed at an Article V Convention; and

The President plays no role in the process.

Opponents of this measure warn of the possibility for a runaway convention that exceeds its initial scope and even endangers components of the Bill of Rights, like the Second Amendment…but it only takes 13 states to block any amendment that would be proposed from the convention and state legislatures could control who represents them.

I, along with many of you are very concerned with what has been happening at the federal level. If you look at what’s been happening over the last fifty years many of us are unhappy with the direction we are headed.  We have burdened our children and grandchildren with a $19 trillion (and growing) national debt crisis that if not addressed will consume our federal budget.  We have regulatory agencies that seem to write rules and regulations without regard to the will of the legislative branch, and a judicial branch and executive branch that continually over reaches their authority. It’s time for the states to take back some of the power they have ceded to the federal government.

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One last note…on Friday, February 26th I will be in Central City at the Venture Center, 1532 17th Avenue, from 7:30 a.m.-8:30 a.m., for a Town Hall meeting sponsored by the Merrick County Farm Bureau and the Central City Area Chamber of Commerce.  It’s an opportunity for you to stop by to voice your concerns about state issues and to hear updates on legislation.

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Weekly Column

February 12th, 2016

As we approach the midpoint of this short session, I thought it was time for me to let you know about the bills I’ve introduced.  They are:

LB 735 – allows rapid transit buses operated by Omaha’s Metropolitan Authority to exceed the current 40 foot length limit to 65 feet.   These buses are designed for improved speed, convenience, and a benefit to passengers traveling to some of Omaha’s most congested areas.

LB 736 – amends the Community-Based Energy Development (C-BED) Act to allow all Nebraska electric utilities the option of negotiating a contract for energy from a C-BED project, by removing the limited definition of electric utility and using the term electric supplier.

LB 737 – expands eligible funded activities for public entities seeking low-interest loans through the Clean Water State Revolving Fund.  The funded activities are for the purposes of constructing wastewater treatment facilities and sanitary sewer collection systems to alleviate public health and environmental problems and would also increase loan terms from 20 years to a maximum of 30 years or the useful life of the project, whichever is less.

LB 784 – harmonizes language in the County Budget Act and the Nebraska Budget Act.  Currently both acts proportionally limit expenditures from each budgeted fund between July 1 and the adoption of the budget in September.  The Nebraska Budget Act also provides a mechanism to exceed such proportional expenditures upon a finding of the governing body that the expenditures are necessary to meet statutory duties and responsibilities.  LB 784 would add this concept to the County Budget Act.  The bill would make it clear that counties can use the resources available for roads during the late summer – prime time to build and maintain roads – rather than being limited to a proportion of their road budget during this time.

LB 785 – authorizes the Department of Motor Vehicles to move to an alternate method of issuing motor vehicle operator’s licenses.  This enabling legislation will address the three main complaints from the public regarding driver licensing services: 1) very long wait times in their busiest offices; 2) not being open past “normal” business hours; and 3) why not all services are provided at all offices, i.e., CDL tests, motorcycle tests, and drive tests.

LB 814 – eliminates the requirement that an applicant for a school permit must live at least 1.5 miles or more from school to be eligible for a permit.  Applicants still must reside or attend school outside a metropolitan, primary or first class city.  I introduced this bill on behalf of a constituent who asked to have the mileage lowered.  After studying this issue I decided that to change any mileage amount would just invite other requests, so I just eliminated it altogether.

LB 996 – excludes a manufacturer who owns or operates two or fewer dealer or dealership locations within the state, who owned or operated a warranty repair or service facility as of January 1, 2016, and who is engaged in the manufacturer of engines installed in motor vehicles with a gross vehicle weight rate of more than 16,000 pounds, from the prohibitions placed upon manufacturers under the Nebraska Motor Vehicle Industry Licensing Act.  LB 996 was introduced to allow Cummins Inc., to operate just as they do today.

LB 1042 – gives another layer of approval to tax-increment financing (TIF) projects.  Before approval is made by the governing body of a TIF project, LB 1042 requires the county board of equalization of the county directly affected by the financing project, to approve the plan if it meets all statutory requirements for TIF imposed under the Community Development law.  LB 1042 also changes the property valuation information certified by the Property Tax Administrator to the State Department of Education, which is used to determine the adjusted valuation of school districts for purposes of allocating state aide through the Tax Equity and Educational Opportunities Support Act.  The bill requires that excess valuation for properties that qualify for TIF will be included in the assessed valuation of school districts for state aide purposes.

Weekly News Column

January 29th, 2016

A bill that would remove several requirements in the approval process for privately-owned renewable energy projects to encourage more investment in Nebraska was heard before the Natural Resources Committee last week.  We had a full house of testifiers including proponents, opponents and a record number of neutral testimony.

LB 824 would be a significant policy shift for Nebraska as it would allow the development of privately-owned renewable electricity generation facilities without the barriers and protections placed in the “wind for export” bill passed in 2010. As a member of the Southwest Power Pool (SPP) we do not control which type of power will supply the grid. The SPP chooses the cheapest source that is capable of filling the need at that particular time. Wind power which has a federal tax credit would be the cheapest energy available because of the tax credit.

LB 1048, passed in 2010, created a new regulatory approval process for renewable generation facilities producing energy to be exported out of Nebraska.  The bill was the result of work between developers, the Power Review Board, and our public power entities to allow the development of wind energy in the state while protecting public power interests.  While LB 1048 provided the opportunity, the public power protections kept private developers from building large-scale renewable projects in Nebraska.

In 2014, the Legislature passed LB 1115, which provided for a study to identify opportunities and challenges that impact the capacity and desirability of developing 5,000 to 10,000 megawatts of renewable generation capacity in Nebraska for export.  The report gave policy options for the Legislature to consider to overcome challenges towards increasing private renewable energy investment.  LB 824 would make some of those policy changes.

Specifically, LB 824 would accomplish the following:

Remove current anti-competitive statutes covering the Nebraska Power Review Board process for private renewable energy development, which are not applicable in states neighboring Nebraska and are a costly barrier for companies seeking to do business in this state. The main obstacle would be the current requirement to have a power purchase agreement in place before you can begin a project.

Maintain the notification and registration of all renewable energy development projects by the Nebraska Power Review Board and would not remove the requirement to comply with the 52 existing governmental permits from 15 separate federal agencies;

Would not impact any existing local control by counties which have zoning ordinances or oversight processes or mechanisms to either approve or deny renewable energy projects. There are however, numerous counties that do not have zoning laws and would not have the local control to regulate where these turbines would be located.

Would not allow privately developed and other renewable electric power generation facilities to provide direct electric service to retail or wholesale end use customers.

Allowing wind development could bring in hundreds of millions of dollars in investments and would help reduce property taxes in those areas that are suitable for development.

There are several concerns I have with this bill dealing with the short and long term consequences of this major policy change. Currently we have around 25% surplus generation capacity and the Southwest Power Pool also has surplus capacity. As with corn when you have a surplus you have low prices, with surplus energy you have low priced electricity on the market. If we add large amounts of wind generation we put more cheap energy, because of the production tax credit, on the market thus lowering the price of energy even further. If our publicly owned generation facilities are losing revue because coal plants are running at minimum capacity they will need to pass those costs on in their transmission rates and thus the consumer may end up paying more for power in the long run. This is an extremely complex issue that will have long term implications and we need to get it right. Any power generated would be directly competing with our publicly owned facilities.

Also, the Aurora Chamber of Commerce and I will be hosting a Town Hall Meeting, February 15 at 4:00 p.m. at the Senior Center, located at 1205 11th St., in Aurora.  It will be an opportunity for me to visit with you about your concerns and to provide an update on legislative issues.  The meeting is open to the public and anyone wishing to attend is invited.

 

 

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.

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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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When I made the decision to run for the District 34 legislative seat, I had already formed some ideas of what to expect as a freshman Senator. I admit not everything was like I thought it would be. I knew there would be some difficult decisions, like LB268 the repeal of the death penalty, some easy like LB577, giving counties permission to regulate peddlers, hawkers and solicitors, and some that I had absolutely no knowledge about like LB107, dealing with the scope of practice of nurse practitioners. Dealing with criminal justice reform bills was a steep learning curve for those of us that were not lawyers or a part of the Judiciary Committee.

And you don’t know what you don’t know. For instance, when I came to Lincoln for freshman orientation they gave us a number of documents to help familiarize us with information on how to conduct ourselves properly on the legislative floor. The Rules of the Nebraska Unicameral Legislature was one of those documents. There are so many things to learn about our legislative process that one cannot possibly learn in one session. Certain motions in specific stages of the process require a different number of votes to prevail. The master of that rule book is Senator Chambers with 40 years of experience. He provided many of us freshmen with a brief lesson of options to use in extending debate on issues that we wanted to filibuster. We learned quickly and this process was used many times this session.

One question that I was asked repeatedly during the campaign was “how would I be able to work with Senator Chambers”? My seat on the floor is directly in front of Senator Chambers. I found him to be very thoughtful and respectful of the legislative process. Although at times he could sound very angry and voice some very disrespectful comments, he is actually a very kind, soft-spoken and respectful person. He is certainly not always the contentious person he portrays during debate on issues he is passionate about.

During orientation a point was made that there are no new ideas on any topic you want to address. Over the years there have been literally thousands of bill that were written and introduced dealing with almost anything you can think of. There are some issues dealing with new technology or concepts that have not been addressed before, such as dealing with technology or companies like Uber or Lyft. I found that many things I thought would be innovative initiatives have already been done. Many bills and studies introduced have been recycled before and are just old ideas with a new face.

Over the next four years I know I will make some life-long friends. The collegiality is overwhelming. The Unicameral is labeled as nonpartisan and, because of that, I think it is much easier to become someone other than a person who is “on the other side of an issue with you”.

We have so many scheduled breakfasts, lunches, receptions and dinners. Every day we are able to learn much more about each of us that is outside of our professional interests. Lobbyist and constituent groups have found these events are a good way to let us know what their issues are going to be and a casual way to get to know us better.

I have enjoyed hearing from my constituents and learning about their opinions on specific legislation or how certain bills would impact them. Whether we agree or disagree I always appreciate hearing from all of you.
Between now and the next legislative session I will be researching issues that I intend to introduce in the next session. Of course, the most critical is property tax relief.

Although the session is over, my legislative office will continue to be open every weekday. You can still reach me by email at cfriesen@leg.ne.gov and also telephone at 402-471-2630. My staff will be able to help you with issues or concerns you have with state government.

I will be glad to be back home and close to my constituency. Hopefully I will have some tractor time in order to clear my head. I have been honored to have the opportunity to serve you as a member of the Legislature.
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Even at this late hour, I have not given up my quest for providing significant property tax relief. What we have passed so far does not provide the relief I had hoped for, but it’s moving in the right direction. So far we have provided $204 million per year for the property tax relief fund and $19.8 million in personal property tax relief.

Property owners will be getting a tax credit total of what amounts to $95.00 per $100,000 of valuation. And, there will be an exemption from property tax on the first $10,000 of valuation of tangible personal property.

I realize this does not fix the problem many rural property owners have with high property taxes. Several of my rural colleagues and I have gotten the message across to the rest of the legislative body that we will not stop asking for a solution in tax relief. What we need is a fundamental change in how we fund education in order to achieve a permanent solution to our high property taxes.

However, lowering property taxes will not be an easy fix. It may come at a price, because as the old adage goes: “You can’t get something for nothing.” There’s no doubt about it, a solution will necessitate a tax shift. I’m sure we could find some cost savings within education’s budget but it will not be enough to provide the property tax relief we are looking for. Some Senators are looking at increasing sales taxes and some are considering eliminating tax exemptions granted by prior Legislatures. There are literally hundreds of exemptions to the state sales tax. I would continue to oppose any sales tax on inputs for any industry.

The way our schools are financed through the Tax Equity and Educational Opportunities Support Act (TEEOSA), over 65% of the property taxes I pay go to finance education. We spend close to one billion dollars administered under the TEEOSA formula and currently only 35% of school districts receive state equalization aid.

In 2013 the Tax Modernization Committee held public hearings across the state and heard from Nebraska citizens that their taxes – specifically, their property taxes – were too high. The first recommendation made by the committee regarding property taxes was to increase the state aid commitment to schools to offset property tax use and reduce property taxes as a share of total state and local taxes.

Separate Legislative Resolutions (LR 344 and LR 332) have been introduced by both the Education Committee and the Revenue Committee to address the recommendation made by the Tax Modernization Committee. Studies will be carried out and public hearings will be held this coming fall. At the conclusion of the studies each committee will report their findings to the Legislature. I am optimistic the information gathered will generate legislation to introduce in the next legislative session.

It’s encouraging to read the list of introduced Interim Study Resolutions dealing with taxes. Some of those include: 1) whether imposition of a sales or income tax upon the sale of agricultural land may provide funding for a targeted property tax relief fund for agricultural property owners; 2) income tax rates; 3) current method of using adjusted property valuation as the primary measurement of local resources in Nebraska’s public education funding formula; 4) procedure for and use of like-kind exchanges under the Internal Revenue Code and their impact on the taxable value of agricultural and horticultural land; procedures and categories used by county assessor to classify types of land for valuation and taxation purposes; and 5) tax revenues for public schools.

A worthy reminder is the 2014 Legislature enacted several proposals that lowered taxes. Military retirees benefitted with a tax exemption of either: up to 40% of their military retirement from state income tax for 7 years, or they could exclude 15% of their military retirement income at age 67 and for all subsequent years.

Indexing brackets in the state income tax code, were implemented at the beginning of this year. It significantly reduced “bracket creep” when brackets are not adjusted for inflation. Exempted was increased income thresholds under which social security income is taxed.

Sales tax exemptions were given for net energy billings for customer-generators of electric service and for agriculture machinery repair and replacement parts used in commercial agriculture. These items account for millions of dollars of tax relief but did little for property taxes. Hopefully next year we will address this issue.

As my first year in the legislature heads into the final weeks of the session, and where some of the biggest issues are waiting, I am starting to see the pressure that is building and how it affects my colleagues. Some of the debates can get a little heated, and what I feel are minor issues can flare into major discussions. The following bills have generated a fair amount of mail from outside the district and some from within.

Two separate bills have been introduced and prioritized this session that would legalize medical marijuana. Both have an end result of treating people with illnesses that can’t be controlled with FDA approved drugs. One is very tightly controlled and would provide good measurable data, and the other would open the door for many more options and is not as well defined, because the end rules are not written until after we pass this bill.

LB 643, introduced by Sen. Tommy Garrett of Bellevue, creates the Cannabis Compassion and Care Act. Dramatically amended by the Judiciary Committee, the bill gives detailed instructions on how manufacturers can operate and sets out restrictions for the use of medical marijuana in the state. The Department of Health and Human Services (DHHS) would then be responsible for developing specific rules and regulations.

It allows medical cannabis to be taken only in liquid form, including oil, by pill or vapor. Any other method, including smoking, would have to be approved by DHHS. Patients would have to be certified to use medical marijuana, to show they have qualifying diagnoses made by a doctor, and whether a caretaker is needed to administer the medication. Certification would be required yearly.

Unless the caretaker is a parent or legal guardian, that person would have to be at least 21, administer the medication to only one patient unless additional patients live at the same residence, submit to a background check and file fingerprints.

Patients would have to register and pay an annual $200 fee to use medical marijuana. From registration information, DHHS would evaluate patient demographics, effective treatment options, and clinical and quality-of-life outcomes. The fee would be $50 for patients receiving Social Security disability or who are in the medical assistance program.

Illnesses or medical conditions the state would allow to be treated with medical marijuana would be limited, including seizures; cancer, if symptoms include severe or chronic pain, or nausea or severe vomiting, or severe weight loss; glaucoma; HIV or AIDS, Tourette’s syndrome; ALS; multiple sclerosis with severe or persistent muscle spasms; Crohn’s disease and terminal illnesses.

DHHS would be allowed to approve any additional delivery method or qualifying illness or condition. Two manufacturers would be allowed to have four distribution centers, which would be located geographically across the state. Local governments would be allowed to put zoning restrictions for distribution facilities. A five-member Medical Cannabis Board will advise DHHS on rules and regulations, medical cannabis policies and any changes to the law as needed.

At the lengthy hearing a number of people shared stories of loved ones with debilitating illnesses such as, Dravet Syndrome, epilepsy, PTSD, Huntington Disease, seizures, and other conditions that current medicines had no effect on. Many testifiers said they received recommendations from doctors and friends, including doing their own research on how marijuana use improved the quality of life for many people who had similar conditions. Most of the testifiers said their life changed dramatically and some were even pain-free after using marijuana.

The other bill, LB 390, introduced by Sen. Sue Crawford of Bellevue, would allow for a pilot study performed by the University of Nebraska Medical Center (UNMC) to explore the safety and effectiveness of using cannabidiol –hemp oil—to treat resistant seizures for about 50 young people.

Twenty-four other states have legalized marijuana in one form or another for specific illnesses.

Governor Ricketts believes the virtues of marijuana are still much debated. He has concerns about both pieces of legislation and that we should wait until there is FDA approval before enacting a state law.

I am willing to support LB390 but not LB643. If results from the UNMC study show promise we could consider expanding the program. Debate on LB 643 began last week and will resume this week.

The Appropriations Committee provided the legislative body with recommendations of their $8.6 billion 2-year budget which is made up of 7 bills (LB’s 658, 659, 656, 657, 660, 661, 662, 663, and 663A).

We began the discussion last Thursday on those recommendations, which include utilizing $55.7 million of Cash Reserve Fund monies for four different items: 1) a $17.2 million to cover payment of IV-E disallowance penalties imposed on the Department of Health and Human Services; 2) $5.5 million transfer to the Republican River Compact Litigation Contingency Cash Fund to pay a court-ordered settlement related to the State of Kansas v. State of Nebraska Republican River Compact; 3) $25 million transfer to the Nebraska Capital Construction Fund for construction at the University of Nebraska Medical Center of the Global Center for Advanced Inter-professional Learning; and 4) $8 million to Coordinating Commission to contract with Creighton University to increase the number of graduates of the dental college which provides reduced-fee and charitable oral health services, oral health workforce development, and oral health services using tele-health. This last item has drawn some opposition on first round and may have trouble staying in the budget.

With approximately $720 million in the cash reserve we will follow the concepts used by the Appropriations Committee in the 2014 session which were that a significant balance should be retained in the Cash Reserve Fund and any use of the Cash Reserve Fund should be for one-time items to match the one-time nature of the financing source.

A $60 million increase in the amount of money transferred to the Property Tax Credit Cash Fund was made a priority of the Appropriation Committee. The $60 million per year transfer totals $120 million over the two year biennium which would place $200 million per year into the Property tax relief fund. This would give a credit of around $94 per $100,000 of valuation. Although accounted for as a transfer and not an expenditure, in terms of using available General Funds, this is the single largest increase in the budget. Of particular interest is the distribution of the property tax credit has increased over the years for the agricultural sector. Since the property tax credit is distributed solely based on valuation, the high growth in ag land values and flat valuation in residential has resulted in a shift in the credit distribution to taxpayers. In 2007, when the Property Tax Credit Fund was created, ag land received a distribution of 24.1%, while residential land received a distribution of 55.7%. In the new budget recommendations ag land is estimated at receiving 44.8%, while residential will be receiving 37.9%.

The committee budget includes funding for state aid to schools (TEEOSA) to fully fund the certified aid for 2015/16 and current estimated funding needs for 2016/17 based on the existing TEEOSA formula. TEEOSA school aid is the largest single spending item accounting for a $79.7 million increase over the two years. Even with this increase there will be no school in District 34 that will receive equalization aid and the number of schools statewide that receive equalization funding will decline.

The appropriation for the Department of Correctional Services is one of the largest increases in the budget. In FY15-16 the increase is 11.2% or $20.3 million. Almost half of this amount is related to inmate medical costs. Health care costs have increased significantly during recent years due to an increase in inmate population, an aging inmate population, inflation, and the new Hepatitis C treatment. The committee recommendation also includes $2.5 million each year for 59 additional security staff and $1.2 million each year for behavioral health staff. These funds are critically important in helping to solve the current overcrowding of our prison system by making sure treatment programs are available to inmates that are in need of mental health programs. Hopefully by providing intense probation and aggressive treatment of the mental health issues, such as drug and alcohol addictions, we can keep these people from returning to prison.

And finally, the committee included a general 3% increase to the University of Nebraska, State Colleges, and Community Colleges. Also funded were several specific items for the University of Nebraska including operation and program costs for the Health Science Education Center ($1,424,000 FY16 and $2,424,000 FY17) and support of the Yeutter Institute for International Trade and Finance ($1,250,000 each year). This program could be the push we need to grow our international markets that our agricultural economy will need to keep us the number one industry in this state.

Budget growth in the proposed budget is 3.8% in FY16 and 2.4% in FY17 for a two-year average of 3.1%. This two year average is virtually the same as the Governors recommendation, and would be the third lowest growth in the last 30 years.

If this budget is approved, $48.9 million will be available for other proposals still under consideration by individual senators. By the end of the day at 8 p.m. we advanced the budget recommendations to the second round of consideration.

The Nebraska Economic Forecasting Advisory Board met on Thursday, as we began debate of the budget bills, with good news to report. They did not have to lower the revenue forecast for the 2015-17 fiscal years as some had been concerned about. In fact, they raised the money that could be available by nearly $10 million. And if current year revenues grow as expected, the state would have $12 million more to deposit into the Cash Reserve Fund. Hopefully the body will not look at these dollars as additional spending opportunities.

 

Last week Speaker Hadley again reminded us of the number of bills that need to be addressed. Our time to take up those issues is running out, and with the budget debate scheduled to start on April 30 we need to focus and stay on track.

This week we will begin working through the noon hour and up until 7:00 in the evening or later. It seems that we can spend a lot of time discussing a bill that seems simple, but then many times we start picking it apart the debate turns into something that has far broader implications than we first thought.

A bill that changed several provisions in the Liquor Control Act was amended to ban the sale of powdered alcohol, a substance that turns water into spirits such as vodka or rum. A brand of the product called Palcohol recently won approval from a federal regulator, but is now running into resistance on the state level.

LB 330 was introduced by Sen. Tyson Larson and prioritized by the General Affairs Committee. Sen. Larson argued that powdered alcohol is a relatively new product and any decision to ban it should be made by the Liquor Control Commission, which has authority over regulation of liquor in the state. I don’t feel that there is a need for this product and there is too much risk of abuse to allow this product in Nebraska.

The first round vote 32-3 moved Nebraska into position to block powdered alcohol before it reaches store shelves. Six other states have banned the product and 39 states are considering regulations this year. Sen. Mark Kolterman, sponsor of the amendment said that powdered alcohol would be too easy for kids to use and hide. He was also concerned that it would probably turn up in public places where alcoholic beverages are prohibited.

The amended bill also contains language to regulate pedal pubs, which are bicycle-like minibars that have become popular in tourist areas and entertainment districts. The regulations require pedal pubs to obtain licenses from the Commission that allow them to sell alcoholic beverages. Each license will be good throughout the state. The license holder may sell individual alcoholic drinks to customers who are 21 and older while on the pedal-pub vehicle. I do think that even though the license is good across the state, they should also be required to get approval to operate from the local officials from the area that the event is held. LB330 still needs two more rounds of discussion in order to get to the Governor’s desk.

A first-round compromise was reached after a year of negotiations on a bill that would allow transportation network companies like Uber and Lyft to legally operate in Nebraska.

Introduced by Sen. Health Mello and made a priority of the Transportation and Telecommunications Committee, LB 629 was advanced from first-round debate 39-1. Sen. Mello said he has a final proposal that he believes will resolve the last remaining concern. This was a very complicated bill because of the issue of who’s insurance policy would cover what and when during the time that a person is working for the transportation network company. My first concern is for the passenger but the driver also needs to be covered by commercial insurance during the act of transporting a ride.

There was also concern that banks and other lenders may not know if a vehicle that they have a lien on is being used for commercial purposes. And that’s a concern because typical auto insurance coverage is nullified when a vehicle is used for commercial purposes. If you deliver newspapers or pizza with your vehicle or charge for delivering something, then that is considered a commercial use and your policy is no longer in effect. So, if an Uber driver gets into an accident, there would not be coverage from your personal insurance policy to fix a vehicle that may have been used as collateral for a loan. Most vehicle owners do not realize this is in most insurance policies that are written in Nebraska.

Sen. Mello has pledged that he would work out a compromise that would put the responsibility on drivers to prove that they had notified their lender about driving for Uber or another transportation networking company. That proof would ensure that a lender was aware one of their vehicles was being used for ride hailing so that the need for collision and comprehensive insurance could be handled by the driver or the transportation network company.

Existing state laws regulate cabs via the Public Service Commission, but those became law before firms like Uber and Lyft came into the picture. Cab companies argue that businesses like Uber and Lyft are different because they have no vehicles and no company drivers. Uber and Lyft are Internet-based services using an app on a smart phone to summon a ride from an individual who may be a full or part time driver furnishing his or her own vehicle and works for a transportation network company (TNC) such as Uber or Lyft. I was happy to see TNC’s come to Nebraska because I think this type of business could be very beneficial in the smaller communities across the state. We have a significant shortage of transportation options in some of the smaller cities, and maybe someday this will help address that issue. I personally utilized an Uber vehicle while in DC last year and admit it was the best cab ride I have ever experienced.

Provisions under LB 629 would require companies like Uber and Lyft to register with the State Public Service Commission and follow several other rules to operate.
###

Sen. Curt Friesen

District 34
Room #1110
P.O. Box 94604
Lincoln, NE 68509
Phone: (402) 471-2630
Email: cfriesen@leg.ne.gov
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