NEBRASKA LEGISLATURE

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Tim Gragert

Sen. Tim Gragert

District 40

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 tgragert@leg.ne.gov

The Legislature spent four hours this past week debating LB 906 which focuses on employer vaccine mandates. As amended by Health and Human Services Committee amendments, LB 906 would apply to businesses with one or more employees but would only pertain to the COVID-19 vaccine. LB 906 clarifies that if an employer requires employees to be vaccinated against COVID-19, an exemption to the mandate is allowed for a medical reason, accompanied by a signed statement from their health care practitioner, or for a religious reason, based on the employee’s sincerely held religious beliefs. The employer may require employees granted an exemption to be tested periodically for COVID-19 and wear personal protective equipment, both at the employer’s expense. An amendment was adopted clarifying that federal law supersedes state law. This was necessary after the U.S. Supreme Court upheld a federal vaccine mandate last month for health care providers that participate in the federal Medicare or Medicaid programs.

An amendment was offered to LB 906 that would have stricken the authority of employers to require the unvaccinated to undergo periodic testing and wear PPE. Initially, the sponsor of the bill, Senator Ben Hansen, supported this amendment. However, the committee amendments represented a compromise, allowing several entities to withdraw their opposition to the bill. When the amendment threatened to unravel this compromise, Senator Hansen withdrew his support for the amendment, after which the amendment failed. The cloture motion to end debate and allow for a vote on the advancement of the bill was successful on a 38-3 vote and LB 906 advanced to Final Reading on a 36-2 vote.

Debate began this week on LB 939, which proposes to reduce the top individual income tax rate from 6.84% to 5.84% over a three-year period. The Revenue Committee amendments add the provisions of LB 938, which reduce the top rate of the corporate income tax to 5.84% as well. Last year, legislation was passed to reduce the top corporate income tax rate from 7.81% to 6.84%. Under the amended version of LB 939, the top corporate income tax rate would be reduced further and faster than what was previously enacted. By fiscal year 2025/26, it is estimated that the tax cuts would reduce state revenue by approximately $400 million.

The sponsor of LB 939, Revenue Committee chair Senator Lou Ann Linehan, said that because state revenues have grown far greater than predicted, it is time to return the excess to taxpayers. Furthermore, LB 939 would make Nebraska more competitive with other states, when contending for businesses and residents. Much of the debate centered on whether the Legislature will be able to afford this tax cut in future years and whether it primarily benefits the wealthy.

The Nebraska Chamber of Commerce presented data showing that our current income tax system provides relatively low tax burdens for lower income taxpayers, but that middle-income and above taxpayers have some of the highest income tax rates in the Midwest. They urged Nebraska to modernize our outdated tax system and be more competitive in today’s environment, when trying to attract new residents, talent, jobs, and entrepreneurs. Whereas, the Open Sky Policy Institute distributed information showing that approximately 83% of the corporate income tax cut would flow to out-of-state taxpayers and that 84% of the personal income tax cut would go to the highest earning 20% of Nebraskans.

As the Legislature debates tax policy and other issues, I encourage you to inform me of your thoughts and opinions. I can be reached at tgragert@leg.ne.gov. My mailing address is District #40, P.O. Box 94604, State Capitol, Lincoln, NE 68509 and my telephone number is (402) 471-2801.

The public hearing on LB 1023 was held on Thursday, February 10th before the Natural Resources Committee. It reflects the work of the Statewide Tourism and Recreational Water Access and Resource Sustainability Special Committee (STAR WARS) and proposes to adopt the Lake Development Act and the Water Recreation Enhancement Act. I was appointed to serve on the STAR WARS Committee, stemming from the passage of LB 406 last year. In addition to recommendations to construct a 3,600 acre lake in or near Sarpy County and a new marina at Lake McConaughy, the legislation also recommends a new lodge and event center at Niobrara State Park and expanding the Weigand Marina at the Lewis and Clark State Recreation Area.

A number of testifiers representing Knox County, the Village of Niobrara, the Niobrara School District, and the Ponca Tribe drove to Lincoln to express their support for this exciting opportunity to increase tourism and economic development in Northeast Nebraska. Proposed funding for the projects is included in legislation before the Appropriations Committee.

Last week, I mentioned that LB 986 was filibustered. This legislation would have limited an increase in a school district’s property tax asking to 2.5% or the inflation rate, whichever was greater. A cloture motion to end debate and allow a vote on the advancement of LB 986 was unsuccessful, falling five votes short of the necessary 33 votes. A number of senators felt that this would put too severe of a restriction on school districts. An unsuccessful cloture motion means the issue is done for this year.

The Legislature gave first-round approval to legislation addressing vaccine mandates. Under LB 906, any employer that requires its employees to be vaccinated against COVID-19 must allow for an exemption to such requirement if the employee submits a completed vaccine exemption form, developed by the Department of Health and Human Services. An exemption would be allowed for health purposes with a signed written statement from a doctor or if the vaccine conflicts with a sincerely held religious belief. Anyone granted an exemption, could be required to be periodically tested or wear personal protective equipment, at the employer’s expense.

The Legislature began debate on LB 890, which proposes major changes in the school funding formula. The legislation establishes an education stabilization base aid factor in the formula, giving schools approximately $1,100 per student in state funding. The proposal lowers the local effort rate from $1.00 to $0.75 and increases the allocation of state income tax returning to the schools from 2.23% to 20%. One hundred fifty-eight school districts would become equalized under the proposal, up from the current 87 of 244 districts. The intent is to fund the proposal through the dedication of one-half cent of current sales tax revenue and to repurpose the money directed to the refundable income tax credits under the Nebraska Property Tax Incentive Act. After several hours of debate, the sponsor of LB 890 asked that the bill be placed on a Speaker’s hold, only to return to the agenda if an agreement is reached between the primary proponents and opponents.

I introduced legislation pertaining to Nebraska’s College Savings Plan before the Revenue Committee this past week. LB 864 would expand the definition of qualified higher education expenses to allow the funds to be used for education loan payments for the beneficiary or the sibling of a beneficiary, up to $10,000 per person. In December of 2019, President Trump signed the SECURE Act, expanding qualified distributions for 529 plans at the federal tax level to include apprenticeship and student loans. Legislation passed last year to add apprenticeships to the definition of qualified higher education expenses. LB 864 would complete the process by passing enabling legislation on the state level to bring our 529 plan in line with the federal changes. This issue was brought to my attention by a constituent who wanted her son to have more flexibility with his 529 plan, as allowed on the federal level. I worked with the Nebraska State Treasurer, John Murante, who administers our College Savings Plan. He testified in support of the bill, as did the constituent who brought the issue to me. No one testified against the proposal.

If you support or have concerns with any legislation before senators, I encourage you to contact me with your thoughts. I can be reached at tgragert@leg.ne.gov. My mailing address is District #40, P.O. Box 94604, State Capitol, Lincoln, NE 68509 and my telephone number is (402) 471-2801.

We have reached the one-third mark of this 60-day legislative session, but still have a great deal of work to do. The various Standing Committees are busy holding public hearings on the 600 bills that were introduced in January. As of February 3rd, public hearings have been conducted on 257 bills during the first three weeks of hearings, but 343 bills have yet to be heard during the next four weeks before the public hearing process concludes and the Legislature begins to meet on the floor in full-day debate.

LB 925, the bill I introduced to create the Resilient Soils and Water Quality Act, was advanced from the Natural Resources Committee this past week. I have designated it as my priority bill. The purposes of the Act are to accelerate the use of best management practices for healthy soil; protect and improve soil and water quality; protect the public’s health and enhance agricultural production and profitability; and to increase awareness, education, and promotion of best management practices for healthy soils through peer-to-peer relationships, as well as demonstration and research farms.

Under LB 925, the Department of Natural Resources would hire a facilitator to assist in the formation of a producer learning community (PLC). The PLC is an agricultural producer-led nonprofit voluntary organization dedicated to fostering the learning and sharing of knowledge, while carrying out the purposes of the Act. The intent is that the PLC would become self-sufficient after five years.

Thirty-seven other states have formed Producer Learning Communities, which were started because their members wanted to learn and enhance their working knowledge to promote best management practices for healthy soils to others. It has been found that producers can effectively learn from their peers. When I ran for the Legislature, water quality was one of my top priorities. The quality of our soil and water are vital, not just for increased agricultural production, but for economic viability, long-term food security, and our quality of life. High nitrate levels in wells across the state are of major concern to me. Rather than focusing on being reactive and treating water with high nitrate levels, I am supportive of being proactive and pushing for a comprehensive plan of best management practices for healthy soils.

Public hearings were held this past week on two bills that I introduced. LB 779 was heard before the Government, Military, and Veterans Affairs Committee. It would remove the 10-year limitation on access to state tuition assistance for members of the Nebraska National Guard. This bill would harmonize the National Guard with the Reserve component, which has no lifetime limit on tuition credit. This could serve as a recruiting and retention tool and would not require additional state funding. The National Guard testified in support and no one opposed the bill.

LB 1082 was heard before the Natural Resources Committee. It would require applications for annual hunting or fishing permits to include a question asking applicants if they want to add their name to the Donor Registry and donate their organs upon death. Although potential donors can also register when obtaining a driver’s license, this would allow for an annual registration opportunity, instead of waiting on our 5-year drivers’ license cycle. Other states with a similar law have seen immediate success in growing their donor registry. On any given day, there are approximately 300 Nebraskans and 100,000 Americans waiting for an organ transplant. A father of a son who died while waiting for a heart transplant gave compelling testimony, noting his promise to his son that he would carry out his mission to obtain more donors.

The Legislature spent several hours discussing LB 986, as the bill was filibustered this past week. LB 986 would limit an increase in a school district’s property tax asking to 2.5% or the three-year inflation average, whichever is greater. This limit could be exceeded with a 75% vote of the school board or a 60% majority of voters. The amount by which it could be exceeded ranges from 7% for school districts with an average daily membership of 471 or less to 4% for districts with more than 10,000 students.

As we continue the public hearing process, I encourage your input on the legislation before us. I can be reached at District #40, P.O. Box 94604, State Capitol, Lincoln, NE 68509. My email address is tgragert@leg.ne.gov and my telephone number is (402) 471-2801.

This past week, the Legislature gave first-round approval to two bills offering tax relief for Nebraskans. Further debate on the two proposals will wait until we are further along in the session and have a better idea of projected revenues and expenses.

LB 825 accelerates the phase-out of the taxation of social security benefits. Under the proposal, all social security benefits will no longer be subject to the income tax beginning in 2025.

LB 723 guarantees a higher level of property tax relief for taxpayers. When senators passed the Property Tax Incentive Act two years ago, it called for a significant hike in funding for the income tax credit, from $125 million the first year to $375 million the fourth year. The formula used to calculate the annual increase in funding considered whether the cash reserve was adequately funded and included excess revenue growth above 3.5%. Due to the postponement of income tax filings because of the pandemic and the influx of federal pandemic relief dollars, it pushed the formula to an unpredicted $548 million this year, which represents about 25% of property taxes paid to school districts (the largest recipient of property taxes). LB 723 will guarantee that the $548 million in funding is not reduced to $375 million, as specified as the funding level for the fourth year in the original legislation. This amount will be allowed to grow annually by the increase in the total assessed value of real property from year to year. An amendment was added to ensure the funding is sustainable in future years.

LR 14 authorizes the Legislature to apply to Congress, under the provisions of Article V of the U.S. Constitution, to call a convention of states limited to proposing amendments to the Constitution that impose fiscal restraints on the federal government, limit the power and jurisdiction of the federal government, and to prescribe term limits for members of Congress. LR 14 was passed by the Legislature on Friday, January 28th with a 32-11 vote, after successfully overcoming a filibuster. LR 14 won’t take effect until the Legislatures in 33 other states make application on the same subject.

A revamped funding formula for school districts was proposed in LB 890 and LB 891. The proposed plan would increase state support for almost every school, which would in turn provide property tax relief. A public hearing was held on LB 890 this past week before the Education Committee and on LB 891 before the Revenue Committee. The Education Committee selected LB 890 as one of their two committee priority bills. The proposal would implement a district specific maximum levy calculated for each school district, not to exceed $0.95. The new formula is projected to result in $715 million in property tax relief. It would repurpose the Property Tax Incentive Act and dedicate one-half of one cent of the sales tax to the state aid formula, which would be matched by the state. A new component of the formula is the Education Stabilization Base Aid, guaranteeing a certain amount of state funding (approximately $1,100) for every student. The allocated income tax returned to school districts would increase from 2.23% to 20%, which was the original intent when the current state aid formula was enacted. More school districts would qualify for equalization aid under LB 890 and LB 891. Currently only 87 of the state’s 244 school districts qualify, but under this plan 148 districts would receive equalization aid. The increased state funding would result in the state paying approximately 58% of the cost of schools, with local property taxes funding 42%. Although some question whether significant property tax relief is guaranteed under this proposal, I believe it warrants discussion.

The Crime and Justice Institute worked with the Nebraska Criminal Justice Reinvestment Working Group (made up of criminal justice leaders from across the state, the chair of the Judiciary Committee, the Governor, and the Chief Justice) to develop a report that evaluated Nebraska’s criminal justice system. Senator Steve Lathrop, the chair of the Judiciary Committee, introduced LB 920 as a result. The reforms proposed attempt to reduce prison overcrowding and recidivism. Nebraska has the most overcrowded prison system in the nation. Discussion has centered on whether we can build our way out of this, if we need to enact reforms, or both. Data has shown that while the prison population increased over the last decade, admissions decreased, reflecting the consequences of mandatory minimum sentences and increasing sentence lengths. The Governor has proposed building a new 1,500 bed prison to replace the Nebraska State Penitentiary. However, if reform isn’t enacted, projections show that even with the new prison, our system would be overcrowded again by 2030.

Again, I encourage you to inform me of your thoughts on the bills before the Legislature. I can be reached at tgragert@leg.ne.gov. My mailing address is District #40, P.O. Box 94604, State Capitol, Lincoln, NE 68509 and my telephone number is (402) 471-2801.

Just over 600 bills and constitutional amendments were introduced during the 10-day bill introductory period for this legislative session. Currently, the various committees are in the process of holding public hearings on every bill introduced.

Senators gave second-round approval to LR 14 this past week. This resolution would serve as Nebraska’s application for a convention of the states authorized under Article V of the U.S. Constitution, to limit the power of the federal government, impose fiscal restraints, and enact term limits for members of Congress. Prior to receiving second-round approval, an amendment was adopted that would rescind the application in 5 years. LR 14 is now ready for Final Reading.

Two bills that were heard before the Revenue Committee this past week, were advanced and scheduled for debate by the Legislature. In 2020, the Legislature passed LB 1107 which created a refundable income tax credit for a portion of property taxes paid to school districts. The funding for this program began at $125 million, with the intent to increase it to $375 million by the 4th year of the program. However, the increased revenue the state has recently experienced has impacted the formula and created higher funding levels than predicted. LB 723 creates a floor for the amount of the refundable income tax credit for property taxes paid to school districts, so that it’s not reduced below the current $548 million in funding for this program.

LB 825, introduced by Senator Brett Lindstrom, would exempt all Social Security income within a four-year period. Last year, Senator Lindstrom introduced LB 64 which phased out 50% of the tax on Social Security income by 2025 and included intent language to increase the percentage of social security benefits that are excluded from the income tax to 100% by year 2030. LB 825 speeds up this process, exempting 40% this year and increasing the exemption by 20% annually until all social security benefits are exempt from taxation in year 2025.

The public hearing was held this past week on LB 773 before the Judiciary Committee. LB 773, referred to as the constitutional carry legislation, allows anyone who isn’t otherwise prohibited by state law to carry a concealed weapon without a permit in Nebraska. Persons wanting to carry a concealed weapon would no longer need to have a background check, complete training, or pay the fee for a permit. Senator Tom Brewer, the sponsor of LB 773, has already designated it as his priority bill. Representatives of law enforcement testified against the bill at the public hearing, stating that it could jeopardize public safety and hinder their ability to seize illegal guns. Senator Brewer vowed to work with them to address their concerns.

LB 809 was heard before the Natural Resources Committee, on which I serve. Introduced by Senator Mike Moser, at the request of the Nebraska Department of Environment and Energy, the legislation would amend the Drinking Water State Revolving Fund Act and the Wastewater Treatment Facilities Construction Assistance Act to better align the funds with the new provisions of the Infrastructure Investment and Jobs Act. The legislation increases the allowable amount of grant and loan forgiveness assistance to up to 75% of eligible project costs for entities serving 10,000 persons or less. This bill will help our smaller communities afford necessary modifications to their drinking water systems.

As the public hearing process continues, I urge you to contact me with your thoughts and opinions on bills that have been introduced. I can be reached at District #40, P.O. Box 94604, State Capitol, Lincoln, NE 68509. My email address is tgragert@leg.ne.gov and my telephone number at the State Capitol is (402) 471-2801.

On Thursday, January 13th, Governor Ricketts presented his final State of the State Address to the Nebraska Legislature. The Governor emphasized his message over the past 8 years has been to Grow Nebraska. He reported that this has happened, despite floods, fires, and a global pandemic. He touched on his priorities for this year, which include tax relief, strengthening public safety, and investing in natural resources. He endorsed legislative proposals to accelerate the phase-out of taxing Social Security benefits, to place a cap on annual increases in property taxes, and to reduce the top individual and corporate income tax rate.

The governor highlighted his recommended adjustments to the 2021-23 state budget as well has his suggestions for spending the American Rescue Plan Act (ARPA) money. Included in his recommendations, is $150 million from the General Fund and $50 million in ARPA funding for the Statewide Tourism and Recreation Water Access and Resource Sustainability (STAR WARS) program. Through the passage of LB 406 last year, a consultant was hired to study three areas of the state – the Lower Platte River Area, the Lake McConaughy Area, and the Niobrara River Area. Pertaining to the northeast Nebraska area, the consultant recommended constructing a new boat launch near the Village of Niobrara, expanding the Weigand Marina, and building a new Event Center and Lodge at Niobrara State Park. The total funding recommended was $86.7 million. We are working with the Ponca Tribe and the Nebraska Game and Parks Commission to assist in funding this exciting project.

Also included in the Governor’s recommendation was $60 million to restore and protect drinking water systems in rural areas across the state, such as Cedar and Knox Counties. I had been working with the Lewis and Clark Natural Resources District on needed improvements to ensure the sustainability of a long-term water source.

This past week, the Legislature discussed several major issues carried over from last year. One was the inheritance tax. Nebraska is one of only six states that currently impose an inheritance tax, but the only state where the counties receive the revenue. If this tax were eliminated, property taxes would likely increase in a number of counties. As amended, LB 310 received first-round approval on a 41-4 vote, after the Nebraska Association of County Officials agreed to the committee amendments, if further attempts to completely eliminate the tax were dropped. As amended, the rates are decreased and the exemptions are increased from the current amounts. These changes bring Nebraska more in line with other states that have the inheritance tax, without reducing county revenue too drastically.

With a 32-10 vote, lawmakers gave first round approval to LR 14, the legislative resolution that proposes to apply to Congress, under Article V of the U.S. Constitution, to call a convention of the states, which would be limited to proposed amendments dealing with fiscal restraints on the federal government, limiting the power and jurisdiction of the federal government, and term limits for officials and members of Congress. To meet the constitutional requirements to convene a Convention of States, 34 states would be required to call with matching resolutions to LR 14. Fifteen states have already utilized this opportunity and a resolution is pending before an additional 26 states. For any proposed amendment resulting from a Convention of States to officially become an amendment to our Constitution, it must be ratified by 38 states.

LB 364 proposed to adopt the Opportunity Scholarships Act. Taxpayers could claim a nonrefundable income tax credit of up to 50% of their state income tax liability on contributions they make to nonprofit organizations that grant scholarships to students who attend private schools. The scholarships would be directed to new students, who qualify for free and reduced priced lunches. Under proposed committee amendments, the amount of credits would be limited to $5 million in any calendar year. LB 364 failed to receive enough votes to invoke cloture last year and fell to the same fate this year, after an attempt was made to end the filibuster.

If you have any comments on the Governor’s proposal or on any of the bills introduced so far this legislative session, I encourage you to contact me with your thoughts and opinions. I can be reached at District #40, P.O. Box 94604, State Capitol, Lincoln, NE 68509. My telephone number is (402) 471-2801 and my email address is tgragert@leg.ne.gov.

After a three month break, the Legislature convened on Wednesday, January 5, to begin the
One Hundred Seventh Legislative Session, Second Session. Senators were called into special session in
September to complete the redistricting process, based on new census data. Legislative District #40 no
longer contains Boyd or Rock Counties. Rock and Boyd Counties are now part of Legislative District #43,
represented by Senator Tom Brewer. Legislative District #40 also lost the southern portion of Dixon
County, which will be covered by Senator Joni Albrecht, who represents Legislative District #17.
Legislative District #40 gained Antelope County and the northern half of Pierce County. Holt, Knox, and
Cedar Counties were not altered and remain in Legislative District #40.

Legislative sessions in even-numbered years last for sixty days. During the short session,
senators make necessary adjustments to the two-year budget developed during the ninety-day session
in 2021. However, this year, with approximately $1 billion in federal funding available because of the
American Rescue Plan Act (ARPA), senators will devote a much larger portion of time to budget issues.
The Governor has strongly suggested that only one-time projects are funded with the ARPA money, to
prevent an ongoing financial obligation. Furthermore, unlike other years in which the Legislature has
had to make budget cuts, projected state revenue is exceeding state spending, allowing for the rare
opportunity of additional tax relief.

Bills are introduced during the first ten days of the legislative session, which will fall on January
20th this year. I have introduced three bills this past week. One would authorize Nebraska College
Savings Plan accounts (NEST 529) to be used for qualified education loan repayment. Another would
eliminate the 10-year limitation on National Guard members’ use of the tuition benefit. The final bill
makes some common-sense changes in the child labor laws and gives the Commissioner of the
Department of Labor more flexibility in implementing the short-time compensation plan. I plan to
introduce legislation that would implement a recommendation from the Healthy Soils Task Force report
regarding best management practices for soil health and water quality. I also introduced a resolution to
recognize the service of former Senator Cap Dierks, who represented this area of the state for twenty
years. All 48 senators signed on to the resolution, sending our condolences to the family of Cap & Gloria
Dierks.

Until early March, the Legislature will meet in the mornings, beginning debate on carry-over
legislation from last year. In the afternoons, senators will break into various committees for public
hearings. Again this year, I will serve on the Business and Labor Committee on Mondays, the Agriculture
Committee on Tuesdays, and the Natural Resources Committee the remainder of the week. Beginning
on March 8, after public hearings have been held on every bill introduced, the Legislature will meet in
full-day debate.

The Legislature has a website – NebraskaLegislature.gov – which contains a wealth of
information. Viewers can read the text of bills introduced, search statutes, find their senator, follow the
progress of legislation, read the Unicameral Update, and watch the Legislature live through video
streaming.

After serving our country for 40 years in the military, our flag is very important to me. Over the
interim, I worked with the Department of Administrative Services to ensure that every U.S. flag
purchased by the State of Nebraska is made in the USA. The Governor was supportive of my idea and
the new policy was put in place on January 4.

With the beginning of session, I will be in Lincoln during the week and home in Creighton on the
weekends. My office is still located on the 11th floor, due to the HVAC project. The general public doesn’t
have access to the 11th floor, however if you are in the Capitol and would like to visit with me, please call my office and my staff will escort you up the elevator. Turner Adams serves as my administrative assistant and Kim Davis as my legislative aide. Turner will be the one answering the phone and is responsible for my calendar. Kim works on legislation and constituent issues.

In order to effectively represent District #40, I encourage your input. I can be reached at
tgragert@leg.ne.gov. My mailing address is District #40, P.O. Box 94604, State Capitol, Lincoln NE 68509
and my telephone number at the Capitol is (402) 471-2801.

Welcome
January 5th, 2022

Thank you for visiting my website. It is an honor to represent the people of the 40th legislative district in the Nebraska Unicameral Legislature.

You’ll find my contact information on the right side of this page, as well as a list of the bills I’ve introduced this session and the committees on which I serve. Please feel free to contact me and my staff about proposed legislation or any other issues you would like to address.

Sincerely,
Sen. Tim Gragert

Sen. Tim Gragert

District 40
Room 11th Floor
P.O. Box 94604
Lincoln, NE 68509
(402) 471-2801
Email: tgragert@leg.ne.gov
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