NEBRASKA LEGISLATURE

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Sen. Tim Gragert

Sen. Tim Gragert

District 40

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The One Hundred Sixth Legislature, First Session, has adjourned sine die. The Legislature passed some important bills and failed to agree on other critical issues. Of the forty-nine individual priority bills, thirty-four became law. Of the thirty-three committee priority bills, twenty-nine were passed by the Legislature.

LB 720, the ImagiNE Nebraska Act, was the priority bill of Seward Senator Mark Kolterman. It proposed to replace and update the Nebraska Advantage Act, which offered tax incentives to businesses for investment and employment growth. LB 720 was voted on two days after the property tax relief measure failed. Although I believe our state needs some type of tax incentives in order to compete with other states, I had to withhold my support for LB 720. I did not think we should proceed with appropriating funding for tax incentives prior to funding property tax relief. I felt we needed to keep these two issues as a package deal, if we wanted any hope of getting property tax relief passed next year, as property tax relief is my top priority. The vote to end debate on LB 720 fell three votes short. All bills pending at the end of this legislative session are automatically carried over to the 2020 session.

Priority bills that were passed include LB 686 dealing with prison overcrowding, LB 149 raising the legal age from 18 to 19 for purchasing and using cigarettes, tobacco and vaping products, and LB 657 allowing Nebraskans to grow, process, and handle hemp and hemp products. Priority bills left pending include LB 44 to eliminate the death penalty, LB 110 to allow for medical marijuana, LB 483 to change the method used to assess agricultural land, and LB 670 offering scholarships to private school students.

A balanced budget was passed, limiting spending growth to 2.9%, which was lower than the Governor’s recommendation. The budget included additional funding for the Property Tax Credit Fund, increasing the annual funding for this property tax relief program to $275 million annually.

Both of the bills that I introduced were passed. LB 243 creates the Healthy Soils Task Force, which will be appointed by the Governor in the next couple weeks. The task force will develop a comprehensive healthy soils initiative and action plan. LB 406 updated the statutes pertaining to the State Treasurer’s unclaimed property division.

An initiative petition drive calling for property tax relief is currently underway to place a proposed constitutional amendment on the 2020 general election ballot. The proposal would give taxpayers a refundable income tax credit in the amount of 35% of property taxes paid each year. Property taxes collected in 2018 amounted to just under $4.2 billion, of which 35% would be approximately $1.5 billion. Although budget cuts would be considered, to deal with this amount of property tax relief, the Legislature would most likely also have to increase taxes or broaden the tax base by repealing exemptions or taxing more services in order to fund the income tax credit proposal.

The residents of Northeast Nebraska that were victims of the March flooding still continue to be a top priority to me. The Legislature passed LB 512, which will require the County Board of Equalization to adjust the value of destroyed real property to its assessed value on the date of the damage. Current law required land and buildings to be valued for property tax purposes on January 1 of each year. The passage of this bill will put a process in place to reduce property values when damaged by a natural disaster between January 1 and July 1.

With the completion of the legislative session, I will be spending more time back in Creighton. During the interim, I will try to get around the district as much as possible. I will still travel to Lincoln periodically for meetings and office work. If I’m not in Lincoln, my staff will be able to assist you. My contact information is tgragert@leg.ne.gov. My telephone number at the State Capitol is (402) 471-2801 and my mailing address is District #40, P.O. Box 94604, State Capitol, Lincoln, NE  68509.

 

The Legislature gave second-round approval to the budget bills this past week, which will allow them to be read on Final Reading by the 80th legislative day (May 22), as required by legislative rules. The only amendments that were adopted were offered by the Appropriations Committee and were primarily technical in nature.

Senators began debating LB 720, the ImagiNE Nebraska Act. LB 720 would provide tax benefits to companies that invest or increase employment by a specified amount. The topic of tax benefits versus the cost of tax incentive programs has been a topic of discussion for years. Back in 1987, the Legislature passed LB 775, the Employment and Investment Growth Act, in an effort to keep ConAgra from leaving the state. In 2005, a comprehensive revision of LB 775 was passed. The Nebraska Advantage Act focused on making Nebraska more attractive for starting and growing a business, added a rural component, promoted higher paying jobs, and provided more transparency.

The purpose of LB 720 is to increase the value of the program through better investments, better jobs, more robust reporting, and more overall transparency.  The legislation would simplify the process and direct applications to the Department of Economic Development, rather than the Department of Revenue, in an attempt to build stronger relationships with businesses. It also proposes a new revolving loan fund to accelerate tax credits into front-end loans for job training and site development. The intent of LB 720 is to spend no more than what Nebraska Advantage spends on average, which is approximately $150 million annually. The legislation shortens the benefit period to 15 years (rather than 26 years), thereby providing greater predictability for the state’s budget.

In order to be competitive with other states, tax incentives are an important factor for Nebraska. As businesses evolve, programs need to be updated. However, I feel that the Legislature should pass a property tax relief measure before determining how LB 720 fits into the process. Senators are still working on LB 289 and on alternative approaches and are hopeful that property tax relief will be on the agenda again in the near future.

Two bills that the Legislature debated for three hours this past week, but appear unlikely to be on the agenda again this year, are LB 670 (private school scholarships) and LB 110 (medical marijuana). LB 670 proposed to create a state income tax credit for taxpayers who contributed to private school organizations for education scholarships. The credit could offset up to 50% of their tax liability. The decrease in revenue due to the tax credits was capped at $10 million the first year. If 90% of the credit was used each year, the cap could grow by 25% annually.

LB 110, which would adopt the Medicinal Cannabis Act, was advanced from the Judiciary Committee last week on a 5-1-2 vote. Committee amendments substantially tightened the original bill. The amendments require a patient to be examined by a doctor, physician assistant, or advanced practice registered nurse with whom they have a bona fide practitioner-patient relationship. If the patient has a qualifying condition (such as cancer, epilepsy, Parkinson’s disease, terminal illness, or PTSD), the practitioner would complete a certification, which the patient could take to a dispensary to receive cannabis or cannabis products. The amendments also significantly reduce the allowable possession amount to 2 ½ ounces of cannabis or cannabis products containing no more than 2000 mg of THC, prohibit the growing of marijuana at home, and prohibit the smoking of cannabis. An Enforcement Department and Medicinal Cannabis Board would be created to oversee and regulate the process.

The Governor has made his opposition to LB 110 known, emphasizing that UNMC has conducted research supporting successful clinical trials for Epidiolex, which is a cannabidiol derivative from marijuana that was recently approved by the Food and Drug Administration to treat seizures. LB 110 would circumvent this system of FDA approval, thereby putting public health at risk. Supporters of legalizing medicinal marijuana have already begun gathering signatures on a petition initiative they hope to place on the 2020 general election ballot if the Legislature doesn’t pass LB 110.

As we enter the final weeks of 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 email address is tgragert@leg.ne.gov and my telephone number is (402) 471-2801.

Sen. Tim Gragert

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