NEBRASKA LEGISLATURE
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Sen. Mike Groene

Sen. Mike Groene

District 42

Tuesday, the three main budget bills passed and were sent to the governor’s desk. He has the option to line-item veto individual appropriations within the entire budget.

The combined budget of $10.8 billion includes the general fund budget derived from state tax and fee receipts and federal money (Medicaid, education, etc.). The $4.5 billion annual general fund budget is the focus of our legislative actions. We are increasing it by 1 percent annually over the biennium budget.

To do so, we had to reduce our cash reserves (savings account) from $637 million to $379 million over a two-year period, and by using an accounting trick we lowered our general fund minimum reserve (checking account) requirement from 3 percent to 2.5 percent; therefore, we could claim we cut the budget by an additional $44 million.

Another problematic assumption on the budget is that our economy will rebound quickly and state revenues over the next two years will increase from 1 percent this year to a healthy 5 percent annually over the next two years. The last two times we had a budget crisis was after unique incidents, credit banking corrections and tech bubble stock market crashes. Those recovered quickly with federal intervention and stock market rebounds. This time the state’s revenue reductions are due to downturns in two of our basic economic engines: agriculture and energy. Those are not so easily reversed.

I joined 11 other senators voting no on Legislative Bill 331 which included the provision to lower the minimum reserve from 3 percent to 2.5 percent. I fear that we will be back next year with two options: cutting spending more or increasing the tax burden on citizens.

Bill updates:

LB 75: Sen. Justin Wayne’s attempt to give felons voting rights at the time they complete their parole was vetoed by the governor. Presently, it is restored to them after two years if they have stayed out of the criminal justice system. Originally, I voted for the bill, I do believe in redemption, but I voted to uphold the veto. It may well be that the proposed law was unconstitutional. Our State Constitution seems to clearly state that only the parole board can restore civil rights to felons, not the Legislature.

LR 1CA: This was Sen. John Murante’s attempt to put a constitutional voter ID requirement on the 2018 ballot for voter approval. I supported the effort. This issue is not about race or the economic status of a citizen, it is a reaction to a huge influx of immigration and the fact that we are a mobile society. Americans should be proud to prove they are a citizen and they should be willing to prove they reside in the district they are voting in. I have personally started a habit of showing my ID when I vote; I am proud to be an American. The measure failed to advance; it did not have enough votes to overcome a filibuster.

LB 171: This bill provides for claims against the state. Every budget cycle the Legislature must budget for lawsuit settlements against the state of Nebraska. For example, this year the state settled a lawsuit after the Department of Roads failed to immediately replace a stop sign after construction work and an individual was harmed in an automobile accident. Also included in the appropriation is workman compensation claims. The cost of the claims is $2.9 million.

LB 478: The bill allowing felons to own archery equipment was signed Tuesday by the governor. It includes an emergency clause so those individuals can enjoy spring and summer hunting seasons and prepare for fall hunting excursions. Our legislation legitimized by statute what was already happening, but a recent Nebraska Supreme Court ruling enforcing a state statute forbidding a felon from possessing a knife with a blade over 3.5 inches in length cast doubts on felons possessing archery equipment. Clarification needed to be made.

We are still working with other senators to press forward on property tax relief. LB 640 is still alive.

Please do not hesitate to contact our office, mgroene@leg.ne.gov or 402-471-2729, with any comments, questions or concerns.

Wednesday May 17, 2017

Education
Location: Room 2102
Time: 12:20 PM

Document Introducer Description
Appointment Peterson, Carter – Board of Trustees of the Nebraska State Colleges
Appointment Bieganski, Gary – Board of Trustees of the Nebraska State Colleges
Appointment Meyer, Jerald – Board of Educational Lands and Funds
Appointment Hadley, Marilyn – Nebraska Educational Telecommunications Commission
Appointment Carpenter, Stan – Nebraska Educational Telecommunications Commission
Appointment Smith, Clay – Nebraska Educational Telecommunications Commission
Appointment Gray, Cindy – Technical Advisory Committee for Statewide Assessment
LR98 Wayne Support the call to action of the My Brother’s Keeper Initiative and Community Challenge to address opportunity gaps faced by boys and young men of color nationwide

Taxes and spending: for some in government those two terms have a complete disconnect. Tuesday, we debated LB461, the Governor’s and Revenue Committee’s comprehensive tax plan. As a Revenue Committee member I helped vote the bill out of committee with the caveat that I could only support it going forward if either our LB640 to cap local property tax funding for public education advanced or changes were made to the bill that protected present and future property tax relief.  During debate, there was a rumor that a compromise was being cooked up, past unfulfilled promises on legislation has taught me not to decide my vote on rumors. I did not vote to advance the bill.

The bill had two major components. Starting next year, ag-land valuation would be lowered from 75% to 65% which sounds great until you realize that a large majority of Lincoln County farmland is in non-equalized school districts. The effect of the changes would cause all taxing entities to raise their tax rates to make up for the lost valuations.  The little tax relief for agriculture would have shifted to home and business owners. There are two ways to gain property tax relief:  replace local property taxes with state income and sales taxes through state aid to education and simultaneously control local government spending.  The other aspect of the bill was income tax cuts, another sure-fire vote getter for politicians.  Small cuts would have been given starting in 2019 by adjusting the tax brackets, but at the earliest, the larger tax breaks would have taken effect no earlier than 2020 and only if revenues increased by 3.5% or more.  I could not support a bill that gave a false impression that it was property tax relief and at the same time took away the source of future property tax relief–increased state revenues. A politician would have voted for LB461 and claimed it was middle class tax relief: I am not a politician. There was not a single farm, ranch, or educational group who supported the bill.  The proponents of LB461 had good intentions, but the resulting bill was not good for Lincoln County.

LB98: 10-year extension (tax increase) of a sunset date of a 3-cent property tax levy for over and fully appropriated Natural Resource Districts which includes all of Lincoln county. Senator Erdman and I filibustered the bill and garnered enough support to stop its advancement.  During the first 3 hours of debate a month ago, I opposed it. I have since not received correspondence from farmers or homeowners criticizing my stance but I continue to receive daily concerns about burdensome property taxes. I believe a message needed to be sent to local government officials that we are serious about property tax relief. The levy is still in effect next year, giving us the interim between sessions to come up with a compromise. What must be in the fix is a sunset extension of less than 5 years, lowering the levy to take into consideration the increases in valuations, and we must demand accountability through budget reporting of how the money was spent to alleviate the over use of our groundwater resources.

LB327: the almost $11 billion mainline budget bill. The first three hours of debate was not spent on spending, but instead a small provision in the bill that would have altered which women’s health clinics could receive Nebraska’s $1.9 million share of federal Title X funding. It is an attempt to defund clinics that perform abortions or encourage them. I agree, I do not want any of my tax dollars funding abortions, but I do want women in Lincoln County to have easy affordable access to preventive early health care testing. The way the bill was written would have denied a local nonprofit clinic from receiving the $120,000 federal funding they received in the past. After no language change could be found to protect rural clinics, Appropriations Chairman Stinner introduced an amendment to remove controversial language.  I supported his effort and the budget bill advanced.

Revenue forecast came in another $55 million short. We have more cuts to make in order to balance our already proposed deficit spending budget.

Please do not hesitate to contact our office at mgroene@leg.ne.gov or 402-471-2729 with any comments, questions, or concerns.

17 days remain to approve a budget and finalize legislation.  The planned 1% increase in the biennium budget is problematic.  I don’t believe Nebraska’s economy, and thus tax revenues, will recover quickly, we need to slow down our spending at an even faster pace than the present budget dictates.  The budget robs $198 million from cash funds of state government entities, these funds are usually generated from fees charged to taxpayers (such as the fee cattlemen pay the Brand Committee). It also reduces the state’s Cash Reserve Fund by $259 million, which in times like this, is why the fund exists. But no matter how you look at the budget, it is deficit spending. Plainly stated, we have not cut the budget to match expected revenues. I would be willing to wager we will be back next year cutting the budget even further.

LB640: Our attempt to fix the funding inequity in the Tax Equity and Educational Opportunities Support Act (TEEOSA) funding formula was debated Monday for 3 hours. LB640 would fix the overreliance on property taxes.  We have the votes to pass it, but presently the political climate in Lincoln, does not allow for the 33 votes needed to overcome a filibuster from senators who are under pressure from urban school administrators who benefit from the present TEEOSA formula.  They don’t want to lower the maximum property tax levy by 6.3 cents. Why? Because they know that they have the homeowner by the neck, you may lose your job, your income tax burden may drop but you must come up with your property taxes or lose the roof over your head. This battle is not over, the concept of LB640 and the bill itself is still alive, eventually the citizens will speak loud enough that something will change on this issue.

LB461, the comprehensive tax relief plan: I did vote it out of revenue committee because all forms of high taxation needs discussion, but I do not support the passage of the bill in its present form. First, the income tax cuts are too deep. We need to protect income tax revenues as the source of the present $224 million Property Tax Relief Fund (PTRF).  Plus income tax revenues must be part of the answer to correct the TEEOSA formula’s over reliance on property taxes.  Second, the property tax portion of LB461 gives very little relief to agriculture landowners in Lincoln County and the little it gives will be shifted to homeowners and businesses. What needs to be done is a compromise which incorporates components of both LB640 and 461 into legislation with the goal to reverse the shift of school funding to property taxes, controls spending, and lowers taxes.  When I first got here the issue was dismissed, three years later we got major legislation to the floor; the debate has shifted in our favor.

LB595: school discipline legislation to give teachers more decision-making authority on discipline issues in their classrooms was debated Monday for 3 hours. Common sense does not reign in public education.  The bill is about protecting children and school employees from violence and maintaining orderly classroom environments; it became a debate over misbehavior being a mental health issue and was opposed by a few arrogant school administrators (none from western Nebraska or Lincoln County) who believe the schools and some senators belong to them. Again, we have the 25 votes needed for passage, we do not have the super majority of 33 needed to overcome a filibuster.

LB409:  Education Committee legislation to match the TEEOSA formula’s 2.3% ($67.9 biennium budget) increase in school funding, about half of what was expected, passed General File.  Even with education being buffeted from severe budget cuts, there will be attempts to offset the reductions in expected state funding by adding amendments to the bill that will increase the property tax burden of Nebraska’s citizens. Nebraska is tenth in the nation in per pupil spending, it is evident that Nebraskans support public education.  It is time for the few, but vocal, large school districts within the public education establishment to support the taxpayer.

Please do not hesitate to contact our office at mgroene@leg.ne.gov or 402-471-2729 with any comments, questions, or concerns.

This week’s column was penned by Senator Groene’s Legislative Aide, Tim Erickson.

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LB478, advanced to Select File, which is our bill that allows productive citizens who have been convicted of a felony in their past to possess archery equipment. The Game and Parks Department has had a policy of issuing archery hunting permits to individuals who have a past felony conviction. A recent Nebraska Supreme Court case cast doubts on the legality of felons owning bows and arrows and using a knife with a blade over 3 ½” long to process game. LB478 also allows felons to own hunting knives if they possess a hunting license. The bill was advanced unanimously on a 25-0 vote.  It is a Speaker Priority Bill and will have a great chance at passage this session.

Our horse massage bill, LB596, was voted out of committee and onto General File last Thursday.  We discovered that in the world of horse enthusiasts, horse massage is a common practice to keep competitive livestock at the top of their game, no different than a professional athlete. We found that because of the onerous requirements Nebraska has set, there is not one single licensed equine massage therapist in Nebraska. We introduced LB596 to exempt equine massage therapy from the list of animal therapies that must be licensed under the Veterinary Medicine and Surgery Practice Act. The bill advanced with a 4-0 vote with 3 not voting.

Next week will be tremendously busy for our office.  Tentatively, the speaker has let us know that we will start off Tuesday morning with LB640. This is our property tax relief proposal which Senator Friesen selected as his priority bill.  The goal of LB640 is to put tax equity back into the “Tax Equity and Educational Opportunities Support Act” (TEEOSA). The final amended version of the bill will cap local property tax support of school districts at 55% and lowers the maximum school general fund levy from 1.05 to .987. It shifts back to the state its constitutional responsibility to financially support public schools. Because LB640 caps the local property tax effort at 55% of revenues, it will take away the negative effect property valuation increases have had on your property taxes due to the injustice in the present TEEOSA formula.

On Wednesday, we may start the day with LB409; this is legislation that has to pass for schools to receive the State Aid to Education formula (TEEOSA) to match the Appropriations Committee’s proposed $1 billion State Aid to public schools. Although it is an increase of $20 million over last year, it is below the formula’s expected $67 million increases. It is not a simple task to fairly adjust a flawed TEEOSA formula. Although some want to hold the bill hostage in order to fund schools with an even larger increase when others are taking a cut, this bill as it has been amended is the prudent thing to do.

LB595, will also be on General File debate within the next few weeks.  LB595 has been amended after prolonged conversations with all the parties involved.  The bill was amended from its original form to clarify that the teacher or administrator is only protected from legal action or administrative discipline if their conduct was reasonable and that penalties still exist for those that abuse their authority.  It provides for a common sense approach to address student behavior that is violent to him or herself or to others.  It also provides a process for the return to the classroom for the student.  It makes sure that the student is allowed to be returned to the teacher’s classroom without the teacher’s consent if required pursuant to the Special Education Act or the Federal Individuals with Disabilities Education Act.  Students can also be returned after a conference between the parents or legal guardians, principal, and teacher to address the student’s behavior. LB595 enforces learning in a classroom; not only does it allow learning to happen, it allows teachers to instruct students that there are behavior boundaries that all citizens should follow.  It’s a common-sense approach.  We’re working with all parties to make this work for everyone involved.

Please do not hesitate to contact our office mgroene@leg.ne.gov or 402-471-2729 with any comments, questions, or concerns.

Committee Hearings wrapped up last week and this week we began full day debate on the floor of the legislature.

LB640, our property tax relief proposal was voted out of the Revenue Committee. Senator Friesen selected it as his priority bill, so it will be debated this year. The goal of LB640 is to put tax equity back into the “Tax Equity and Education Opportunity Support Act” (TEEOSA). The final amended version of the bill will cap local property tax support of school districts at 55% and lowers the maximum school general fund levy from 1.05 to .987. Rapid increases in property values in rural Nebraska has caused 174 school districts out of 245 to receive no state equalization aid, which is the main source of state aid. Brady, Hershey, Maxwell, and Wallace are among those schools; Sutherland is on the cusp of losing the small amount they now receive. Those schools will gain property tax relief because of the 55% limit. North Platte Schools is an equalized district and is scheduled to receive over $10 million in aid next year. Taxpayers in the North Platte district will receive tax relief by the lowering of the maximum levy, which will be offset with an additional $1.4 million in state aid.  LB640 does not reduce total needs calculated for a district, it keeps districts funded; what it does is shift back to the state its constitutional responsibility to financially support public schools. Because LB640 caps the local property tax effort at 55% of revenues, it will take away the negative effect property valuation increases have had on your property taxes due to the injustice in the present TEEOSA formula. There is no better way to encourage rural communities to grow than to lower the property tax burden on all homeowners and businesses, LB640 is a step in that direction.

Senator Chambers’ LB447 removes mandatory minimum sentences for felony convictions.  I was in opposition to the original bill, but Senator Linehan dropped an amendment to only include non-violent drug offenses. I supported her amendment and helped advance the bill to select file. Why? Because we have a prison overcrowding problem and it needs to be addressed. Either we lock people up for extended periods, spend millions we do not have to build new prisons and staff them, or we figure out a way to rehabilitate criminals back into society. Probation and rehabilitation programs are less expensive.   After being informed by law enforcement officials that LB447 would not only reduce sentences for nonviolent drug-users, but also career drug dealers and manufacturers, I have decided not to support LB447 on select file.  Protecting society is the top concern, but as a fiscal conservative, I do not want to build and staff new prisons. There has got to be a better way.

LB518 creates “The Rural Workforce Housing Act” by transferring $7.3 million in seed money from the   “Affordable Housing Trust Fund” which presently generates its funds from real estate document fees. Competitive grants would be awarded to nonprofit development organizations in areas with demonstrated housing needs, low unemployment, and the ability to complete projects within 2 years.  The program will require a local one to one match of the grant program.  I voted for the bill because it does not take new housing projects off the local property tax rolls and it allows local entities, such as a non-profit hospital, who believe there is a housing shortage, to donate funds to the program.  I will not support another so-called workforce housing bill, LB496, which would allow housing projects to use Tax Increment Financing (TIF).  We can’t continue to complain about property taxes and then turn around and take property taxes away from our schools with abuses of TIF.

LB98 extended a sunset-date for over or fully appropriated Natural Resource Districts to levy an additional three-cents ($45 on an average $150,000 home) to FY 2025-26. It was in existence for 12 years, plenty of time to accomplish its purpose. I helped stop it from advancing. Either we want property tax relief or we don’t.

Please do not hesitate to contact my office mgroene@leg.ne.gov or 402-471-2729 with any comments, questions, or concerns.

We named LB595 as our Senator Priority Bill authorizing teachers and administrators to use physical force or restraint on violent students and gives limited immunity for those employees from legal and administrative discipline. It also gives teachers the authority to have repeatedly disruptive students removed from the classroom and it sets up a process involving the teacher and parents as to when the principal can have the student returned to the classroom.  The Education Committee voted the bill out of committee, meaning it will be debated on the floor of the Legislature.

LB478 allows productive citizens who have been convicted of a felony in their past to possess archery equipment. The Game and Parks Department has had a policy of issuing archery hunting permits to individuals who have a past felony conviction. A recent Nebraska Supreme Court case cast doubts on the legality of felons owning bows and arrows and using a knife with a blade over 3 ½” long to process game. LB478 also allows felons to own hunting knives if they possess a hunting license. The bill came out of committee and was selected to be one of the Speaker’s 25 priority bills.

LB640, our property tax relief bill, was picked up by Senator Friesen as his priority bill. The bill would set 60% as the maximum amount that property taxes could generate for a local public school’s budget, the remainder would come from increased state aid along with present federal, state, and miscellaneous local funding (speeding tickets etc.) It would also lower the maximum property tax rate schools can levy from 1.05 to 1.00. We would designate the appropriated funds presently in the Property Tax Relief Fund to pay for the shift of school funding back to the state. It is presently still in Revenue Committee and may be used as the base for the property tax relief portion of a comprehensive income tax bill. Either way, I believe Senator Friesen and I have the votes to get the bill on to the floor for debate.

LB594 requires a limited liability company (LLC) seeking a tax benefit to file an amended certificate of organization with the Secretary of State disclosing the members of the LLC. It has been the policy of our democracy that when you receive the direct benefits of tax dollars you lose your right to privacy, no one should be able to hide behind a front company. The hearing was last Monday. The Banking, Commerce and Insurance Committee has not acted on the bill as yet. Since no one testified against the bill. It should have a good chance to make it to the floor.

Sometimes government can over-regulate to the point that it can deny consumers access to services they wish to use. An example of this was equine (horse) massage therapy. The Department of Health and Human Services regulates animal health issues including issuing licenses for veterinary medicine. We were approached by Karen Hough from Arnold, Nebraska about the issue. She wished to practice equine massage therapy as a sideline business. Although she had taken training and had practical experience, she was denied a license due to the requirements set by the state. We discovered that in the world of horse enthusiasts, horse massage is a common practice to keep competitive livestock at the top of their game, no different than a professional athlete. Texas, Montana, South Dakota, and many other western states do not require a license to be a horse massage therapist. I was informed that it is practiced in Nebraska, but it is being done illegally without a license. We found that because of the onerous requirements Nebraska has set, there is not one single licensed equine therapist in Nebraska. We introduced LB596 to exempt equine massage therapy from the list of animal therapies that must be licensed under the Veterinary Medicine and Surgery Practice Act. We had the hearing last week in the Health and Human Services Committee. I think it has a good chance to be voted out of committee. I have found no better example than this issue to show the public’s sometimes frustration of government becoming a “nanny state”.

Please do not hesitate to contact my office mgroene@leg.ne.gov or 402-471-2729 with any comments, questions, or concerns.

Monday 3/20

Business and Labor
Location: Room 2102
Time: 1:30 PM

Document Introducer Description
LB598 Groene Require consideration of certain factors by the Commission of Industrial Relations when establishing wage rights

Education
Location: Room 1525
Time: 1:30 PM

Document Introducer Description
LB155 Brasch Require successful completion of a civics examination as a prerequisite to high school graduation
LB308 Brasch Change provisions relating to the committee on Americanism
LB14 Krist Require successful completion of a civics examination as a prerequisite to high school graduation

Tuesday 3/21

Education
Location: Room 1525
Time: 1:30 PM

Document Introducer Description
LB540 Stinner Provide for a temporary aid adjustment factor in the Tax Equity and Educational Opportunities Support Act

Wednesday 3/22

Health and Human Services
Location: Room 1510
Time: 2:00 PM

Document Introducer Description
LB128 Groene Change eligibility provisions relating to the Supplemental Nutrition Assistance Program

We are at a point in the session where committee hearings are wrapping up and floor debate on Senator and committee priority bills are in full swing. We have also reached the time where we start meeting 4 instead of 5 days a week; it comes just in time to save friendships, avoid fistfights, and maintain good governing. Legislation comes fast to the body when action is constant; time is lacking to inform oneself on upcoming legislation, work on your own bills with your colleagues, and have time to go back home where sanity prevails. It is not that work is not done on the fifth day, it is just common sense that if one can have time to study issues a couple of days a week, it can avoid bad legislation caused by uninformed votes or worse by votes given due to political friendships or persuasion by the lobby.

This week we had the education hearing on LB409, legislation to adjust the State Aid to Education formula (TEEOSA) to match the Appropriations Committee’s proposed $1 billion State Aid to public schools. Although it is an increase of $20 million over last year, it is below the formula’s expected $67 million increases. It is not a simple task to fairly adjust a flawed TEEOSA formula. Since no proponents but many opponents testified on the bill, it was apparent LB409 was fair to all; it will lower funding to all sizes of districts.

LB98 extends the sunset date on an additional 3 cent taxing authority per hundred dollars of valuation for 8 out of 23 Natural Resource Districts (NRD) that are designated over or fully appropriated on groundwater. The extension would be from 2017 to 2026.  All NRDs have a base taxing authority of 4.5 cents.  NRDs have been a beneficiary of the massive valuation increases in property valuations, taxing revenues have increased 77% over the last 10 years. Another factor is the 2009 State Supreme Court case Garey vs. Nebraska Dept. of Natural Resources which reaffirmed our State Constitution’s mandate that property taxes can’t be used for state purposes. They can’t be used to build pipelines or maintain property or infrastructure whose purpose is to satisfy state surface water agreements with another state, such as the Republican River compact or the Platte River Agreement.  Eliminating the tax would give Lincoln County residents $45 of tax relief on a home valued at $150,000 or $250 on an average quarter of farm ground.

LB496 would add new housing projects designated for workforce purposes (regardless of building site) to what is allowable under TIF projects. If this passes it will put small housing contractors out of business or it would be foolish of anybody to build a house unless they would be granted TIF. If enacted it will cause a huge property tax shift to hardworking small businesses, home owners, and agriculture land. After all, someone must pay the taxes to afford public safety, good schools, and maintain government infrastructure.  It has been prioritized so it has a good chance to become law.

I have introduced LB599 which would consider all new development infrastructure and building construction as business inventory until occupied, leased, or sold. To a contractor, new development is business inventory, not unlike an automobile on a dealer’s lot, where property taxes are not charged until the vehicle is retailed. I believe LB599 would be a fairer method to aid home construction and would eliminate government picking winners and losers in tax relief. The hearing on the bill is this Thursday in the Revenue Committee.

March 9

LB596 allows for an exemption from licensing by the Department of Health and Human Services for those in the profession of Horse Massage Therapy.  Presently, there have been no licenses for horse massage therapists issued by DHHS.  There are Nebraska citizens that have experience to do this and current regulations keep them from aiding horse owners.

March 13

LB594 provides for limited liability companies applying for economic development programs to file amended certificates of organization.  This will allow for transparency about those that are applying for economic development programs.  The bill provides for transparency to the public about who is receiving tax incentives.

Please do not hesitate to contact my office mgroene@leg.ne.gov or 402-471-2729 with any comments, questions, or concerns.

Monday 3/13

Banking, Commerce and Insurance
Location: Room 1507
Time: 1:30 PM

Document Introducer Description
LB594 Groene Require a limited liability company seeking a tax benefit to file an amended certificate of organization

Tuesday 3/14

Education
Location: Room 1525
Time: 1:30 PM

Document Introducer Description
LB630 Larson Adopt the Independent Public Schools Act
LB650 Linehan Change provisions for teaching certificates
LB568 Erdman Change provisions related to temporary teaching certificates

*order of bills may change

Sen. Mike Groene

District 42
Room #1107
P.O. Box 94604
Lincoln, NE 68509
Phone: (402) 471-2729
Email: mgroene@leg.ne.gov
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