NEBRASKA LEGISLATURE

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Mark Kolterman

Sen. Mark Kolterman

District 24

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This week the Legislature held the first round of debate on LB 147 which I designated as one of the Retirement Committee Priority Bills. It addresses two major Retirement Committee objectives – the expansion of the availability of retirees to provide substitute service after retirement and it transfers management of the Omaha Public School Retirement System (OSERS) to the Public Employees Retirement Board (PERB).

Under LB 147, retired teachers will be able to double the number of days they can sub during the six months following retirement.  Currently, teachers are only allowed to sub about 4 days a month, but the bill doubles it to 8 days every calendar month which means a teacher will be able to sub up to 48 days during the mandatory six-month break in service. This change addresses a critical need for additional substitute teachers in every school district across the state.

The second change reflects a culmination of many years of work on the Omaha School Employees Retirement System. In 2016, after the OSERS board of trustees made a series of investment decisions that resulted in enormous losses to the OSERS Plan, the legislature moved the investment authority from the OSERS board of trustees to the Nebraska Investment Council (NIC). That bill passed by a vote of 47-0 and the Governor signed the bill. The investment authority transfer has occurred seamlessly and has been very successful. Last year the OSERS Plan earned an investment return of 9.4% under NIC investment management.

I have continued to work closely with OPS to help find ways to relieve the district’s administrative duties for the OSERS plan so the district can focus on its core mission of educating students. So two years ago, at the request of OPS Superintendent, Dr. Cheryl Logan, I introduced LB 31 to study transferring the management of the Omaha retirement system to the PERB, which administers six other retirement systems on behalf of the State.  The bill passed with the support of 47 senators and was signed by the Governor.

The LB 31 Study was completed last summer and determined that transferring the management of the OSERS Plan to the PERB would result in an annual management cost savings of about $250,000. The LB 31 Study also projected it would cost approximately $4.2 million and take three years to transfer the administration of OSERS to the PERB.  LB 147 puts in place the necessary statutory changes to transfer OSERS management to the PERB.

There are three vitally important provisions that I have made sure are contained in LB 147:

1.      The State will not assume any financial responsibility or liability for the nearly $1 billion of OSERS’ unfunded liability. The language of the bill says specifically that “OPS at all times and in all circumstances remains solely liable for all funding obligations of the OSERS Plan and at no time or under any circumstances does the State assume any financial liability or obligation for the OSERS Plan.”
2.      The OPS school district, who paid the entire cost for the LB 31 transfer study, is also obligated to pay costs to transfer the management of OSERS to the PERB.  The State will not pay a single cent of these costs.
3.      Once the transfer occurs, the annual costs of administering the OSERS Plan will be paid by the OSERS Plan – just like the administrative costs are assessed against each of the six plans PERB currently administers. The $250,000 annual administration cost savings will result from the efficiencies of the PERB management of multiple retirement plans.

Additionally, the Omaha Board of Education passed a resolution which commits the Board to paying for all transfer of management costs under LB 147 and also maintains its commitment to the retention of all financial responsibility and funding liability for the OSERS Plan.

I have tremendous confidence in the PERB and the staff of the Nebraska Public Employees Retirement System who do a tremendous job serving the 142,000 retirement plan members. They will continue keeping the plans in compliance with all federal and state laws, and working in partnership with the Legislature’s Retirement Committee to ensure that the policymakers are kept aware of necessary IRS compliance changes, actuarial adjustments, and potential retirement policies that need to be addressed to ensure the long-term sustainability of the retirement systems.

I believe the changes proposed under LB 147 will better serve all school districts throughout the State by increasing availability of substitute teachers. It will also result in better service to the 14,000 OSERS Plan members while freeing the OPS school district from the responsibility of administering a retirement system so it can focus solely on educating its students.  I am confident these changes will not expose the State of Nebraska and the state’s taxpayers to any additional costs or liability and will ultimately result in administration cost savings for the OSERS Plan.

I am committed to ensuring the long-term sustainability of our public retirement plans. Nebraska is consistently ranked among the top ten states in the nation for the solid funding status of our state-administered plans which average over a 90% funding ratio.  In addition, our public employee retirees provide an economic boost to every county in Nebraska.  Last year, the plans administered by the PERB paid out retirement benefits each and every month totaling over $67 million. I see this as a win-win for Nebraska.

As always, if we can be of assistance to you in any way, please do not hesitate to contact my office. My door is open and I have made it a goal to be accessible to the constituents of our district. Please stop by any time. My e-mail address is mkolterman@leg.ne.gov, and the office phone number is 402-471-2756. Tyler and Katie are always available to assist you with your needs. If I am not immediately available, please do not hesitate to work with them to address any issues that you may need assistance. Please continue to follow me on Facebook at Kolterman for Legislature and on Twitter at @KoltermanforLegislature.

Weekly Column – April 23rd
April 23rd, 2021

This week, I’d like to discuss why I was not supportive of LB 408 – Adopt the Property Tax Request Act.  LB 408, as introduced, would limit the annual increase in property taxes, excluding approved bonds, for all political subdivisions to three percent.  This limitation would affect every single county, city, village, school district, learning community, sanitary improvement district, natural resource district, educational service unit, or community college across the state.

Since being elected, I have always fought to provide property tax relief to Nebraska.  For instance, I was heavily involved in creating the Property Tax Incentive Program, the largest property tax bill in state history, which provides refundable income tax credits for any taxpayer who pays school district taxes.  This program will provide $313,672,849 dollars towards property tax relief each year over the next two years and as a member of the Appropriations Committee, I worked to provide additional dollars to the original Property Tax Credit Fund.  This year, the Legislature is appropriating $300 million dollars to the Property Tax Credit Fund and in 2022, $313 million dollars.  When I was first elected to the Legislature seven years ago, the Legislature was providing $115 million dollars in property relief.  When the two property tax relief programs are added together, over $1.45 billion over the next biennium towards direct property tax relief.

Had LB 408 been enacted, different political subdivisions would be affected in different ways.  For example, a city could raise other taxes such as occupational taxes or sales taxes to replace any lost property tax revenue, thus shifting the tax load to low and middle-income Nebraskans.  Most all other political subdivisions do not have the option to levy taxes other than property taxes, so while our towns and cities would be able to collect additional revenues to make up the difference, counties and our schools do not have this option, so they would likely have to cut services or jobs in order to adhere to the limit in budget growth.

All of our political subdivisions across Nebraska are different.  A “one size fits all” blanket creates different outcomes for all of our localities.  LB 408 would likely have caused local governments to levy the full 3% in allowed growth every year to build up a reserve in case a large expense is needed in the future, thus, property taxes would not necessarily decrease had LB 408 been enacted into law.

strongly believe in local control.  I was elected by the same individuals who elect our local leaders who are in charge of these budgets.  I don’t believe in second guessing the other elected officials who were elected by the same voters who elected me.  Voters have the option to address high property taxes when electing those individuals to positions that are responsible for levying property taxes.

I will continue to look for ways to achieve substantial property tax relief for our citizens that is fair and equitable for all, including our taxing entities to ensure critical infrastructure and services are not harmed.  Unfortunately, LB 408 did not achieve that goal and therefore, I was unable to support this proposal.

As always, if we can be of assistance to you in any way, please do not hesitate to contact my office. My door is open and I have made it a goal to be accessible to the constituents of our district. Please stop by any time. My e-mail address is mkolterman@leg.ne.gov, and the office phone number is 402-471-2756. Tyler and Katie are always available to assist you with your needs. If I am not immediately available, please do not hesitate to work with them to address any issues that you may need assistance. Please continue to follow me on Facebook at Kolterman for Legislature and on Twitter at @KoltermanforLegislature.
Weekly Column – April 16th
April 19th, 2021

On Wednesday, April 14, the Legislature debated LB 108, a bill introduced by Senator John McCollister to expand eligibility for the Supplemental Nutrition Assistance Program (SNAP).  LB 108 would increase the gross income limit from 130% of the federal poverty level to 165%, while keeping the current net income limits in place.

On March 29, I decided to cosponsor this legislation after seeing how it would benefit Legislative District 24 directly.  According to data provided by Voices for Children in Nebraska, in the 24th district, 33.5% of the children participate in Free and Reduced School Lunch programs and more than 1 in 10 children participate in SNAP specifically.  Almost 16% of the children in the district experienced food insecurity and of those, 66% of those children were likely eligible for public assistance.

During fiscal year 2019, 161,000 of our neighbors participated in SNAP, and more than 72% of those participants are families with children.  The average monthly SNAP benefit for each household member equaled $124 dollars and the average SNAP benefit per person per meal averaged $1.26.  SNAP was able to keep 31,000 people out of poverty in each year between 2013 and 2017.

As we have all seen, the COVID-19 pandemic has placed a strain on our food banks and charity organizations across the state.  Since the pandemic began, 162,737 individuals have been provided at least one unemployment insurance claim.  By modestly increasing the gross income limit, over 3,000 additional households would be eligible to receive SNAP benefits.

Traditionally, the federal government pays for the actual SNAP benefits and the only cost to the State of Nebraska is the administrative cost to provide benefits to newly eligible populations. However, due to the American Rescue Plan of 2021, the federal government will also pay the State expenses to administer the SNAP program through September 30, 2023.  After that date, the State would be required to provide 50% of the administrative costs associated with the program.

Multiple studies have consistently shown that SNAP benefits are one of the most effective forms of economic stimulus programs.  For each $5 of SNAP benefits, $9 in economic activity is created.  According to the USDA’s Economic Resource Service, each $1 billion of retail generated by SNAP creates an additional $340 million in farm production, $110 million in value-added agriculture, and 3,300 farm jobs, while creating an additional 8,900 to 17,9000 full-time jobs.

LB 108 advanced from General File with the support of 28 of my colleagues and is supported by a wide variety of advocacy organizations.  Supporters include the AARP of Nebraska, the Center for Rural Affairs, the Food Bank for the Heartland, the Food Bank of Lincoln, the Lincoln Chamber of Commerce, the Nebraska Catholic Conference, the Nebraska State Education Association and the Omaha Chamber of Commerce.   Because the benefits of LB 108 far outweigh the costs to our State, I look forward to working with my colleagues to enact into law.

As always, if we can be of assistance to you in any way, please do not hesitate to contact my office. My door is open and I have made it a goal to be accessible to the constituents of our district. Please stop by any time. My e-mail address is mkolterman@leg.ne.gov, and the office phone number is 402-471-2756. Tyler and Katie are always available to assist you with your needs. If I am not immediately available, please do not hesitate to work with them to address any issues that you may need assistance. Please continue to follow me on Facebook at Kolterman for Legislature and on Twitter at @KoltermanforLegislature.

Weekly Column – April 9th
April 9th, 2021

This week, the Legislature began discussions on the 2021-2022 $9.7 billion budget.  As a new member of the Appropriations Committee, I am proud to have worked on this budget that properly funds our pressing needs, while allowing for over $211 million available for other legislation that is pending in the Legislature.  I want to highlight some of the major items in the budget.

One of the major concerns the Legislature addressed in this budget is providing significant property tax relief.  Last year, the Legislature enacted the Property Tax Incentive Program that provides refundable income tax credits for any taxpayer who pays school district taxes.  This program will provide $313,672,849 dollars towards property tax relief each year over the next two years.  The Legislature also increased appropriations to the original Property Tax Credit Fund.  This year, the Legislature is appropriating $300 million dollars to the Property Tax Credit Fund and in 2022, $313 million dollars.  When these two programs are combined, over $600 million a year is going towards direct property tax relief.

The Legislature has also provided a rate increase to our service providers.  Over the next two years, we are providing a 4% increase which amounts to an increase of $83.5 million dollars.  These funds are provided to providers serving individuals who qualify under various Department of Health and Human Services programs, community correction services, and juvenile services.  By increasing these funds, these providers will be able to serve more people across the state.

The Legislature is also replenishing the cash reserve fund by providing an additional $351 million dollars bringing the total balance to $763 million dollars.  This “rainy day fund” helps cover the State’s cash flow needs to continue State operations if there is a disruption in regular revenues.

This week, I was also appointed to the LR 29 – Eastern Service Child Welfare Contract Special Investigative and Oversight Committee of the Legislature.  This Committee will investigate the circumstances relating to the procurement of the Saint Francis child welfare contract by the Department of Administrative Services and the Department of Health and Human Services.  The Committee will also investigate the implementation and oversight of the child welfare contract itself.

As you may remember, Saint Francis submitted an unreasonably low bid to win the award, and returned to the state less than two years later to ask for an additional $110 million dollars, which is a more expensive contract than what competing bidders were requesting to provide these same services.  At the same time, they still have not met the requirements established by the contract in the first place.

Over the last three years, I have introduced legislation to address procurement reform.  If that legislation had been enacted two years ago, this entire situation would have likely been prevented.  I look forward to working with this committee to further shine the light on this sloppy, mismanaged procurement for child welfare services that did not follow the Department of Administrative Services’ own procurement manual, the request for proposal, or even Nebraska law, which has placed the children of Nebraska at risk.

As always, if we can be of assistance to you in any way, please do not hesitate to contact my office. My door is open and I have made it a goal to be accessible to the constituents of our district. Please stop by any time. My e-mail address is mkolterman@leg.ne.gov, and the office phone number is 402-471-2756. Tyler and Katie are always available to assist you with your needs. If I am not immediately available, please do not hesitate to work with them to address any issues that you may need assistance. Please continue to follow me on Facebook at Kolterman for Legislature and on Twitter at @KoltermanforLegislature.

​C​ooperation and goodwill are essential elements to achieve progress in Nebraska. That positive spirit has enabled sensible steps in recent years to help the Omaha Public Schools to begin addressing the huge challenges it faces in meeting its unfunded liabilities for OPS employee pensions.​​

An unexpected effort last week by Gov. Pete Ricketts to kill a current proposal involving the OPS pension fund violates that constructive spirit and needlessly threatens continued progress. The administration is raising a false claim — that Nebraskans statewide will be at risk of taking on the OPS financial liabilities if management of the OPS fund is transferred to the state.

Such a misleading claim is contradicted by the entire history of this issue. For years, every time the State of Nebraska has taken any action in regard to the OPS pension system, lawmakers in committee and in floor debate have been unanimous in stating, clearly and emphatically, that Nebraskans statewide must not take on any of the OPS pension liabilities. That is a crucial, common-sense stance the Legislature has rightly adopted throughout the past five years.

State senators emphasized that point in 2016 when the Legislature voted overwhelmingly to transfer investment authority from the OPS pension board to the state investment council. The governor signed the measure into state law.

In 2019, State Sen. Mark Kolterman of Seward, chairman of the Legislature’s Retirement Systems Committee, worked with stakeholders to consider a follow-up. The state gave the go-ahead for a study (paid for by OPS, a $140,000 cost) to examine the feasibility of transferring management of the OPS pension fund to the state. The projected long-term cost savings would be about $250,000 a year.

Such a transfer would end all of OPS’s management duties in regard to the pension system. The district would then have one remaining, all-important obligation: bearing the full burden of meeting the system’s financial liabilities. State law, in fact, now requires OPS to meet its actuarily required annual payment for long-term pension stability, and the district has been exceeding that amount the past several years.

The Legislature voted 47-0 in 2019 for the study to be done, and the governor signed the legislation. Since then, a wide variety of stakeholders have cooperated for the management transfer to occur. OPS agreed from the get-go to cover the upfront costs of around $4 million for new computer technology to enable the management change.

It’s baffling, then, that after so much complicated work and cooperation, the Ricketts administration would indulge in an eleventh-hour effort to sabotage the initiative.

Undermining an effort involving OPS might be good politics in the view of some, but it would be terrible public policy. The Legislature should move forward with this initiative and, if necessary, override a gubernatorial veto. The public interest, and not scaremongering by the governor, must prevail on this issue.

https://omaha.com/opinion/editorial/editorial-legislature-should-stand-up-to-the-governor-move-forward-with-ops-initiative/article_516bfc5c-8d56-11eb-92fb-33bd22203d35.html#tncms-source=login

Weekly Column – March 26th
March 26th, 2021

This week, the Legislature discussed LB 529, a bill that outlined how the State of Nebraska will distribute education lottery dollars for the five-year period from 2021-22 through 2025-26.  I introduced a similar bill, LB 62, this year because these programs are critical to our students.  As LB 529 contained the provisions of LB 62, I am proud to support this legislation. These dollars appropriated through LB 529 are allocated for our students, whether they are in elementary school, high school, college, or even those individuals who are in the workforce who are returning to school for career training.

Included in LB 529 are provisions that remove the sunset date for the Nebraska Opportunity Grant (NOG) program which was due to expire this year.  NOG is the only need-based financial aid program for postsecondary students in Nebraska who are Pell-eligible.  In 2020, NOG provided aid to nearly 13,000 students across Nebraska to attend the student’s college of choice, such as Southeast Community College, York College, and Concordia University.

LB 529 also establishes the Access College Early (ACE) Cash Fund.  ACE helps pay tuition and mandatory fees for qualified, low-income students to enroll in courses from our colleges or universities if a student decides to do dual-enrollment courses or enroll in an institution early.  The Community College Gap Assistance program is also extended.  These funds offer financial aid to students not eligible for Pell grants who are enrolled in community colleges that could lead to jobs in a high-need field.  The Legislature is also providing funds to help cover testing fees for certain students enrolled in AP classes in high school to allow the student to receive college credit.

LB 529 distributes funds for the Expanded Learning Opportunity Grant Fund.  This program helps fund after school programs and summer school programs.  There are currently four programs located within District 24 that utilize this funding: St. Vincent de Paul Extended Care Program in Seward, the Colt’s Corral in Utica, York Elementary School and York Middle School.

Funds allocated through LB 529 will also go towards behavioral training for the first time for our teachers.  These funds will help train our teachers to properly identify and intervene in classroom situations when an issue arises. These funds also establish an employee assistance program for our teachers to allow them to talk to teachers across the state to discuss best strategies on how to respond to certain situations.

The Legislature is also appropriating money to the Excellence in Teaching cash fund, with a majority of those funds earmarked to attract new teachers into the profession, including $1,000 in financial assistance to student teachers who complete their program.  The appropriation also continues to provide assistance to established teachers who are seeking further education to allow them to teach more classes.  The Career-Readiness and Dual-Credit Education Cash fund helps our educators earn extra college credits in order to allow them to teach dual-credit classes.

As I stated earlier, I am proud to support this bill.  This comprehensive bill helps all our students, regardless of where students are in their academic career, in all corners of the state by providing funds to these critical programs.  On March 24, LB 529 advanced from General File to Select File and I look forward to helping ensure this bill is enacted into law.

As always, if we can be of assistance to you in any way, please do not hesitate to contact my office. My door is open and I have made it a goal to be accessible to the constituents of our district. Please stop by any time. My e-mail address is mkolterman@leg.ne.gov, and the office phone number is 402-471-2756. Tyler and Katie are always available to assist you with your needs. If I am not immediately available, please do not hesitate to work with them to address any issues that you may need assistance. Please continue to follow me on Facebook at Kolterman for Legislature and on Twitter at @KoltermanforLegislature.

Weekly Column – March 19th
March 19th, 2021

This year, I am proud to have prioritized LB 64, a bill to change provisions relating to the taxation of social security benefits which was introduced by Senator Brett Lindstrom of Omaha.  As introduced, LB 64 would have phased out the income tax on social security income.  Starting in 2021, 20% of the income would be exempt, and would increase by 20% each subsequent year until 2025 when 100% of all social security income would be exempted.

During the committee hearing, the Revenue Committee heard from Jina Ragland, the Associate State Director of Advocacy and Outreach for AARP Nebraska who testified in support of LB 64.  During her testimony, she told the committee that Nebraska is one of only thirteen states that currently taxes Social Security benefits.  She further explained that these taxes on Social Security benefits could be used to pay for prescription drugs, food, and utility bills.

Before 1984, Social Security benefits were exempt from federal income tax and Nebraska income tax.  However, in 1983, the United States Congress enacted legislation to tax a portion of Social Security benefits, with the tax gradually increasing as a person’s income rose above a certain threshold.  With this change in federal statute, Nebraska began to tax these benefits, and in 1993, a second income threshold was added at the federal level that increased the taxable share of benefits.  As a result of these changes in federal statutes, many states changed their laws to ensure these benefits were not taxed at the state level, however, Nebraska was not one of these states.

LB 64 helps more than retirees as social security also provides monthly benefits for disabled workers, their spouses and dependents, and also provides monthly benefits to qualified survivors of deceased workers.  For these citizens on fixed income, annual increases in Medicare and Medicaid Supplemental insurance fees often wipe out Social Security benefit increases which reduces retiree household income.  LB 64 allows for greater financial security for our citizens who are receiving Social Security benefits. It also allows for these individuals to care for their families and to live in their own homes, which I believe is a shared goal of us all as we age.

On March 15, LB 64 advanced from the Revenue Committee and placed on General File with am 473.  AM 473 simply extends the phase out of taxation of social security benefits from 5 years to 10 years and reduces the percentage of exempt from 20% a year to 10% a year.  Currently, the average monthly Social Security benefit in Nebraska is $1,232.  This is not a tax break for the rich.  This allows our citizens receiving Social Security benefits to live with greater dignity and independence. I, along with Senator Lindstrom, and 8 other cosponsors, look forward to enacting LB 64 to make our state friendlier to retirees and those others who are on a fixed income.

As always, if we can be of assistance to you in any way, please do not hesitate to contact my office. My door is open and I have made it a goal to be accessible to the constituents of our district. Please stop by any time. My e-mail address is mkolterman@leg.ne.gov, and the office phone number is 402-471-2756. Tyler and Katie are always available to assist you with your needs. If I am not immediately available, please do not hesitate to work with them to address any issues that you may need assistance. Please continue to follow me on Facebook at Kolterman for Legislature and on Twitter at @KoltermanforLegislature.

Weekly Column – March 12th
March 12th, 2021

Last year, the group Nebraskans for Medical Marijuana submitted over 180,000 verified signatures in an attempt to allow our citizens the opportunity to vote on whether or not to allow for medical marijuana in Nebraska, as it is now legal in 33 states and Washington D.C. Following a Nebraska Supreme Court decision that barred the question from being placed on the ballot due the initiative being in conflict with the single subject rule, Senator Anna Wishart of Lincoln introduced Legislative Bill 474, a bill that would adopt the Medicinal Cannabis Act. Given the groundswell of support the citizens of Nebraska have shown for medical marijuana legislation, I have explored the provisions of LB 474 further.

If LB 474 were to be enacted into law, a patient must have a qualifying medical condition and a written certification issued by a physician, nurse practitioner, or physician’s assistant with whom they have a bona-fide relationship.  A qualifying medical condition is any illness for which cannabis provides relief as determined by the patient’s healthcare practitioner.  Any patient under 18 years of age would require written consent from a parent or guardian.

These practitioners would be required to perform a physical exam on patients, which would include an assessment for alcohol and substance abuse.  Under LB 474, a practitioner would be required to complete continuing medical educational courses if they provide more than 10 patients a certification for medicinal cannabis per year and a practitioner is prohibited from issuing more than 275 certifications for this treatment in any 90-day period.

Any patient who is certified may possess cannabis products such as ointments, pills, or tinctures that do not contain more than 2000 milligrams of THC unless granted a waiver to receive a higher amount, and a patient may designate a caregiver to assist in the use and purchase of medical cannabis.  A patient may not smoke cannabis, but may use vaporizing products, and patients cannot consume edible products, other than pills.  Patients would also be prohibited from cultivating their own cannabis.  There are also restrictions on operating a vehicle while under the influence, and the consumption of cannabis while in a vehicle, regardless if the patient is a driver or a passenger.

LB 474 would allow for four types of medical cannabis businesses.  One to grow cannabis, one to make products such as oils, lotion, and pills, establishes dispensaries, and establishes laboratories to test for potency and contaminants.  Any dispensary would be required to contract with a licensed pharmacist to give patient advice which is a new addition to this legislative proposal.  These businesses are prohibited from being near schools, and could even be prohibited from any locality if the governing board decides to ban them.

LB 474 would create the Cannabis Enforcement Department, which would create and enforce rules, regarding oversight, record keeping, security, and labeling.  This Department would establish requirements for law enforcement and health professionals to report adverse events involving these products to the department.  LB 474 would also restrict advertising and marketing.

I have never been opposed to the idea of medical cannabis if it were prescribed by a physician and administered through a pharmacy like any other prescription medication, however, these provisions have never been included in any previous proposal which is why I haven’t supported similar legislation in the past.  Senator Wishart is working hard to listen to the concerns of stakeholders such as our medical professionals, pharmacists, and law enforcement issues to make a restrictive medical marijuana bill that protects patients and the public.  Personally, I believe if we have medical marijuana in our state, we regulate through the Legislature rather than the Nebraska Constitution.

As always, if we can be of assistance to you in any way, please do not hesitate to contact my office. My door is open and I have made it a goal to be accessible to the constituents of our district. Please stop by any time. My e-mail address is mkolterman@leg.ne.gov, and the office phone number is 402-471-2756. Tyler and Katie are always available to assist you with your needs. If I am not immediately available, please do not hesitate to work with them to address any issues that you may need assistance. Please continue to follow me on Facebook at Kolterman for Legislature and on Twitter at @KoltermanforLegislature.

Weekly Column – March 5th
March 5th, 2021

This week, I’d like to highlight another important piece of legislation that I introduced this legislative session that will help fill a serious gap in the state’s procurement process.  I introduced LB 61 which will provide a formal protest procedure for state contracts exceeding ten million dollars which was heard in the Government, Military, and Veterans Affairs Committee on March 4.

Currently, Nebraska law does not provide an express right of judicial review of an agency award decision.  The current appeal process is very limited, allowing a disappointed vendor to write a protest letter and a meeting with the Director of the Department of Administrative Services.  Following the meeting, the Director will make the final decision.  This puts Nebraska at a disadvantage.  LB 21 would allow for an unsuccessful vendor to protest an award decision, and within 60 days of receipt of the protest, the Department of Administrative Services will hold a hearing.  After the decision is made, any party to the decision could then appeal the decision to court.

Without judicial review of procurement decisions, this puts Nebraska at a disadvantage.  Over half of all states and the United States Government provides for a judicial review of procurement decisions.  During the hearing, the Committee heard testimony that without an appeal process which includes judicial review, many companies are being dissuaded from investing in Nebraska.  LB 21 will show vendors that they will be treated fairly during an appeals process and would give them certainty that errors in the process can be corrected.

Time after time, we receive news that a state contract has been terminated after millions of dollars in state funds have been spent due to the vendor not being able to complete its work.  The most recent was in December when contracts with two technology companies were terminated.  The two contracts were terminated after $12 million dollars of state tax money was spent.

This is not the only example.  In 2007, the State awarded a $50 million dollar contract to a Medicaid Management Information System project to a company with 75 employees even though a larger company with 20,000 employees and a history of completing similar projects.  After the contract was awarded, the contract was terminated when the State found out that the smaller company wouldn’t be able to complete the contract, costing the state $7 million in tax dollars.

A recent contract failure, that being the contract that was awarded to Saint Francis to provide child welfare services in Douglas and Sarpy Counties is the most egregious example of why we need this legislation.  Saint Francis submitted an unreasonably low bid to win the award, and returned to the state less than two years later to ask for more funds than what competing bidders were requesting to provide these same services and the Department of Health and Human Services rewarded Saint Francis for doing so.

This sloppy, mismanaged procurement for child welfare services, which did not follow the Department of Administrative Services’ own procurement manual, RFP, or Nebraska law, puts the children of Nebraska at risk.  All of these issues would have been discovered by an independent third-party review of the procurement decision that allows for discovery, depositions, and judicial review.

I look forward to working with the Government, Military, and Veterans Affairs Committee to advance this important piece of legislation to help make the state’s procurement process more fair and transparent in order to save the state, and most importantly, the taxpayer, their tax dollars. While allowing for juridical review may slow down the procurement process slightly, these are contracts that cost our tax-payers tens of millions of dollars and could put our most vulnerable citizens at risk and it is better to do things correctly rather to do them fast.

As always, if we can be of assistance to you in any way, please do not hesitate to contact my office. My door is open and I have made it a goal to be accessible to the constituents of our district. Please stop by any time. My e-mail address is mkolterman@leg.ne.gov, and the office phone number is 402-471-2756. Tyler and Katie are always available to assist you with your needs. If I am not immediately available, please do not hesitate to work with them to address any issues that you may need assistance. Please continue to follow me on Facebook at Kolterman for Legislature and on Twitter at @KoltermanforLegislature.

Weekly Column – February 19th
February 19th, 2021

As you may know, I have served on the Retirement Committee for six years and have served as Chair of the committee for five. Since I have been with the Committee, I have been working with OPS on various issues related to the investments and management of the Omaha School Employees Retirement System or OSERS for short. Before going into the legislation I introduced on OSERS this year, I want to give you some background on the work the Retirement Committee has done on the OSERS retirement system.

In 2016, at the request of OPS, we passed legislation to move the investment authority of the OSERS retirement assets to the Nebraska Investment Council – which also invests all the state-administered retirement system assets. As part of that legislation, the governance of the OSERS plan was shifted from the OPS Board of Education to the OSERS Board of Trustees.

In 2019, OPS expressed interest in exploring transferring the management of the OSERS plan to the Public Employees Retirement Board (PERB), which already administers 6 retirement systems for the State. I introduced legislation for the PERB to produce a Work Plan, which was completed in June of last year.  It examined management transfer tasks, projected a 3-year timeline for the transition to occur, and estimated transfer costs which ranged from $3.8 million to $6.1 million, with the most likely cost tagged at $4.2 million.

The OPS Board of Education reviewed the Work Plan and last August voted to move forward with the management transfer, with the understanding that OPS is solely responsible for all transfer costs and that OPS would continue to retain all financial obligation and liability for the OSERS plan.

I agreed to introduce legislation to move forward with the understanding that the State will not assume any liability for any costs related to this plan, nor will it assume the near $1 billion unfunded liability for the OSERS plan. I also made it clear that the management transfer is not a merger of the OSERS plan with the School retirement plan – they remain separate retirement systems.

On Tuesday, February 23, the Retirement Committee will hold hearings on a package of bills I have introduced to carry out the transfer of OSERS management to the PERB.  Here is a summary of the bills.

LB 144 was introduced as merely a placeholder bill. Under our legislative rules, retirement bills can only be introduced in the 90-day session, so this bill will carry over until next session and serve as a vehicle for any follow-up legislation needed on the management transfer.

Since the Work Plan was completed last summer, additional study and tasks have been identified that need to be completed before the transfer occurs. LB 145 requires an IRS Legal Compliance Audit to be conducted in 2021 to determine if the plan is in compliance with all IRS requirements. Any audit issues identified in the compliance audit that require statutory changes will be amended into the placeholder bill and taken up in the 2022 session. It also requires the State Auditor to begin auditing the OSERS plan in 2022 to examine any operational issues that may need to be addressed prior to the transfer and requires the PERB to continue to advise the Retirement Committee of any additional issues that need to be addressed prior to management transfer. To accommodate these additional examinations to ensure compliance audit and operational issues can be resolved, the date of transfer will be delayed one year until September 1, 2024.

LB 146 allows school retirees and school employees who have terminated employment with any school district in the state, including Omaha, to provide substitute service 8 days in every calendar month during the 6 months following termination or retirement. This new policy makes it possible for former teachers to sub more frequently during this 6-month time period which will help address the tremendous need for substitutes teachers in all school districts throughout the state.

LB 147 is the main management transfer bill that makes necessary changes for a transfer to occur on September 1, 2024. It clarifies that this is not a merger of the Class V retirement plan with the School plan and contains extensive liability provisions to ensure that the OPS Board of Education retains all financial responsibilities and obligations for the Class V retirement plan and indemnifies and holds harmless the State of Nebraska, the PERB and the Nebraska Public Employees Retirement System from any financial responsibility or funding obligations of the Class V retirement system.

The fifth bill in the package is LB 582, which once again vests retirement administration authority in the OPS Board of Education until the OSERS plan is transferred to the PERB effective September 1, 2024. It also grants the OPS Board of Education the authority to appoint a new Board of Trustees and adds a duty to the Board of Trustees to facilitate the transition and transfer of the plan management to the PERB. Vesting administrative authority with the OPS Board of Education which is seeking this transfer will ensure a smoother transition.

As always, if we can be of assistance to you in any way, please do not hesitate to contact my office. My door is open and I have made it a goal to be accessible to the constituents of our district. Please stop by any time. My e-mail address is mkolterman@leg.ne.gov, and the office phone number is 402-471-2756. Tyler and Katie are always available to assist you with your needs. If I am not immediately available, please do not hesitate to work with them to address any issues that you may need assistance. Please continue to follow me on Facebook at Kolterman for Legislature and on Twitter at @KoltermanforLegislature.

Sen. Mark Kolterman

District 24
Room 2004
P.O. Box 94604
Lincoln, NE 68509
(402) 471-2756
Email: mkolterman@leg.ne.gov
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