2018 Legislative Wrap Up from Mueller Robak
2018 LEGISLATIVE WRAP UP
Nebraska's Legislature adjourned formally for the year, or “sine die,” earlier this week on Wednesday, April 18. Of the 469 legislative bills introduced this year, and 447 bills carried over from last year, the Legislature passed 146 bills, including 21 bills that were passed on Wednesday and are awaiting the Governor's signature. The Legislature killed 11 bills, and Senators withdrew 7 bills.
Bills become effective on July 19, 2018, three calendar months after the Legislature adjourned, unless they include a specific operative date or they include an emergency clause in which case they become effective the day after they are signed by the Governor. Because this is the second session in the legislative biennium, bills that did not pass will not carry over to the next legislative session. Bills will need to be reintroduced in 2019 to be considered again by the Legislature.
The 106th Legislature will convene on January 9, 2019, to begin next year's legislative session (unless the Legislature is called into special session, which we think is unlikely and is discussed further below).
This year the Governor and Legislature responded to lagging tax receipts and a continued budget shortfall with three bills – LB 944, LB 945, and LB 946 – that together cut government spending by making appropriations, re-appropriations, cash fund transfers, Cash Reserve spending, and other adjustments to last year's state budget. These budget bills garnered significant legislative debate, including multiple filibusters, but they ultimately passed and were signed by the Governor without any line-item vetoes. As discussed in our previous legislative update, the Appropriations Committee did NOT target roads funding to help make up the state's continued budget shortfall. Roads funding was not part of the budget debate this year.
Tax Reform Efforts Stalled
Tax reform was the biggest issue in the Legislature this year, other than the budget. There were several proposals to provide property tax relief and one proposal that combined property tax relief with income tax cuts. In the end, the stakeholders could not garner enough support to advance any single proposal.
This does not, however, mean that tax reform is dead for the year. A number of rural Senators and ag interest groups are working to put property tax relief on the ballot as an initiative in November. Their proposal would provide property tax relief through a state income tax credit equal to 50 percent of a taxpayer's property taxes that go to school funding. The credit is estimated to cost approximately $1.2 billion, nearly a quarter of the state's annual budget. For AGC members, it is important to understand that, if the ballot initiative passes, it necessarily will affect state spending, and, because of its size, nearly every state spending program could be in jeopardy, including roads funding. Therefore, while property tax relief, standing alone, could be a good thing for members, the ballot initiative's success could have a significant impact on roads funding and the highway construction business – on capital improvement projects, in particular, and possibly even on maintenance and preservation. If you have any questions on this initiative, please reach out to Katie Wilson or any of us at Mueller Robak: Bill Mueller (Mueller@MuellerRobak.com), Mary Johnson (Johnson@MuellerRobak.com), or Bub Windle (Windle@MuellerRobak.com).
There is also a chance that tax reform could be addressed in a special session of the Legislature. Last week, after the parties were unable to reach an agreement on tax reform, a group of 13 Senators submitted a letter to the Secretary of State requesting a special session to address property tax relief. Their request needs the support of 33 Senators, including the 13 Senators who made the initial request. Because proponents of property tax relief were unable to get 33 Senators to support any of the various property tax relief proposals introduced during the regular term of the legislative session, many observers believe that it will be hard to find 33 Senators to support the call for a special session. Senators have until April 23 to respond to the Secretary of State to affirm their support for convening a special session.
Other Legislative Issues
This year, Senator Curt Friesen introduced LB 1031, related to large excavation projects and locate costs. AGC opposed the bill because it would impose locate costs on our members and create other problems in administering “large projects,” defined in the bill as “an excavation in a city of the metropolitan class, city of the primary class, or city of the first class measuring more than one mile in length and taking more than ninety days to complete.” The bill did not advance this year. But it raised the issue's profile, and Senator Friesen introduced a legislative resolution, LR 426, to study the issue in the interim period before the 2019 legislative session begins. AGC will be part of this process.
The other major roads-related bill was LB 1009, introduced by Senator John Murante. The bill does two things: (1) it creates a new statutory classification for Super-Two's; and (2) it authorizes NDOT to increase the maximum speed limits on state highways by 5 mph. The bill passed last week and was approved by the Governor earlier this week.
William J. Mueller, Mary Johnson, and Bub Windle
530 South 13th Street | Suite 110 | Lincoln, Nebraska 68508
Telephone 402.434.3399 | Fax 402.434.3390