Legislature Down to Final Days

With only a few days left in the 2014 legislative session, lawmakers continue to methodically process priority bills. First round approval was given to a prison reform measure (Legislative Bill 907) and a bill (Legislative Bill 1092) that would allow the state to issue bonds to fund highway projects.

The minimum wage bill (Legislative Bill 943) will likely be debated on the floor of the Legislature this week. Introduced by Sen. Jeremy Nordquist (Omaha), the bill would increase the state’s minimum wage from $7.25 an hour to $7.65 an hour in 2015; to $8.35 an hour in 2016; and to $9 an hour in 2017. Members of the Legislature need to be reached immediately to express your opposition to an increase in the state’s minimum wage.

Lawmakers have given final approval to three budget bills updating the state’s two-year financial plan. The final budget package would continue the 5.5 percent level of spending growth under last year’s two-year budget. Among the major items in the budget, include the following:

NFIB supported the additional funding for property tax relief.  The governor has indicated that he may exercise his line-item veto authority to reduce the amount of state spending. Any gubernatorial vetoes would be subject to being overridden by the legislature with 30 votes.

The following tax relief measures, both supported by NFIB, were also given final approval this week:

Legislative Bill 987 – Income Taxation: LB 987 would index state income tax brackets for inflation, reduce the amount of social security benefits that are included in federal adjusted gross income for income tax purposes, and exclude a portion of military retirement pay from taxation.  Over the next 10 years, individuals subject to the state income tax would receive an estimated $100 million in tax savings under the bill.

Legislative Bill 96 – Ag Repair Parts Sales Tax Exemption: LB 96 would exempt repair or replacement parts for agricultural machinery and equipment from the state sales tax. Prior to passage of LB 96, Nebraska was one of only eight states to charge sales tax on agricultural machinery and equipment repairs and parts, creating a distinct competitive disadvantage for Nebraska farm implement dealers and making it more expensive for farmers to shop at home.

The Business and Labor Committee has amended and advanced Legislative Bill 961 to General File.  In its original form, LB 961, introduced by Sen. Tanya Cook (Omaha), would have waived workers’ compensation as the exclusive remedy if an employer is guilty of willful negligence. The bill would also have deemed a finding by the Nebraska Workers’ Compensation Court that an employee has been injured by reason of the willful negligence of the employer to be determinative and binding on the parties in any subsequent action for damages at law. NFIB was opposed to LB 961, and in advancing the bill, the Business and Labor Committee removed these objectionable provisions.

As amended, LB 961 contains the provisions of Legislative Bill 951, which was introduced by Sen. Scott Lautenbaugh (Omaha).  The bill now clarifies that a lump sum settlement that is not required to be submitted for approval by the Compensation Court shall be final and conclusive unless procured by fraud. The measure would also require amounts to be paid by the employer to the employee pursuant to the release to be paid within 30 days of filing the release with the Compensation Court, with a 50 percent “penalty” to be added if not made within the 30 day time period. Finally, the bill would require the Court to enter an order dismissing the action with prejudice, except for expenses specifically excluded from the release.

Under current law, a lump sum settlement may become final without court approval provided the employee is represented by counsel.  The law requires a release to be filed with the Compensation Court which is signed and verified by the employee and the employee’s attorney.  The release constitutes a full and complete discharge from further liability for the employer on account of the injury, including future medical, surgical, or hospital expenses, unless such expenses are specifically excluded from the release.

The provisions of the bill are designed to address issues raised by the Nebraska Supreme Court in the case of Holdsworth v. Greenwood Farmers Co-Op, in which it was determined that the waiting time penalty and attorney fees do not apply to lump sum settlements for which court approval is not required. With the ultimate passage of LB 961, as amended, employers and employees will have additional incentive to utilize the lump sum settlement without court approval process.