Speaker: It’s Legislative Lights Out May 31

NFIB-supported amendments in workers' compensation bill passed, sent to governor

State Director Bob Hallstrom reports from Lincoln on the small business agenda for the legislative week ending May 17

The Speaker of the Legislature announced Thursday that lawmakers will be “turning out the lights” on the 2019 legislative session on May 31, four working days earlier than expected.

As a result, bills will need to advance from General File by Tuesday of next week in order to be approved by the Legislature in time to allow for a vote to override any potential vetoes by Gov. Pete Ricketts.

Property Tax Relief Expected to Resurface

Sen. Tom Briese (Albrion) has filed proposed amendments to another pending tax bill (Legislative Bill 183) that is awaiting second-round debate by the Legislature. This action will avoid the necessity for the sponsor of the original property tax relief bill (Legislative Bill 289) to show sufficient support (33 votes) to break a filibuster on that bill.

LB 183 would make adjustments to the valuation of agricultural land, with amendments to the original bill offering a slimmed down version of LB 289. The Briese amendment to LB 183 would eliminate a series of sales tax exemptions similar to those contained within the amended version of LB 289 to provide additional revenue to fund property tax relief. The amendment would provide approximately $100 million in additional property tax relief on top of the $51 million proposed by Governor Ricketts and contained within the budget bills. The amendment to LB 183 would set a floor of $275 million annually for the property tax credit fund and would direct new revenues to be allocated to the property tax credit fund until state support for K-12 education increases by 120 percent year-over-year. The measure would also eliminate the half–cent increase in the state sales tax rate and any increase in the cigarette tax as proposed under LB 289.

Income Tax Bills Move Forward

The Revenue Committee advanced two income tax bills to General File this week. Legislative Bill 153, introduced by Sen. Tom Brewer (Gordon) and prioritized by Sen. John Lowe (Kearney) would exempt 50 percent of military retirement pay from the Nebraska income tax. Legislative Bill 288, with a Revenue Committee amendmen,t would:

allow taxpayers to itemize their deductions to fully deduct their property taxes on their Nebraska income tax returns

phase out the Nebraska personal exemption credit for taxpayers with federal adjusted gross income in excess of $250,000

reinstate the Nebraska additional tax for married filing joint returns with gross income in excess of $250,000 and for single income filers with gross income in excess of $200,000

impose corporate income tax on out-of-state businesses selling intangibles or services (raises approximately $22 million annually)

reduce the top corporate income tax rate of 7.81 percent over the next four years to create parity with the top individual income tax rate of 6.84 percent.

Budget Bill Hits Bump in the Road—Then Advances

Following a full day of a debate on the package of budget bills on Tuesday, the mainline $9.3 million spending bill (Legislative Bill 294) failed to garner sufficient votes to invoke cloture. The cloture motion, which requires 33 votes to be successful, failed on a vote of 31–14. Debate on LB 294 resumed Wednesday afternoon, and the bill was advanced to Final Reading. By rule, the budget must be adopted by the Legislature and sent to the governor by the 80th day of the legislative session.

Workers’ Compensation Bill Sent to Governor

The Legislature gave final approval to Legislative Bill 418 on Monday. Introduced by Sen. Michaela Cavanaugh (Omaha), and designated as a priority bill by the Business and Labor Committee, LB 418, in its original form, would have required collection agencies to cease attempts to collect a debt if a case was pending in the Nebraska Workers’ Compensation Court and the debt was alleged to be subject to Neb.Rev.Stat. Section 48–120 (medical, surgical and hospital services).

Prior to final passage, the Legislature adopted an amendment that expanded the restriction on collection efforts to any provider of services, supplier of services, collection agency, collector, or creditor attempting to collect a debt incurred against an employee or his or her spouse for treatment of a work-related injury while the matter is pending in the Compensation Court until final adjudication of the case regarding such debt.

In order for the restrictions on debt collection to be effective, the entity attempting to collect the debt for treatment of a work-related injury would need to have been provided with written notice containing the provider’s name, employee’s name, date of injury and a description of the injury, together with the filing date in case number pending in the Compensation Court. A subsequent notice, provided within 30 days after the initial notice would need to specifically identify the debt upon which collection should be stayed, unless identification was made in the initial notice.

In its final form, the bill also includes the provisions of Legislative Bill 360, introduced by Sen. Matt Hansen (Lincoln), which provides for settlement of claims of nonresident alien dependents by authorizing a nonresident alien dependent, at any time prior to final settlement, to file with the Workers’ Compensation Court a power of attorney designating any suitable person residing in the state to act as an attorney-in-fact and Workers’ Compensation Court proceedings. The power of attorney could act as attorney-in-fact for the nonresident alien in court proceedings if the court determines that the interests of the nonresident alien dependent will be better served by the attorney-in-fact than by the consular officer. The attorney-in-fact would be required to furnish a bond satisfactory to the Compensation Court conditioned upon the proper application of any money received as compensation under the Workers’ Compensation Act.

While NFIB was “neutral” on LB 418, it supported the provisions of LB 360 that were amended into the bill.

Medical Marijuana—Employer Protections

Earlier this week, the Legislature’s Judiciary Committee advanced Legislative Bill 110 to General File. Introduced and designated as a priority bill by Sen. Anna Wishart (Lincoln), LB 110 would authorize the purchase of marijuana for medicinal purposes. The bill was debated for three hours late Wednesday evening, removed from the agenda and unlikely to resurface this session.

While NFIB has not taken a position on the underlying bill, we raised concerns regarding the ability of employers to avoid having to pay for expenses associated with the use of medical marijuana following a workplace injury. NFIB worked with Senator Wishart to incorporate an amendment to LB 110 to clarify that no employer or insurance carrier is required to reimburse a person for costs associated with the medicinal use of marijuana, cannabis, or cannabis products under the Nebraska Workers Compensation Act. In addition, nothing in LB 110 affects the ability of an employer to restrict the use of marijuana, cannabis, or cannabis products by employees or requires any employer to accommodate the medicinal use of such products.

Burial Benefits Bill Advanced

The Business and Labor Committee has advanced LB 448 to General File. Introduced by Sen. Mike McDonnell (Omaha), LB 448 would revise the manner in which an employer’s responsibility for burial expenses is determined. As originally introduced, the burial expense would have been set at 14 times the state’s average weekly wage. An amendment proposed by the Business and Labor Committee would set the burial expense at 12 times the state’s average weekly wage, to be automatically adjusted annually. Given the late date for the advancement of the bill, no further action is expected on LB 448 this session. (NFIB Position – Opposed)