April 8, 2022

2022 SESSION, 107TH LEGISLATURE

Filibusters were the order of the week, as the Legislature spent four hours on Select File debate on Tuesday before advancing the tax relief package (LB 873) and spent eight hours on General File debate on both LB 920 (prison reform/overcrowding) and LB 933 (Nebraska Human Life Protection Act), with both measures falling short of the 33 votes required to invoke cloture and cease debate. In addition, an effort to override Governor Ricketts’ veto of a federal rental assistance funding bill (LB 1073) fell one vote short of the 30 votes needed to override the veto.

As of the end of this week, only four days remain in the 2022 Legislative Session. Friday marked the final day for bills to be considered on General File and still have a chance for passage. Bills on Select File must advance to Final Reading next Monday in order to reach the finish line. Lawmakers will take a five-day recess following adjournment next Wednesday and will return for the final day of the session on April 20 to consider overriding any Gubernatorial vetoes and take action on any bills remaining on Final Reading.

Rural Workforce Housing Final Reading

The Legislature has given second-round approval to LB 1069, a bill introduced and prioritized by Senator Matt Williams (Gothenburg), on behalf of the NBA, which would: a) extend the definition of workforce housing to include owner-occupied housing units that cost not more than $325,000 (currently $275,000) and rental housing units that cost not more than $250,000 (currently $200,000); b) replace the $2 million cumulative grant limitation with provisions allowing for the Department, in its discretion, to determine the cumulative amount of grants for any single grantee; c) reduce the matching requirement for grants from 100% to 50%; and d) extend the sunset date for provisions of the Act from July 1, 2022, to July 1, 2027.

Tax Relief Measure Given Final Approval

​Lawmakers gave final approval on Thursday to a nearly $900 million tax relief package (LB 873), after rejecting efforts earlier in the week to include income tax cuts for middle-income taxpayers. As adopted, LB 873 will:

• Reduce individual and corporate income maximum rates to 5.84% over the next five years
• Provide additional property tax relief for the portion of real estate taxes paid for community colleges, with initial funding for property tax credits in the amount of $50 million in 2022, increasing to $195 million by 2026, with the credit percentage to be adjusted going forward on the basis of credits allowed in the prior year increased by the allowable growth percentage of no more than 5%
• Increase the amount of credits available under the Property Tax Incentive Act to $548 million in 2022, $567 million in 2023, and eliminate the existing cap of $375 million, otherwise applicable in 2022
• Completely phases out income taxes on social security income.

Legislature Overrides Governor's Budget Vetoes

Earlier this week, Governor Ricketts sharpened his veto pen by cutting more than $170 million out of the $9.8 billion biennium state budget. The Governor line-item vetoed payments for providers caring for vulnerable Nebraskans, affordable urban housing development, and vocational and life skills programs to assist inmates to succeed outside of prison.

The Appropriations Committee recommended that all of the vetoes issued by Governor Ricketts be overridden, with the exception of the $14 million, to be left in the Governor's emergency fund, rather than being transferred into the state's Cash Reserve Fund. The Legislature took up the veto overrides on Thursday and accepted the Appropriation Committee's recommendations by overriding the Governor's vetoes, restoring more than $172 in expenditures.

ARPA Funding Approved

LB 1014, which would distribute just over $1 billion in ARPA funds for approximately 40 projects or focus areas, was given final approval by the Legislature on Thursday. The legislation contains $10 million for rural workforce housing “infrastructure” (laying drinking water transmission lines, rehabilitation, renovation, demolition or destruction of vacant or abandoned buildings in disproportionately impacted communities and removal and remediation of environmental contaminants or hazards from vacant or abandoned properties in disproportionately impacted communities).
 
Under LB 1014, ARPA funding would be provided to address the following project areas:
 
Public Health:
$60 million for a rural health complex at the University of Nebraska-Kearney; $20 million to help rural communities replace aging ambulances
 
Economic Revival:
$60 million to Nebraska’s six community colleges to strengthen and grow a post-pandemic skilled workforce; $20 million for grants to Nebraska food banks and to groups with innovative food supply chain projects
 
Premium Pay:
Nearly $37 million to provide pay increases for front-line public health and public safety workers in 24-hour facilities; $55 million for rate increases for certain providers of developmental disabilities services
 
Infrastructure:
$23 million to repair irrigation tunnels that collapsed in the Fort Laramie–Gering Irrigation District; $20 million to the Nebraska State Fair for wastewater and sewage systems
 
LB 1014 has been sent to the Governor, who has line-item veto authority to cut specific expenditures of ARPA funds. The Legislature will likely consider overrides of any potential vetoes.

Consumption Tax Nixed

LR 264 CA, a proposed Constitutional Amendment to eliminate the state income tax, state sales tax, local property taxes and the inheritance tax and replace these taxes with a new “consumption” tax to fund state and local government, fell short of the 25 votes required to move the measure to Select File. The vote on the consumption tax proposal was as follows:
 
Ayes: Sens. Albrecht, Bostelman, Brewer, Briese, Cavanaugh, M., Clements, Geist, Gragert, Halloran, Hansen, B., Hilgers, Hilkemann, Hunt, Lathrop, Lowe, McDonnell, Moser, Murman, and Wayne.
 
Nays: Sens. Aguilar, Blood, Bostar, DeBoer, Dorn, Flood, Friesen, Kolterman, Linehan, McCollister, Pansing Brooks, Slama, Vargas, and Williams.
 
Present-Not Voting: Sens. Arch, Brandt, Cavanaugh, J., Erdman, Hansen, M., Hughes, Jacobson, McKinney, Morfeld, Sanders, Stinner, Walz, and Wishart.

Other Bills of Interest

The following bill was debated and advanced to Select File this week:

LB 729 - QUICK ACTION CLOSING FUND ACT: Introduced by Senator Brett Lindstrom (Omaha), LB 729 would establish the Quick Action Closing Fund to authorize expenditures by the Governor for the purposes of economic development and related infrastructure development if expenditures of such funds would likely be a determining factor in locating a high-impact business project or facility in the state or in retaining such project or facility within the state. (NBA Position: Support)