Bill Summary, LB 397 (1997)
LB 397 (1997) represented the follow-up bill to a two-year process to fully implement the Tax Equalization Review Commission (TERC). The TERC was the brainchild of Senator Doug Kristensen of Minden, a member of the Revenue Committee in 1997, who would later be elected to the office of Speaker. The idea behind TERC was to replace the State Board of Equalization with a fulltime commission having oversight of the equalization process.
In 1995 the Legislature passed LB 490 and LR 3CA. LB 490 embodied the Tax Equalization Review Commission Act, which established the structure and duties of the commission. LB 490 also created the office of Property Tax Administrator to work closely with the commission. LR 3CA was a constitutional amendment to eliminate the old State Board of Equalization and replace it with the TERC. The amendment appeared on the 1996 Primary Election Ballot as Amendment Number 4 and was passed by the voters with a 54% to 46% margin.
With all the pieces in place by 1997, it was time to fine-tune the TERC Act in order address issues that were discovered since the passage of LB 490. The bill also transferred the powers and duties from the State Board of Equalization to the Tax Equalization and Review Commission. The only change to the school finance formula under LB 397 involved the elimination of an outdated and obsolete reference to amounts paid by the state to refund litigated personal property taxes to school districts in 1988. These amounts were listed as receipts to school districts and counted as part of their formula resources for purposes of calculating state aid.
LB 397 passed with the emergency clause attached on March 10, 1997 by a 42-0 vote. The Governor signed the bill into law on March 13th.