AGO 97022.

CourtNebraska
Nebraska Attorney General Opinions 1997. AGO 97022. DATE: March 27, 1997SUBJECT: LB 799; Constitutionality of Appropriation to the Nebraska Arts Council to Fund the Public Portion of the Proposed Cultural TrustREQUESTED BY: Senator LaVon Crosby Nebraska State LegislatureWRITTEN BY: Don Stenberg, Attorney General Lynn A. Melson, Assistant Attorney General You have requested our opinion regarding the constitutionality of LB 799. This proposed legislation, including AMO653, would create "a body politic and corporate, not a state agency, but an independent instrumentality exercising essential public functions" to be known as the Cultural Trust. A Cultural Trust Fund would also be created which would be administered by five trustees selected and approved by the Nebraska Arts Council and the state affiliate of the National Endowment for the Humanities. The trust fund would consist of revenue from public and private sources with only the earnings used for the operations of the Nebraska Arts Council and the state affiliate of the National Endowment for the Humanities and their constituent organizations. LB 799 also states the intent to appropriate $12,500,000 in each of the next two fiscal years to the Nebraska Arts Council to fund the public portion of the Cultural Trust. That appropriation is to be returned to the general fund by the Cultural Trust in fiscal year 2023-24. Your specific concerns are with Article XIII, section 3 of the Nebraska Constitution which prohibits lending the credit of the State and Article III, section 18 of the Nebraska Constitution which prohibits special legislation or the granting of special privileges and immunities. We will also discuss Article XII, section 1 which prohibits the creation of a single corporation by special law. I. Article XIII, Section 3 We will first address whether LB 799 violates the provision of the state constitution which mandates that "[t]he credit of the State shall never be given or loaned in aid of any individual, association, or corporation. . . . " Neb. Const. Art. XIII, section 3. The case of Haman v. Marsh, 237 Neb. 699, 467 N.W.2d 836 (1991), is a recent Nebraska Supreme Court decision which interprets Article XIII, § 3 of the Nebraska Constitution. At issue in Haman was legislation which appropriated state tax money to compensate depositors who had suffered losses due to the failure of industrial loan and investment companies in Nebraska. The Nebraska Supreme Court set out a three-prong test, and stated that to establish a law was unconstitutional under Article XIII, § 3, a plaintiff had to prove each of the following elements: (1) The credit of the state (2) was given or loaned; (3) in aid of any individual, association, or corporation. Haman, 237 Neb. at 719. The threshold...

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