Nebraska Attorney General Opinions 1997. AGO 97051. DATE: October 1, 1997SUBJECT: Constitutionality of Advances from the Federal Government to the State for Payment of Unemployment Compensation Benefits REQUESTED BY: Fernando Lecuona, III, Commissioner Department of LaborWRITTEN BY: Don Stenberg, Attorney General Fredrick F. Neid, Assistant Attorney General You have requested the opinion of the Attorney General concerning the constitutionality of a financing arrangement under federal law that authorizes the State to borrow funds from the federal government to fund payment of benefits provided in the Employment Security Law, Neb. Rev. Stat. §§ 48-601 to 48-671 (1993 and Cum. Supp. 1996). Among other things, the Employment Security Law establishes various funds for payment of unemployment compensation benefits to eligible individuals and provides for determining the contribution rate applicable to each employer for each calendar year. State unemployment agencies may receive "advances" from the federal government for payment of benefits upon application of the Governor of the State under the provisions of 42 U.S.C.A. §§ 1321 and 1322. The specific question you ask is whether borrowing by the State of Nebraska from the federal government is subject to the restrictions set forth in Article XIII, sec. 1 or any other section of the Nebraska Constitution. It is our opinion that borrowing funds from the federal government for payment of unemployment benefits would fall within the constitutional prohibition against contracting debts set forth in Article XIII, sec. 1 of the Nebraska Constitution. It is unnecessary to address other constitutional issues since we have concluded that the constitutional debt limitation is applicable to the borrowing arrangement you have inquired about. STATUTORY BACKGROUND You indicate the constitutional question arises because the Commissioner of Labor is charged with the duty of determining the rate of combined tax applicable to each employer under the provisions of Neb. Rev. Stat. §§ 48-649 and 48-650 (Cum. Supp. 1996). As part of the rate determination procedure, the Commissioner considers anticipated benefit payments, anticipated combined receipts, and fund balances available for payment of benefits. The Department of Labor is interested in knowing whether borrowing funds from the federal government...
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