State claims bill advances

Claims against the state would be approved by a bill advanced from general file March 15.

If a person sues the state of Nebraska, he or she files with the state claims board. Approved claims exceeding $50,000 must be reviewed by the Legislature.

LB1072, introduced by the Business and Labor Committee, would approve such claims to the tune of $495,000 for tort claims and $275,000 for miscellaneous claims. The bill also includes $3.9 million in write-offs for fiscal year 2010-11.

A committee amendment, adopted 29-2, included an additional $2.5 million in denied claims that were made by subcontractors of Boys and Girls Home—a former lead contract agency with the Nebraska Department of Health and Human Services (DHHS).

In July 2009, the department selected six private entities as lead agencies to implement a child welfare reform initiative. All but one lead agency have left the reform process, citing an inability to fund their portion of the reform effort under the terms of their individual contracts with DHHS.

Omaha Sen. Steve Lathrop, chairperson of the committee, said DHHS has a statutory obligation to pay its service providers.

“I believe that paying these contractors is a matter of fairness,” Lathrop said.

Fremont Sen. Charlie Janssen spoke in support of the amendment. He said that subcontractors were put in a position where they had to borrow money to complete their payroll in order to continue providing needed services to children.

Norfolk Sen. Mike Flood argued that the approval of the subcontractors’ claims would set a bad precedent for the state.

“If [the state] goes around and remedies every breach of contract between a subcontractor and the relationship with the prime contractor, we could be setting a precedent where we are required to intervene with a third party all the time,” Flood said.

The bill advanced from general file on a 34-0 vote.