Now that Nebraska's law to regulate campaign spending has been overturned by the courts, lawmakers advanced a bill Thursday to take the law off the books but make campaign finance reporting more transparent.

The bill (LB79), which faces two more rounds of consideration, advanced from first-round debate on a 27-0 vote.

The Nebraska Supreme Court ruled in August that Nebraska’s Campaign Finance Limitation Act was unconstitutional. The 1992 law was meant to level the financial playing field in political campaigns. Under the act, candidates for state offices had varying spending limits for primary and general elections. Candidates who agreed to abide by the voluntary limits could qualify for matching public funds if their opponents exceeded the cap.

In addition to taking the law off the books, Lincoln Sen. Bill Avery's bill would take some $630,000 of the $920,000 in the old Campaign Finance Limitation Act fund — which was used to pay matching funds to candidates — and buy computer software and equipment so campaigns can file their financial reports electronically with the state Accountability and Disclosure Commission.

Now, those reports are done on paper and commission staff type the data in so it can be viewed on the commission's website.

The other $290,000 in the fund would be used to buy equipment for the Secretary of State's Office.

The bill originally would have lowered the threshold for reporting campaign contributions and expenditures. It would have required the source of any contributions to or expenditures by a political campaign to be disclosed once they total more than $100. Current law sets the threshold at $250.

But the Government, Military and Veteran's Affairs Committee took that provision out. Avery said some committee members would prefer to eliminate all thresholds. He said he did not fight the change in order to get the bill to the floor for debate.

"I would have liked to see the thresholds lowered, but it's more important to get that money transferred so we can have more transparency" via the electronic filing of campaign statements, Avery said. "The public will be able to see where the money is coming from and where it is going ... as soon as is practicable."

The committee also stripped a provision that would have required campaigns to furnish the Accountability and Disclosure Commission with bank statements, a move that alarmed Jack Gould of the political watchdog group Common Cause.

He said having that requirement in place would have allowed the accountability commission to discover that former Sen. Brenda Council of Omaha had misused campaign funds. Council pleaded guilty last year to two misdemeanor charges of filing false campaign reports for using $63,000 in campaign donations to gamble at casinos.

"No single event over the last decade revealed the need for greater disclosure than the scandal surrounding Senator Council's gambling away ... her campaign funds," Gould said. "Elected officials are required to report contributions and expenditures but they are not required to file an end-of-the-year bank statement.

"Most citizens would expect their legislature to recognize the flaw in the reporting system and move quickly to ensure that no one could abuse campaign funds again. Instead, the Government Committee removed that portion of the bill," he said.

The money in the Campaign Finance Limitation Act fund was collected from civil penalties and late filing fees paid by campaigns that broke the accountability and disclosure laws and from donations people gave via a check-off on their state tax returns.

In overturning the Campaign Finance Limitation Act in August, Nebraska's high court cited a 2011 U.S. Supreme Court decision that struck down part of an Arizona law that gives money to publicly funded candidates facing privately funded opponents and independent groups. The Arizona law was passed in the wake of a public corruption scandal and was intended to reward candidates who forgo raising campaign cash, even in the face of opponents' heavy spending fueled by private money.

But the court said the Arizona law violated the First Amendment.

"Laws like Arizona's matching funds provision that inhibit robust and wide-open political debate without sufficient justification cannot stand," Chief Justice John Roberts said in the court's majority opinion.

After that ruling, Nebraska Attorney General Jon Bruning's office issued an opinion that the Campaign Finance Limitation Act likely was unconstitutional, and the state Supreme Court was asked to weigh in.

In the August ruling, Chief Justice Mike Heavican said the act indeed stifled free speech.

"The Nebraska statutory scheme is similar to that of Arizona, which was found unconstitutional," he wrote. "Under the CFLA’s public financing provisions, public funds are disbursed to abiding candidates in response to the political speech of privately financed candidates. Such restrictions on campaign spending create substantial burdens on the rights of free speech under the First Amendment."

Reach Kevin O'Hanlon at 402-473-2682 or kohanlon@journalstar.com.