AGO Opinion 98003
Constitutionality of Legislative Bill 650 Providing for Supplemental Retirement Benefits
DATE: January 9, 1998
SUBJECT: Constitutionality of Legislative Bill 650 Providing for Supplemental Retirement Benefits
REQUESTED BY: Senator D. Paul Hartnett, Nebraska State Legislature
WRITTEN BY: Don Stenberg, Attorney General
Fredrick F. Neid, Assistant Attorney General
You have inquired concerning the constitutionality of
Legislative Bill 650 introduced in the 1997 legislative session.
LB 650 would amend the provisions of the Nebraska State Patrol
Retirement Act, Neb. Rev. Stat. §§ 81-2014 to 81-2036 (1994, Cum.
Supp. 1996, and Supp. 1997), to provide supplemental retirement
benefits for certain retired state patrol officers or surviving
spouses in an amount equal to 3 percent for the years 1985 through
From a constitutional viewpoint, an increase in retirement
benefit amounts for retired public employees is viewed in the
context of whether the supplemental benefit for certain retired
employees would constitute special legislation in violation of
Article III, § 18, of the Nebraska Constitution; and, secondly,
whether the benefit increase would constitute a gratuity in
violation of Article III, § 19, of the Nebraska Constitution.
Neb. Const. art. III, § 18 states in particular part:
The Legislature shall not pass local or special laws in
any of the following cases, that is to say: . . . .
Granting to any corporation, association, or individual
any special or exclusive privileges, immunity, or
franchise whatever. . . . In all other cases where a
general law can be made applicable, no special law shall
A legislative act constitutes special legislation under this
constitutional provision if the act (1) creates an arbitrary and
unreasonable method of classification or (2) creates a permanently
closed class. See City of Ralston v. Balka, 247 Neb. 773, 530
N.W.2d 594 (1995); Henry v. Rockey, 246 Neb. 398, 518 N.W.2d 658
(1994). Accordingly, the first inquiry is whether the provisions
of LB 650 would create an arbitrary and unreasonable method of
The purpose of LB 650 is to provide supplemental retirement
benefits for a class of retirees under the State Patrol Retirement
Act. We generally believe the classification is reasonable since
the Legislature is accorded broad discretion as to the conditions
of public employment and as to requirements, classifications,
contributions to, and benefits conferred by a retirement act. See
Gossman v. State Employees Retirement System, 177 Neb. 326, 129
N.W.2d 97 (1964).
The second inquiry is whether the legislative act would
establish a permanently closed class. It is our view that the
class of retirees to be benefited constitutes a permanently closed
class and, therefore, unconstitutional special legislation. The
class to be created is closed in the sense that only those retirees
who retired prior to December 31, 1991, would receive the increased
benefit amount. The Nebraska Supreme Court has long held that:
The rule appears to be settled by an almost unbroken line
of decisions that a classification which limits the
application of the law to a present condition, and leaves
no room or opportunity for an increase in the numbers of
the class by future growth or development, is special,
and a violation of the constitution above quoted. . . .
Haman v. Marsh, 237 Neb. 699, 716, 467 N.W.2d 836, 848 (1991)
[citing City of Scottsbluff v. Tiemann, 185 Neb. 256, 262, 175
N.W.2d 74, 79 (1970) (quoting State v. Kelso, 92 Neb. 628, 139
N.W.2d 226 (1912)]. (Emphasis added).
For this reason, it is our conclusion that LB 650 is
constitutionally suspect as special legislation offensive to Neb.
Const. art. III, § 18.
GRANTING OF EXTRA COMPENSATION
The granting of a retirement or pension benefit where no part
of the service was rendered subsequent to the enactment of the law
is a gratuity in violation of Neb. Const. art. III, § 19. Retired
City Civilian Employees Club v. City of Omaha Ret. Sys., 199 Neb.
507, 260 N.W.2d 472 (1977); Gossman v. State Employees Retirement
System. However, adjustments to retirement benefits of public
employees to reflect cost of living and wage changes are
constitutionally permissible. In relevant part, Article III, § 19,
The Legislature shall never grant any extra compensation
to any public officer, agent or servant after the
services have been rendered . . . except that retirement
benefits of retired public officers and employees may be
adjusted to reflect changes in the cost of living and
wage levels that have occurred subsequent to the date of
retirement. . . .
Adjustments that are based on changes in the cost of living
and wage levels are not offensive to this constitutional provision.
However, it is problemsome that the provisions of LB 650 purport to
provide increases to reflect changes in the cost of living and wage
levels equal to 3 percent for certain specified years. The
provisions of the bill do not define the term "cost of living," and
the adjustments are not expressly based on a specific cost of
living index. This office has previously concluded that "the
percentage of increase implemented would necessarily be based on a
cost of living index." See Ops. Att'y Gen. 93020 (1993) and 97026
It does not appear, or at least it cannot be readily
ascertained, whether the percentage increases are based on
increases that have occurred in the cost of living and wage levels
as measured by a consumer price index. Thus, the adjustments would
be gratuitous in the absence of any showing that the adjustment
amounts are tied to a cost of living index. Accordingly, we
believe the provisions of LB 650 are constitutionally suspect as
offensive to Neb. Const. art. III, § 19.
You also request that the Attorney General "provide some
guidance on steps which might be taken to cure any potential
constitutional defects. . . ." As we pointed out above, the
legislative act should not create a permanently closed class. As
the Nebraska Supreme Court has concluded, the class created should
have room for future growth or opportunity for an increase in
numbers. An open class would not constitute special legislation.
In other respects, any increase in benefits, after services
are rendered, should be tied to a consumer price index. We point
out that provisions of the State Patrol Retirement Act include
benefit adjustments that are based on a consumer price index. See
Neb. Rev. Stat. § 81-2027 (1994). We refer you to this statutory
provision only because benefit adjustments are tied to increases
determined by a consumer price index.
You have also inquired whether "any potential constitutional
defects in LB 650 call into question the validity of the earlier
legislation?" The earlier legislation you refer to is Neb. Rev.
Stat. § 81-2035 (1994) which includes provisions similar to LB 650.
Generally, we decline to respond to legislative inquiries regarding
the constitutionality of statutes as a matter of policy. See Op.
Att'y Gen. No. 157 (1985).
Fredrick F. Neid
Assistant Attorney General