§ 77-5544 — Audit; costs; confidentiality; violation; penalty

Nebraska § 77-5544

• Jurisdiction: Nebraska
• Ch. 77: Revenue and Taxation

Text

(1) By January 1, 2005, and each January 1 every
five years thereafter for so long as there are companies that have qualified
for benefits and remain within the entitlement period and there are sufficient
companies qualified for benefits so as not to reveal confidential information
that allows identification of any company, there shall be an audit to determine
compliance with the Invest Nebraska Act. The Tax Commissioner shall contract
with a qualified independent accounting firm to conduct the audit. The cost
of the audit shall be paid from funds appropriated to the Department of Revenue
by the Legislature. Such cost shall include, in addition to the fees and costs
of such independent firm, the incremental costs to the department to comply
with this section, as determined by the department. If a qualified independent
accounting firm cannot be located or engaged to conduct such audit, then such
audit shall instead be performed by the department. A qualified independent
firm shall be a firm that meets all of the following requirements: (a) The
firm must be an accounting firm employing or comprised of at least ten certified
public accountants who are licensed under the Public Accountancy Act to practice
accounting and auditing in Nebraska; (b) the firm, at the time of the beginning
of such audit, and for the period of at least twenty-four months before such
audit commences, has not performed any services for any of the companies that
at such time have filed applications under the Invest Nebraska Act, and the
firm must agree not to engage in and to withdraw from representing any companies
that file applications after such audit commences and before the audit report
is issued; (c) the firm must have executed such audit contract as required
by the Tax Commissioner; and (d) the firm, and all such accountants and personnel
of such firm who will be involved in the audit, must have executed such confidentiality
and nondisclosure agreements as required by the Tax Commissioner. In hiring
such firm, the Tax Commissioner shall comply with all Nebraska laws pertaining
to the selection and hiring of outside private sector services.
(2) The purpose of the audit is to examine information collected by
the department in order to determine:
(a) The extent the data collected from the companies receiving benefits
is verified;
(b) The extent to which the projects receiving benefits from the act
are in compliance with the act initially and throughout the entitlement period;
(c) Whether the requirements of the act regarding the investment threshold
have been attained and maintained by the companies;
(d) Whether and to what extent new employees are added by the companies
to their workforce and employed at the project locations;
(e) Whether and to what extent the new jobs created meet the minimum
compensation requirements of the act;
(f) The industry or industries in which the new jobs are created, by
North American Industry Classification System Code;
(g) The extent to which the minimum new job threshold of the act has
been attained and maintained by the companies;
(h) By category of spending, what is purchased by the companies that
is claimed as qualified investments; and
(i) Gross sales from output of the project if reasonably determinable.
(3) After the audit is conducted, and on or before January 1, 2005,
and each January 1 every five years thereafter, the auditor shall issue a
report to the Legislature and Governor detailing the results of the audit. The report submitted to the Legislature
shall be submitted electronically. The report shall be presented
using aggregated information and other techniques so as not to reveal confidential
information that allows identification of the company. The report shall not
be issued until the Tax Commissioner has confirmed in writing that the report
does not reveal any confidential information that allows identification of
the company. For purposes of this section, confidential information includes
all information that is (a) referred to as confidential in section 77-5534 ,
(b) restricted from disclosure or treated as confidential under any federal
or state law, or (c) provided by the company to the department in connection
with the company's project under the act. The report shall detail all assumptions,
methods, or models that were used in performing the analysis and shall report
information by industry group or expenditure category so that further analysis
can be performed. The firm shall have access to all records of the department
with regard to the credits granted under the act and the companies receiving
such credits. Such records shall remain confidential in the hands of the firm
conducting the audit and shall not be revealed to any person that is not employed
by the department or the firm conducting the audit. No officer or employee
of the firm conducting the audit shall disclose any information to any other
person if such information is protected by federal or state confidentiality
laws. Notwithstanding any other provision of this section to the contrary,
neither the independent accounting firm nor any of its personnel shall be
provided by the department with any confidential information except to the
extent and under conditions when the department is permitted without penalty
to do so under applicable federal or state laws.
(4) All information provided by the department to the independent accounting
firm shall be examined only on the premises of the department and shall be
stored in a secure place. The firm shall make no copies of such information.
Any qualified independent accounting firm, or any personnel of the firm, which
violates this section shall be guilty of a Class IV felony and, in the discretion
of the court, may be assessed the costs of prosecution.
(5) Nothing in this section shall be construed to require the company
to provide, or require the department to obtain from the company, any information
beyond that required as part of the application or beyond that required by
the department to confirm the company is entitled to the benefits of the act
or to obtain the information required in subsection (2) of this section. The
independent accounting firm shall not request any information from the company
or its personnel. The independent accounting firm shall be permitted and expected
to obtain additional outside public information available from sources outside
of the company and the department in order to comply with the requirements
for the report if copies of all such data, information, and sources are made
available to the public or included with the report.
(6) Information obtained in connection with the audit from either the
department or the company is confidential and is not discoverable or admissible
in evidence in any civil action, and no department or company personnel shall
be compelled to testify in regard thereto. Such information may be discovered
and be admissible, and testimony compelled in regard thereto, by the department
or by the company in an action relating to the determination of whether the
company is entitled to the benefits of the act.

Legislative History

Source: Laws 2001, LB 620, § 44; Laws 2006, LB 1003, § 11; Laws 2012, LB782, § 145. Cross References: Public Accountancy Act, see section 1-105.