Nebraska Legislature

Several tax-related bills were on the agenda for debate in the Nebraska Legislature the week of April 5-9, with many of the bills advancing to the next stage of review.

Tuesday, April 6

  • LB180 – Advanced to Enrollment and Review Initial

Introduced by Sen. Lou Ann Linehan, chair of the Revenue Committee, LB180 would require the Tax Commissioner to issue monthly reports in comparison to the most recent forecast and in comparison to the same month for the previous fiscal year. The fiscal year-end report would be issued in comparison to the certified forecast and the prior fiscal year’s net receipts. The bill was advanced from the first stage of consideration.

  • LB274 – Advanced to Enrollment and Review for Engrossment

Introduced by Sen. John Lowe of Kearney, LB274 would set the tax rate for ready-to-drink cocktails, allow the sale of mixed alcoholic beverages by certain retailers and farm wineries and provide for promotional farmers market special designated licenses under the Nebraska Liquor Control Act.

On April 6, the bill also saw Sen. Mike Groene’s amendment filed and adopted to change the language in the definition of a microdistillery to reflect that microdistilleries are now able to produce up to 100,000 gallons of liquor annually instead of 10,000. 

Sen. Megan Hunt of Omaha expressed her support for the provisions that allowed drinks-to-go, which were originally authorized by Gov. Pete Ricketts through an executive order last year.

“We saw how this change didn’t contribute to any change in drunk driving patterns or have any visible negative impacts,” she said. “It allowed so many local establishments to keep their doors open during an economically challenging time and was the only means of steady income for lots of small businesses. We’ve seen now that businesses and customers can safely adapt and there is an appetite for this service.”

  • LB274AAdvanced to Enrollment and Review for Engrossment

LB274A advanced as an Appropriation Bill for LB274 after Lowe’s amendment was adopted to add a section that stated: “Since an emergency exists, this act takes effect when passed and approved according to law.”

  • LB544 – Advanced to Enrollment and Review for Engrossment

Introduced by Sen. Justin Wayne of Omaha, the bill calls to adopt the Urban Redevelopment Act. 

According to Unicameral Update, the act would offer tax incentives to businesses that operate in urban areas where poverty and unemployment rates are higher than average. 

Lawmakers approved clarifying language offered by Wayne and Sen. Terrell McKinney of Omaha before advancing the bill. The bill will have its adopted amendments incorporated before being reprinted for the final stage of consideration.

Introduced by Sen. Ben Hansen of Blair, LB644 serves as a “truth in taxation” bill aimed at bringing greater transparency to political subdivisions seeking to increase the amount of property taxes they collect.

“It’s about transparency but also about accountability,” Hansen said. “So those are the two kinds of big things we’re trying to accomplish with this.”

Hansen’s priority bill would require political subdivisions looking to increase property taxes to hold a joint hearing instead of a separate hearing for each entity. The goal, he said, is to make sure taxpayers are properly informed about their taxes.

“Instead of going to all these different hearings, we just bring one representative to one hearing so they can actually hear from the taxpayer and then vice versa,” Hansen said. “And it has to be after 6 p.m. because people do work, so it gives them a chance then, after work, to actually go.”

Under an amendment from the Revenue Committee, the requirement for a joint hearing would only apply to four of the proposed nine political subdivisions: counties, cities, school districts and community colleges. 

The bill would also require counties to notify taxpayers of any changes to their property tax rates via a postcard mailed to their property. The cost of sending out the postcards would be covered by the taxpayers in the affected counties issuing the postcards.

According to Unicameral Update, the committee’s amendment outlines the information to be printed on the postcard. It would include the property’s assessed value in the current and previous tax years, the amount of property taxes due in the current and previous years for each relevant political subdivision and the change in the amount of property taxes due for each political subdivision from the previous year to the current year.

Sen. Steve Halloran of Hastings filed an amendment on April 6 that was pending. The amendment would add the contents of LB189, which Halloran introduced, to change provisions relating to property tax refunds. The amendment would require political subdivisions to include property tax refunds they owed to be included in their next budget and be paid in full at a rate of 9%.

Hansen said he has been working with the Nebraska Association of County Officials and the League of Nebraska Municipalities to ensure amendments are being introduced that will be favorable to everyone involved. 

“I just want to make sure, for people who do own property and have property taxes, if this does pass, look out for that postcard and pay attention to it and go to the hearing and get engaged,” Hansen said. “I don’t care what you believe in, what your ideology is. I just want to make sure that the voter gets engaged in this. That’s how we create change.”

Sen. Hunt has voiced her opposition to LB644, saying that the bill calls for an unfunded mandate for the state’s cities, counties and schools.

“Our cities and counties and schools are already working under limitations to keep providing the services their communities need in the most tax-effective way possible, and they’re already under immense pressure to limit spending,” she said. “Why should we give them another expense and then tell them to limit their spending?”

Hunt also said that she was not opposed to the idea of a joint public hearing. She said she supports making government more accessible to the public but isn’t OK with the bill’s perceived intention of putting pressure on subdivisions by seeking funding required for the notices.

“I don’t like the spirit of that intent, but I do support transparency for taxpayers, and so if we can find a way to do this without leaving cities and counties holding the bag, I’d consider supporting it,” Hunt said.

Wednesday, April 7

  • LB644 – Hansen’s bill underwent several amendments before advancing to second-round approval
  • LB180 – Linehan’s bill entered second-round approval

Thursday, April 8

  • LB274 – Lowe’s bill advanced to the third and final stage of consideration by the full Legislature

Friday, April 9

  • LB544 – Placed on Final Reading
  • LB544A – Placed on Final Reading

The Revenue Committee has also been working on two priority bill packages known as “Christmas trees,” which contain multiple bills. The first tax package, under Sen. Joni Albrecht’s LB595, covers sales tax bills which would:

  • Exempt tower leases for the purposes of providing internet access from sales and use tax
  • Extend the law that allows the Game and Parks Commission to collect the sales and use tax from the sale of motor boats, personal watercraft, all-terrain vehicles and utility-type vehicles
  • Provide a tax exemption to eligible Nebraska Advantage participants 
  • Redefine the sales and use tax exemption on agricultural machinery and equipment

LB432, an income tax shell bill, is the second priority bill for the Revenue Committee. Each committee is allotted two priority bills per session.

“This started out as what we call a shell bill,” Linehan said. “You have to introduce the bills in the first 10 days and you don’t know what every senator, what all 49 senators, are going to want. When you find bills you want to pass as a group, you put them into the shell.”

The LB432 shell bill includes LB299 to exempt firefighter cancer benefits from taxation and LB597 to provide a tax credit for the parents of stillborn children, among other bills.

Approximately 100 tax-related bills were introduced in the Legislature in the 107th Session that went to the Revenue Committee. Of those, the committee sent 22 to the floor of the Legislature. Along with the committee’s two priority bills, 17 tax-related bills became priority bills for senators this session, who are each allowed to select one priority bill, which guarantees a bill will get a floor vote.