The Nebraska Legislature continues to work on tax issues this session and this week advanced LB947 from the Revenue Committee on a 5-3 vote. Revenue Committee members voting in favor of the Governor's tax bill were: Senators Smith, Brasch, Groene, Larson, and Lindstrom; with Senators Friesen, Harr and Schumacher voting nay to advance the bill with Revenue Committee Amendment, AM2542, which becomes the bill.
The bill has several components and was explained in Governor Ricketts' press release below.
Understanding the Revised Property Tax Cuts and Opportunities Act
March 22, 2018
Media Contacts:
Taylor Gage, 402-471-1970
Luke Robson, 402-471-1967
"Thank you to Chairman Smith and the Revenue Committee for their significant investment of time and work to move the Property Tax Cuts and Opportunities Act (LB 947) forward. High property taxes are hurting farm families and homeowners across our state, and the Legislature needs to take action this session. I look forward to working with pro-growth Senators to deliver this major property tax relief for the people of Nebraska."
- Governor Pete Ricketts
TAX REFORM THAT PUTS WORKING NEBRASKANS FIRST
Governor Ricketts has been working with pro-growth Senators to get major property tax relief done this year.
- The Revenue Committee advanced LB 947 on March 20, 2018.
- The changes outlined below are reflected in the amendment to LB 947 adopted by the Revenue Committee.
The Nebraska Property Tax Cuts and Opportunities Act will deliver $2.3 billion in property tax relief over the next 10 years for Nebraska's ag producers and homeowners.
- Major New Property Tax Relief:
- Creates a new agricultural land tax credit and a new homeowner tax credit for property taxes paid commencing for tax year 2018.
- The ag land and homeowner credits start at 2 percent and 1 percent respectively of property taxes paid in 2018 and grow until reaching 20 percent.
- These tax credits are refundable tax credits.
- There is no cap on the amount of tax credits received on ag land and improvements.
- The proposal caps the homeowner credit to direct the relief towards average homeowners. When fully implemented, the maximum relief will be $500 for each homeowner.
- Protects Existing Property Tax Relief:
- Retains the existing Property Tax Credit Relief Fund at $224 million per year.
- Retains the existing Personal Property Tax exemption.
The Nebraska Property Tax Cuts and Opportunities Act builds a better tax climate for job creation and commits new, dedicated resources to workforce development.
- Scaled Down: Income tax reforms are dramatically scaled down in this amendment, making up less than 10 percent of the relief.
- Rate Parity: Business income tax top rate is reduced over 5 years to a rate of 6.84 percent to match the top individual income tax rate.
- Long-Term Commitment: Creates a dedicated source of workforce development funding of $5 million each year starting in 2018.
- Economic Development: Funding is directed to the Job Training Cash Fund at the Department of Economic Development.
NEBRASKANS NEED THE PROPERTY TAX CUTS & OPPORTUNITIES ACT THIS YEAR
Nebraska's tax laws are hurting hardworking Nebraska families and ag producers, and consequently hindering the ability of the state to grow in the future.
- Nebraska's property tax rates are uncompetitive nationally. The Tax Foundation ranks Nebraska's property taxes as 11th highest in the nation. More here.
- When you look at Nebraska's taxes another way on a per capita basis, we do just as poorly. Local property tax collections rank 12th highest at $1,757 per capita. More here.
- The U.S. Department of Agriculture projected farm income to decline in 2018. Steep declines the last few years have left Nebraska's ag producers struggling to pay high tax bills. More here.
Nebraska's business tax climate is uncompetitive regionally and it's only getting worse.
- Nebraska has the highest business income tax rate of any regional state except Iowa and the 23rd highest rate in the nation. More here.
- State tax laws are a significant factor considered by businesses and site selectors when determining where to create jobs and make investments.
- This reform is important to making Nebraska a more attractive place for site selectors who screen for tax rates when locating new projects.
With a low unemployment rate, Nebraska's job creators rank workforce development as their top priority as they seek to create more opportunities for hardworking families.
- Right now, the state has no job training funds in the state's traditional programs.
- Nebraska's job creators consistently identify workforce development as a top priority. Workforce quality and availability of labor topped the Nebraska State Chamber's annual member survey in 2017. More here.
- Nebraska has one of the lowest unemployment rates in the nation at 2.7 percent, which has forced the state to seek creative solutions to talent recruitment and workforce development.
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This week also saw multiple hours of debate on the three bills that make adjustments to the biennium budget that was passed last year.
LB944
, the "mainline budget bill had the most contentious debate and after six hours of bantering back and forth by senators, it still remains on Select File. Supporters of Title Ten Funding grants, which are federal grant dollars that are used to subsidize reproductive and preventive health services for low-income individuals, were at odds with those that do not wish to see these funds used at facilities that also perform abortions, thus a filibuster ensued. LB944 obtained 30 votes after the first three hours of floor debate on Select File and 32 after the subsequent three hours, still falling one vote short of the 33 needed for a Cloture to end debate and vote to move the bill from Select File.
By the Legislature's Rules, lawmakers have till the 50th Legislative Day to send the budget adjustments to the Governor, which is Tuesday of this coming week. Since LB944 does not appear on Monday's Legislative Agenda and is rumored to be up on Tuesday's, lawmakers will have to vote to suspend their own rules in order to move forward.
The other two budget bills, LB945, which transfers dollars from cash funds, and LB946, which transfers money from the cash reserve, both bills were placed on Final Reading on Wednesday of this week.
Around the Rotunda this week
As reported by several media sources this week, Senator Tom Briese who introduced LB1084, a bill to remove the sales tax exemption on a multitude of items, as well as, increase the state sales tax rate by ½% to 6%, the state tax on cigarettes by $1.50 per pack, etc. may see an effort by Senator Briese to pull the bill from the Revenue Committee. A pull motion takes 25 votes by the Legislature and is used to get a bill to the floor of the Legislature when it is "stuck" in committee.
Senator Briese who was quoted in the Lincoln Journal Star says: "I feel we have enough to pull it (from committee)."
"This is one of those watershed issues that deserves fair and full debate," Briese said.
No motion has been filed thus far by Senator Briese to attempt to pull the bill from committee.
LB477
, a bill introduced on behalf of NPCA by Senator John McCollister was advanced to the floor of the Legislature on Tuesday of this week by the Agricultural Committee on a 7-0 vote. Senator Chambers was not present for the executive committee session and thus did not vote.
Prior to advancing the bill the Committee adopted an amendment, AM2409, which will be replaced by AM2603 once debated on the floor of the Legislature.
AM2603
replaces Section 19 of the green copy of the bill with the following:
"Sell an advertised blend of automotive spark ignition engine fuel containing a ten percent ethanol blend or less at a price other than the price advertised to the consumer on any manual, digital, electronic, or any other form of advertising medium. Any location utilizing multi-product fuel dispensers with six or more fueling positions shall make such advertised automotive spark ignition engine fuel available at every fueling position. This subdivision does not apply to the sale of any fuel blends containing an ethanol content of greater than ten percent and does not prohibit discounts for cash payment, self-service, customer loyalty, or other similar discounts to the base price at each dispenser; or".
In addition, AM2603 will: "On page 4, strike lines 1 through 4; and strike beginning with "payments" in line 10 through "retail" in line 12 and insert "payment, self-service, customer loyalty, or other similar discounts to the base price at each".
LB1009
is a bill to provide a super-two rural highway classification and change maximum highway speed limits as prescribed, aka, allow the speed limit on I-80 to go to 80 miles per hour. AM2254 removed the ability to increase the speed limit on I-80 to 80mph but does allow for speed limits to increase from 60mph to 65mph on any four-lane divided state highway that is not part of the state highway system other than an expressway or freeway.
Next week lawmakers will continue with their late-night schedule working until around 10pm each evening, except the last day of the work week. This week senators will adjourn midday on Thursday for a four-day holiday weekend.
Speaker Sheer has also scheduled General File debate of the Consent Calendar bills and will take up the first half of them on Monday evening, with the second half to be addressed on Tuesday.
The following rules apply to Consent Calendar
- If any three members of the Legislature object to the bill being considered on Consent Calendar, please advise the Clerk in writing. Such requests must be filed with the Clerk prior to the expiration of 15 minutes of debate, at this stage of consideration, on the bill to be removed.
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- Upon either the completion of debate or the expiration of 15 minutes, whichever comes first, a vote shall be taken to advance the bill and on any pending motions or amendments pursuant to Rule 5, Section 6(d).
- Any amendment adopted, other than the standing committee amendment, which adds new subject matter to the bill will result in the bill not being scheduled at the next stage of debate.
On Monday, no later than 8:00pm the follow bills will be discussed on the first round of the General File Consent Calendar:
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Introducer
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Description
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Change references to a federal form relating to veterans
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Exempt certain commercial driver's license holders from hazardous waste endorsement requirements
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Modify deadlines and sanctions in the Surplus Lines Insurance Act
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Adopt federal banking provisions, revise powers of certain state-chartered financial institutions, and eliminate obsolete provisions
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Provide regulatory authority regarding reinsurance
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Change provisions relating to licenses of county highway and city street superintendents
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Change provisions relating to waiver of certain testamentary rights of surviving spouses
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Correct a provision relating to possession of a deadly weapon by a prohibited person
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Change a reporting date relating to the Nebraska Children's Commission
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Change reporting requirements for the Foster Care Review Office
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Change provisions relating to juvenile court bridge orders
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Change provisions relating to property tax protests
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Authorize self-service storage facility operator insurance producer licenses
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Provide for telehealth practice by physicians and physician assistants
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Change provisions relating to noncompete agreements under the Franchise Practices Act
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On Tuesday this week the second grouping of Consent Calendar bills will be taken up and include:
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Document
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Introducer
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Description
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Provide and eliminate duties relating to fire codes
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Change provisions relating to division fences
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Change training requirements under the Quality Child Care Act
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Change records relating to employee deaths which may be withheld from the public
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Require a bond election under the Public Facilities Construction and Finance Act
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Change provisions relating to audiovisual court appearances
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Provide for persons eighteen years of age or older to consent to certain behavioral health services
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Change the expenditure limit for a recognition dinner under the Local Government Miscellaneous Expenditure Act
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Provide a deadline for electronic voter registration
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Provide consumer protection and civil relief for servicemembers and provide a duty for the National Guard
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Change provisions relating to recording and filing fees
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Change terminology related to county government
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Change the sales tax sourcing rules for certain motor vehicles and trailers
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Require instruction and teacher education related to dyslexia
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Require annual reporting of school performance scores and classifications
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