As time becomes more and more valuable in the 2018 Legislative Session lawmakers chug along at a turtle's pace. This pace is mainly set by Senator Chambers, who continues to filibuster bills in order to make his point on the eradication of black tailed prairie dogs on your neighbor's property, who are a nuisance on your property, and to try and gain leverage.
With only two more weeks of public hearings, senators will have more time each day, actually twice as much time, to debate bills on the floor. The last scheduled day for public hearings is February 27th, with all day floor debate beginning on the 28th.
Even though there are only two weeks of public hearings, there are a multitude of bills that await their day in the public eye. Here are the ones of interest this coming week.
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2018 Hearings of Interest
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Hearing Date
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Bill Number
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Introducer
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Committee
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On Liner
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2/20/18
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LB856
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Morfeld
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Transportation
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Adopt the Internet Neutrality Act, change communications provider requirements under the Nebraska Telecommunications Regulation Act, and change financial assistance provisions relating to the Nebraska Internet Enhancement Fund
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2/21/18
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LB1022
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Schumacher
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Revenue
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Adopt the Irrigation Tax Act (1/10thcpg) and change the valuation of agricultural land for property tax purposes. Adds language to disregard for purposes of determining the land's taxable value the value of irrigation.
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2/21/18
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LB814
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Schumacher
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Government
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Provide a procedure to resolve protests of government service contract procurement decisions
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2/21/18
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LB811
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Lindstrom
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Judiciary
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Change prohibited uses of scanning devices and encoding machines. Makes important updates to Nebraska law to reflect new payment card technology. These changes are needed because payment card readers in the United States are transitioning away from magnetic strips and stripes and towards computer chips.
The bill also adds criminal penalties to posses a scanning device or encoding machine with the intent to use in a manner without proper authorization from the authorized user of the payment card, the issuer of the authorized user's payment card or a merchant.
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2/22/18
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LB1076
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Friesen
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Revenue
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Increase the documentary stamp tax and provide for the use of the revenue. Increase the rate on all documents by $0.25@ and transfers $0.50 of stamp fees to the Property Tax Credit Cash Fund.
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2/22/18
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LB1075
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Friesen
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Revenue
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Impose a fee on transfers of real estate. The fee shall be equal to one percent of the value of the real estate.
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2/22/18
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LB1016
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Briese
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Revenue
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Adopt the Money Transmission Fee Act and provide income tax credits. Puts a $5 fee on money transfers for individuals only under $166.66 and a fee of 3% if over $266.66. This fee only applies to transfers to other states or outside of the United States, except that such term shall not include a financial institution transmitting money or monetary value from an account or on behalf of a depositor.
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2/23/18
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LB1100
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Erdman
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Revenue
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Change the valuation of agricultural land and horticultural land.
The proposed changes include (for property tax valuations):
- Move from market based to production-based valuation.
- Uses watering data from NRSA and crop price data from USDA in figuring production values.
- Establishes an Agricultural Land Valuation Board made up of eight members:
- livestock production,
- agricultural crop production,
- a farm advocacy organization,
- someone with a county assessor certificate,
- someone from the Department of Agricultural Economics at the University of Nebraska-Lincoln,
- and someone from the Nebraska Ethanol Board.
- Nebraska's Tax Commissioner serves as the seventh member of the board.
- Nebraska's Director of Agriculture serves as the eighth member of the board and serves as the board's chair.
The Agricultural Land Valuation Board is charged with creating a manual detailing the methods to be used for agricultural land valuations across the state and for setting appropriate discount rates to be used for calculating agricultural land valuations.
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2/23/18
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LB1104
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Friesen
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Revenue
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Change provisions relating to the special valuation of agricultural or horticultural land.
Would require that a land owner located in a county with more than 1,000 inhabitants and that owns more than five contiguous acres to prove that they received at minimum15% of their gross income from agricultural or horticultural activities each year.
If such land owner is not able to prove the 15% criteria, they lose the special valuation exemption for agricultural/horticultural use.
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2/23/18
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LB910
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Bolz
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Revenue
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Adopt the Property Tax Circuit Breaker Act and change the funding of the Property Tax Credit Act.
The purpose of the Property Tax Circuit Breaker Act is to provide tax relief through a refundable income tax credit for taxpayers with limited income available to pay property taxes.
To qualify a land owner (in state resident) would have to have less than $350,000 in federal adjusted gross revenue in a taxable year. Out of state land owners would have a threshold of less than $175,000.
The program's credits are capped at $105 million annually, at which point they are prorated on an aggregate request basis.
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2/23/18
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LB693
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Blood
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Judiciary
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Regulate and create criminal offenses regarding the use of unmanned aircraft systems
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Senators and committees continued to name priority bills this week
in anticipation of the priority bill designation deadline, which is this coming Tuesday, February 20th, upon the day's session adjournment.
The deadline to make a Speaker Priority request was this past Wednesday, with the Speaker announcing his 25 Speaker Priority bills on February 21st.
Thus far there are 32 priority bills (senator and committee) that have been named. After Wednesday of next week, when the Speaker names his 25 priority bills and Tuesday's deadline on senator and committee priority designations there will be around 104 priority bills, depending on how many committee priority bills there are in the end.
As you can read from the list of priority bills later in this report, a half dozen or so have had floor debate this session, a couple are on Final Reading, and a few have been stalled, aka, killed for the year. The remainder of them will be vying for floor time this session in the hope of making it to Governor Ricketts' desk and the potential for his signature making them law.
The issues of personal and corporate income taxes, along with property tax relief continue to be in the lime light this session. What will happen yet this session, if anything, is yet to be determined. There are several bills that have been introduced this session to make adjustments to all three, which one(s) that will make it to the floor of the legislature for debate is a unknow at this time. They are being referred to as "works in progress".
Those bills dealing with income and property taxes that have had the most publicity thus far are:
LB 1090 (Smith)
is needed to offset the recent federal Tax and Jobs Cut Act. Specifically, the $134 personal exemption credit and establish standard deductions for single tax payers of $6,750 and $9,900 for head of household filers.
The Revenue Committee held a public hearing on the bill on February 7th and is yet to act.
LB947 (Smith on behalf of the Governor)
would adopt the
Nebraska Property Tax Cuts and Opportunities Act, change income tax rates, and eliminate certain exemptions and credits, is a bill that's intent is to:
- Property tax - Gives homeowners (capped at $230) and ag land owners only (Nebraska resident land owners), removing property tax credits for commercial and industrial property tax payers, a 10% refundable tax credit against property taxes paid and would be offset by state sales and income tax revenues.
The bill also repeals the current property tax credit program, approximately $225 annually in funding to offset property taxes paid by Nebraskans.
- Income tax - reduces the top corporate and personal income rate from 7.81% and 6.84% respectively to 6.99% over a two-year period.
As indicated in the bills title, it also includes an "opportunities", aka jobs training component. This will be in the form of $5 million for two years for "key" jobs.
The bill had a public hearing on January 31st and still awaits committee action.
You may find a more detailed description of the bill's intent by reading the Unicam Update on the bill, as the bill's Statement of Intent did not contain Governor Ricketts' proposal of removing the tax credit triggers. During his testimony he said he would consider accelerating the tax credit to 12% this year and a 14% in 2019. The goal would be to reach a maximum of 30% by 2031, increasing the credit by 2% every three years.
LB 829 (Erdman and his priority bill)
is a property tax relief bill. The bill would enable Nebraska property owners to get a credit or refund on their State income tax return equal to 50% of that portion of their property tax bill which goes to fund K-12 education. For most property owners LB 829 will result in a 30% reduction in their property taxes.
LB829 had its public hearing before the Revenue Committee on January 25th and has not seen any action by the committee thus far.
LB1084 (Briese and his priority bill)
would make multiple changes to Nebraska taxing authority in order to provide immediate and substantial property tax relief while shielding local school district funding.
The bill attempts to eliminate the current sales tax exemption on 25 plus items including, but not limited to: soda pop, candy, bottled water, painting services, investment services, personal care services, real estate services, meat slaughtering, motor vehicle and, motorboat trade-ins, etc.
At the same time, it looks to increase the cigarette tax by $1/pack, apply a surcharge (2.5% on incomes over $500,000 to $1 million and 5% on those over $1,000,000, eliminate the private property tax exemption, and direct any increase in sales tax revenue from internet sales to the property tax credit fund. - LB1084 contains the same language as in the amended version of LB44, the internet sales tax bill. - The bill is estimated to raise between $700-$800 million in annual revenues putting $600 million into the property tax credit fund.
The public hearing on LB1084 was held on February 8th before the Revenue Committee and the committee has yet to take any action on the bill.
You can find a more detailed description of the bill's financial impact by reviewing the bill's Fiscal Note.
Yet to come is LB1088,
which would adopt the Nebraska Education Formula and the Remote Seller Sales Tax Collection Act, terminate the Tax Equity and Educational Opportunities Support Act and the Property Tax Credit Act, and eliminate certain tax exemptions.
This bill is 200 pages in length and among some of its provisions:
- it increases the state sales tax rate by ½% from 5.5% to 6.5%;
- removes the exemption from sales and use tax for repair and replacement parts of motor vehicles, watercraft, rolling stock (both railroad and common/contract carriers).
- Eliminates the Property Tax Credit Fund and appropriates any funds in such to the Nebraska Educational Fund that is established in the bill.
- Adds a similar section to that of LB44 (Internet Sales Tax bill) to collect sales and use tax on internet sales.
- Removes the same exemptions that are found in LB1021 in reference to fuels, and agricultural equipment for sales and use tax.
- Makes multiple changes to school aid funding and school/teaching requirements.
LB1088 is set for public hearing before the Revenue Committee on February 27th, the last day of hearings for the committee.
Both LB1088 and LB1084 could be considered offsets to LB829 in replacing the $1.1 billion that LB829 or its accompanying petition intuitive would cost the State of Nebraska in having to replace loss property revenues to K-12 education.
To View More Details of Priority Bills, go to:
https://nebraskalegislature.gov/session/priority.php
