The Room Where it Happens
Governor Ricketts signed the $9.3 billion adjusted state budget without so much as a single line-item veto. Hrumph! Who doesn’t enjoy a good veto override battle on the floor of the Legislature?
The Super Seven emerged from “the room where it happens” with a Grand Compromise. A package of economic development incentives, property tax relief, and a $300 million gift to the University of Nebraska Medical Center.
The compromise was immediately amended (AM 3316) by “Scheer” coincidence into LB 1107, a Speaker Scheer priority bill that just so happened to be available on General File. Floor debate began Wednesday, and LB 1107 advanced to Select File on Thursday (43-2-4). Select File debate is Tuesday morning.
- Property Tax Incentive Act is a refundable income tax credit based on the amount a taxpayer pays in property taxes to their school district during the previous year, not including taxes levied for bonded indebtedness or a levy override. In 2020, total credits will equal $125 million. For 2021 – 2023, credits will increase based on growth in the state’s net tax receipts and the cash reserve level. In 2024, the credit will cap at $375 million. Each year after that, total credits will be $375 million-plus the growth in total assessed value for all real property from the prior year to the current year. The Property Tax Credit Relief Fund remains funded annually at $275 million.
- ImagiNE Nebraska Act creates a new business tax incentive act. The Department of Economic Development director cannot approve applications that would include refunds or credits for a calendar year in which a “base authority” would be exceeded, without the governor’s approval. The base authority is $25 million in calendar years 2021 and 2022, $100 million for 2023 and 2024, and $150 million for 2025. In 2026, the director will adjust the base authority every three years to equal 3% of the state’s general fund net receipts. The unused base authority would carry forward to the following year, but base authority before 2026 could not exceed $400 million.
- Transformational Projects Act requires the state to provide $300 million toward a potential $1.6 billion academic hospital and all-hazards disaster response facility at the University of Nebraska Medical Center.
Mercifully, the Legislature adjourns sine die on Thursday. Thank you, COVID, for the longest short session in Nebraska history.
Advanced to the Governor
LB803 (Hughes) MONITOR – SPEAKER PRIORITY BILL
- Creates a new promotional checkoff program for pulse crops, including dry peas, lentils, chickpeas or garbanzo beans, faba beans, and lupine. The bill also expands a waiver of a distance limitation for overweight/oversize vehicles transporting crops to include pulse crops.
Some Provisions Amended Into LB 1107
- The Nebraska Transformational Project Act would provide $300 million in state funding to the University of Nebraska Medical Center for their NExT Project. Before receiving $300 million, UNMC must show the economic impact to Nebraska is at least $2.7 billion during the planning and construction period and at least $4.9 billion over ten years.
- NExT Project has two components: a state of the art academic medical center facility and a federal all-hazard disaster response military and civilian partnership.
- Retains the state’s annual $275 contribution to the Property Tax Credit Fund and sets this amount as the fund minimum. Distribution to property taxpayers is based on the value of their property.
- Year 1: Creates another $125 million Property Tax Credit Fund. Distribution to taxpayers would be based on property taxes paid.
- Year 2: Adds new tax revenue that exceeds 3.5% growth in the state budget (up to $125 million) to the new PTCF.
- Year 3: Any unappropriated revenue from the prior year that exceeds 3.5% growth (up to $125 million), carries over to the next year.
- The goal is to grow the Property Tax Credit Fund to $650 million.
- Potential revenue from the racetrack gambling ballot initiative would add to the fund.
LB1107 (Scheer) SEE ABOVE
LB919 (Wayne) MONITOR
- Hemp cultivator, processor-handler, and broker license and renewal applications shall only be denied if they are incomplete or deficient, including for nonpayment of the required application and registration fees, or if the applicant does not meet minimum qualifications.
LB946 (Briese) MONITOR
- The bill lowers the sales tax rate and eliminates exemptions on services. Service includes all activities that are engaged in for other persons for a consideration and that involve predominantly the performance of a service as distinguished from selling or leasing tangible personal property.
LB974 (Linehan) MONITOR
- A complex property tax reduction and school funding bill. As amended by AM2433, the bill would reduce property taxes as a significant source of funding for K-12 education. Unless expressly exempt:
- Real property would be valued at 95% of actual value for the tax year 2020, 91% in the tax year 2021, and 86% in 2022 and after that.
- Agricultural and horticultural land would be valued at 65% of actual value in the tax year 2020, for purposes of taxes levied by a school district and 75% of actual value for taxes levied by other political subdivisions.
- Agricultural and horticultural land would be valued at 60% of actual value in the tax year 2021, for purposes of taxes levied by a school district and 75% of actual value for taxes levied by other political subdivisions.
- Agricultural and horticultural land would be valued at 55% of actual value in the tax year 2022, and each tax year after that, for purposes of taxes levied by a school district and 75% of actual value for taxes levied by others.
LB1159 (Stinner) SUPPORT
- Extends the initial training period for a noncertified pesticide applicator from 60 to 120 days prior to obtaining an initial commercial or noncommercial applicator license. The bill also authorizes unlimited exam attempts for the noncertified applicator during that training period.