The time for new bill introductions has expired with a total of 655 bills and four proposed constitutional amendments to be addressed by the Legislature this session. Committee hearings have commenced and the initial floor debate of the session will occur on January 23, with the initial bills advancing from Committee ready for consideration.
Governor’s State-of-the-State Address
Gov. Pete Ricketts presented the annual State-of-the-State address on Thursday, January 22. He unveiled a two-year budget plan that would reduce the growth in state spending to 3.1 percent during the 2015-17 fiscal biennium. Areas in which spending increases have been proposed include K-12 and higher education, prison facilities and Medicaid provider rates.
The governor will also be promoting property tax relief through the infusion of an additional $60 million annually into the Property Tax Credit Cash Fund and advocating for a phased-in reduction in agricultural land valuations from 75 percent to 65 percent. He has also proposed expansion of tax breaks for benefits received by retired military personnel.
Finally, the governor pledged to tackle the overregulation of business noting that, “while the cost of regulation is hidden, it’s a job killer all the same.” The Governor pledged to have all state agency directors prioritize innovative ways to reduce regulatory burdens and bureaucratic delays.
Bills of Interest to Small Business
Workers’ Compensation
- Legislative Bill 556-Workers’ Compensation Act – Exclusive Remedy: Sen. Rick Kolowski (Omaha) is the sponsor of legislation that would waive workers’ compensation as the exclusive remedy if an employer is guilty of willful negligence. The bill would also deem a finding by the Nebraska Worker’ Compensation Court that an employee has been injured by reason of the willful negligence of the employer to be determinative and binding on the parties in any subsequent action for damages at law.
- Legislative Bill 600 – Workers’ Compensation – Self Insured Trust Funds: Sen. Laura Ebke (Crete) has introduced legislation that would authorize trust funds which are required to be established under the Workers’ Compensation Act to be invested in the same manner authorized for insurers under the Insurers Investment Act. Currently, under Neb.Rev.Stat. Section 48-145, self-insureds are require to post financial security in an amount set by the Workers’ Compensation Court, to provide reserves for the self-insured’s anticipated claims for that year. The financial security requirement can be satisfied by purchasing a bond securing the amount required by the Court, or by creating a trust that holds the full amount required by the Court. The Court has placed significant restrictions on the investments that can be made with the funds held in trust and LB 600 would allow the funds to be invested in the same manner, and under the same regulatory restrictions, that apply to insurer’s investing their reserves under the Insurer’s Investment Act.
Taxation
- Legislative Bill 73 – Modern Tax Act: LB 73, introduced by Sen. Paul Schumacher, effective Jan. 1, 2016, would impose a tax of 5 ½ percent on the amount of interest paid by a qualified debtor (resident of Nebraska, trust created under Nebraska law or business entity organized under Nebraska law or which has its principal office located in Nebraska) on any eligible loan (loan secured by real estate located in Nebraska, loan secured by filing Uniform Commercial Code filing, loan secured by a security or commercial paper held in or delivered to a creditor in Nebraska, loan secured by a vehicle titled in Nebraska or loan over which Nebraska courts have jurisdiction and venue in any action for default in payment. The bill would require the lender to collect the tax from the qualified debtor at the time any regularly scheduled payment on the eligible loan is due and to remit the taxes collected to the tax commissioner on a monthly basis. Loans to governmental entities, publically traded bonds and loans the proceeds of which are used by a licensed financial institution or insurance company to make loans subject to the tax would be exempted.
- Legislative Bill 523 – Income Taxation: Introduced by Sen. Kate Sullivan, LB 523 would increase income tax rates to facilitate increase state support for public education, shifting some of the tax burden for education from property taxes to income taxes. Beginning Jan. 1, 2016, the bill would increase the lowest individual income tax bracket from 2.46 percent to 2.56 percent; the second lowest income tax bracket from 3.51 percent to 3.65 percent; the third lowest income tax bracket from 5.01 percent to 5.21 percent and the highest individual income tax bracket from 6.84 percent to 7/11 percent. The measure would also, beginning Jan. 1, 2016, increase the corporate income tax rate from 5.58 percent to 5.80 percent on the first $100,000 of taxable income and from 7.81 percent to 8.12 percent on all taxable income in excess of $100,000.
- Legislative Bill 178 – Property Taxation – Valuation of Agricultural Land and Horticultural Land: LB 178, introduced by Sen. Dan Watermeier, would reduce the valuation of agricultural land and horticultural land for school district taxation purposes from 70 percent beginning in 2016 to 55 percent in 2019 and all years thereafter.
- Legislative Bill 278 – Sales and Use Taxation: Introduced by Sen. Burke Harr (Omaha), LB 278 would exempt motor vehicle washing and waxing services from the sales and use tax.
- Legislative Bill 256 – Sales and Use Taxation – Property Tax Relief: Sen. Dave Bloomfield (Hoskins), has introduced legislation that would increase the state sales tax rate from five and a half percent to six percent, effective October 1, 2015, with the proceeds from the extra one half of one percent in sales taxes to be credited to the property tax credit cash fund.
- Legislative Bill 259 – Personal Property Tax Relief Act: Introduced by Sen. Mike Gloor, LB 259 would exempt the first $25,000 of depreciable tangible personal property from the Personal Property Tax. Counties would be reimbursed by the state for revenues lost due to the personal property tax exemption.
- Legislative Bill 364 – Property Tax Credit Cash Fund: Introduced by Sen. Dan Watermeier (Syracuse), LB 364 would transfer $60 million from the General Fund to the Property Tax Credit Cash Fund in fiscal years 2015-16 and 2016-17.
- Legislative Bill 387 – Property Tax Credit Cash Fund: Sen. David Schnoor (Scribner) has introduced legislation (LB 387) that would transfer $60 million from the Cash Reserve Fund to the Property Tax Credit Cash Fund on or before December 15, 2015
- Legislative Bill 309 – Property Tax Credit Cash Fund: Sen. Al Davis introduced LB 309 which would appropriate $25 million from the General Fund to the Property Tax Credit Cash Fund for fiscal years 2015-16 and 2016-17.
- Legislative Bill 398 – Personal Property Tax: Sen. Burke Harr has also introduced legislation (LB 398) that would exempt all tangible personal property from property taxation, effective January 1, 2017.
- Legislative Bill 442 – Property Tax Credit Cash Fund: Sen. Kate Bolz also introduced legislation that would appropriate $20 million in FY 2015-16 and 2016-17 from the General Fund to the Property Tax Credit Cash Fund.
- Legislative Bill 574 – Intangible Personal Property Tax Act: Sen. Al Davis introduced legislation that would tax intangible personal property (stocks, bonds, bank accounts, certificates of deposit, notes receivables, and mutual funds) at a rate equal to $1.50 for every one hundred dollars of valuation. The bill would allow individuals to exempt up to $150,000 of the fair market value of intangible personal property otherwise subject to the tax (up to $300,000 for married couples filing joint intangible tax returns).
Upcoming Hearings
- Legislative Bill 83 – Prohibition on Employee Wage Disclosure: LB 83, introduced by Sen. Tanya Cook (Omaha), has been scheduled for public hearing before the Business and Labor Committee on Monday, January 26. The measure would prohibit an employer from requiring non-disclosure of wages as a condition of employment and prevent an employer from requiring an employee to sign a waiver or other document purporting to deny an employee the right to disclose the employee’s wages. The measure would prohibit an employer from taking any adverse employment action against an employee for disclosing an employee’s own wages or discussing another employee’s wages that have been disclosed voluntarily. The bill would also establish a cause of action under the Nebraska Wage and Payment and Collection Act for violations by an employer with the employee entitled to receive reinstatement, back pay, restoration of loss service credit, money damages and costs and reasonable attorney’s fees. NFIB will present testimony in opposition to this legislation.
Small Business Day at the Captiol
NFIB/Nebraska will co-sponsor Small Business Day at the Capitol, March 31, in Lincoln.
NFIB’s co-sponsors are the Nebraska Chamber of Commerce and Industry, the Greater Omaha Chamber of Commerce, the Lincoln Chamber of Commerce, the Lincoln Independent Business Association and Nebraskans For Workers’ Compensation Equity and Fairness.
Small Business Day gives NFIB members an opportunity to network with other small-business owners. Gov. Pete Ricketts is expected to speak, and there will be a legislative briefing by state senators.
Details on the time and location of Small Business Day at the Capitol will be released soon. Check www.NFIB.com/NE for the latest information.
Past Reports
