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Governor Signs Bill Reducing AG-Implement Sales Tax

Date: April 13, 2014

Update from State Director Bob Hallstrom

Lawmakers will reconvene on April 17 for the final day of the 2014 Legislative Session. The Legislature will approve a number of bills on Final Reading and consider potential over-rides of any gubernatorial vetoes before adjourning.  

Agriculture Implement Bill Signed Into Law

Gov. Dave Heineman has given his seal of approval to NFIB-supported Legislative Bill 96, legislation that will make agriculture implement business more competitive with those in surrounding states by exempting repair and replacement parts for agricultural machinery from the state sales tax.  

Any qualifying purchases made prior to October 1, 2014, are eligible for refund, provided a claim is filed with the Tax Commissioner within three years after the date of purchase. Prior to the bill’s approval, Nebraska was among eight states that still charged sales tax on these types of purchases.  It is estimated that the bill will provide $10.8 million of tax relief over the next five years.

Workers’ Comp. Legislation Sent to Governor

The Legislature has given final approval to an amended version of Legislative Bill 961. In its final form, LB 961 contains the provisions of Legislative Bill 951, which was introduced by Sen. Scott Lautenbaugh (Omaha).  

The bill now clarifies that a lump sum settlement that is not required to be submitted for approval by the Compensation Court shall be final and conclusive unless procured by fraud. The measure would also require amounts to be paid by the employer to the employee pursuant to the release to be paid within 30 days of filing the release with the Compensation Court, with a 50 percent penalty to be added if not made within the 30 day time period.  

Finally, the bill would require the court to enter an order dismissing the action with prejudice, except for expenses specifically excluded from the release. NFIB supported LB 961 as approved by the Legislature.  

Under current law, a lump sum settlement may become final without court approval, provided the employee is represented by counsel. The law requires a release to be filed with the Compensation Court which is signed and verified by the employee and the employee’s attorney. The release constitutes a full and complete discharge from further liability for the employer on account of the injury, including future medical, surgical, or hospital expenses, unless such expenses are specifically excluded from the release.

The provisions of the bill are designed to address issues raised by the Nebraska Supreme Court in the case of Holdsworth v. Greenwood Farmers Co-Op, in which it was determined that the waiting time penalty and attorney fees do not apply to lump sum settlements for which court approval is not required. With the passage of LB 961, employers and employees will have additional incentive to utilize the lump sum settlement without court approval process.  

In its original form, LB 961, introduced by Sen. Tanya Cook (Omaha), would have waived workers’ compensation as the exclusive remedy if an employer is guilty of willful negligence.  The bill would also have deemed a finding by the Nebraska Workers’ 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. NFIB had opposed LB 961 in its original form and the objectionable provisions were removed in the final version of the bill.  

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