Tax-Reduction Bills Introduced

Lawmakers began the second week of the 2014 legislative session by commencing with floor debate on carryover legislation. After adopting the permanent rules to govern the legislative session, lawmakers moved to consideration of bills on General File. Committee hearings began January 21, following the long, holiday weekend.

Gov. Dave Heineman delivered his State of the State address last week in which he highlighted his priorities to provide tax relief, reform the prison system, modify the “good time” law for prisoners, and expressed his continuing opposition to Medicaid expansion. 

With regard to the governor’s plans for tax relief, he is advocating reductions in agricultural land valuations for property tax purposes and reductions in the individual income tax rates. With the cash reserve at an all-time high of nearly $674 million, the governor wants to reduce taxes by between $370 million and $500 million over the next three years.  He noted that “small businesses need lower income tax rates to help grow their businesses and create jobs.”

A series of bills affecting a variety of tax issues have been introduced during the early days of the 2014 legislative session, including the following:

Legislative Bill 721-Tax Relief: Sen. Charlie Janssen (Fremont), one of three senators running for governor, has introduced this comprehensive tax relief bill. Under the legislation, individual income tax rates would be decreased by 20 percent over the next four years, with the highest income tax rate being lowered from the current 6.84 percent to 5.5 percent by 2018. The measure would also reduce agricultural land valuation from 75 percent to 65 percent of actual value for property tax purposes, exempt social security and military retirement benefits from income taxes and add $35 million to the state’s Property Tax Credit Cash Fund.

Legislative Bill 669-Property Tax Relief: Another candidate for governor, Sen. Beau McCoy (Omaha), has introduced LB 669 to transfer an additional $85 million from the state’s cash reserve to the state’s Property Tax Credit Cash Fund. The additional funding under LB 669 would increase the Property Tax Credit Cash Fund to $200 million annually. 

Legislative Bill 913-Property Tax Credit: Sen. Rick Kolowski (Omaha) has introduced LB 913, which would grant homeowners an income tax credit on property taxes they have paid on their primary residence. The amount of credit could exceed $250 for individuals and $500 for married couples filing jointly, with individuals earning more than $100,000 a year or married couples earning more than $200,000 ineligible to claim the credit.  

Legislative Bill 812-Repeal Of Inheritance Tax: Sen. Tom Hansen (North Platte) is the sponsor of LB 812, which would repeal the inheritance tax.  

The following workers’ compensation reform bills will be supported by NFIB:

Legislative Bill 731- Workers’ Compensation Act/First Injury Reports: Sen. Rick Kolowski (Omaha) has introduced a bill that would make first injury reports relating to their workplace injuries confidential, unless the employee waived confidentiality to allow the report to be made available for public inspection.

Legislative Bill 824-Workers’ Compensation Act/Temporary Disability Benefits: Sen. Scott Lautenbaugh (Omaha) is the sponsor of legislation that would deny temporary disability benefits to an employee if the employee’s employment is terminated for cause following the occurrence of an accident or occupational disease for reasons unrelated to the occurrence of the accident or occupational disease and the employer would have accommodated the employee’s temporary restrictions but for the employee’s separation from employment.

Legislative Bill 951-Workers’ Compensation Act/Lump Sum Settlements: Sen. Scott Lautenbaugh also introduced a bill that would clarify 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 in a timely fashion.  Finally, the bill would require the court to enter an order dismissing the action with prejudice upon the employer making payment as required in the release.

The following measures will be opposed by NFIB: 

Legislative Bill 793-Workers’ Compensation Act/Death Benefits: Sen. Norm Wallman (Lincoln) has introduced a bill that would base death benefits for dependants of a retired worker dying as a result of an occupational disease or latent and progressive injury or disease upon the wages earned when the retired worker was last employed by the employer found liable for the occupational disease or latent or progressive injury or disease. The bill would also establish a conclusive presumption that a retired worker who died as a result of an occupational disease or latent and progressive injury or disease suffered a loss of access to the labor market and suffered diminution of employability or impairment of earning capacity.

Legislative Bill 961-Workers’ Compensation Act/Exclusive Remedy: Sen. Tanya Cook (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.

Two bills to increase the state’s minimum wage surfaced.

Legislative Bill 943-Minimum Wage: The state’s minimum wage would increase to $9 per hour over the next three years under the provisions of LB 943, introduced by Sen. Jeremy Nordquist (Omaha). NFIB is opposed to raising the minimum wage, because it frequently hurts small businesses and raises unemployment, especially among younger and lower-skilled workers. NFIB is also opposed to increasing the state’s minimum wage beyond the level of the federal minimum wage.  

Legislative Bill 947-Minimum Wage: Another minimum wage bill (LB 947), introduced by Sen. Steve Lathrop (Omaha), would raise the minimum wage for workers’ who are paid by gratuities, with the minimum wage for such employees ultimately increasing to 70 percent of the minimum wage for other workers.
 
Paid Family Medical Leave

Legislative Bill 955-Paid Family Medical Leave: Another negative bill for small business is LB 955, introduced by Sen. Annette Dubas (Fullerton). Under the measure, employees in Nebraska would be entitled to up to six weeks’ worth of paid leave to care for a new baby, a sick spouse or an elderly parent. Funding for the paid family medical leave would come out of a statewide pool funded with a new payroll tax.