Nebraska Legislature a Third of the Way Through its Session

Date: February 19, 2021

Appropriations Committee releases its preliminary budget

State Director Bob Hallstrom reports from Lincoln on the legislative and political week ending February 19

The Legislature has completed one-third of the long, 90-day session as it adjourned for an extended weekend on Friday. On Tuesday, the first half of the day was devoted to floor debate on bills advanced from committee. Lawmakers efficiently processed 23 bills which moved to the second round of debate.

Committee Activity

NFIB appeared before multiple committees during the past week to present testimony on the following bills:

  • Legislative Bill 139 – COVID-19 Liability Protection Act: Sen. Tom Briese (Albion) introduced a measure (LB 139) that would prevent a person from bringing or maintaining a civil action seeking recovery for any injuries or damages sustained from exposure or potential exposure to COVID-19 unless the plaintiff can prove, by clear and convincing evidence, that the civil action relates to a minimum medical condition (a diagnosis of COVID-19 that requires inpatient hospitalization or results in death) resulting from gross negligence or willful misconduct. The bill does not affect the rights or limits under the Nebraska Workers’ Compensation Act. (NFIB Position – Support)

In his opening remarks on the legislation at the committee hearing, Senator Briese described LB 139 as “reasonable, common-sense legislation.”

In testifying in support of the measure, NFIB suggested that Nebraska should join the more than 20 states that have adopted similar COVID-19 business liability protections to stop the threat of lawsuits from delaying the recovery of our state’s economy.

Thank you to the many NFIB small business owners who responded to an Action Alert by contacting members of the Judiciary Committee to encourage support for LB 139. The Committee is not expected to take any action on the bill in the near future, so continuing contacts with committee members would be beneficial.

  • Legislative Bill 310 – Inheritance Tax Exemptions: Sen. Robert Clements (Elmwood) has introduced LB 310, which would increase, commencing January 1, 2022, the inheritance tax exemption for immediate family members from $40,000 to $150,000 and would reduce the rate of taxation beginning on January 1, 2023, from 1 percent to .75 percent and on January 1, 2024, and every year thereafter, to .50 percent The bill would also, commencing on January 1, 2024, increase the exempt amount to $160,000 and increase the exempt amount by $5,000 for each subsequent calendar year. Commencing January 1, 2022, the bill would decrease the inheritance tax exemption for uncles, aunts, nieces or nephews, from 13 percent to 11 percent and increase the exemption amount from $15,000 to $60,000; beginning January 1, 2023, the rate of taxation would be reduced to 9 percent and the exemption amount increased to $62,500 and beginning January 1, 2024, the rate of taxation would be decreased to 6 percent and the exemption amount increased to $65,000 and increased by $2,500 each calendar year thereafter. Finally, commencing January 1, 2022, the bill would decrease the rate of taxation for all other persons from 18 percent to 15 percent and increase the exempt amount from $10,000 to $40,000; beginning on January 1, 2023, would decrease the rate of taxation to 12 percent and increase the exempt amount to $42,500; and beginning on January 1, 2024, and each year thereafter, decrease the rate of taxation to 9 percent with the exempt amount to be increased to $45,000, and increased by $2,500 each year thereafter. (NFIB Position – Support)
  • Legislative Bill 622 – Property Tax Valuations: Sen. Curt Friesen (Henderson) introduced legislation (LB 622) which would limit increases in total assessed value of all non-agricultural real property for any year to not more than 3 percent greater than the total assessed value of all such property in the prior year, excluding any new growth (increase in real property valuation due to improvements to real property as a result of new construction and additions to existing buildings and any other improvements to real property which increase the value of such property) occurring since the prior year’s assessment. The bill would also limit increases in total assessed value of all agricultural land and horticultural land for any year to not more than 3 percent greater than the total assessed value of all such property in the prior year, excluding any new growth occurring since the prior year’s assessment. (NFIB Position – Support)

Upcoming Hearings

NFIB will be appearing next week to present testimony on the following bills:

  • Legislative Bill 410 – Income Taxation: Introduced by Sen. Lou Ann Linehan (Elkhorn), LB 410 would, for tax years beginning on or after January 1, 2021, allow individuals itemizing deductions on their federal tax return to subtract from federal adjusted gross income on their state income tax return the greater of either (a) the standard deduction; or (b) the sum of federal itemized deductions, except for the amount for state or local income taxes included in federal itemized deductions before any federal disallowance; and the total amount of state and local property taxes reported on the federal return before any federal disallowance or cap, less the amount of state and local property taxes actually included in federal itemized deductions. (NFIB Position – Support)
  • Legislative Bill 625 – Income Tax Surcharge: Sen. Tony Vargas (Omaha) has introduced LB 625, which would impose a surtax, for taxable years beginning on or after January 1, 2022, on high–income individuals for the purpose of providing funds for early childhood education in Nebraska. The bill would impose a surtax of 4 percent of the amount of taxable income in excess of $1 million for individuals filing jointly or head of household and 4 percent of the amount of taxable income in excess of $500,000 for all other individuals. (NFIB Position – Oppose)
  • Legislative Bill 680 – Income Taxation: Senator Linehan has also introduced LB 680, which would reduce the tax rate on corporate income in excess of $100,000 from 7.81 percent to 6.84 percent beginning January 1, 2022. (NFIB Position – Support)

Appropriations Committee Releases Preliminary Budget

The Appropriation Committee issued its preliminary budget on Tuesday morning. The Committee has moved much more quickly this session in finalizing the budget process in hopes of adopting the budget more quickly in case the pandemic has an adverse impact on the session. Growth under the preliminary budget is -1.3 percent in fiscal year 2022 and 2.5 percent in fiscal year 2023 for a two-year average of 0.6 percent.

Previous Reports and Related News Releases

Photo courtesy of Unicameral Update, the Nebraska Legislature’s official news source since 1977

 

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