Deadline for Bill Introduction Passes in Lincoln

Date: January 19, 2018

NFIB readies for fight against costly workers’ compensation proposal

State Director Bob Hallstrom reports from the State Capitol on the legislative week ending January 19

The past week saw the commencement of Committee hearings and expiration of the time for new bill introductions. Lawmakers, in recognition of the short, 60-day session, and the existence of many contentious issues, exercised great restraint in introducing only 468 new bills.

The Legislature continues to conduct floor debate on pending measures in the mornings, with committee hearings occupying the afternoon sessions.

Workers’ Compensation

Legislative Bill 858 –Workers’ Compensation – Disability Benefits: The Business and Labor Committee will conduct a public hearing on LB 858 January 22. Introduced by Sen. Matt Hansen (Lincoln), and opposed by NFIB, LB 858 would provide annual adjustments for total disability benefits in proportion to the annual increase in the state’s average weekly wage. The automatically escalating disability benefits proposed under LB 858 will result in increased costs for employers. (NFIB Position – Oppose)

Tax Reform

Legislative Bill 947 – Nebraska Property Tax Cuts and Opportunities Act: Introduced by Sen. Jim Smith (Papillion), LB 947 would provide increased property tax relief by restructuring the state’s current Property Tax Credit Cash Fund into a new, refundable income tax credit available only to owner-occupied households in Nebraska and to agricultural landowners who reside in the state.

The income tax credit would be equal to 10 percent of the property tax bill on taxpayers’ homes or farms, with the credit for homeowners capped at $230. Property tax relief in future years would result when state revenue exceeds revenue forecasts. Individual and corporate income taxes would also be reduced, with the top individual income tax rate dropping from 6.84 percent to 6.75 percent in 2019 and to 6.69 percent in 2020.

The maximum corporate tax rate (paid on income of more than $100,000) would be reduced from 7.81 percent to 6.75 percent in 2019, and to 6.69 percent in 2020. The bill would also propose an additional $10 million in funding over the next two years for workforce development and would eliminate the exemption for the first $10,000 from personal property taxation.

Legislative Bill 1084 – Property Tax Request Limitation Act: Sen. Tom Briese (Albion) has introduced LB 1084, which would

  • eliminate the personal property tax exemption (first $10,000) for tax years beginning on or after January 1, 2019
  • repeal a series of sales tax exemptions, including, motor vehicles and motor boat trade-ins; newspapers; laundromats; tele floral deliveries; school lunches; admissions to school events; fine art purchases by a museum; motor vehicle cleaning services; cleaning and repair of clothing; cleaning, maintenance and repair of other tangible personal property; maintenance, paining and repair of real property; entertainment admissions; personal care services; lawn care, gardening, and landscaping services; pet-related services; storage and moving services; other personal services, taxi, limousine, and other transportation services; other real estate services; and prepaid calling arrangements
  • sunset a series of tax incentives including the New Markets Job Growth Investment Act effective January 1, 2019
  • increase the cigarette tax by $1 per pack, with funding from the cigarette tax increase to go to the Property Tax Credit Cash Fund
  • would impose a surtax on high-income individuals (2.5 percent on incomes between $500,000 and $1 million and 5 percent on incomes of at least $1 million)
  • increase the state sales tax from 5.5 percent to 6 percent effective October 1, 2018
  • repeal the resident apportionment of multi-state, pass-through income from S Corporations and limited liability companies
  • reinstate the state income tax on premature or lump-sum distributions from qualified retirement plans
  • repeal the exclusion of capital gains on the sale of employee-owned stocks from Nebraska taxable income.

Other Bills of Interest to Small Business

Legislative Bill 978 – Garnishments: Sen. Burke Harr (Omaha) has introduced LB 978 which would:

  • establish a standard notice of garnishment form for wage garnishments
  • provide for electronic payment of garnishment amounts
  • reduce the aggregate disposable earnings of an employee for any work week, which are subject to garnishment to the lesser of 20 percent (was 25 percent) of disposable earnings for the week or the amount by which disposable earnings for the week exceed 40 (was 30) times the federal minimum hourly wage.

The bill would also allow an employer withholding earnings for more than one employee to transfer garnishment payments to the court by electronic payment and combine the amounts in one electronic payment, provided that it specifies the name, case number, and amount for each employee. Payments made by check, draft, or other similar paper instrument may not be combined in one payment and must be issued separately.

Legislative Bill 1014 – Prohibition on Employee Wage Disclosure: Sen. Patty Pansing Brooks (Lincoln) has introduced LB 1014 which 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 employees’ 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 lost service credit, money damages and costs and reasonable attorney’s fees.

Legislative Bill 1015 – Workers’ Compensation – Confidentiality of First Injury Reports: LB 1015, also introduced by Sen. Tom Briese (Albion), would prohibit access to first reports of injury which reveal the identity of the employee who is the subject of the report. The measure has been referred to the Government, Military and Veterans Affairs Committee.

Legislative Bill 1021 – Sales Tax on Agricultural Services: Introduced by Sen. Paul Schumacher (Columbus), the legislation would repeal a series of sales and use taxes related to agriculture, including:

  • semen and insemination services
  • feed, water, veterinary medicines, and agricultural chemicals used in caring for animal life, the products of which ordinarily constitute food for human consumption
  • agricultural chemicals for use in commercial agriculture and oxygen for use in aquaculture
  • mineral oil applied to grain as a dust suppressant
  • repair or replacement parts for agricultural machinery and equipment used in commercial agriculture
  • depreciable repairs or parts for agriculture machinery or equipment.

Legislative Bill 1022 – Irrigation Tax Act: Also introduced by Senator Schumacher, LB 1022 would impose a tax upon the use of water to irrigate agricultural land in an amount equal to one cent for every 10 gallons of water pumped from a covered water well (any water well used to irrigate agricultural land and capable of producing at least 5,000 gallons of water per day).

The bill would also disregard, for purposes of determining agricultural land tax valuation for land that is irrigated, the added value associated with such irrigation. Revenues from the irrigation tax would be directed to the school aid fund to provide payments to school districts that do not receive equalization aid under the Tax Equity and Educational Opportunity Support Act.

Small Business Day at the Capitol

NFIB/Nebraska will co-sponsor a Small Business Day at the Capitol March 13, 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. Governor 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 for the latest information.

Previous Reports, News Releases, and Editorials

January 17 Guest Editorial—Nebraska Congressional Delegation Thanked

January 12 Report—NFIB Scores Victory in First Week of Session

January 12 News Release—Comment on Gov. Ricketts’ State-of-the-State Speech

January 5 Report—Nebraska Legislature Opens for 2018 Business

[Tile photo of Sen. John Lowe courtesy of Unicameral Update, “The Nebraska Legislature’s official news source since 1977.”]

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