Nebraska Legislative Session Crosses Midway Point

Inheritance tax, paid sick leave proposals advance

State Director Bob Hallstrom reports from Lincoln on the small-business agenda for the legislative and political week ending March 19

Lawmakers adjourned for a long weekend, having reached the mid-point of the 2021 Legislative Session. Full-day floor debate commenced on Wednesday as the Legislature gave first-round approval to Legislative Bill 561 designed to implement the voter-approved casino gambling measure. The Legislature closed out the week by overcoming a filibuster effort and invoking “cloture” to advance a bill preventing student journalists from being censored by school administrators.

Paid Sick Leave Bill Advances

LB 258 has been advanced to General File by the Business and Labor Committee on a 4-3 vote. Introduced by Sen. Tony Vargas (Omaha), and designated as a priority bill by Sen. Matt Hansen (Lincoln), LB 258 would allow employees to accrue a minimum of one hour of paid sick time for every 30 hours worked, with a maximum of 40 hours of paid sick time accrued in a calendar year. Under the measure, employees would be entitled to use accrued paid sick time beginning on the 60th calendar day following commencement of employment. Paid sick leave would be authorized for:

an employee’s mental or physical illness, injury, or health condition
an employee’s need for medical diagnosis, care, or treatment of a mental or physical illness, injury, or health condition
an employee’s need for preventative medical care
care of a family member with a mental or physical illness, injury, or health condition
care of a family member who needs medical diagnosis, care, or treatment of a mental or physical illness, injury, or health condition
care of a family member who needs preventative medical care
absence necessary due to domestic abuse, domestic assault, sexual assault, or stalking. (NFIB Position – Opposed)

Inheritance Tax Proposal Advances

The Revenue Committee, on a 6-2 vote, has advanced LB 310 to General File. Introduced by Sen. Rob Clements (Elmwood), LB 310 as amended, would for decedents dying on or after January 1, 2022, increase the exemption amount for Class I beneficiaries (immediate relatives and siblings) from $40,000 to $100,000 and retain the existing 1 percent tax rate. For Class II beneficiaries (remote relatives-nieces and nephews), the exemption amount would be increased from $15,000 to $40,000 and the tax rate reduced from 15 percent to 11 percent. For Class III beneficiaries (non-relatives) the exemption amount would be increased from $10,000 to $25,000 and the tax rate reduced from 18 percent to 15 percent. In addition, any person under the age of 22 would not be subject to the inheritance tax.

The amended bill would require annual reports by county treasurers to be submitted to the Nebraska Department of Revenue for all classes of beneficiaries, with such report to include the amount of inheritance tax revenue generated by each class of beneficiaries, and the number of beneficiaries in each class who receive property subject to the tax. The report would also be required to include the number of beneficiaries receiving property that was subject to the tax who do not reside in the state of Nebraska. (NFIB Position – Support)

Additional Property Tax Relief Proposed

The Appropriations Committee is expected to finalize its two-year state budget proposal next week. During the past week, the budget proposal was adjusted to increase the state property tax credit program by $63 million over the next two years. The additional funding is designed to allow the credits to grow by 2 percent annually from the 2019 fund level. With these changes, if adopted, property tax relief will increase by $574 million compared with the two years ending June 30 – 65 percent increase. With these changes, the state will allocate over $1.45 billion to direct property tax relief over the next two years from the combination of the property tax credit program and the refundable income tax credit provisions.

Mark Your Calendar

NFIB will be co-hosting the annual Small Business Day at the Capitol on April 7, 2021. This year’s event will be held “virtually,” with the event to include discussion of bills of interest to small business and presentations by individual state senators on major issues to be addressed by the Legislature. An invitation and more information regarding the meeting will be heading your way soon.