NFIB accomplishments for small businesses included liability protection, tax parity, property tax reform, and quicker workers’ compensation settlements
The 2021 half of the Nebraska Legislature’s two-year session ended May 28 with some big accomplishments for small businesses. The second half commences Jan. 5, 2022
Won Business Liability Protections
Introduced by Sen. Tom Briese (Albion), Legislative Bill 139 provides a “safe harbor” from potential lawsuits alleging that a protected individual or organization negligently exposed an individual to COVID-19 infection. Under the new law, civil lawsuits would be prohibited as long as the protected individual or organization was acting in compliance with “federal public health guidance” (written or oral guidance related to COVID-19 issued by the Centers for Disease Control; the Centers for Medicare and Medicaid services; or the Federal Occupational Safety and Health Administration). The bill does not affect the rights or limits under the Nebraska Workers’ Compensation Act.
Secured Corporate Income Tax Parity
LB 432, as originally introduced, would have created parity between the highest marginal individual income tax rate of 6.84 percent and the top marginal corporate income tax rate by reducing the tax rate on corporate income in excess of $100,000 from 7.81% to 6.84% beginning January 1, 2022. During Select File debate, LB 432 was amended to phase in a smaller income tax rate cut for the next two years.
LB 432 will cut the state’s top corporate income tax rate to 7.5% for tax years beginning on or after January 1, 2022, with the rate falling to 7.25% for tax years beginning on or after January 1, 2023. The amendment states the intent of the Legislature to further reduce the rate to 7% for tax years beginning on or after January 1, 2024 and to 6.84% for all tax years thereafter. Subsequent reductions to carry out the “legislative intent” will require affirmative legislative action.
Helped Win Passage of the Property Tax Request Act
Under LB 644, introduced and designated as a priority bill by Sen. Ben Hansen (Blair), certain political subdivisions (counties, cities, school districts and community colleges) will be required to hold a joint public hearing prior to increasing the property tax requests. The political subdivisions will be required to provide notice of the hearing to taxpayers by postcard, the hearing would be open to public testimony, and the agenda would include only the property tax request proposals. The joint public hearing will only be required to be conducted if the political subdivisions are seeking to increase the property tax request by more than an “allowable growth percentage,” equal to 2% plus the political subdivision’s real growth percentage.
Fought for and won Reduction of Social Security Taxes
Introduced by Sen. Brett Lindstrom (Omaha), and designated as a priority bill by Sen. Mark Kolterman (Seward), LB 64 will provide, for tax years beginning on or after January 1, 2021, for a phase-in reduction of income taxation of Social Security benefits by 5%, increasing to 20% in 2022 and increasing by 10% each year thereafter until federal adjusted gross income is reduced by 50% of the benefits for tax years beginning on or after January 1, 2025. The bill was further amended to express legislative intent to continue incremental reduction of the tax on Social Security benefits to within the next five years to increase the percentage of Social Security benefits excluded by 10% each year until 100% of the benefits are excluded for tax years beginning on or after January 1, 2030. Reductions beyond 50% of the benefits to carry out the “legislative intent” will require affirmative legislative action in the future.
Won Clarification of Lump-Sum Settlements in Workers’ Compensation Cases
Introduced by Sen. Matt Hansen (Lincoln), LB 256 will clarify that a release of a lump-sum settlement for indemnity benefits only, that is not required to be submitted for approval by the Compensation Court, need not contain allegations regarding eligibility for Medicare if the employee’s right to receive future medical, surgical, and hospital services is specifically excluded from the settlement and Medicare has not paid medical, surgical, or hospital expenses or if Medicare has paid medical, surgical, or hospital expenses for which it claims it is entitled to reimbursement and Medicare has been reimbursed for such expenses at the time the settlement is executed.
Succeeded in Helping Pass the Nebraska Broadband Bridge Act
Introduced by Sen. Curt Friesen (Henderson) and designated as a priority bill by Speaker Mike Hilgers (Lincoln), LB 388 will appropriate $20 million annually, beginning with fiscal year 2021-22 to facilitate and fund the development of broadband networks in unserved and underserved areas. The bill will create grants to be used for development costs for a qualifying project and require matching funds from political subdivisions making application for a grant, equal to 50% of the total development costs.
Defeated Costly Paid Sick Leave Proposal
Lawmakers debated and rejected a proposal that would have allowed employees to accrue a minimum of one hour of paid sick time for every 30 hours worked, with a minimum of 40 hours of paid sick time accrued in a calendar year. During General File debate, two amendments proposed by Sen. Tony Vargas (Omaha), sponsor of the bill, were defeated. The first amendment would have provided for application of the bill to employers with 50 or more employees (provisions of the original bill applied to four or more employees). The amendment failed on a 19-16 vote, with 25 votes needed for adoption. The second amendment offered by Senator Vargas would have changed the leave time from paid to unpaid and was also rejected by lawmakers on an 18-14 vote. Legislative Bill 258 failed to advance from General File on the following 17-20 vote. Many thanks to the NFIB members who responded to an Action Alert to encourage their state senator to oppose LB 258.