April 7, 2017                                                                 Legislative Report Archive 

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revcomRevenue Committee Advances Property Tax Package
The Revenue Committee reported the property tax portions of its tax package to the floor of the Legislature on Thursday. AM954, the committee amendment to LB461, would implement an income approach for valuing agricultural and horticultural land, make changes to income tax rates, and suspend some tax credits.
Some of the concepts are borrowed from LB338, a bill that Senator Lydia Brasch introduced on behalf of Governor Ricketts. AM954 also contains income tax and exemption concepts from LB337 and LB452. AM954 would replace LB461 as originally introduced. Two bills to address school aid, LB409 and LB640, will be debated separately.
Debate on LB461 is tentatively scheduled for April 20. The school aid bills will be debated earlier that week.
Operative Date
Under AM954, assessments made on or after January 1, 2018 would use an income approach. LB338 proposed a January 1, 2019 operative date.
Acceptable Range
Under AM954, agricultural and horticultural land would be valued based on the agricultural-use value, reflected in a capitalized income approach. The assessed value would be determined on the basis of the land's value for agricultural and horticultural purposes by capitalizing the net income by a rate that reflects the agricultural-use value in the ordinary course of trade. The capitalization rate would need to result in an aggregate agricultural-use value for the class of agricultural and horticultural land that is 55-65 percent of the actual value for agricultural or horticultural purposes. LB338 proposed a rate of 60-75 percent. Under existing law, the acceptable range is 69-75 percent.
Valuation Cap
The aggregate agricultural-use value would be capped at 3.5 percent more than the prior year. This is the same rate proposed in LB338.
Data Inputs
The average commodity price used in the calculation would be based on the average of the last eight years, excluding the highest and lowest prices of that period. LB338 proposed using information from the past ten years.
AM954 contains specific language addressing average yield information for irrigated cropland, dryland cropland, and grassland, as well as average yield based on animal unit carrying capacity for grassland used for grazing. It specifically addresses calculations for gross income, land uses, and expenses. LB338 proposed granting the Property Tax Administrator authority to consider prices for each commodity.
Agricultural Land Valuation Committee
AM954 would create an Agricultural Land Valuation Committee to develop income and expense estimates and capitalization rate necessary to produce uniform and proportionate assessed valuations. The committee would meet at least six times per year. The five members would be:
  • Tax Commissioner or designee from his or her staff
  • Representative of the agricultural and horticultural industry appointed by the Tax Commissioner based upon recommendations made by not less than three industry groups designated by the Tax Commissioner
  • County assessor appointed by the Tax Commissioner
  • Appraiser from the private sector holding a credential as a certified general real property appraiser or an MAI designation from the Appraisal Institute and who would be appointed by the Tax Commissioner
  • Representative from the faculty of one of the research universities in the state specializing in agricultural economics appointed by the Tax Commissioner
The committee would meet in November 2017 and each November thereafter to establish income and capitalization rates. They would issue a report of the values established for each land capability group to each county assessor no later than January 1 each year. They would use information from the U.S. Department of Agriculture, University of Nebraska Institute of Agriculture and Natural Resources, Nebraska Investment Finance Authority, Department of Revenue, and other sources determined necessary by the committee.
Appeals Process
AM954 would not change the protest and processes for residential or commercial property. For agricultural and horticultural land, the county board of equalization could correct errors in characteristics affecting the income-producing capability of land or could correct the resulting value of such land. LB338 proposed limiting county board of equalization corrections to characteristics affecting the income-producing capability of the land.
Under AM954, if a county assessor believes the values for the land capability groups result in values that are not uniform and proportionate within the class of agricultural or horticultural land, he or she could petition the Tax Commissioner on or before February 1 for an alternative value to be applied to the land capability group. LB338 proposed a similar appeals process if the income range is not uniform and proportionate. The assessor could appeal to request an alternative income range to be applied to the land capability group.
If the Property Tax Administrator believes any agricultural-use value as implemented by the assessor does not comply with the requirements of the Act, he or she could petition the Tax Commissioner on or before April 1 for an order to adjust the agricultural-use value to achieve compliance. LB338 creates a similar appeals process if the Property Tax Administrator believes that the agricultural use value as determined by the assessor does not comply with the Act
As proposed by LB338, the assessor or Property Tax Administrator could appeal the Tax Commissioner's decision to TERC.
Special Valuation
AM954 and LB338 would strike special valuation language.

 snapSnapshots of County Issues
Legislative Activities This Week 
With one-third of the session remaining, debate this week focused on advancing senator, committee, and speaker priority bills. April 5 marked the 60 th day of the 90-day legislative session.
Monday started with a Final Reading vote on LB46, a bill that would create Choose Life license plates. As with the earlier two rounds of debate on this bill, a cloture vote was needed to end debate and vote on advancement of the bill. Governor Pete Ricketts signed LB46 into law on April 5.
Senators spent the rest of the day and much of Tuesday debating Select File (second round) committee and senator priority bills. On Wednesday and Thursday, senators debated and advanced bills from General File, the first round of debate.

Next week senators will take up LR6, to apply for a convention of states to amend the U.S. Constitution; LB44, to require online retailers to collect Nebraska sales tax; LB158, to require counties to pay for legal counsel for juveniles in all counties; and LB253, to authorize intergovernmental service agreements under the County Industrial Sewer Construction Act..

Speaker Jim Scheer released a schedule of planned late nights of debate during the remainder of the session. Most late nights are expected to adjourn around 7 p.m., but could go much later depending on the issues being debated.

Bills Reported out of Committees
Committees continued to meet in executive sessions to report bills to the floor in anticipation of a consent calendar later this month.
The Government, Military and Veterans Affairs Committee reported out the following bills of interest to counties: LB458 would exempt purchases by county coroners from the County Purchasing Act. LB497 would update references to a federal veterans discharge form (DD214) that is now available electronically. LB200 would change population thresholds when the county surveyor performs the functions of a highway superintendent from 50,000 to 60,000. LB508 would change population caps for county civil service systems from 300,000 to 400,000. A committee amendment would revise membership and quorum requirements.

The Judiciary Committee reported out LB517 to update Nebraska's Uniform Probate Code, LB562 to require monthly reports to the Legislature from the Department of Correctional Services, and LB516 to revise reporting on juveniles placed in room confinement.

Bills Advanced from General File
A bill requested by NACO was one of the speaker priority bills advanced from General File this week. LB152 would strike a January 1, 2018 sunset on funding for preserving, maintaining, and modernizing public records. Senator Joni Craighead introduced the bill on behalf of NACO. Senator John Lowe introduced a similar bill, LB369, but put his support behind Senator Craighead's bill. If the sunset date is not terminated, the fees would return to pre-2012 levels.
LB300 would remove the statute of limitations for civil actions on child sexual assault causing injuries to the victim. Existing law limits lawsuits to 12 years after the plaintiff's 21 st birthday. A severability clause was added before the bill advanced.
LB509 was introduced on behalf of the Nebraska Bar Association to modernize statutes relating to the service of subpoenas commanding an individual to testify at a trial or deposition. The bill would bring Nebraska statutes into line with federal court rules.

Bills Debated but not Advanced 
Senators were allotted three hours on April 3 for General File debate a bill that would prohibit cities and counties from regulating by ordinance the ownership, possession, transportation, carrying, registration, transfer or storage of firearms, ammunition, or firearm accessories. Instead, the state would have exclusive authority to regulate these firearm issues so that rules would be consistent statewide. Opponents filibustered LB68 so that a vote was not taken at that time. Three more hours of debate would be needed before cloture could be invoked to end the filibuster and take a vote on advancement.

Senators spent several hours on Thursday on a measure to prohibit workplace discrimination on the basis of gender. The Legislature adjourned for the day before taking a vote on LB173.

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