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The Nebraska Legislature started last week with LB34, introduced by Sen. Tom Brewer of Gordon, as the new vehicle for Gov. Jim Pillen's property tax relief plan. The bill was advanced from the Revenue Committee on a 6-1 vote with a committee amendment that contained the major portions of LB1, including new taxes and the elimination of certain exemptions for more than 60 products and services. (The provisions to tax accounting services and tax preparation services were removed before the bill even made it out of committee.) Ultimately, the amendment did not have enough votes to advance and they substituted that amendment with AM84, which significantly pared down the bill and ultimately advanced.
The bill would impose caps on local spending at 0% or the rate of inflation using an index specific to local governments -- whichever is higher. Exceptions would exist for real growth, personnel costs for public safety or public health, or by a vote of the people at a regularly scheduled election.
The bill would also retool the existing property tax credits to provide payments directly to school districts and would "frontload" the tax credits, so Nebraskans would no longer need to apply for property tax credits on their income tax return. Instead, these credits would appear directly on Nebraskans' property tax statements. Additional funds (about $185 million) are also added to the credit fund.
After eight hours of debate, the Legislature adopted AM84 to LB34 and advanced the bill from General File on a vote of 36-8.
LB34 received second round consideration during Select File debate late last week. Though more efforts were made to amend the bill and add some exemption removals, those amendments failed and the bill advanced to Final Reading with 39 votes in favor of the bill. (An amendment was added, however, to alleviate some concerns with Tax Increment Financing and other procedural components of the bill.) This bill is expected to be considered for its final round of approval on Tuesday, August 20.
Late last week, the Revenue Committee advanced LR2CA out of committee; the bill would place on the ballot for voter approval a provision to allow the Legislature to differentiate the valuation percentage of owner-occupied residential property for property tax purposes. The Nebraska Constitution has a similar provision for agricultural and horticultural property.
Nebraska law currently requires a four-month waiting period after the Legislature approves a constitutional amendment for voter approval before the issue can be placed on the ballot. Multiple bills were introduced during the Special Session that would have shortened this procedural window to two months, thus permitting any constitutional amendments approved during the Special Session to appear on this November's ballot. The Legislature's Executive Committee indefinitely postponed the bills that would have made such procedural changes, undercutting the viability of LR2CA and other constitutional amendments proposed this session.
In response, senators amended LR2CA on Friday so that, if approved, the state would hold a special election concurrent with this November's general election for voters to consider LR2CA. This amendment raised the bar on LR2CA's approval requirement, so that 40 votes will now be required on Final Reading to trigger this special election.
LR2CA received 32 "yes" votes on General File. After three hours of debate on Saturday, LR2CA was bracketed until today, meaning that it will likely appear on the floor of the Legislature tomorrow, August 20. Proponents must gather 33 votes to invoke cloture on LR2CA. (Cloture is a parliamentary action to cease debate on a bill and vote immediately on its advancement.)
Today, August 19, is a "check-in" day for the State Senators in the Nebraska Legislature and no legislation is scheduled for consideration until tomorrow.
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