2023 SESSION, 108TH LEGISLATURE The Legislature passed the 60-day mark this week and no bills have yet to receive final approval. Lawmakers spent the majority of the week addressing back-to-back-to-back contentious issues, having to invoke cloture in each case to move LB 574 (restrictions on transgender surgery for minors); LB 626 (“heartbeat” abortion bill); and LB 753 (tax credits for private school scholarships) to the next round of debate. Christmas in AprilAs the week drew to a close, the Legislature commenced debate on the first of the mega, “Christmas Tree” Committee priority bills. The Health and Human Services Committee, chaired by Senator Ben Hansen (Blair), has designated LB 227, containing five separate bills, as one of its two Committee priorities. Under an amendment presented on Friday morning, the second Health and Human Services Committee priority bill (LB 181), containing an additional six bills was proposed for adoption. As previously reported, in an effort to address the ongoing filibuster efforts, these types of packages are expected to become routine. The Revenue Committee has already advanced a Committee priority bill containing, in part, the following measures supported by the NBA: LB 207 – Trust Deeds-Location Of Trustee’s Sale Senator Brad von Gillern (Omaha) is the sponsor of LB 207, which would clarify that the sale of property pursuant to a power of sale under a trust deed may be conducted on the premises, at the county courthouse, or in any public building in which county offices are located within the county in which the property to be sold is situated. LB 214 - Omnibus Department Of Banking Bill Introduced by Senator Julie Slama (Dunbar) LB 214 would adopt changes to federal law regarding banking and finance and change provisions relating to digital asset depositories, loan brokers, mortgage loan originators, and installment loans. The bill would also renew the annual bank and savings and loan “wild-card” provisions. LB 669 – Department Of Banking Conditional Orders Introduced by Senator Beau Ballard (Lincoln), LB 669 would authorize the Director of the Department of Banking to prescribe conditions for banks, trust companies, credit unions, building and loan associations, savings and loan associations, digital asset depositories, and their holding companies, if any, as part of any written order, decision or determination required to be made pursuant to the Nebraska Banking Act, Chapter 8, Article 3, the Credit Union Act, and the Nebraska Financial Innovation Act. LB 674 – Nebraska Financial Innovation Act Introduced by Senator Mike Jacobson (North Platte), LB 674 would make technical corrections to the Nebraska Financial Innovation Act regarding digital asset depositories. North/South Omaha Recovery Act AdvancesIn an unusual turn of events, the Legislature moved quickly through four bills designated as Speaker’s “Super Priority” measures on Tuesday. The Speaker’s “Super Priority” measures included two appropriations measures authorizing payment of salaries of legislators and constitutional officers, a bill relating to payment of claims by the state and a bill for judge’s salaries. The respite from continuing filibusters appears to be designed to allow for prompt action on LB 531, a bill supported by the NBA, a bill introduced by Senator Terrell McKinney (Omaha) and designated as a priority bill by the Urban Affairs Committee, which would provide funding for grants to multiple proposals seeking to revitalize parts of North and South Omaha. 2023 SESSION, 108TH LEGISLATURE With almost two-thirds of the Legislative Session complete, lawmakers adjourned early Thursday afternoon for the long, four-day Easter holiday weekend. When lawmakers return next Tuesday, they will begin debate on budget bills to appropriate funds for the salaries for members of the Legislature and constitutional officers, along with two bills (LB 282 - payment of claims against the state; and LB 799 - changes judges' salaries) that have been designated as Speaker's Major Proposals. Pursuant to the rules of the Legislature, the Speaker is authorized, with the approval of two-thirds of the Executive Board, to designate up to five bills or resolutions proposing to amend the Constitution as Major Proposals. The Speaker is further authorized to determine the scheduling of Major Proposals and the order in which amendments and motions will be considered. Governor Appoints New SenatorThe Legislature was surprised mid-week with the announcement that Senator Suzanne Geist (Lincoln), a candidate for mayor of the city of Lincoln, was resigning from the Legislature to concentrate on her mayoral campaign. Governor Pillen moved promptly in appointing Carolyn Bosn to serve as the new state senator from Legislative District 25. Senator Bosn, who will complete the remainder of Senator Geist's term, is a native of Columbus, Nebraska. She earned a Bachelor of Arts in Political Science from Baylor University and a law degree from Creighton University. Senator Bosn has previously worked in county attorneys' offices in a number of counties, handling cases relating to juvenile law offences, child neglect and abuse, domestic assaults and narcotics. Property Tax Relief Measure Moves OnThe Legislature has adopted a package of property tax relief proposals and advanced LB 243 to Select File on a vote of 41-1. Introduced by Senator Tom Briese (Albion), LB 243 would provide for the minimum amount of relief under the Property Tax Credit Act for 2024 and each year thereafter, and a percentage increase equal to the percentage increase, if any, in the total assessed value of all real property in the state from the prior year to the current year. Following adoption of Committee amendments, the bill would increase annual property tax credits provided to taxpayers from the current level of $315 million in 2023 to $38 million in 2024 and, ultimately, raise the annual property tax credit amount to $560 million by 2029. Other property tax relief measures incorporated into LB 243 include: LB 589 - School District Property Tax Limitation Act Introduced by Senator Briese, LB 589 would prohibit a school district from making a property tax request for any year in excess of 3% more than its property tax request in the prior year, or the percentage increase in the Consumer Price Index, except with approval of the majority of its school board or by a 60% majority of the registered voters in a Primary, General or Special Election. (NBA Position: Support) LB 242 - Nebraska Property Tax Incentive Act Also introduced by Senator Briese, LB 242 would eliminate the 5% cap on the amount of income tax credits provided for property taxes paid and replace it with limitations based on teh total increase in statewide property tax valuations. (NBA Position: Support) LB 783 - Eliminate the Levy Authority of Community College Areas Introduced by Senator Dave Murman (Glenvil), LB 783 would remove property taxes as a source of funding for the state community colleges, shifting approximately $200 million in property taxes annually to the state sales and income taxes. (NBA Position: Watch) Public Education Funding Proposal AdvancesLawmakers have given first-round approval to a bill (LB 583), introduced by Senator Rita Sanders (Bellevue) on behalf of Governor Pillen, that would direct additional state funding to K-12 public schools. Under LB 583, the state would provide $1,500 in foundation aid per student for public school districts, beginning with school fiscal year 2023-2024. The bill would also increase state aid to school districts to provide 80% of the school district's special education funding needs when combined with federal funding. Under an amendment adopted by the Legislature, a portion of the foundation aid and the supplemental education allowances would be paid from a new Education Future Fund to be created by LB 681, sponsored by Senator Robert Clements (Elmwood) on behalf of Governor Pillen. The Legislature was once again required to approve a motion to invoke cloture to end debate and vote on advancement of the bill, which was ultimately advanced to Select File on a vote of 39-3. The Session AheadWith filibusters being encountered on every bill considered by the Legislature, efforts to amend separate bills into priority bills being debated are increasing. With the total number of priority bills expected to receive consideration this session diminishing with every passing day, it appears that an attitude of "combine and conquer" is going to take place.
Speaker of the Legislature John Arch (La Vista) has suggested that Standing Committees will likely, at best, be able to have only one of their two Committee priorities considered on the floor of the Legislature. In response to this announcement, a number of Committees are combining the bills contained within their two separate priority bills into a single priority bill and are considering adding additional non-controversial measures to the resulting priority bill. For example, the Revenue Committee has incorporated the provisions of 20 tax-related bills into LB 727, previously designated as a Committee Priority Bill, and has advanced the bill to General File. The Banking, Commerce and Insurance Committee is expected to follow suit with an amendment to LB 92, one of the Committee Priority Bills, which may incorporate as many as 20 separate banking-related measures. 2023 SESSION, 108TH LEGISLATURE The Legislature continues to endure filibusters on every bill debated on the floor of the Legislature. Under current rules, this requires eight hours of debate on bills during General File and four hours of debate for bills on Select File before a motion to invoke cloture, cease debate and vote on advancement of the bill can be entertained. On Thursday and Friday, over 650 amendments and procedural motions were filed to bills that have advanced from Committee with priority bill status, as well as other priority bills that remain in Committee. Speaker of the Legislature John Arch (La Vista) announced that, given the number of hours for debate remaining in the session and in the absence of a change in circumstances, the Legislature will only be able to process approximately 20 of the 100+ priority bills, including the package of budget bills which must be approved this session. Rules ChangeThe Legislature adopted revisions to its rules, effectively limiting the number of motions that can be introduced at each stage of debate. Introduced in response to a tactic employed last week during debate on LB 574 (transgender surgery) in which opponents filed various procedural motions, talked for 10 minutes, and then withdrew the motions, the rules change will limit motions to postpone debate, recommit a bill to Committee, or indefinitely postpone to one-per-day on each of the three rounds of debate. While the rules change will not inhibit filibusters, it will require more time to be spent debating amendments to measures, rather than discussing procedural motions and enhance the ability to adopt substantive amendments. Income Tax Relief Package AdvancesFollowing eight hours of debate on Wednesday and Thursday, the Legislature approved a motion to invoke cloture and advanced LB 754 to select file on a vote of 41-0. Introduced on behalf of Governor Pillen and designated as a priority bill by Senator Lou Ann Linehan (Elkhorn), LB 754 would reduce the maximum individual income tax rate from 6.84% to 3.99% and also reduce the maximum corporate income tax rate from 7.25% to 3.99% over the next five years. Prior to advancing the bill, amendments incorporating the provisions of LB 38 (exclude federal retirement income from state income tax to the extent included in federal adjusted gross income); LB 206 (allow partnerships to pay taxes owed on an amended return on behalf of the partners rather than requiring each partner to file an amended return and allow pass-through entities (LLCs and S-Corps) to pay state and local taxes on behalf of members/shareholders); LB 318 ($35 million in tax credits for childcare expenses); LB 497 (would allow individual taxpayers to deduct all itemized deductions on the state income tax return); and LB 641 (accelerate phase-out of income taxes on social security benefits), were added to the bill. Property Tax Relief Package on DeckThe Legislature commenced debate on LB 243 late Friday morning prior to adjourning for the weekend. Introduced by Senator Tom Briese (Albion), LB 243 would provide for the minimum amount of relief under the Property Tax Credit Act for 2024 and each year thereafter, in the amount of $700 million, plus a percentage increase equal to the percentage increase, if any, in the total assessed value of all real property in the state from the prior year to the current year. With proposed committee amendments, the bill would increase annual property tax credits provided to taxpayers from the current level of $315 million in 2023 to $388 million in 2024 and, ultimately, rising to $560 million by 2029. Other property tax relief measures to be incorporated into LB 243 include: LB 589 - School District Property Tax Limitation Act Introduced by Senator Briese, LB 589 would prohibit a school district from making a property tax request for any year in excess of 3% more than its property tax request in the prior year, or the percentage increase in the Consumer Price Index, except with approval of the majority of its school board or by a 60% majority of the registered voters in a Primary, General or Special Election. (NBA Position: Support) LB 242 - Nebraska Property Tax Incentive Act Also introduced by Senator Briese, LB 242 would eliminate the 5% cap on the amount of income tax credits provided for property taxes paid and replace it with limitations based on the total increase in statewide property tax valuation. (NBA Position: Support) LB 783 - Eliminate the Levy Authority of Community College Areas Introduced by Senator Dave Murman (Glenvil), LB 783 would remove property taxes as a source of funding for the state community colleges, shifting approximately $200 million in property taxes annually to state sales and income taxes. (NBA Position: Watch) 2023 SESSION, 108TH LEGISLATURE With 50 days in the books, Friday marked the final day of Committee hearings. When lawmakers return to action next Tuesday, they will conduct the initial day of all-day floor debate and will hold the first of 27 evening sessions scheduled in the final 40 days of the session. The Legislature debated the "Let Them Grow Act" (LB 574) for three full morning sessions prior to approving a motion to invoke cloture and advance the bill to Select File late Thursday morning. Some opponents of LB 574 have indicated their intention, with advancement of the bill, to filibuster every measure considered for the remainder of the session. Only time will tell! Committee Hearing ActivityThe NBA testified during the final Banking, Commerce and Insurance Committee hearing on Tuesday in opposition to the following bill: LB 710 - Credit Union Act Introduced by Senator George Dungan (Lincoln), LB 710 would: a) eliminate requirements for the Director of the Nebraska Department of Banking and Finance (NDBF) to provide notices of an application for establishment of a branch of a credit union and remove discretion from the Director to hold a public hearing on amendments to a credit union association’s bylaws which are brought before the Department; b) allow a credit union with a main chartered office or approved branch in the state, upon notification to the Department, to establish savings account programs in any elementary or secondary school, whether public or private, that has students who reside in the same city or village as the main chartered office or branch of the credit union; c) expand the field of membership of a credit union to include persons or organizations within a geographically defined community, neighborhood, or rural district; d) authorize a credit union to conduct annual or special meetings by virtual conferencing platform; e) authorize credit unions to invest in shares, stocks, or member units of financial technology companies in a total amount not exceeding 5% of the net worth of the credit union; and f) repeal the 18% usury rate on credit union loans. (NBA Position: Oppose) Property Tax Relief Package AdvancesHaving recently advanced a package of income tax cut bills, providing approximately $3 billion in relief over the next five years, the Revenue Committee has followed suit by moving a group of property tax relief proposals to the floor of the Legislature. The property tax relief measures are estimated to provide more than $3 billion in relief over the next six years.
LB 243, introduced and designated as a Priority Bil by Senator Tom Briese (Albion), has advanced from the Revenue Committee on a 7-0 vote. With proposed committee amendments, the bill would increase annual property tax credits provided to taxpayers from the current level of $315 million in 2023 to $388 million in 2024 and, ultimately, rising to $560 million by 2029. Other property tax relief measures incorporated into LB 243 include: LB 589 - School District Property Tax Limitation Act Introduced by Senator Briese, LB 589 would prohibit a school district from making a property tax request for any year in excess of 3% more than its property tax request in the prior year, or the percentage increase in the Consumer Price Index, except with approval of the majority of its school board or by a 60% majority of registered voters in a Primary, General or Special Election. (NBA Position: Support) LB 242 - Nebraska Property Tax Incentive Act Also introduced by Senator Briese, LB 242 would eliminate the 5% cap on the amount of income tax credits provided for property taxes paid and replace it with limitations based on the total increase in statewide property tax valuations. (NBA Position: Support) LB 783 - Eliminate the Levy Authority of Community College Areas Introduced by Senator Dave Murman (Glenvil), LB 783 would remove property taxes as a source of funding for the states' community colleges, shifting approximately $200 million in property taxes annually to state sales and income taxes. (NBA Position: Watch) 2023 SESSION, 108TH LEGISLATURE Lawmakers adjourned on Thursday for a long, four–day weekend. After confronting filibusters on virtually every bill for the past three weeks, lawmakers ended the week with a flurry of activity by advancing three Committee Priority bills from General File. When the Legislature reconvenes on Tuesday, they will take up a contentious bill (LB 574), which would prohibit the performance of gender altering procedures for individuals under the age of 19. With passage of the deadline for designating priority bills, the agenda for the rest of the session has been established. Any bills that have not been prioritized, amended into a priority bill, or are eligible to be considered on “consent calendar” (bills advancing from Committee with no dissenting votes and no opposition) are not likely to receive further consideration this session. Income Tax Relief Package AdvancesWhile not officially reported to the floor of the Legislature, media reports indicate that the Revenue Committee has advanced Governor Pillen's income tax relief package to General File. Introduced by Senator Lou Ann Linehan (Elkhorn), LB 754 would reduce the maximum individual income tax rate from 6.84% to 3.99% and also reduce the maximum corporate income tax rate from 7.25% to 3.99% over the next five years. Prior to advancing the bill, the provisions of LB 318 ($35 million in tax credits for childcare expenses); LB 641 (accelerate phase-out of income taxes on social security benefits); and LB 38 (exclude federal retirement income from state income tax to the extent included in federal adjusted gross income) were added to the bill. Upcoming HearingsThe NBA will present testimony before the Banking, Commerce and Insurance Committee next week in opposition to the following bill: LB 710 - Credit Union Act Introduced by Senator George Dungan (Lincoln), LB 710 would eliminate requirements for the Director of Banking to provide notices of an application for establishment of a branch of a credit union and remove discretion from the Director to hold a public hearing on amendments to the Credit Union Association's bylaws which are brought before the Department. The bill would also allow a credit union with a main chartered office approved branch in the state, upon notification to the Department, to establish savings account programs in any elementary or secondary school, whether public or private, that has students who reside in the same city or village as the main chartered office or branch of the credit union or, if the main office of the credit union is located in an unincorporated area of the county, at any school that has students who reside in the same unincorporated area. The legislation would: expand the field of membership of a credit union to include persons or organizations within a geographically defined community, neighborhood, or rural district; authorize a credit union to conduct annual or special meetings by virtual conferencing platform; and authorize credit unions to invest in shares, stocks or member units of financial technology companies in a total amount not exceeding 5% of the net worth of the credit union. (NBA Position: Oppose) Committee Hearing ActivityThe NBA presented testimony before various Committees this week on the following bills: Business and Labor Committee: LB 367 - Fair Chance Hiring Act Introduced by Senator Danielle Conrad (Lincoln), LB 367 would prohibit an employer from asking an applicant to disclose information concerning the applicant's criminal record or history until after the applicant has received a conditional offer of employment from the employer. The bill would allow an employer to request information concerning the applicant's criminal record or history only after making a conditional offer of employment if the applicant is applying for a position for which a) a criminal history record information check is required by federal or state law; or b) federal or state law specifically disqualifies an applicant with a criminal background even if the law allows for a waiver that would allow the applicant to be employed. (NBA Position: Oppose) Banking, Commerce and Insurance Committee: LB 446 - Peer-to-Peer Vehicle Sharing Program Act Introduced by Senator Eliot Bostar (Lincoln), LB 446 would require a Peer-to-Peer Vehicle Sharing Program. The NBA proposed an amendment to protect vehicles that serve as collateral for a bank loan which would require if a vehicle has a lien against it, that during each sharing period the vehicle owner's risk of loss due to physical damage to the vehicle is covered through at least one of the following: a) a physical damage protection package; b) a financial protection package; or c) any policy of insurance providing comprehensive and collision coverage that recognizes that the vehicle insured under the policy is made available and used through a Peer-to-Peer vehicle sharing program. Priority Bill DesignationsThe following bills of interest to the banking industry have been designated as priority bills, which will enhance their likelihood of being considered as the session progresses. Senator Priority Bills LB 77 - Concealed Weapons Introduced by Senator Tom Brewer (Gordon), LB 77 would authorize a county to allow the carrying of concealed weapons for all persons not otherwise prohibited from possessing or carrying such weapons under state or federal law. (Retains provisions of existing law prohibiting a person not prohibited from possession or carrying a concealed handgun to carry a concealed handgun in specified business locations, including a financial institution.) (NBA Position - Watch) SEN. BREWER PRIORITY BILL LB 79 - Taxation - Consumption Tax Act Introduced by Senator Steve Erdman (Bayard), LB 79 would eliminate all property, income and corporate taxes and replace them with a tax on the use or consumption in the state of Nebraska of taxable property or services (excludes intangible property and services) at a rate of 7.5%. The legislation would impose the consumption tax on financial intermediation services, including explicitly and implicitly charged fees for financial intermediation services to be collected with the same frequency that statements are rendered by the financial institution, but not less frequently than quarterly. NBA Position: Oppose) SEN. ERDMAN PRIORITY BILL LB 249 - Rural Workforce Housing Investment Act Introduced by Senator Tom Briese (Albion), LB LB 249 would have expanded the definition of workforce housing to include housing that receives federal or state low-income housing tax credits, community development block grants, home funds, funds from the National Housing Trust Fund, or funds from the Affordable Housing Trust Fund, thereby allowing for the use of such funds, together with Rural Workforce Housing Investment Funds. The bill would allow a nonprofit development organization to apply for more than one grant subject to a limitation on the maximum amount of grant funds awarded to such nonprofit development organization over a two-year period to no more than $5 million. The bill would also provide $20 million in additional funding for the Rural Workforce Housing Investment Act. The NBA had initially opposed LB 249 based upon the proposed removal of “anti-stacking” provisions, which prohibited the mixing of certain low-income housing funds with rural workforce housing funds. Prior to advancing the bill, the Committee removed the objectionable provisions, and the NBA supports the bill as amended. (NBA Position: Support) SEN. IBACH PRIORITY BILL Committee Priority Bills LB 116 - Beginning Farmer Tax Credit Act Introduced by Senator Tom Brandt (Plymouth), LB 116 would increase the net worth requirements for individuals to be qualified as a beginning farmer or livestock producer under the Beginning Farmer Tax Credit Act from $200,000 to $1 million (pension, retirement, or other types of deferred benefit accounts owned by the beginning farmer or livestock producer, including such accounts owned by a spouse or dependent would be excluded from the determination of a qualified beginning farmer’s or livestock producer’s net worth). (NBA Position: Support) AGRICULTURE COMMITTEE PRIORITY BILL LB 214 - Omnibus Department of Banking Bill Introduced by Senator Julie Slama (Dunbar), LB 214 would adopt changes to federal law regarding banking and finance and change provisions relating to digital asset depositories, loan brokers, mortgage loan originators, and installment loans. The bill would also renew the annual bank and savings and loan “wild-card” provisions. Amendments to incorporate the provisions of LB 669 (Department of Banking Conditional Orders) and LB 674 (Nebraska Financial Innovation Act) into the bill, both of which are supported by the NBA, have been adopted by the Committee. (NBA Position: Support) BANKING, COMMERCE AND INSURANCE COMMITTEE PRIORITY BILL LB 531 – Economic Recovery Act LB 531, introduced by Senator Terrell McKinney (Omaha), would address the distribution of ARPA funds to North and South Omaha under the Economic Recovery Act of 2022. (NBA Position: Support) URBAN AFFIARS COMMITTEE PRIORITY BILL LB 754 - Taxation - Individual and Corporate Income Tax Reductions Senator Linehan has introduced legislation that would reduce the maximum individual income tax rate from 6.84% to 3.99% and also reduce the maximum corporate income tax rate from 7.25% to 3.99% over the next five years. (NBA Position: Support) REVENUE COMMITTEE PRIORITY BILL Speaker Priority Bills LB 206 – TAXATION – PARTNERSHIP RETURNS: LB 206, introduced by Senator Brad von Gillern (Omaha), would allow a partnership, at the partnership’s election, to file an amended Nebraska income tax return and pay all Nebraska income tax associated with the amended return after taking into consideration offsetting positive and negative adjustments of partnership items, at the top individual tax rate as if the partnership were an individual. The bill would avoid the need for partners of the electing partnership to file an amended Nebraska income tax return or pay Nebraska income tax resulting from the amended return in the year of the election, with the basis, and other tax items in the hands of the partner, arising from the partner’s interest in the partnership to be determined as if the election had not been made. (NBA Position: Support) NBA Holds Virtual Legislative UpdateThe NBA conducted a virtual legislative update on Friday morning with over 75 members participating. NBA General Counsel, Bob Hallstrom, provided an overview of the session, including an update on the state budget and efforts to provide tax relief and also discussed a number of measures opposed by the NBA, such as ESG legislation (LB 67, LB 730, and LB 743); credit union legislation seeking access to public funds (LB 483) and expanded powers (LB 710) and political subdivision investment pools (LB 268, LB 476 and LB 594). NBA Associate General Counsel, Ryan McIntosh updated the group on the status of NBA Affirmative Legislation, including LB 69 (Life Insurance Assignment - Notice of Lapse/Termination), LB 94 (UCC Article 12 - Cross Collateralization), LB 207 (Trust Deeds - Location Of Trustee’s Sale), LB 279 (Executive Officers’ Reporting Requirements), and LB 330 (Small Estate Affidavit – Endorsement of Checks). |
Past Legislative Updates
June 2024
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