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Priority bill designation for the 2018 legislative session has taken place. After this point, generally only bills and resolutions that have been prioritized are placed on the agenda. Every senator is allowed to designate one priority bill, committees are allowed to designate two, and the speaker can designate 25 speaker priority bills.
I designated LB 44 as my priority bill. Under proposed amendments, LB 44 would adopt the Noncollecting Retailer Notice and Reporting Act. The Supreme Court ruled years ago that retailers who didn’t have a physical presence in the state were not required to collect the state’s sales tax. South Dakota passed legislation meant to challenge this ruling and the U.S. Supreme Court should issue its opinion by June.
LB 44 would require out-of-state retailers that don’t collect sales tax to meet reporting requirements if their total sales to Nebraska purchasers exceed $100,000 or amount to 200 or more transactions. The reporting requirements are meant to be onerous, thereby encouraging retailers to voluntarily submit the sales tax. Furthermore, LB 44 would require such retailers to collect sales tax upon the overturning of the previous Supreme Court case or July 1, whichever is later. Therefore, if the Supreme Court ruling is overturned in June, this legislation would allow Nebraska to begin collecting sales tax on online purchases beginning July 1. It has been estimated that our state is losing out on tens of millions of tax dollars, which are currently owed by purchasers, but few pay.
The Appropriations Committee chose LB 861 as one of their two priority bills. LB 861 would require the state to pay a county’s prosecution costs arising from a single correctional institution incident that exceed 2 ½ cents of the county’s levy. I introduced this bill to offer assistance to Johnson County residents, whom must foot the bill for the cost of prosecuting the crimes associated with several incidents at TSCI. I do not think it is fair that the county is responsible for the costs to defend inmates from across the state, just because the correctional institution is located within the county. This bill could be seen as a catastrophic insurance policy, requiring the state to help the county with prosecution costs when they become an extreme hardship for county residents.
The speaker revealed that he received 72 requests for the 25 speaker priority bill designations. He did indicate that his personal priority bill was among those requested for speaker priority designation. My request for LB 745 was granted. LB 745 deals with the refund of local option sales tax in situations when sales or use tax has been overpaid and must be refunded due to an error in collection or computation. I introduced it at the request of Nebraska City officials, as it will help municipalities plan for such occurrence.
Several bills pertaining to tax relief were designated as priority bills. LB 829, prioritized by Senator Steve Erdman, would provide for a refundable income tax credit equal to 50% of the portion of taxes directed towards K-12 education, resulting in an approximate 30% reduction in property taxes. The Revenue Committee has not advanced LB 829 and Senator Erdman has indicated that he may try to pull it from committee, which would require an affirmative vote by the majority of the Legislature.
LB 947, the governor’s proposal for income and property tax relief, was selected by Senator Jim Smith, the chair of the Revenue Committee, as his personal priority bill. However, this bill still remains in the Revenue Committee as well. As introduced, it proposes a 10% refundable income tax credit of property taxes paid, which would increase if actual general fund receipts were above estimated receipts. The top rate for individual income taxes and corporate income taxes would be reduced to 6.69%. Furthermore, $10 million would be appropriated for job training.
LB 1084, prioritized by Senator Tom Briese, would significantly increase the amount of funding for the Property Tax Credit program, as well as increase funding for K-12 education. To fund the proposal, the legislation proposes to increase the sales tax by ½ cent, increase the cigarette tax by $1.00, eliminate various sales tax exemptions, and impose sales tax on more services. LB 1103, selected by Senator Curt Friesen, seeks to provide a minimum amount of state aid to every school district. LB 640, designated as a priority by Senator Mike Groene, reduces the maximum levy for school districts from $1.05 to $1.00 and limits the amount of property taxes that fund local schools. LB 1084 and LB 1103 remain in committee, while LB 640 is on General File.
The public hearing process will conclude on February 27 and the Legislature will begin full day sessions on February 28. I encourage you to contact me with your thoughts and opinions on legislation before us. I can be reached at District #1, P.O. Box 94604, State Capitol, Lincoln, NE 68509. My email address is email@example.com and my telephone number is (402) 471-2733.