This week we began floor debate from 9:00 a.m.-9:00 p.m. This gave us more time to debate the different bills that have been voted out of committee to General File or those bills moved from General File to Select File.

Our first order of business on Tuesday was to discuss a motion made by Senator Erdman on Friday, March 24th to suspend certain rules for the remainder of the 108th Legislature, First Session. This would limit the motions to postpone to a time certain, to commit, or to postpone indefinitely once daily at the same stage of the bill or proposition. This debate took a full 8 hours and was accepted on a vote of 32-13. These rules have been adopted for the remainder of the 108th Legislative Biennium.

Bill to Watch–Income Tax Package–LB754 as amended
This is one of the Revenue Committee’s priority bills. This is a Christmas Tree bill that has been debated on General File for several days this week. This bill includes:

• LB318–Adopt the Child Care Tax Credit Act and reauthorize tax credits under the School Readiness Tax Credit Act brought to the committee by Senator Bostar. This creates the Child Care Tax Credit. The Act affords eligible parents or guardians a tax credit against tax imposed for qualified individuals whose child receives qualified care or is enrolled in child care subsidy. It also gives Refundable Credit for Qualified Parents–$2,000 per Child for income under $75,000; $1,000 per Child for income over $75,000 but under $150,000. It authorizes 100% nonrefundable credit for qualified contributions to qualified child care providers and 75% nonrefundable credit for contributions not qualifying for the 100%. It also increases the credits authorized for qualified programs of qualified providers and credit for eligible employees.
•  LB754–Reduce individual and corporate income tax rates brought to the committee by Senator Linehan. This decreases individual and corporate top tier tax rates to 5.84% in 2024 and incrementally reduces individual and corporate tax rates annually, hitting 3.99% for corporate and tier 3 and top tier for individuals in 2027.
•  LB38–Provide an income tax adjustment relating to federal retirement annuities brought by Senator Blood. This allows a deduction from federal adjusted gross income for federal retirement pension income.
• LB641–Change provisions relating to the taxation of social security benefits brought by Senator Kauth. This increases percentages of social security benefits included in an individual’s federal adjusted gross income that can be reduced from the federal AGI for purposes of Nebraska income tax. It will be a 100% dedication by 2024.
• LB497–Change provisions relating to itemized deductions brought by Senator Linehan. This allows the greater standard deduction or federal itemized deductions plus any state and local property taxes not already deducted.
•  LB492–Allow income tax deductions for the cost of certain property and for certain research or experimental expenditures brought by Senator von Gillern. This allows immediate expensing and income tax deductions for the cost of certain property and services related to certain research and experimental expenditures.
•  LB173–Change provisions relating to the taxation of nonresident income brought by Senator Bostar and Senator Kauth (LB416). This changes provisions on taxation of nonresident income and sourcing of income earned by nonresidents and considered income from employment Nebraska income if present more than 15 days in a tax year.
• LB206–Change provisions relating to the taxation of partnerships brought by Senator von Gillern. This would change the provisions relating to the taxation of partnerships when filing an amended return. It would allow the partnership to elect to make any tax payments owed and outstanding based on the amended return on behalf of the partners. As such, the partners would not be subject to any additional taxes as a result of the partnership’s amended return.

This bill is part of Governor Jim Pillen’s tax cut and school aid plan. Those pieces together would reduce state tax revenues by at least $3.3 billion over six years, based on estimates from the Legislative Fiscal Office. (Stoddard, Martha and Bamer, Erin. “Lawmakers spar over income tax rate measure”, Omaha World Herald, March 30, 2023) I am proud to serve on this committee and we will be bringing more tax packages forward in the coming weeks to be debated on the floor.

Bills Update

• LB77–Concealed Carry Bill–This bill was debated on Select File this week and voted 31-10 to move forward to Final Reading.
• LB376–Change provisions of the Nebraska Liquor Control Act–This bill was debated on Select File this week and voted 47-0 to move forward to Final Reading.
• LB276–Adopt the Certified Community Behavioral Health Clinic Act–This bill is enabling legislation that allows for implementation of the Certified Community Behavioral Health Clinic model in Nebraska. Key components of the model include integration of primary and behavioral health care services, increased access to medication assisted treatment and strengthening the treatment system capacity by requiring quality reporting, increased evidence-based practices and expanded community partnerships with law enforcement, justice system and schools. We began debating this bill on Tuesday and voted to move it to Select File on Wednesday 46-0.

As always, I invite you to let me know your thoughts, ideas, concerns, or suggestions by contacting me by calling (402) 471-2716 or emailing me at jalbrecht@leg.ne.gov.