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LEGISLATURE OF NEBRASKA
ONE HUNDRED SIXTH LEGISLATURE
FIRST SESSION
LEGISLATIVE BILL 419
Introduced by Bolz, 29.
Read first time January 18, 2019
Committee: Revenue
1 A BILL FOR AN ACT relating to revenue and taxation; to amend sections
2 77-5701, 77-5702, 77-5714, 77-5723, 77-5725, 77-5726, and 77-5735,
3 Reissue Revised Statutes of Nebraska; to change the Nebraska
4 Advantage Act as prescribed; to create a fund and a grant program;
5 to harmonize provisions; and to repeal the original sections.
6 Be it enacted by the people of the State of Nebraska,
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1 Section 1. Section 77-5701, Reissue Revised Statutes of Nebraska, is
2 amended to read:
3 77-5701 Sections 77-5701 to 77-5735 and section 7 of this act shall
4 be known and may be cited as the Nebraska Advantage Act.
5 Sec. 2. Section 77-5702, Reissue Revised Statutes of Nebraska, is
6 amended to read:
7 77-5702 The Legislature hereby finds and declares that it is the
8 policy of this state to make revisions in Nebraska's tax structure in
9 order to (1) encourage new businesses to relocate to Nebraska, (2) retain
10 existing businesses and aid in their expansion, (3) promote the creation
11 and retention of new, quality jobs in Nebraska, specifically jobs that
12 pay above the Nebraska average weekly wage and that include employer-
13 provided health care benefits related to research and development,
14 manufacturing, and large data centers, and (4) attract and retain
15 investment capital in the State of Nebraska.
16 Sec. 3. Section 77-5714, Reissue Revised Statutes of Nebraska, is
17 amended to read:
18 77-5714 (1) Number of new employees, for a tier 1, tier 2, tier 3,
19 or tier 4 project, means the number of equivalent employees that are
20 employed at the project during a year that are in excess of the number of
21 equivalent employees during the base year, not to exceed the number of
22 equivalent employees employed at the project during a year who are not
23 base-year employees, who are offered employer-provided health care
24 benefits, and who are paid wages at a rate equal to at least one hundred
25 thirty sixty percent of the Nebraska average weekly wage for the year of
26 application.
27 (2) Number of new employees, for a tier 6 project, means the number
28 of equivalent employees that are employed at the project during a year
29 that are in excess of the number of equivalent employees during the base
30 year, not to exceed the number of equivalent employees employed at the
31 project during a year who are not base-year employees and who are paid at
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1 a rate equal to or greater than the tier 6 weekly required compensation
2 for the year of application.
3 (3) Teleworkers working for wages or salaries in Nebraska from their
4 residences for a taxpayer on tasks interdependent with the work performed
5 at the project shall be considered to be employed at the project.
6 (4) Employees who work at a military installation in Nebraska for a
7 taxpayer on tasks interdependent with the work performed at the project
8 shall be considered to be employed at the project.
9 Sec. 4. Section 77-5723, Reissue Revised Statutes of Nebraska, is
10 amended to read:
11 77-5723 (1) In order to utilize the incentives set forth in the
12 Nebraska Advantage Act, the taxpayer shall file an application, on a form
13 developed by the Tax Commissioner, requesting an agreement with the Tax
14 Commissioner.
15 (2) The application shall contain:
16 (a) A written statement describing the plan of employment and
17 investment for a qualified business in this state;
18 (b) Sufficient documents, plans, and specifications as required by
19 the Tax Commissioner to support the plan and to define a project;
20 (c) If more than one location within this state is involved,
21 sufficient documentation to show that the employment and investment at
22 different locations are interdependent parts of the plan. A headquarters
23 shall be presumed to be interdependent with each other location directly
24 controlled by such headquarters. A showing that the parts of the plan
25 would be considered parts of a unitary business for corporate income tax
26 purposes shall not be sufficient to show interdependence for the purposes
27 of this subdivision;
28 (d) A nonrefundable application fee of one thousand dollars for a
29 tier 1 project, two thousand five hundred dollars for a tier 2, tier 3,
30 or tier 5 project, five thousand dollars for a tier 4 project, and ten
31 thousand dollars for a tier 6 project. The fee shall be credited to the
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1 Nebraska Incentives Fund; and
2 (e) A timetable showing the expected sales tax refunds and what year
3 they are expected to be claimed. The timetable shall include both direct
4 refunds due to investment and credits taken as sales tax refunds as
5 accurately as possible.
6 The application and all supporting information shall be confidential
7 except for the name of the taxpayer, the location of the project, the
8 amounts of increased employment and investment, and the information
9 required to be reported by sections 77-5731 and 77-5734.
10 (3) An application must be complete to establish the date of the
11 application. An application shall be considered complete once it contains
12 the items listed in subsection (2) of this section, regardless of the Tax
13 Commissioner's additional needs pertaining to information or
14 clarification in order to approve or not approve the application.
15 (4) Once satisfied that the plan in the application defines a
16 project consistent with the purposes stated in the Nebraska Advantage Act
17 in one or more qualified business activities within this state, that the
18 taxpayer and the plan will qualify for benefits under the act, and that
19 the required levels of employment and investment for the project will be
20 met prior to the end of the fourth year after the year in which the
21 application was submitted for a tier 1, tier 3, or tier 6 project or the
22 end of the sixth year after the year in which the application was
23 submitted for a tier 2, tier 4, or tier 5 project, the Tax Commissioner
24 shall approve the application. For a tier 5 project that is sequential to
25 a tier 2 large data center project, the required level of investment
26 shall be met prior to the end of the fourth year after the expiration of
27 the tier 2 large data center project entitlement period relating to
28 direct sales tax refunds. The Tax Commissioner shall approve no more than
29 sixty million dollars in credits for any calendar year. Once such limit
30 is reached for the year, the Tax Commissioner may continue to approve
31 applications, but any agreement signed with respect to such an
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1 application shall not include any credits as part of the allowed
2 incentives.
3 (5) The Tax Commissioner shall make his or her determination to
4 approve or not approve an application within one hundred eighty days
5 after the date of the application. If the Tax Commissioner requests, by
6 mail or by electronic means, additional information or clarification from
7 the taxpayer in order to make his or her determination, such one-hundred-
8 eighty-day period shall be tolled from the time the Tax Commissioner
9 makes the request to the time he or she receives the requested
10 information or clarification from the taxpayer. The taxpayer and the Tax
11 Commissioner may also agree to extend the one-hundred-eighty-day period.
12 If the Tax Commissioner fails to make his or her determination within the
13 prescribed one-hundred-eighty-day period, the application shall be deemed
14 approved.
15 (6) Within one hundred eighty days after approval of the
16 application, the Tax Commissioner shall prepare and mail a written
17 agreement to the taxpayer for the taxpayer's signature. The taxpayer and
18 the Tax Commissioner shall enter into a written agreement. The taxpayer
19 shall agree to complete the project, and the Tax Commissioner, on behalf
20 of the State of Nebraska, shall designate the approved plan of the
21 taxpayer as a project and, in consideration of the taxpayer's agreement,
22 agree to allow the taxpayer to use the incentives contained in the
23 Nebraska Advantage Act. The application, and all supporting
24 documentation, to the extent approved, shall be considered a part of the
25 agreement. The agreement shall state:
26 (a) The levels of employment and investment required by the act for
27 the project;
28 (b) The time period under the act in which the required levels must
29 be met;
30 (c) The documentation the taxpayer will need to supply when claiming
31 an incentive under the act;
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1 (d) The date the application was filed; and
2 (e) A requirement that the company update the Department of Revenue
3 annually on any changes in plans or circumstances which affect the
4 timetable of sales tax refunds as set out in the application. If the
5 company fails to comply with this requirement, the Tax Commissioner may
6 defer any pending sales tax refunds until the company does comply.
7 (7) The incentives contained in section 77-5725 shall be in lieu of
8 the tax credits allowed by the Nebraska Advantage Rural Development Act
9 for any project. In computing credits under the act, any investment or
10 employment which is eligible for benefits or used in determining benefits
11 under the Nebraska Advantage Act shall be subtracted from the increases
12 computed for determining the credits under section 77-27,188. New
13 investment or employment at a project location that results in the
14 meeting or maintenance of the employment or investment requirements, the
15 creation of credits, or refunds of taxes under the Employment and
16 Investment Growth Act shall not be considered new investment or
17 employment for purposes of the Nebraska Advantage Act. The use of
18 carryover credits under the Employment and Investment Growth Act, the
19 Invest Nebraska Act, the Nebraska Advantage Rural Development Act, or the
20 Quality Jobs Act shall not preclude investment and employment from being
21 considered new investment or employment under the Nebraska Advantage Act.
22 The use of property tax exemptions at the project under the Employment
23 and Investment Growth Act shall not preclude investment not eligible for
24 the property tax exemption from being considered new investment under the
25 Nebraska Advantage Act.
26 (8) A taxpayer and the Tax Commissioner may enter into agreements
27 for more than one project and may include more than one project in a
28 single agreement. The projects may be either sequential or concurrent. A
29 project may involve the same location as another project. No new
30 employment or new investment shall be included in more than one project
31 for either the meeting of the employment or investment requirements or
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1 the creation of credits. When projects overlap and the plans do not
2 clearly specify, then the taxpayer shall specify in which project the
3 employment or investment belongs.
4 (9) The taxpayer may request that an agreement be modified if the
5 modification is consistent with the purposes of the act and does not
6 require a change in the description of the project. An agreement may not
7 be modified to a tier that would grant a higher level of benefits to the
8 taxpayer or to a tier 1 project. Once satisfied that the modification to
9 the agreement is consistent with the purposes stated in the act, the Tax
10 Commissioner and taxpayer may amend the agreement. For a tier 6 project,
11 the taxpayer must agree to limit the project to qualified activities
12 allowable under tier 2 and tier 4.
13 Sec. 5. Section 77-5725, Reissue Revised Statutes of Nebraska, is
14 amended to read:
15 77-5725 (1) Applicants may qualify for benefits under the Nebraska
16 Advantage Act in one of six tiers:
17 (a) Tier 1, investment in qualified property of at least one million
18 dollars and the hiring of at least ten new employees. There shall be no
19 new project applications for benefits under this tier filed after
20 December 31, 2026 2020. All complete project applications filed on or
21 before December 31, 2026 2020, shall be considered by the Tax
22 Commissioner and approved if the project and taxpayer qualify for
23 benefits. Agreements may be executed with regard to completed project
24 applications filed on or before December 31, 2026 2020. All project
25 agreements pending, approved, or entered into before such date shall
26 continue in full force and effect;
27 (b) Tier 2, (i) investment in qualified property of at least three
28 million dollars and the hiring of at least thirty new employees or (ii)
29 for a large data center project, investment in qualified property for the
30 data center of at least two hundred million dollars and the hiring for
31 the data center of at least thirty new employees. There shall be no new
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1 project applications for benefits under this tier filed after December
2 31, 2026 2020. All complete project applications filed on or before
3 December 31, 2026 2020, shall be considered by the Tax Commissioner and
4 approved if the project and taxpayer qualify for benefits. Agreements may
5 be executed with regard to completed project applications filed on or
6 before December 31, 2026 2020. All project agreements pending, approved,
7 or entered into before such date shall continue in full force and effect;
8 (c) Tier 3, the hiring of at least thirty new employees. There shall
9 be no new project applications for benefits under this tier filed after
10 December 31, 2026 2020. All complete project applications filed on or
11 before December 31, 2026 2020, shall be considered by the Tax
12 Commissioner and approved if the project and taxpayer qualify for
13 benefits. Agreements may be executed with regard to completed project
14 applications filed on or before December 31, 2026 2020. All project
15 agreements pending, approved, or entered into before such date shall
16 continue in full force and effect;
17 (d) Tier 4, investment in qualified property of at least ten million
18 dollars and the hiring of at least one hundred new employees. There shall
19 be no new project applications for benefits under this tier filed after
20 December 31, 2026 2020. All complete project applications filed on or
21 before December 31, 2026 2020, shall be considered by the Tax
22 Commissioner and approved if the project and taxpayer qualify for
23 benefits. Agreements may be executed with regard to completed project
24 applications filed on or before December 31, 2026 2020. All project
25 agreements pending, approved, or entered into before such date shall
26 continue in full force and effect;
27 (e) Tier 5, (i) investment in qualified property of at least thirty
28 million dollars or (ii) for the pro