LB825 LB825
2024 2024
LEGISLATURE OF NEBRASKA
ONE HUNDRED EIGHTH LEGISLATURE
SECOND SESSION
LEGISLATIVE BILL 825
Introduced by Blood, 3.
Read first time January 03, 2024
Committee: Revenue
1 A BILL FOR AN ACT relating to revenue and taxation; to amend sections
2 77-2715.07, 77-2717, and 77-2734.03, Revised Statutes Supplement,
3 2023; to adopt the Nebraska Farmers of Color Opportunity Act; to
4 provide tax credits; to harmonize provisions; to provide an
5 operative date; 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. Sections 1 to 12 of this act shall be known and may be
2 cited as the Nebraska Farmers of Color Opportunity Act.
3 Sec. 2. The Legislature finds that:
4 (1) It is in the best interests of the State of Nebraska and its
5 citizens to encourage individuals and businesses to support organizations
6 that financially assist black agricultural producers in this state; and
7 (2) Such encouragement can be accomplished through the use of tax
8 credits as provided in the Nebraska Farmers of Color Opportunity Act.
9 Sec. 3. For purposes of the Nebraska Farmers of Color Opportunity
10 Act:
11 (1) Department means the Department of Revenue;
12 (2) Eligible farmer means an individual who meets the following
13 requirements:
14 (a) The individual is a black resident of this state; and
15 (b) The individual's primary source of income is crop or livestock
16 production in this state; and
17 (3) Qualified granting organization means an organization that is
18 certified pursuant to section 4 of this act to provide tax-credit-
19 supported grants to eligible farmers.
20 Sec. 4. (1) An organization may apply to the department to become
21 certified as a qualified granting organization under the Nebraska Farmers
22 of Color Opportunity Act. An organization shall obtain such certification
23 prior to providing any grants to eligible farmers under the act.
24 (2) In order to become certified, the applicant shall provide the
25 department with sufficient information to show:
26 (a) That the applicant is exempt from federal income taxation under
27 section 501(c)(3) of the Internal Revenue Code of 1986, as amended;
28 (b) That the applicant will offer one or more grant programs for
29 eligible farmers;
30 (c) That the applicant will limit the maximum grant amount awarded
31 to any eligible farmer to XX dollars; and
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1 (d) That the applicant will be able to comply with the requirements
2 of section 10 of this act.
3 (3) If the applicant meets the requirements of this section, the
4 department shall certify it as a qualified granting organization for tax-
5 credit purposes under the Nebraska Farmers of Color Opportunity Act. Such
6 certification is subject to revocation by the department if the qualified
7 granting organization subsequently fails to fulfill the requirements of
8 this section or section 10 of this act.
9 Sec. 5. (1) An individual taxpayer who makes one or more cash
10 contributions to one or more qualified granting organizations during a
11 tax year shall be eligible for a credit against the income tax due under
12 the Nebraska Revenue Act of 1967. Except as otherwise provided in the
13 Nebraska Farmers of Color Opportunity Act, the amount of the credit shall
14 be equal to the lesser of (a) the total amount of such contributions made
15 during the tax year or (b) fifty percent of the income tax liability of
16 such taxpayer for the tax year. A taxpayer may only claim a credit
17 pursuant to this section for the portion of the contribution that was not
18 claimed as a charitable contribution under the Internal Revenue Code.
19 (2) Taxpayers who are married but file separate returns for a tax
20 year in which they could have filed a joint return may each claim only
21 one-half of the tax credit that would otherwise have been allowed for a
22 joint return.
23 (3) The tax credit allowed under this section shall be a
24 nonrefundable credit. Any amount of the credit that is unused may be
25 carried forward and applied against the taxpayer's income tax liability
26 for the next five years immediately following the tax year in which the
27 credit is first allowed. The tax credit cannot be carried back.
28 (4) The taxpayer may not designate all or any part of the
29 contribution to a qualified granting organization for the benefit of any
30 eligible farmer specifically identified by the taxpayer.
31 (5) The tax credit allowed under this section is subject to section
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1 9 of this act.
2 Sec. 6. (1) Any partnership, limited liability company, or
3 corporation having an election in effect under subchapter S of the
4 Internal Revenue Code of 1986, as amended, that makes one or more cash
5 contributions to one or more qualified granting organizations during a
6 tax year shall be eligible for a credit against the income tax due under
7 the Nebraska Revenue Act of 1967. Except as otherwise provided in the
8 Nebraska Farmers of Color Opportunity Act, the amount of the credit shall
9 be equal to the lesser of (a) the total amount of such contributions made
10 during the tax year or (b) fifty percent of the income tax liability of
11 such taxpayer for the tax year. A taxpayer may only claim a credit
12 pursuant to this section for the portion of the contribution that was not
13 claimed as a charitable contribution under the Internal Revenue Code. The
14 credit shall be attributed to each partner, member, or shareholder in the
15 same proportion used to report the partnership's, limited liability
16 company's, or subchapter S corporation's income or loss for income tax
17 purposes.
18 (2) The tax credit allowed under this section shall be a
19 nonrefundable credit. Any amount of the tax credit that is unused may be
20 carried forward and applied against the taxpayer's income tax liability
21 for the next five years immediately following the tax year in which the
22 credit is first allowed. The tax credit cannot be carried back.
23 (3) The taxpayer may not designate all or any part of the
24 contribution to a qualified granting organization for the benefit of any
25 eligible farmer specifically identified by the taxpayer.
26 (4) The tax credit allowed under this section is subject to section
27 9 of this act.
28 Sec. 7. (1) An estate or trust which makes one or more cash
29 contributions to one or more qualified granting organizations during a
30 tax year shall be eligible for a credit against the income tax due under
31 the Nebraska Revenue Act of 1967. Except as otherwise provided in the
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1 Nebraska Farmers of Color Opportunity Act, the amount of the credit shall
2 be equal to the lesser of (a) the total amount of such contributions made
3 during the tax year or (b) fifty percent of the income tax liability of
4 such taxpayer for the tax year. A taxpayer may only claim a credit
5 pursuant to this section for the portion of the contribution that was not
6 claimed as a charitable contribution under the Internal Revenue Code. Any
7 credit not used by the estate or trust may be attributed to each
8 beneficiary of the estate or trust in the same proportion used to report
9 the beneficiary's income from the estate or trust for income tax
10 purposes.
11 (2) The tax credit allowed under this section shall be a
12 nonrefundable credit. Any amount of the tax credit that is unused may be
13 carried forward and applied against the taxpayer's income tax liability
14 for the next five years immediately following the tax year in which the
15 credit is first allowed. The tax credit cannot be carried back.
16 (3) The taxpayer may not designate all or any part of the
17 contribution to a qualified granting organization for the benefit of any
18 eligible farmer specifically identified by the taxpayer.
19 (4) The tax credit allowed under this section is subject to section
20 9 of this act.
21 Sec. 8. (1) A corporate taxpayer as defined in section 77-2734.04
22 which makes one or more cash contributions to one or more qualified
23 granting organizations during a tax year shall be eligible for a credit
24 against the income tax due under the Nebraska Revenue Act of 1967. Except
25 as otherwise provided in the Nebraska Farmers of Color Opportunity Act,
26 the amount of the credit shall be equal to the lesser of (a) the total
27 amount of such contributions made during the tax year or (b) fifty
28 percent of the income tax liability of such taxpayer for the tax year. A
29 taxpayer may only claim a credit pursuant to this section for the portion
30 of the contribution that was not claimed as a charitable contribution
31 under the Internal Revenue Code.
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1 (2) The tax credit allowed under this section shall be a
2 nonrefundable credit. Any amount of the tax credit that is unused may be
3 carried forward and applied against the taxpayer's income tax liability
4 for the next five years immediately following the tax year in which the
5 credit is first allowed. The tax credit cannot be carried back.
6 (3) The taxpayer may not designate all or any part of the
7 contribution to a qualified granting organization for the benefit of any
8 eligible farmer specifically identified by the taxpayer.
9 (4) The tax credit allowed under this section is subject to section
10 9 of this act.
11 Sec. 9. (1) Prior to making a contribution to a qualified granting
12 organization, any taxpayer desiring to claim a tax credit under the
13 Nebraska Farmers of Color Opportunity Act shall notify the qualified
14 granting organization of the taxpayer's intent to make a contribution and
15 the amount to be claimed as a tax credit. Upon receiving each such
16 notification, the qualified granting organization shall notify the
17 department of the intended tax credit amount. If the department
18 determines that the intended tax credit amount in the notification would
19 exceed the limit specified in subsection (3) of this section, the
20 department shall notify the qualified granting organization of its
21 determination within thirty days after receipt of the notification. The
22 qualified granting organization shall then promptly notify the taxpayer
23 of the department's determination that the intended tax credit amount in
24 the notification is not available. If an amount less than the amount
25 indicated in the notification is available for a tax credit, the
26 department shall notify the qualified granting organization of the
27 available amount and the qualified granting organization shall notify the
28 taxpayer of the available amount within three business days.
29 (2) In order to be allowed a tax credit as provided by the act, the
30 taxpayer shall make its contribution between thirty-one and sixty days
31 after notifying the qualified granting organization of the taxpayer's
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1 intent to make a contribution. If the qualified granting organization
2 does not receive the contribution within the required time period, it
3 shall notify the department of such fact and the department shall no
4 longer include such amount when calculating whether the limit prescribed
5 in subsection (3) of this section has been exceeded. If the qualified
6 granting organization receives the contribution within the required time
7 period, it shall provide the taxpayer with a receipt for the
8 contribution. The receipt shall show the name and address of the
9 qualified granting organization, the date the qualified granting
10 organization was certified by the department in accordance with section 4
11 of this act, the name, address, and, if available, tax identification
12 number of the taxpayer making the contribution, the amount of the
13 contribution, and the date the contribution was received.
14 (3) The department shall consider notifications regarding intended
15 tax credit amounts in the order in which they are received to ascertain
16 whether the intended tax credit amounts are within the annual limit
17 provided in this subsection. The annual limit on the total amount of tax
18 credits for calendar year 2025 shall be twenty-five million dollars. The
19 annual limit on the total amount of tax credits for calendar year 2026
20 and each calendar year thereafter shall be calculated by taking the
21 annual limit from the prior calendar year and then multiplying such
22 amount by (a) one hundred twenty-five percent if the intended tax credit
23 amounts in the prior calendar year exceeded ninety percent of the annual
24 limit applicable to that calendar year or (b) one hundred percent if the
25 intended tax credit amounts in the prior calendar year did not exceed
26 ninety percent of the annual limit applicable to that calendar year.
27 (4) The Department of Agriculture and the Department of Revenue
28 shall publish on their respective websites information identifying the
29 annual limit when it is increased pursuant to subsection (3) of this
30 section.
31 (5) Once credits have reached the designated annual limit for any
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1 calendar year, no additional credits shall be allowed for such calendar
2 year. Credits shall be prorated among the notifications received on the
3 day the annual limit is exceeded.
4 Sec. 10. (1) In order for a qualified granting organization to
5 remain certified under the Nebraska Farmers of Color Opportunity Act, the
6 qualified granting organization shall allocate its revenue as follows:
7 (a) If the annual limit on tax credits under section 9 of this act
8 is less than thirty-five million dollars, the qualified granting
9 organization shall allocate at least ninety percent of its revenue for
10 grants to eligible farmers and no more than ten percent of its revenue
11 shall be used or reserved for administrative costs; or
12 (b) If the annual limit on tax credits under section 9 of this act
13 is thirty-five million dollars or more, the qualified granting
14 organization shall allocate at least ninety-five percent of its revenue
15 for grants to eligible farmers, and no more than five percent of its
16 revenue shall be used or reserved for administrative costs.
17 (2) For purposes of subsection (1) of this section, revenue is
18 allocated when it is expended or otherwise irrevocably encumbered for
19 expenditure. The percentage of revenue allocated for grants to eligible
20 farmers shall be measured as a monthly average over the most recent
21 twenty-four-month period or, for a qualified granting organization that
22 has been certified for less than twenty-four months, over the period of
23 time that the qualified granting organization has been certified.
24 Sec. 11. (1) Each qualified granting organization shall annually
25 submit to the department no later than Decem