LB1084 LB1084
2024 2024
LEGISLATURE OF NEBRASKA
ONE HUNDRED EIGHTH LEGISLATURE
SECOND SESSION
LEGISLATIVE BILL 1084
Introduced by Ibach, 44; Kauth, 31.
Read first time January 09, 2024
Committee: Revenue
1 A BILL FOR AN ACT relating to revenue and taxation; to amend sections
2 77-908 and 77-3806, Revised Statutes Cumulative Supplement, 2022,
3 and sections 77-2715.07, 77-2717, and 77-2734.03, Revised Statutes
4 Supplement, 2023; to adopt the Nebraska Shortline Rail Modernization
5 Act; to provide for tax credits; to harmonize provisions; and to
6 repeal the original sections.
7 Be it enacted by the people of the State of Nebraska,
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1 Section 1. Sections 1 to 10 of this act shall be known and may be
2 cited as the Nebraska Shortline Rail Modernization Act.
3 Sec. 2. For purposes of the Nebraska Shortline Rail Modernization
4 Act:
5 (1) Department means the Department of Revenue;
6 (2) Eligible taxpayer means:
7 (a) Any shortline railroad company located wholly or partly in
8 Nebraska that is classified by the federal Surface Transportation Board
9 as a Class II or Class III railroad; and
10 (b) Any owner or lessee of a rail siding, industrial spur, or
11 industry track located on or adjacent to any railroad in Nebraska;
12 (3) Qualified new rail infrastructure expenditures means
13 expenditures for new rail infrastructure and improvements, including, but
14 not limited to, the acquisition of a right-of-way, engineering,
15 construction of new track such as industrial leads, switches, spurs, and
16 sidings, loading dock improvements, and transloading structures involved
17 with servicing customer locations or expansions by any railroad located
18 in Nebraska;
19 (4)(a) Qualified shortline railroad maintenance expenditures means
20 gross expenditures for railroad infrastructure maintenance and capital
21 improvements, including, but not limited to, rail, tie plates, joint
22 bars, fasteners, switches, ballast, subgrade, roadbed, bridges,
23 industrial leads, sidings, signs, safety barriers, crossing signals and
24 gates, and related track structures owned or leased by a Class II or
25 Class III railroad.
26 (b) Qualified shortline railroad maintenance expenditures do not
27 include expenditures used to generate a federal tax credit or
28 expenditures funded by a federal grant; and
29 (5) Taxpayer means any individual, corporation, partnership, limited
30 liability company, trust, estate, or other entity subject to the income
31 tax imposed by the Nebraska Revenue Act of 1967 or any tax imposed by
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1 sections 77-907 to 77-918 or 77-3801 to 77-3807.
2 Sec. 3. (1) For taxable years beginning or deemed to begin on or
3 after January 1, 2024, under the Internal Revenue Code of 1986, as
4 amended, an eligible taxpayer shall be allowed a credit against the
5 income tax imposed by the Nebraska Revenue Act of 1967 or any tax imposed
6 by sections 77-907 to 77-918 or 77-3801 to 77-3807 for qualified
7 shortline railroad maintenance expenditures or qualified new rail
8 infrastructure expenditures.
9 (2) The credit provided in this section shall be a nonrefundable tax
10 credit equal to:
11 (a) Fifty percent of the qualified shortline railroad maintenance
12 expenditures incurred during the taxable year by the eligible taxpayer.
13 The amount of the credit may not exceed an amount equal to five thousand
14 dollars multiplied by the number of miles of railroad track owned or
15 leased in the state by the eligible taxpayer at the end of the taxable
16 year; and
17 (b) Fifty percent of the qualified new rail infrastructure
18 expenditures incurred during the taxable year by the eligible taxpayer.
19 (3) The total amount of tax credits allowed in any taxable year
20 under the Nebraska Shortline Rail Modernization Act shall not exceed:
21 (a) Four million dollars for qualified shortline railroad
22 maintenance expenditures; and
23 (b) Five million dollars for qualified new rail infrastructure
24 expenditures.
25 (4) The maximum allowable amount of tax credits for qualified new
26 rail infrastructure expenditures in any single taxable year for an
27 individual infrastructure project shall not exceed three million dollars.
28 Sec. 4. To receive tax credits under the Nebraska Shortline Rail
29 Modernization Act, an eligible taxpayer shall submit an application to
30 the department on a form prescribed by the department after incurring the
31 relevant qualified shortline railroad maintenance expenditures or
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1 qualified new rail infrastructure expenditures. The application shall be
2 submitted no later than May 1 of the calendar year immediately following
3 the calendar year in which the expenditures were incurred. The
4 application shall include the following information:
5 (1) If applying for tax credits for qualified shortline railroad
6 maintenance expenditures, the number of miles of railroad track owned or
7 leased in this state by the eligible taxpayer;
8 (2) A description of the amount of qualified shortline railroad
9 maintenance expenditures incurred by the eligible taxpayer; and
10 (3) A description of the amount of qualified new rail infrastructure
11 expenditures incurred by the eligible taxpayer.
12 Sec. 5. (1) If the department determines that an application is
13 complete and that the eligible taxpayer qualifies for tax credits under
14 the Nebraska Shortline Rail Modernization Act, the department shall
15 approve the application and issue a tax credit certificate to the
16 eligible taxpayer. The certificate shall include the following
17 information:
18 (a) An identification number for the certificate;
19 (b) The date of issuance for the certificate; and
20 (c) The amount of the tax credit allowed under the act for the
21 eligible taxpayer.
22 (2) The department shall consider and approve applications for tax
23 credits under the act in the order in which the applications are
24 received.
25 Sec. 6. (1) A taxpayer shall claim the tax credit under the
26 Nebraska Shortline Rail Modernization Act by attaching the tax credit
27 certification received from the department under section 5 of this act to
28 its tax return.
29 (2) Any amount of the credit that is unused may be carried forward
30 and applied against the taxpayer's tax liability for the next five
31 taxable years immediately following the taxable year in which the credit
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1 was first allowed.
2 Sec. 7. The tax credits allowed under the Nebraska Shortline Rail
3 Modernization Act may be assigned by the eligible taxpayer to another
4 taxpayer by written agreement at any time during the taxable year in
5 which the credit was first allowed for the eligible taxpayer or in the
6 five taxable years immediately following the taxable year in which the
7 credit was first allowed for the eligible taxpayer. The assignor and
8 assignee shall jointly file a copy of the written assignment agreement
9 with the department within thirty days of the assignment. The written
10 agreement shall contain the name, address, and taxpayer identification
11 number of the parties to the assignment, the taxable year the eligible
12 taxpayer incurred the expenditures, the amount of credit being assigned,
13 and all taxable years for which the credit may be claimed.
14 Sec. 8. Any tax credit allowable to a partnership, a limited
15 liability company, a subchapter S corporation, or an estate or trust may
16 be distributed to the partners, limited liability company members,
17 shareholders, or beneficiaries in the same manner as income is
18 distributed.
19 Sec. 9. The department may adopt and promulgate rules and
20 regulations to carry out the Nebraska Shortline Rail Modernization Act.
21 Sec. 10. There shall be no new applications for tax credits filed
22 under the Nebraska Shortline Rail Modernization Act after December 31,
23 2033. All applications and all credits pending or approved before such
24 date shall continue in full force and effect.
25 Sec. 11. Section 77-908, Revised Statutes Cumulative Supplement,
26 2022, is amended to read:
27 77-908 Every insurance company organized under the stock, mutual,
28 assessment, or reciprocal plan, except fraternal benefit societies, which
29 is transacting business in this state shall, on or before March 1 of each
30 year, pay a tax to the director of one percent of the gross amount of
31 direct writing premiums received by it during the preceding calendar year
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1 for business done in this state, except that (1) for group sickness and
2 accident insurance the rate of such tax shall be five-tenths of one
3 percent and (2) for property and casualty insurance, excluding individual
4 sickness and accident insurance, the rate of such tax shall be one
5 percent. A captive insurer authorized under the Captive Insurers Act that
6 is transacting business in this state shall, on or before March 1 of each
7 year, pay to the director a tax of one-fourth of one percent of the gross
8 amount of direct writing premiums received by such insurer during the
9 preceding calendar year for business transacted in the state. The taxable
10 premiums shall include premiums paid on the lives of persons residing in
11 this state and premiums paid for risks located in this state whether the
12 insurance was written in this state or not, including that portion of a
13 group premium paid which represents the premium for insurance on Nebraska
14 residents or risks located in Nebraska included within the group when the
15 number of lives in the group exceeds five hundred. The tax shall also
16 apply to premiums received by domestic companies for insurance written on
17 individuals residing outside this state or risks located outside this
18 state if no comparable tax is paid by the direct writing domestic company
19 to any other appropriate taxing authority. Companies whose scheme of
20 operation contemplates the return of a portion of premiums to
21 policyholders, without such policyholders being claimants under the terms
22 of their policies, may deduct such return premiums or dividends from
23 their gross premiums for the purpose of tax calculations. Any such
24 insurance company shall receive a credit on the tax imposed as provided
25 in the Community Development Assistance Act, the Nebraska Job Creation
26 and Mainstreet Revitalization Act, the New Markets Job Growth Investment
27 Act, the Nebraska Higher Blend Tax Credit Act, the Nebraska Shortline
28 Rail Modernization Act, and the Affordable Housing Tax Credit Act.
29 Sec. 12. Section 77-2715.07, Revised Statutes Supplement, 2023, is
30 amended to read:
31 77-2715.07 (1) There shall be allowed to qualified resident
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1 individuals as a nonrefundable credit against the income tax imposed by
2 the Nebraska Revenue Act of 1967:
3 (a) A credit equal to the federal credit allowed under section 22 of
4 the Internal Revenue Code; and
5 (b) A credit for taxes paid to another state as provided in section
6 77-2730.
7 (2) There shall be allowed to qualified resident individuals against
8 the income tax imposed by the Nebraska Revenue Act of 1967:
9 (a) For returns filed reporting federal adjusted gross incomes of
10 greater than twenty-nine thousand dollars, a nonrefundable credit equal
11 to twenty-five percent of the federal credit allowed under section 21 of
12 the Internal Revenue Code of 1986, as amended, except that for taxable
13 years beginning or deemed to begin on or after January 1, 2015, such
14 nonrefundable credit shall be allowed only if the individual would have
15 received the federal credit allowed under section 21 of the code after
16 adding back in any carryforward of a net operating loss that was deducted
17 pursuant to such section in determining eligibility for the federal
18 credit;
19 (b) For returns filed reporting federal adjusted gross income of
20 twenty-nine thousand dollars or less, a refundable credit equal to a
21 percentage of the federal credit allowable under section 21 of the
22 Internal Revenue Code of 1986, as amended, whether or not the federal
23 credit was limited by the federal tax liability. The percentage of the
24 federal credit shall be one hundred percent for incomes not greater than
25 twenty-two thousand dollars, and the percentage shall be reduced by ten
26 percent for each one thousand dollars, or fraction thereof, by which the
27 reported federal adjusted gross income exceeds twenty-two thousand
28 dollars, except that for taxable years beginning or deemed to begin on or
29 after January 1, 2015, such refundable credit shall be allowed only if
30 the individual would have received the federal credit allowed under
31 section 21 of the code after adding back in any carryforward of a net
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1 operating loss that was deducted pursuant to such section in determining
2 eligibility for the federal credit;
3 (c) A refundable credit as provided in section 77-5209.01 for
4 individuals who qualify for an income tax credit as a qualified beginning
5 farmer or livestock producer under the Beginning Farmer Tax Credit Act
6 for all taxable years beginning or deemed to begin on or after January 1,
7 2006, under the Internal Revenue Code of 1986, as amended;
8 (d) A refundable credit for individuals who qualify for an income
9 tax credit under the Angel Investment Tax Credit Act, the Nebraska
10 Advantage Microenterprise Tax Credit Act, the Nebraska Advantage Research
11 and Development Act, or the Volunteer Emergency Responders Incentive Act;
12 and
13 (e) A refundable credit equal to ten percent of the federal credit
14 allowed under section 32 of the Internal Revenue Code of 1986, as
15 amended, except that for taxable years beginning or deemed to begin on or
16 after January 1, 2015, such refundable credit shall be allowed only if
17 the individual would have received the federal credit allowed under
18 section 32 of the code after adding back in any carryforward of a net
19 operating loss that was deducted pursuant to such section in determining
20 eligibility for the federal credit.
21 (3) There shall be allowed to all individuals as a nonrefundable
22 credit against the income tax imposed by the Nebraska Revenue Act of
23 1967:
24 (a) A credit for personal exemptions allowed under section
25 77-2716.01;
26 (b) A credit for contributions to certified community betterment
27 programs as provided in the Community Development Assistance Act. Each
28 partner, each shareholder of an electing subchapter S corporation, each
29 beneficiary of an estate or trust, or each member of a limited liability
30 company shall report his or her share of the credit in the same manner
31 and proportion as he or she reports the partnership, subchapter S
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