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LEGISLATURE OF NEBRASKA
ONE HUNDRED EIGHTH LEGISLATURE
SECOND SESSION
LEGISLATIVE BILL 1217
Introduced by Bostar, 29.
Read first time January 16, 2024
Committee: Revenue
1 A BILL FOR AN ACT relating to revenue and taxation; to amend section
2 77-1333, Reissue Revised Statutes of Nebraska, and sections 77-202,
3 77-202.01, and 77-202.03, Revised Statutes Cumulative Supplement,
4 2022; to provide certain property tax exemptions; to change
5 provisions relating to exemption application procedures and rent-
6 restricted housing projects; to provide a valuation process for
7 sales-restricted houses; to harmonize provisions; and to repeal the
8 original sections.
9 Be it enacted by the people of the State of Nebraska,
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1 Section 1. Section 77-202, Revised Statutes Cumulative Supplement,
2 2022, is amended to read:
3 77-202 (1) The following property shall be exempt from property
4 taxes:
5 (a) Property of the state and its governmental subdivisions to the
6 extent used or being developed for use by the state or governmental
7 subdivision for a public purpose. For purposes of this subdivision:
8 (i) Property of the state and its governmental subdivisions means
9 (A) property held in fee title by the state or a governmental subdivision
10 or (B) property beneficially owned by the state or a governmental
11 subdivision in that it is used for a public purpose and is being acquired
12 under a lease-purchase agreement, financing lease, or other instrument
13 which provides for transfer of legal title to the property to the state
14 or a governmental subdivision upon payment of all amounts due thereunder.
15 If the property to be beneficially owned by a governmental subdivision
16 has a total acquisition cost that exceeds the threshold amount or will be
17 used as the site of a public building with a total estimated construction
18 cost that exceeds the threshold amount, then such property shall qualify
19 for an exemption under this section only if the question of acquiring
20 such property or constructing such public building has been submitted at
21 a primary, general, or special election held within the governmental
22 subdivision and has been approved by the voters of the governmental
23 subdivision. For purposes of this subdivision, threshold amount means the
24 greater of fifty thousand dollars or six-tenths of one percent of the
25 total actual value of real and personal property of the governmental
26 subdivision that will beneficially own the property as of the end of the
27 governmental subdivision's prior fiscal year; and
28 (ii) Public purpose means use of the property (A) to provide public
29 services with or without cost to the recipient, including the general
30 operation of government, public education, public safety, transportation,
31 public works, civil and criminal justice, public health and welfare,
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1 developments by a public housing authority, parks, culture, recreation,
2 community development, and cemetery purposes, or (B) to carry out the
3 duties and responsibilities conferred by law with or without
4 consideration. Public purpose does not include leasing of property to a
5 private party unless the lease of the property is at fair market value
6 for a public purpose. Leases of property by a public housing authority to
7 low-income individuals as a place of residence are for the authority's
8 public purpose;
9 (b) Unleased property of the state or its governmental subdivisions
10 which is not being used or developed for use for a public purpose but
11 upon which a payment in lieu of taxes is paid for public safety, rescue,
12 and emergency services and road or street construction or maintenance
13 services to all governmental units providing such services to the
14 property. Except as provided in Article VIII, section 11, of the
15 Constitution of Nebraska, the payment in lieu of taxes shall be based on
16 the proportionate share of the cost of providing public safety, rescue,
17 or emergency services and road or street construction or maintenance
18 services unless a general policy is adopted by the governing body of the
19 governmental subdivision providing such services which provides for a
20 different method of determining the amount of the payment in lieu of
21 taxes. The governing body may adopt a general policy by ordinance or
22 resolution for determining the amount of payment in lieu of taxes by
23 majority vote after a hearing on the ordinance or resolution. Such
24 ordinance or resolution shall nevertheless result in an equitable
25 contribution for the cost of providing such services to the exempt
26 property;
27 (c) Property owned by and used exclusively for agricultural and
28 horticultural societies;
29 (d)(i) (d) Property owned by educational, religious, charitable, or
30 cemetery organizations, or any organization for the exclusive benefit of
31 any such educational, religious, charitable, or cemetery organization,
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1 and used exclusively for educational, religious, charitable, or cemetery
2 purposes, when such property is not (A) (i) owned or used for financial
3 gain or profit to either the owner or user, (B) (ii) used for the sale of
4 alcoholic liquors for more than twenty hours per week, or (C) (iii) owned
5 or used by an organization which discriminates in membership or
6 employment based on race, color, or national origin.
7 (ii) For purposes of subdivision (1)(d) of this section:
8 (A) Educational this subdivision, educational organization means (I)
9 (A) an institution operated exclusively for the purpose of offering
10 regular courses with systematic instruction in academic, vocational, or
11 technical subjects or assisting students through services relating to the
12 origination, processing, or guarantying of federally reinsured student
13 loans for higher education or (II) (B) a museum or historical society
14 operated exclusively for the benefit and education of the public; and .
15 (B) Charitable For purposes of this subdivision, charitable
16 organization includes (I) an organization operated exclusively for the
17 purpose of the mental, social, or physical benefit of the public or an
18 indefinite number of persons and (II) a fraternal benefit society
19 organized and licensed under sections 44-1072 to 44-10,109. ; and
20 (iii) The property tax exemption authorized in subdivision (1)(d)(i)
21 of this section shall apply to any skilled nursing facility as defined in
22 section 71-429, nursing facility as defined in section 71-424, or
23 assisted-living facility as defined in section 71-5903 that provides
24 housing for medicaid beneficiaries, except that the exemption amount for
25 such property shall be a percentage of the property taxes that would
26 otherwise be due. Such percentage shall be equal to the average
27 percentage of beds in the facility provided to medicaid beneficiaries
28 over the most recent three-year period.
29 (iv) The property tax exemption authorized in subdivision (1)(d)(i)
30 of this section shall apply to a building that (A) is owned by a
31 charitable organization, (B) is made available to students in attendance
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1 at an educational institution, and (C) is recognized by such educational
2 institution as approved student housing, except that the exemption shall
3 only apply to the commons area of such building, including any common
4 rooms and cooking and eating facilities; and
5 (e) Household goods and personal effects not owned or used for
6 financial gain or profit to either the owner or user.
7 (2) The increased value of land by reason of shade and ornamental
8 trees planted along the highway shall not be taken into account in the
9 valuation of land.
10 (3) Tangible personal property which is not depreciable tangible
11 personal property as defined in section 77-119 shall be exempt from
12 property tax.
13 (4) Motor vehicles, trailers, and semitrailers required to be
14 registered for operation on the highways of this state shall be exempt
15 from payment of property taxes.
16 (5) Business and agricultural inventory shall be exempt from the
17 personal property tax. For purposes of this subsection, business
18 inventory includes personal property owned for purposes of leasing or
19 renting such property to others for financial gain only if the personal
20 property is of a type which in the ordinary course of business is leased
21 or rented thirty days or less and may be returned at the option of the
22 lessee or renter at any time and the personal property is of a type which
23 would be considered household goods or personal effects if owned by an
24 individual. All other personal property owned for purposes of leasing or
25 renting such property to others for financial gain shall not be
26 considered business inventory.
27 (6) Any personal property exempt pursuant to subsection (2) of
28 section 77-4105 or section 77-5209.02 shall be exempt from the personal
29 property tax.
30 (7) Livestock shall be exempt from the personal property tax.
31 (8) Any personal property exempt pursuant to the Nebraska Advantage
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1 Act or the ImagiNE Nebraska Act shall be exempt from the personal
2 property tax.
3 (9) Any depreciable tangible personal property used directly in the
4 generation of electricity using wind as the fuel source shall be exempt
5 from the property tax levied on depreciable tangible personal property.
6 Any depreciable tangible personal property used directly in the
7 generation of electricity using solar, biomass, or landfill gas as the
8 fuel source shall be exempt from the property tax levied on depreciable
9 tangible personal property if such depreciable tangible personal property
10 was installed on or after January 1, 2016, and has a nameplate capacity
11 of one hundred kilowatts or more. Depreciable tangible personal property
12 used directly in the generation of electricity using wind, solar,
13 biomass, or landfill gas as the fuel source includes, but is not limited
14 to, wind turbines, rotors and blades, towers, solar panels, trackers,
15 generating equipment, transmission components, substations, supporting
16 structures or racks, inverters, and other system components such as
17 wiring, control systems, switchgears, and generator step-up transformers.
18 (10) Any tangible personal property that is acquired by a person
19 operating a data center located in this state, that is assembled,
20 engineered, processed, fabricated, manufactured into, attached to, or
21 incorporated into other tangible personal property, both in component
22 form or that of an assembled product, for the purpose of subsequent use
23 at a physical location outside this state by the person operating a data
24 center shall be exempt from the personal property tax. Such exemption
25 extends to keeping, retaining, or exercising any right or power over
26 tangible personal property in this state for the purpose of subsequently
27 transporting it outside this state for use thereafter outside this state.
28 For purposes of this subsection, data center means computers, supporting
29 equipment, and other organized assembly of hardware or software that are
30 designed to centralize the storage, management, or dissemination of data
31 and information, environmentally controlled structures or facilities or
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1 interrelated structures or facilities that provide the infrastructure for
2 housing the equipment, such as raised flooring, electricity supply,
3 communication and data lines, Internet access, cooling, security, and
4 fire suppression, and any building housing the foregoing.
5 (11) For tax years prior to tax year 2020, each person who owns
6 property required to be reported to the county assessor under section
7 77-1201 shall be allowed an exemption amount as provided in the Personal
8 Property Tax Relief Act. For tax years prior to tax year 2020, each
9 person who owns property required to be valued by the state as provided
10 in section 77-601, 77-682, 77-801, or 77-1248 shall be allowed a
11 compensating exemption factor as provided in the Personal Property Tax
12 Relief Act.
13 Sec. 2. Section 77-202.01, Revised Statutes Cumulative Supplement,
14 2022, is amended to read:
15 77-202.01 (1) Any organization or society seeking a tax exemption
16 provided in subdivisions (1)(c) and (d) of section 77-202 for any real or
17 tangible personal property, except real property used for cemetery
18 purposes, shall apply for exemption to the county assessor on or before
19 December 31 of the year preceding the year for which the exemption is
20 sought on forms prescribed by the Tax Commissioner. Applications that
21 lack an estimated valuation, or any other required information, shall
22 result in the denial of the requested exemption. The county assessor
23 shall examine the application and recommend either taxable or exempt for
24 the real property or tangible personal property to the county board of
25 equalization on or before March 1 following. For applications involving
26 property described in subdivision (1)(d)(iii) or (iv) of section 77-202,
27 the county assessor shall also calculate the exemption amount for the
28 property and shall submit such calculation to the county board of
29 equalization along with his or her recommendations. Notice that a list of
30 the applications from organizations seeking tax exemption, descriptions
31 of the property, and recommendations of the county assessor are available
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1 in the county assessor's office shall be published in a newspaper of
2 general circulation in the county at least ten days prior to
3 consideration of any application by the county board of equalization.
4 (2) Any organization or society which fails to file an exemption
5 application on or before December 31 may apply on or before June 30 to
6 the county assessor. The organization or society shall also file in
7 writing a request with the county board of equalization for a waiver so
8 that the county assessor may consider the application for exemption. The
9 county board of equalization shall grant the waiver upon a finding that
10 good cause exists for the failure to make application on or before
11 December 31. When the waiver is granted, the county assessor shall
12 examine the application and recommend either taxable or exempt for the
13 real property or tangible personal property to the county board of
14 equalization, shall calculate the exemption amount for any property
15 described in subdivision (1)(d)(iii) or (iv) of section 77-202, and shall
16 assess a penalty against the property of ten percent of the tax that
17 would have been assessed had the waiver been denied or one hundred
18 dollars, whichever is less, f