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LEGISLATURE OF NEBRASKA
ONE HUNDRED EIGHTH LEGISLATURE
FIRST SPECIAL SESSION
LEGISLATIVE BILL 1
Introduced by Linehan, 39; at the request of the Governor.
Read first time July 25, 2024
Committee: Government, Military and Veterans Affairs
1 A BILL FOR AN ACT relating to revenue and taxation; to amend sections
2 2-2701, 9-648, 13-508, 13-518, 13-2817, 29-3933, 53-160, 72-2305,
3 72-2306, 77-2701.11, 77-2701.35, 77-2704.10, 77-2704.24, 77-2704.27,
4 77-2704.50, 77-27,142, 77-27,148, 77-27,235, 77-5209.02, and
5 79-1002, Reissue Revised Statutes of Nebraska; sections 77-382,
6 77-693, 77-801, 77-1238, 77-1239, 77-1248, 77-1776, 77-2602,
7 77-2701.16, 77-2703, 77-27,144, and 81-12,193, Revised Statutes
8 Cumulative Supplement, 2022; sections 77-1632, 77-1633, 77-1701,
9 77-2734.01, 77-4008, 77-6702, and 77-6703, Revised Statutes
10 Supplement, 2023; section 77-3005, Reissue Revised Statutes of
11 Nebraska, as amended by Laws 2024, LB685, section 11; section
12 77-202, Revised Statutes Cumulative Supplement, 2022, as amended by
13 Laws 2024, LB874, section 10, and Laws 2024, LB1317, section 73;
14 section 9-1,101, Revised Statutes Supplement, 2023, as amended by
15 Laws 2024, LB685, section 1; section 77-2701, Revised Statutes
16 Supplement, 2023, as amended by Laws 2024, LB937, section 67, Laws
17 2024, LB1023, section 8, and Laws 2024, LB1317, section 80; section
18 77-2701.02, Revised Statutes Supplement, 2023, as amended by Laws
19 2024, LB1317, section 81; section 77-2701.04, Revised Statutes
20 Supplement, 2023, as amended by Laws 2024, LB937, section 68, and
21 Laws 2024, LB1317, section 82; section 77-2716, Revised Statutes
22 Supplement, 2023, as amended by Laws 2024, LB937, section 75, Laws
23 2024, LB1023, section 10, Laws 2024, LB1317, section 85, and Laws
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1 2024, LB1394, section 1; section 77-27,132, Revised Statutes
2 Supplement, 2023, as amended by Laws 2024, LB1108, section 3;
3 section 77-4025, Revised Statutes Supplement, 2023, as amended by
4 Laws 2024, LB1204, section 36; section 77-4212, Revised Statutes
5 Supplement, 2023, as amended by Laws 2024, LB126, section 11;
6 section 77-4405, Revised Statutes Supplement, 2023, as amended by
7 Laws 2024, LB1317, section 90, and Laws 2024, LB1344, section 14;
8 section 79-1021, Revised Statutes Supplement, 2023, as amended by
9 Laws 2024, LB1284, section 12; Laws 2024, LB685, section 17; and
10 Laws 2024, LB1204, section 17; to adopt the Property Tax Growth
11 Limitation Act, the School District Property Tax Relief Act, and the
12 Advertising Services Tax Act; to change provisions relating to the
13 taxes collected under the Nebraska County and City Lottery Act; to
14 change provisions relating to budgets and budget limitations; to
15 change provisions relating to the taxes collected under the Nebraska
16 Liquor Control Act; to change the Personal Property Tax Relief Act
17 as prescribed; to change provisions relating to property tax
18 statements, the cigarette tax, and sales tax rates; to eliminate
19 certain sales and use tax exemptions and impose sales and use taxes
20 on certain services; to define and redefine terms; to change
21 provisions relating to the imposition of sales and use taxes; to
22 change income tax provisions relating to certain income or loss
23 received from S-corporations and limited liability companies; to
24 change the distribution of sales and use tax and income tax revenue;
25 to change provisions of the Local Option Revenue Act, the Mechanical
26 Amusement Device Tax Act, the Tobacco Products Tax Act, the Property
27 Tax Credit Act, the Nebraska Property Tax Incentive Act, and the Tax
28 Equity and Educational Opportunities Support Act; to harmonize
29 provisions; to provide an operative date; to provide severability;
30 to repeal the original sections; to outright repeal sections
31 77-2701.49, 77-2701.50, 77-2701.51, 77-2701.52, 77-2701.53,
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1 77-2704.22, 77-2704.38, 77-2704.39, 77-2704.40, 77-2704.51,
2 77-2704.53, 77-2704.56, 77-2704.57, 77-2704.60, 77-2704.61,
3 77-2704.62, 77-2704.63, 77-2704.65, and 77-2704.67, Reissue Revised
4 Statutes of Nebraska; sections 77-2704.20 and 77-2704.69, Revised
5 Statutes Cumulative Supplement, 2022; sections 77-2704.36 and
6 77-4003.01, Revised Statutes Supplement, 2023; and section
7 77-2704.66, Reissue Revised Statutes of Nebraska, as amended by Laws
8 2024, LB1317, section 83; and to declare an emergency.
9 Be it enacted by the people of the State of Nebraska,
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1 Section 1. Sections 1 to 8 of this act shall be known and may be
2 cited as the Property Tax Growth Limitation Act.
3 Sec. 2. For purposes of the Property Tax Growth Limitation Act:
4 (1) Approved bonds means bonds as defined in subdivision (1) of
5 section 10-134 that are approved according to law, excluding any bonds
6 issued to finance a project or projects if the issuance of bonds for such
7 project or projects was the subject of a general obligation bond election
8 held at the most recent regularly scheduled election and was not approved
9 at such election;
10 (2) Auditor means the Auditor of Public Accounts;
11 (3) Consumer price index percentage means the annual percentage
12 change in the Consumer Price Index for All Urban Consumers published by
13 the federal Bureau of Labor Statistics, as reported for December of the
14 prior calendar year for the preceding twelve-month period;
15 (4) Emergency means an emergency, as defined in section 81-829.39,
16 for which a state of emergency proclamation or local state of emergency
17 proclamation has been issued under the Emergency Management Act;
18 (5) Growth percentage means the percentage obtained by dividing (a)
19 the political subdivision's growth value by (b) the political
20 subdivision's total property valuation from the prior year;
21 (6) Growth value means the increase in a political subdivision's
22 total property valuation from the prior year to the current year due to
23 (a) improvements to real property as a result of new construction and
24 additions to existing buildings, (b) any other improvements to real
25 property which increase the value of such property, (c) annexation of
26 real property by the political subdivision, (d) a change in the use of
27 real property, and (e) any increase in personal property valuation over
28 the prior year;
29 (7) Political subdivision means any county, city, or village;
30 (8) Property tax request means the total amount of property taxes
31 requested to be raised for a political subdivision through the levy
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1 imposed pursuant to section 77-1601;
2 (9) Property tax request authority means the amount that may be
3 included in a political subdivision's property tax request as determined
4 pursuant to the Property Tax Growth Limitation Act; and
5 (10) State aid means:
6 (a) For all political subdivisions, state aid paid pursuant to
7 sections 60-3,202 and 77-3523 and reimbursement provided pursuant to
8 section 77-1239;
9 (b) For cities and villages, state aid to cities and villages paid
10 pursuant to sections 39-2501 to 39-2520, 60-3,190, and 77-27,139.04 and
11 insurance premium tax paid to cities and villages; and
12 (c) For counties, state aid to counties paid pursuant to sections
13 60-3,184 to 60-3,190, insurance premium tax paid to counties, and
14 reimbursements to counties from funds appropriated pursuant to section
15 29-3933.
16 Sec. 3. (1) Except as otherwise provided in the Property Tax Growth
17 Limitation Act, for fiscal years beginning on or after July 1, 2025, a
18 political subdivision's property tax request for any year shall not
19 exceed its property tax request authority as determined under this
20 section. The preliminary property tax request authority for each
21 political subdivision shall be the amount of property taxes levied by the
22 county board of equalization pursuant to section 77-1601 for such
23 political subdivision in the prior fiscal year.
24 (2) In addition to the preliminary property tax request authority,
25 the political subdivision's property tax request authority may be
26 increased by the product of:
27 (a) The amount of property taxes levied in the prior year increased
28 by the political subdivision's growth percentage, less the sum of
29 exceptions utilized in the prior year pursuant to subdivisions (1) and
30 (2) of section 4 of this act; and
31 (b) The greater of zero or the consumer price index percentage.
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1 Sec. 4. A political subdivision may increase its property tax
2 request authority over the amount determined under section 3 of this act
3 by:
4 (1) The amount of property taxes budgeted for approved bonds;
5 (2) The amount of property taxes needed to respond to an emergency
6 declared in the preceding year, as certified to the auditor;
7 (3) The amount of unused property tax request authority determined
8 in accordance with section 6 of this act;
9 (4) The amount of property taxes budgeted in support of (a) a
10 service relating to an imminent and significant threat to public safety
11 or public health that (i) was not previously provided by the political
12 subdivision and (ii) is the subject of an agreement or a modification of
13 an existing agreement executed after the operative date of this act,
14 whether provided by one of the parties to the agreement or by an
15 independent joint entity or joint public agency or (b) an interlocal
16 agreement relating to public safety;
17 (5) The increase in property tax request authority approved by the
18 legal voters as provided in section 5 of this act; and
19 (6) The amount of property taxes needed to implement a six percent
20 increase in compensation for understaffed law enforcement officer,
21 firefighter, or corrections officer positions. For law enforcement
22 officer positions, understaffing shall be determined using the strength
23 of force numbers established by the Nebraska Commission on Law
24 Enforcement and Criminal Justice. For firefighter positions,
25 understaffing shall be determined using National Fire Protection
26 Association Standard 1710. For corrections officer positions,
27 understaffing shall be deemed to exist if the ratio of inmates to direct
28 custody staff exceeds fifteen to one for all shifts. The six percent
29 increase in compensation authorized in this subdivision shall only be
30 applicable to the increase in compensation related to filling currently
31 vacant positions and shall be in addition to any percentage increase in
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1 such compensation obtained pursuant to section 3 of this act.
2 Sec. 5. (1) A political subdivision may increase its property tax
3 request authority over the amount determined under section 3 of this act
4 if such increase is approved by a majority of legal voters voting on the
5 issue at an election described in subsection (2) of this section. Such
6 issue shall be placed on the ballot (a) upon the recommendation of the
7 governing body of such political subdivision or (b) upon the receipt by
8 the county clerk or election commissioner of a petition requesting such
9 issue to be placed on the ballot which is signed by at least five percent
10 of the legal voters of the political subdivision. The recommendation of
11 the governing body or the petition of the legal voters shall include the
12 amount by which the political subdivision would increase its property tax
13 request authority over and above the amount determined under section 3 of
14 this act.
15 (2) Upon receipt of such recommendation or legal voter petition, the
16 county clerk or election commissioner shall place such issue on the
17 ballot at the next regularly scheduled election. The election shall be
18 held pursuant to the Election Act, and all costs shall be paid by the
19 political subdivision. The issue may be approved on the same question as
20 a vote to exceed the levy limits provided in section 77-3444. If a
21 majority of the votes cast on the issue are in favor of increasing the
22 political subdivision's property tax request authority, the political
23 subdivision shall be empowered to do so.
24 Sec. 6. A political subdivision may choose not to increase its
25 total property taxes levied by the full amount of the property tax
26 request authority allowed in a particular year. In such cases, the
27 political subdivision may carry forward to future budget years the amount
28 of unused property tax request authority, but accumulation of unused
29 property tax request authority shall not exceed an aggregate of five
30 percent of the total property tax request authority from the prior year.
31 Sec. 7. The auditor shall prepare forms to be used by political
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1 subdivisions for the purpose of calculating property tax request
2 authority and unused property tax request authority. Each political
3 subdivision shall calculate such amounts and submit the forms to the
4 auditor on or before September 30, 2025, and on or before September 30 of
5 each year thereafter. If a political subdivision fails to submit such
6 forms to the auditor or if the auditor determines from such forms that a
7 political subdivision is not complying with the limits provided in the
8 Property Tax Growth Limitation Act, the auditor shall notify the
9 political subdivision and the State Treasurer of the noncompliance. The
10 State Treasurer shall then suspend distribution of state aid allocated to
11 the political subdivision until the political subdivision complies. The
12 funds shall be held for six months. If the political subdivision complies
13 within the six-month period, it shall receive the suspended funds. If the
14 political subdivision fails to comply within the six-month period, the
15 suspended funds shall be forfeited and shall be redistributed to other
16 recipients of the state aid or, in the case of homestead exemption
17 reimbursement, returned to the General Fund.
18 Sec. 8. The auditor may adopt and promulgate rules and regulations
19 to carry out the Property Tax Growth Limitation Act.
20 Sec. 9. Sections 9 to 12 of this act shall be known and may be
21 cited as the School District Property Tax Relief Act.
22 Sec. 10. The purpose of the School District Property Tax Relief Act
23 is to provide property tax relief for property taxes levied against real
24 property by school districts. The property tax relief will be made to
25 owners of real property in the form of a property tax credit.
26 Sec. 11. For purposes of the School District Property Tax Relief
27 Act, school district has the same meaning as in se