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LEGISLATURE OF NEBRASKA
ONE HUNDRED EIGHTH LEGISLATURE
FIRST SPECIAL SESSION
LEGISLATIVE BILL 12
Introduced by Day, 49; Cavanaugh, J., 9; Cavanaugh, M., 6; Conrad, 46;
Hughes, 24; Hunt, 8; Raybould, 28.
Read first time July 25, 2024
Committee:
1 A BILL FOR AN ACT relating to revenue and taxation; to amend section
2 81-12,193, Revised Statutes Cumulative Supplement, 2022, and
3 sections 77-6702 and 77-6703, Revised Statutes Supplement, 2023; to
4 adopt the School District Property Tax Relief Act; to change
5 provisions relating to the Nebraska Property Tax Incentive Act; to
6 harmonize provisions; to repeal the original sections; and to
7 declare an emergency.
8 Be it enacted by the people of the State of Nebraska,
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1 Section 1. Sections 1 to 5 of this act shall be known and may be
2 cited as the School District Property Tax Relief Act.
3 Sec. 2. The purpose of the School District Property Tax Relief Act
4 is to provide property tax relief for property taxes levied against real
5 property by school districts. The property tax relief will be made to
6 owners of real property in the form of a property tax credit.
7 Sec. 3. For purposes of the School District Property Tax Relief
8 Act:
9 (1) School district has the same meaning as in section 79-101; and
10 (2) School district taxes means property taxes levied on real
11 property in this state by a school district or multiple-district school
12 system, excluding any property taxes levied for bonded indebtedness and
13 any property taxes levied as a result of an override of limits on
14 property tax levies approved by voters pursuant to section 77-3444.
15 Sec. 4. The School Property Tax Credit Fund is created. The fund
16 shall only be used pursuant to the School District Property Tax Relief
17 Act. Any money in the fund available for investment shall be invested by
18 the state investment officer pursuant to the Nebraska Capital Expansion
19 Act and the Nebraska State Funds Investment Act.
20 Sec. 5. (1) The School District Property Tax Relief Act shall apply
21 to tax year 2024 and each tax year thereafter. For tax year 2024, the
22 amount of relief granted under the act shall be five hundred sixty
23 million seven hundred thousand dollars. For tax year 2025 and each tax
24 year thereafter, the amount of relief granted under the act shall be the
25 amount of relief from the prior year plus thirty million dollars. The
26 relief shall be in the form of a property tax credit which appears on the
27 property tax statement.
28 (2) To determine the amount of the property tax credit for each
29 parcel, the county treasurer shall multiply the amount disbursed to the
30 county under subsection (4) of this section by the ratio of the school
31 district taxes levied on the parcel to the school district taxes levied
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1 on all real property in the county. The amount so determined shall be the
2 property tax credit for that parcel.
3 (3) If the real property owner qualifies for a homestead exemption
4 under sections 77-3501 to 77-3529, the owner shall also be qualified for
5 the credit provided in this section to the extent of any remaining
6 liability after calculation of the relief provided by the homestead
7 exemption. If the credit provided in this section results in a property
8 tax liability on the homestead that is less than zero, the amount of the
9 credit which cannot be used by the taxpayer shall be returned to the
10 Property Tax Administrator by July 1 of the year the amount disbursed to
11 the county was disbursed. The Property Tax Administrator shall
12 immediately credit any funds returned under this subsection to the School
13 Property Tax Credit Fund. Upon the return of any funds under this
14 subsection, the county treasurer shall electronically file a report with
15 the Property Tax Administrator, on a form prescribed by the Tax
16 Commissioner, indicating the amount of funds distributed to each school
17 district in the county in the year the funds were returned, any
18 collection fee retained by the county in such year, and the amount of
19 unused credits returned.
20 (4) The amount disbursed to each county under this section shall be
21 equal to the amount available for disbursement, as determined under
22 subsection (1) of this section, multiplied by the ratio of the school
23 district taxes levied on all real property in the county to the school
24 district taxes levied on all real property in the state. By October 15,
25 2024, and by October 15 of each year thereafter, the Property Tax
26 Administrator shall determine the amount to be disbursed under this
27 subsection to each county and shall certify such amounts to the State
28 Treasurer and to each county. The disbursements to the counties shall
29 occur in two equal payments, the first on or before January 31 and the
30 second on or before April 1. After retaining one percent of the receipts
31 for costs, the county treasurer shall allocate the remaining receipts to
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1 the school districts in the county proportionally based on the amount of
2 school district taxes levied on real property in the county by such
3 school districts.
4 Sec. 6. Section 77-6702, Revised Statutes Supplement, 2023, is
5 amended to read:
6 77-6702 For purposes of the Nebraska Property Tax Incentive Act:
7 (1) Allowable growth percentage means the percentage increase, if
8 any, in the total assessed value of all real property in the state from
9 the prior year to the current year, as determined by the department;
10 (1) (2) Community college taxes means property taxes levied on real
11 property in this state by a community college area, excluding the
12 following:
13 (a) Any property taxes levied for bonded indebtedness;
14 (b) Any property taxes levied as a result of an override of limits
15 on property tax levies approved by voters pursuant to section 77-3444;
16 and
17 (c) Any property taxes that, as of the time of payment, were
18 delinquent for five years or more;
19 (2) (3) Department means the Department of Revenue;
20 (3) (4) Eligible taxpayer means any individual, corporation,
21 partnership, limited liability company, trust, estate, or other entity
22 that pays school district taxes or community college taxes during a
23 taxable year; and
24 (4) (5) School district taxes means property taxes levied on real
25 property in this state by a school district or multiple-district school
26 system, excluding the following:
27 (a) Any property taxes levied for bonded indebtedness;
28 (b) Any property taxes levied as a result of an override of limits
29 on property tax levies approved by voters pursuant to section 77-3444;
30 and
31 (c) Any property taxes that, as of the time of payment, were
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1 delinquent for five years or more.
2 Sec. 7. Section 77-6703, Revised Statutes Supplement, 2023, is
3 amended to read:
4 77-6703 (1) For taxable years beginning or deemed to begin on or
5 after January 1, 2020, and before January 1, 2024, under the Internal
6 Revenue Code of 1986, as amended, there shall be allowed to each eligible
7 taxpayer a refundable credit against the income tax imposed by the
8 Nebraska Revenue Act of 1967 or against the franchise tax imposed by
9 sections 77-3801 to 77-3807. The credit shall be equal to the credit
10 percentage for the taxable year, as set by the department under
11 subsection (2) of this section, multiplied by the amount of school
12 district taxes paid by the eligible taxpayer during such taxable year.
13 (2)(a) For taxable years beginning or deemed to begin during
14 calendar year 2020, the department shall set the credit percentage so
15 that the total amount of credits for such taxable years shall be one
16 hundred twenty-five million dollars;
17 (b) For taxable years beginning or deemed to begin during calendar
18 year 2021, the department shall set the credit percentage so that the
19 total amount of credits for such taxable years shall be one hundred
20 twenty-five million dollars plus either (i) the amount calculated for
21 such calendar year under subdivision (3)(b)(ii)(B) of section 77-4602 or
22 (ii) the amount calculated for such calendar year under subdivision (3)
23 (c)(ii)(B) of section 77-4602, whichever is applicable;
24 (c) For taxable years beginning or deemed to begin during calendar
25 year 2022, the department shall set the credit percentage so that the
26 total amount of credits for such taxable years shall be five hundred
27 forty-eight million dollars; and
28 (d) For taxable years beginning or deemed to begin during calendar
29 year 2023, the department shall set the credit percentage so that the
30 total amount of credits for such taxable years shall be five hundred
31 sixty million seven hundred thousand dollars. ;
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1 (e) For taxable years beginning or deemed to begin during calendar
2 year 2024 through calendar year 2028, the department shall set the credit
3 percentage so that the total amount of credits for such taxable years
4 shall be the maximum amount of credits allowed in the prior year
5 increased by the allowable growth percentage;
6 (f) For taxable years beginning or deemed to begin during calendar
7 year 2029, the department shall set the credit percentage so that the
8 total amount of credits for such taxable years shall be the maximum
9 amount of credits allowed in the prior year increased by the allowable
10 growth percentage plus an additional seventy-five million dollars; and
11 (g) For taxable years beginning or deemed to begin during calendar
12 year 2030 and each calendar year thereafter, the department shall set the
13 credit percentage so that the total amount of credits for such taxable
14 years shall be the maximum amount of credits allowed in the prior year
15 increased by the allowable growth percentage.
16 (3) If the school district taxes are paid by a corporation having an
17 election in effect under subchapter S of the Internal Revenue Code, a
18 partnership, a limited liability company, a trust, or an estate, the
19 amount of school district taxes paid during the taxable year may be
20 allocated to the shareholders, partners, members, or beneficiaries in the
21 same proportion that income is distributed for taxable years beginning or
22 deemed to begin before January 1, 2021, under the Internal Revenue Code
23 of 1986, as amended. The department shall provide forms and schedules
24 necessary for verifying eligibility for the credit provided in this
25 section and for allocating the school district taxes paid. For taxable
26 years beginning or deemed to begin on or after January 1, 2021, and
27 before January 1, 2024, under the Internal Revenue Code of 1986, as
28 amended, the refundable credit shall be claimed by the corporation having
29 an election in effect under subchapter S of the Internal Revenue Code,
30 the partnership, the limited liability company, the trust, or the estate
31 that paid the school district taxes.
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1 (4) For any fiscal year or short year taxpayer, the credit may be
2 claimed in the first taxable year that begins following the calendar year
3 for which the credit percentage was determined. The credit shall be taken
4 for the school district taxes paid by the taxpayer during the immediately
5 preceding calendar year.
6 (5) For the first taxable year beginning or deemed to begin on or
7 after January 1, 2021, and before January 1, 2022, under the Internal
8 Revenue Code of 1986, as amended, for a corporation having an election in
9 effect under subchapter S of the Internal Revenue Code, a partnership, a
10 limited liability company, a trust, or an estate that paid school
11 district taxes in calendar year 2020 but did not claim the credit
12 directly or allocate such school district taxes to the shareholders,
13 partners, members, or beneficiaries as permitted under subsection (3) of
14 this section, there shall be allowed an additional refundable credit.
15 This credit shall be equal to six percent, multiplied by the amount of
16 school district taxes paid during 2020 by the eligible taxpayer.
17 Sec. 8. Section 81-12,193, Revised Statutes Cumulative Supplement,
18 2022, is amended to read:
19 81-12,193 (1) The Nebraska Transformational Project Fund is hereby
20 created. The fund shall receive money from application fees paid under
21 the Nebraska Transformational Projects Act and from appropriations from
22 the Legislature, grants, private contributions, repayments of matching
23 funds, and all other sources. Any money in the fund available for
24 investment shall be invested by the state investment officer pursuant to
25 the Nebraska Capital Expansion Act and the Nebraska State Funds
26 Investment Act.
27 (2) It is the intent of the Legislature that the State Treasurer
28 shall transfer an amount not to exceed three hundred million dollars to
29 the Nebraska Transformational Project Fund. Such transfers shall only
30 occur after the applicant has been selected for participation in the
31 program described in Title VII, Subtitle C, section 740 of Public Law
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1 116-92 and commitments totaling one billion three hundred million dollars
2 in total investment, including only federal dollars and private
3 donations, have been secured. In no case shall any transfer occur before
4 fiscal year 2025-26 or before the total amount of refundable credits
5 granted annually under the Nebraska Property Tax Incentive Act reaches
6 three hundred seventy-five million dollars. Distributions shall only be
7 made from the fund in amounts equal to the amount of private dollars
8 received by the applicant for the project.
9 (3) Any money remaining in the fund after all obligations have been
10 met shall be transferred to the General Fund.
11 Sec. 9. Original section 81-12,193, Revised Statutes Cumulative
12 Supplement, 2022, and sections 77-6702 and 77-6703, Revised Statutes
13 Supplement, 2023, are repealed.
14 Sec. 10. Since an emergency exists, this act takes effect when
15 passed and approved according to law.
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