Bill Summary – FastDemocracy

LB12                                                                                        LB12
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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: Revenue
  A BILL FOR AN ACT relating to revenue and taxation; to amend section
       81-12,193,     Revised Statutes Cumulative Supplement,     2022,      and
      sections 77-6702 and 77-6703, Revised Statutes Supplement, 2023; to
      adopt the School District Property Tax Relief Act;   to change
       provisions relating to the Nebraska Property Tax Incentive Act; to
       harmonize provisions;    to repeal the original sections;       and to
       declare an emergency.
   Be it enacted by the people of the State of Nebraska,
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          Section 1.     Sections 1 to 5 of this act shall be known and may be
   cited as the School District Property Tax Relief Act.
          Sec. 2.    The purpose of the School District Property Tax Relief Act
   is to provide property tax relief for property taxes levied against real
   property by school districts. The property tax relief will be made to
   owners of real property in the form of a property tax credit.
          Sec. 3.     For purposes of the School District Property Tax Relief
   Act:
          (1) School district has the same meaning as in section 79-101; and
          (2)   School district taxes means property taxes levied on   real
   property in this state by a school district or multiple-district school
   system, excluding any property taxes levied for bonded indebtedness and
   any property taxes levied as     a result of   an override of   limits on
   property tax levies approved by voters pursuant to section 77-3444.
          Sec. 4.    The School Property Tax Credit Fund is created. The fund
   shall only be used pursuant to the School District Property Tax Relief
   Act. Any money in the fund available for investment shall be invested by
   the state investment officer pursuant to the Nebraska Capital Expansion
   Act and the Nebraska State Funds Investment Act.
          Sec. 5.    (1) The School District Property Tax Relief Act shall apply
   to tax year 2024 and each tax year thereafter. For tax year 2024, the
   amount of relief granted under the act shall be five hundred sixty
   million seven hundred thousand dollars. For tax year 2025 and each tax
   year thereafter, the amount of relief granted under the act shall be the
   amount of relief from the prior year plus thirty million dollars. The
   relief shall be in the form of a property tax credit which appears on the
   property tax statement.
          (2) To determine the amount of the property tax credit for each
   parcel, the county treasurer shall multiply the amount disbursed to the
   county under subsection (4) of this section by the ratio of the school
   district taxes levied on the parcel to the school district taxes levied
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   on all real property in the county. The amount so determined shall be the
   property tax credit for that parcel.
         (3) If the real property owner qualifies for a homestead exemption
   under sections 77-3501 to 77-3529, the owner shall also be qualified for
   the credit provided in this section to the extent of any remaining
   liability after calculation of    the relief provided by    the homestead
   exemption. If the credit provided in this section results in a property
   tax liability on the homestead that is less than zero, the amount of the
   credit which cannot be used by the taxpayer shall be returned to the
   Property Tax Administrator by July 1 of the year the amount disbursed to
   the county was disbursed.       The Property Tax Administrator shall
   immediately credit any funds returned under this subsection to the School
   Property Tax Credit Fund.       Upon the return of    any funds under this
   subsection, the county treasurer shall electronically file a report with
   the Property Tax Administrator,             on    a form prescribed by    the Tax
   Commissioner, indicating the amount of funds distributed to each school
   district in     the county in    the year the funds were returned,       any
   collection fee retained by the county in such year, and the amount of
   unused credits returned.
         (4) The amount disbursed to each county under this section shall be
   equal to    the amount available for disbursement,        as determined under
   subsection (1) of this section, multiplied by the ratio of the school
   district taxes levied on all real property in the county to the school
   district taxes levied on all real property in the state. By October 15,
   2024,    and by    October    15    of each year thereafter,         the Property Tax
   Administrator shall determine the amount to   be disbursed under this
   subsection to each county and shall certify such amounts to the State
   Treasurer and to each county. The disbursements to the counties shall
   occur in two equal payments, the first on or before January 31 and the
   second on or before April 1. After retaining one percent of the receipts
   for costs, the county treasurer shall allocate the remaining receipts to
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   the school districts in the county proportionally based on the amount of
   school district taxes levied on real property in the county by such
   school districts.
         Sec.    6.   Section    77-6702,     Revised Statutes Supplement,   2023,    is
   amended to read:
         77-6702 For purposes of the Nebraska Property Tax Incentive Act:
         (1) Allowable growth percentage means the percentage increase, if
   any, in the total assessed value of all real property in the state from
   the prior year to the current year, as determined by the department;
         (1) (2) Community college taxes means property taxes levied on real
   property in    this state by   a community college area,    excluding the
   following:
         (a) Any property taxes levied for bonded indebtedness;
         (b) Any property taxes levied as a result of an override of limits
   on property tax levies approved by voters pursuant to section 77-3444;
   and
         (c)    Any property taxes that,     as of    the time of   payment,    were
   delinquent for five years or more;
         (2) (3) Department means the Department of Revenue;
         (3)    (4)    Eligible taxpayer means any individual,     corporation,
   partnership, limited liability company, trust, estate, or other entity
   that pays school district taxes or community college taxes during a
   taxable year; and
         (4) (5) School district taxes means property taxes levied on real
   property in this state by a school district or multiple-district school
   system, excluding the following:
         (a) Any property taxes levied for bonded indebtedness;
         (b) Any property taxes levied as a result of an override of limits
   on property tax levies approved by voters pursuant to section 77-3444;
   and
         (c)    Any property taxes that,     as of    the time of   payment,    were
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   delinquent for five years or more.
       Sec.     7.    Section       77-6703,     Revised Statutes Supplement,     2023,     is
   amended to read:
       77-6703 (1) For taxable years beginning or deemed to begin on or
   after January 1, 2020, and before January 1, 2024, under the Internal
   Revenue Code of 1986, as amended, there shall be allowed to each eligible
  taxpayer   a refundable credit against the income tax imposed by   the
   Nebraska Revenue Act of 1967 or against the franchise tax imposed by
   sections 77-3801 to 77-3807. The credit shall be equal to the credit
   percentage for the taxable year,     as set by   the department under
   subsection     (2)      of this section,   multiplied by   the amount of   school
   district taxes paid by the eligible taxpayer during such taxable year.
       (2)(a)        For taxable years beginning or    deemed to   begin during
   calendar year 2020, the department shall set the credit percentage so
  that the total amount of credits for such taxable years shall be one
  hundred twenty-five million dollars;
       (b) For taxable years beginning or deemed to begin during calendar
   year 2021, the department shall set the credit percentage so that the
   total amount of credits for such taxable years shall be one hundred
   twenty-five million dollars plus either (i) the amount calculated for
   such calendar year under subdivision (3)(b)(ii)(B) of section 77-4602 or
   (ii) the amount calculated for such calendar year under subdivision (3)
   (c)(ii)(B) of section 77-4602, whichever is applicable;
       (c) For taxable years beginning or deemed to begin during calendar
   year 2022, the department shall set the credit percentage so that the
   total amount of credits for such taxable years shall be five hundred
   forty-eight million dollars; and
       (d) For taxable years beginning or deemed to begin during calendar
   year 2023, the department shall set the credit percentage so that the
   total amount of credits for such taxable years shall be five hundred
   sixty million seven hundred thousand dollars. ;
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       (e) For taxable years beginning or deemed to begin during calendar
   year 2024 through calendar year 2028, the department shall set the credit
   percentage so that the total amount of credits for such taxable years
   shall be   the maximum amount of    credits allowed in    the prior year
   increased by the allowable growth percentage;
      (f) For taxable years beginning or deemed to begin during calendar
  year 2029, the department shall set the credit percentage so that the
   total amount of credits for such taxable years shall be the maximum
  amount of credits allowed in the prior year increased by the allowable
  growth percentage plus an additional seventy-five million dollars; and
       (g) For taxable years beginning or deemed to begin during calendar
   year 2030 and each calendar year thereafter, the department shall set the
   credit percentage so that the total amount of credits for such taxable
   years shall be the maximum amount of credits allowed in the prior year
   increased by the allowable growth percentage.
      (3) If the school district taxes are paid by a corporation having an
  election in effect under subchapter S of the Internal Revenue Code, a
   partnership, a limited liability company, a trust, or an estate, the
  amount of school district taxes paid during the taxable year may be
  allocated to the shareholders, partners, members, or beneficiaries in the
  same proportion that income is distributed for taxable years beginning or
  deemed to begin before January 1, 2021, under the Internal Revenue Code
  of 1986, as amended. The department shall provide forms and schedules
   necessary for verifying eligibility for the credit provided in   this
  section and for allocating the school district taxes paid. For taxable
  years beginning or deemed to begin on or after January 1, 2021, and
   before January 1, 2024, under the Internal Revenue Code of 1986, as
   amended, the refundable credit shall be claimed by the corporation having
  an election in effect under subchapter S of the Internal Revenue Code,
   the partnership, the limited liability company, the trust, or the estate
   that paid the school district taxes.
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         (4) For any fiscal year or short year taxpayer, the credit may be
   claimed in the first taxable year that begins following the calendar year
  for which the credit percentage was determined. The credit shall be taken
  for the school district taxes paid by the taxpayer during the immediately
  preceding calendar year.
        (5) For the first taxable year beginning or deemed to begin on or
  after January 1, 2021, and before January 1, 2022, under the Internal
  Revenue Code of 1986, as amended, for a corporation having an election in
  effect under subchapter S of the Internal Revenue Code, a partnership, a
   limited liability company,   a trust,    or an    estate that paid school
   district taxes in   calendar year   2020     but did not claim the credit
   directly or allocate such school district taxes to the shareholders,
   partners, members, or beneficiaries as permitted under subsection (3) of
  this section, there shall be allowed an additional refundable credit.
  This credit shall be equal to six percent, multiplied by the amount of
  school district taxes paid during 2020 by the eligible taxpayer.
         Sec. 8. Section 81-12,193, Revised Statutes Cumulative Supplement,
   2022, is amended to read:
        81-12,193 (1) The Nebraska Transformational Project Fund is hereby
   created. The fund shall receive money from application fees paid under
   the Nebraska Transformational Projects Act and from appropriations from
   the Legislature, grants, private contributions, repayments of matching
  funds,    and all other sources.    Any money in    the fund available for
  investment shall be invested by the state investment officer pursuant to
  the Nebraska Capital Expansion Act and the Nebraska State Funds
  Investment Act.
        (2) It is the intent of the Legislature that the State Treasurer
  shall transfer an amount not to exceed three hundred million dollars to
  the Nebraska Transformational Project Fund. Such transfers shall only
   occur after the applicant has been selected for participation in the
  program described in Title VII, Subtitle C, section 740 of Public Law
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   116-92 and commitments totaling one billion three hundred million dollars
   in total investment,   including only federal dollars and private
   donations, have been secured. In no case shall any transfer occur before
   fiscal year 2025-26 or before the total amount of refundable credits
  granted annually under the Nebraska Property Tax Incentive Act reaches
  three hundred seventy-five million dollars. Distributions shall only be
   made from the fund in amounts equal to the amount of private dollars
   received by the applicant for the project.
       (3) Any money remaining in the fund after all obligations have been
  met shall be transferred to the General Fund.
        Sec. 9.    Original section 81-12,193, Revised Statutes Cumulative
  Supplement, 2022, and sections 77-6702 and 77-6703, Revised Statutes
  Supplement, 2023, are repealed.
        Sec. 10.    Since an emergency exists, this act takes effect when
   passed and approved according to law.
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Statutes affected: 
Introduced: 77-6702, 77-6703