LB417 LB417
2019 2019
LEGISLATURE OF NEBRASKA
ONE HUNDRED SIXTH LEGISLATURE
FIRST SESSION
LEGISLATIVE BILL 417
Introduced by Friesen, 34.
Read first time January 18, 2019
Committee: Revenue
1 A BILL FOR AN ACT relating to revenue and taxation; to amend sections
2 77-1116, 77-27,187.02, 77-2912, 77-5208, and 77-5725, Reissue
3 Revised Statutes of Nebraska; to change application deadlines under
4 the New Markets Job Growth Investment Act, the Nebraska Advantage
5 Rural Development Act, the Nebraska Job Creation and Mainstreet
6 Revitalization Act, the Beginning Farmer Tax Credit Act, and the
7 Nebraska Advantage Act; to repeal the original sections; and to
8 declare an emergency.
9 Be it enacted by the people of the State of Nebraska,
-1-
LB417 LB417
2019 2019
1 Section 1. Section 77-1116, Reissue Revised Statutes of Nebraska, is
2 amended to read:
3 77-1116 (1) A qualified community development entity that seeks to
4 have an equity investment or long-term debt security designated as a
5 qualified equity investment and eligible for tax credits under the New
6 Markets Job Growth Investment Act shall apply to the Tax Commissioner.
7 There shall be no new applications for such designation filed under this
8 section after the effective date of this act December 31, 2022.
9 (2) The qualified community development entity shall submit an
10 application on a form that the Tax Commissioner provides that includes:
11 (a) Evidence of the entity's certification as a qualified community
12 development entity, including evidence of the service area of the entity
13 that includes this state;
14 (b) A copy of the allocation agreement executed by the entity, or
15 its controlling entity, and the Community Development Financial
16 Institutions Fund referred to in section 77-1109;
17 (c) A certificate executed by an executive officer of the entity
18 attesting that the allocation agreement remains in effect and has not
19 been revoked or canceled by the Community Development Financial
20 Institutions Fund referred to in section 77-1109;
21 (d) A description of the proposed amount, structure, and purchaser
22 of the equity investment or long-term debt security;
23 (e) Identifying information for any taxpayer eligible to utilize tax
24 credits earned as a result of the issuance of the qualified equity
25 investment;
26 (f) Information regarding the proposed use of proceeds from the
27 issuance of the qualified equity investment; and
28 (g) A nonrefundable application fee of five thousand dollars.
29 (3) Within thirty days after receipt of a completed application
30 containing the information necessary for the Tax Commissioner to certify
31 a potential qualified equity investment, including the payment of the
-2-
LB417 LB417
2019 2019
1 application fee, the Tax Commissioner shall grant or deny the application
2 in full or in part. If the Tax Commissioner denies any part of the
3 application, the Tax Commissioner shall inform the qualified community
4 development entity of the grounds for the denial. If the qualified
5 community development entity provides any additional information required
6 by the Tax Commissioner or otherwise completes its application within
7 fifteen days after the notice of denial, the application shall be
8 considered completed as of the original date of submission. If the
9 qualified community development entity fails to provide the information
10 or complete its application within the fifteen-day period, the
11 application remains denied and must be resubmitted in full with a new
12 submission date.
13 (4) If the application is deemed complete, the Tax Commissioner
14 shall certify the proposed equity investment or long-term debt security
15 as a qualified equity investment that is eligible for tax credits,
16 subject to the limitations contained in section 77-1115. The Tax
17 Commissioner shall provide written notice of the certification to the
18 qualified community development entity. The notice shall include the
19 names of those taxpayers who are eligible to utilize the credits and
20 their respective credit amounts. If the names of the taxpayers who are
21 eligible to utilize the credits change due to a transfer of a qualified
22 equity investment or a change in an allocation pursuant to section
23 77-1114, the qualified community development entity shall notify the Tax
24 Commissioner of such change.
25 (5) The Tax Commissioner shall certify qualified equity investments
26 in the order applications are received. Applications received on the same
27 day shall be deemed to have been received simultaneously. For
28 applications received on the same day and deemed complete, the Tax
29 Commissioner shall certify, consistent with remaining tax credit
30 capacity, qualified equity investments in proportionate percentages based
31 upon the ratio of the amount of qualified equity investment requested in
-3-
LB417 LB417
2019 2019
1 an application to the total amount of qualified equity investments
2 requested in all applications received on the same day.
3 (6) Once the Tax Commissioner has certified qualified equity
4 investments that, on a cumulative basis, are eligible for the maximum
5 limitation contained in section 77-1115, the Tax Commissioner may not
6 certify any more qualified equity investments for that fiscal year. If a
7 pending request cannot be fully certified, the Tax Commissioner shall
8 certify the portion that may be certified unless the qualified community
9 development entity elects to withdraw its request rather than receive
10 partial credit.
11 (7) Within thirty days after receiving notice of certification, the
12 qualified community development entity shall issue the qualified equity
13 investment and receive cash in the amount of the certified amount. The
14 qualified community development entity shall provide the Tax Commissioner
15 with evidence of the receipt of the cash investment within ten business
16 days after receipt. If the qualified community development entity does
17 not receive the cash investment and issue the qualified equity investment
18 within thirty days after receipt of the certification notice, the
19 certification shall lapse and the entity may not issue the qualified
20 equity investment without reapplying to the Tax Commissioner for
21 certification. A certification that lapses reverts back to the Tax
22 Commissioner and may be reissued only in accordance with the application
23 process outlined in this section.
24 Sec. 2. Section 77-27,187.02, Reissue Revised Statutes of Nebraska,
25 is amended to read:
26 77-27,187.02 (1) To earn the incentives set forth in the Nebraska
27 Advantage Rural Development Act, the taxpayer shall file an application
28 for an agreement with the Tax Commissioner. There shall be no new
29 applications for incentives filed under this section after December 31,
30 2019 2022.
31 (2) The application shall contain:
-4-
LB417 LB417
2019 2019
1 (a) A written statement describing the full expected employment or
2 type of livestock production and the investment amount for a qualified
3 business, as described in section 77-27,189, in this state;
4 (b) Sufficient documents, plans, and specifications as required by
5 the Tax Commissioner to support the plan and to define a project; and
6 (c) An application fee of five hundred dollars. The fee shall be
7 remitted to the State Treasurer for credit to the Nebraska Incentives
8 Fund. The application and all supporting information shall be
9 confidential except for the name of the taxpayer, the location of the
10 project, and the amounts of increased employment or investment.
11 (3)(a) The Tax Commissioner shall approve the application and
12 authorize the total amount of credits expected to be earned as a result
13 of the project if he or she is satisfied that the plan in the application
14 defines a project that (i) meets the requirements established in section
15 77-27,188 and such requirements will be reached within the required time
16 period and (ii) for projects other than livestock modernization or
17 expansion projects, is located in an eligible county, city, or village.
18 (b) For applications filed in calendar year 2015, the Tax
19 Commissioner shall not approve further applications once the expected
20 credits from the approved projects total one million dollars. For
21 applications filed in calendar year 2016 and each year thereafter, the
22 Tax Commissioner shall not approve further applications from applicants
23 described in subsection (1) of section 77-27,188 once the expected
24 credits from approved projects from this category total one million
25 dollars. For applications filed in calendar year 2016 and each year
26 thereafter, the Tax Commissioner shall not approve further applications
27 from applicants described in subsection (2) of section 77-27,188 once the
28 expected credits from approved projects in this category total: For
29 calendar year 2016, five hundred thousand dollars; for calendar years
30 2017 and 2018, seven hundred fifty thousand dollars; and for calendar
31 year 2019 and each calendar year thereafter, one million dollars. Four
-5-
LB417 LB417
2019 2019
1 hundred dollars of the application fee shall be refunded to the applicant
2 if the application is not approved because the expected credits from
3 approved projects exceed such amounts.
4 (c) Applications for benefits shall be considered separately and in
5 the order in which they are received for the categories represented by
6 subsections (1) and (2) of section 77-27,188.
7 (d) Applications shall be filed by November 1 and shall be complete
8 by December 1 of each calendar year. Any application that is filed after
9 November 1 or that is not complete on December 1 shall be considered to
10 be filed during the following calendar year.
11 (4) After approval, the taxpayer and the Tax Commissioner shall
12 enter into a written agreement. The taxpayer shall agree to complete the
13 project, and the Tax Commissioner, on behalf of the State of Nebraska,
14 shall designate the approved plans of the taxpayer as a project and, in
15 consideration of the taxpayer's agreement, agree to allow the taxpayer to
16 use the incentives contained in the Nebraska Advantage Rural Development
17 Act up to the total amount that were authorized by the Tax Commissioner
18 at the time of approval. The application, and all supporting
19 documentation, to the extent approved, shall be considered a part of the
20 agreement. The agreement shall state:
21 (a) The levels of employment and investment required by the act for
22 the project;
23 (b) The time period under the act in which the required level must
24 be met;
25 (c) The documentation the taxpayer will need to supply when claiming
26 an incentive under the act;
27 (d) The date the application was filed; and
28 (e) The maximum amount of credits authorized.
29 Sec. 3. Section 77-2912, Reissue Revised Statutes of Nebraska, is
30 amended to read:
31 77-2912 There shall be no new applications filed under the Nebraska
-6-
LB417 LB417
2019 2019
1 Job Creation and Mainstreet Revitalization Act after the effective date
2 of this act December 31, 2022. All applications and all credits pending
3 or approved before such date shall continue in full force and effect,
4 except that no credits shall be allocated under section 77-2905, issued
5 under section 77-2906, or used on any tax return or similar filing after
6 December 31, 2027.
7 Sec. 4. Section 77-5208, Reissue Revised Statutes of Nebraska, is
8 amended to read:
9 77-5208 The board shall meet at least twice during the year. The
10 board shall review pending applications in order to approve and certify
11 beginning farmers and livestock producers as eligible for the programs
12 provided by the board, to approve and certify owners of agricultural
13 assets as eligible for the tax credits authorized by sections 77-5211 to
14 77-5213, and to approve and certify qualified beginning farmers and
15 livestock producers as eligible for the tax credit authorized by section
16 77-5209.01 and for qualification to claim an exemption of taxable
17 tangible personal property as provided by section 77-5209.02. No new
18 applications for any such programs, tax credits, or exemptions shall be
19 approved or certified by the board after the effective date of this act
20 December 31, 2022. Any action taken by the board regarding approval and
21 certification of program eligibility, granting of tax credits, or
22 termination of rental agreements shall require the affirmative vote of at
23 least four members of the board.
24 Sec. 5. Section 77-5725, Reissue Revised Statutes of Nebraska, is
25 amended to read:
26 77-5725 (1) Applicants may qualify for benefits under the Nebraska
27 Advantage Act in one of six tiers:
28 (a) Tier 1, investment in qualified property of at least one million
29 dollars and the hiring of at least ten new employees. There shall be no
30 new project applications for benefits under this tier filed after
31 December 31, 2019 2020. All complete project applications filed on or
-7-
LB417 LB417
2019 2019
1 before December 31, 2019 2020, shall be considered by the Tax
2 Commissioner and approved if the project and taxpayer qualify for
3 benefits. Agreements may be executed with regard to completed project
4 applications filed on or before December 31, 2019 2020. All project
5 agreements pending, approved, or entered into before such date shall
6 continue in full force and effect;
7 (b) Tier 2, (i) investment in qualified property of at least three
8 million dollars and the hiring of at least thirty new employees or (ii)
9 for a large data center project, investment in qualified property for the
10 data center of at least two hundred million dollars and the hiring for
11 the data center of at least thirty new employees. There shall be no new
12 project applications for benefits under this tier filed after December
13 31, 2019 2020. All complete project applications filed on or before
14 December 31, 2019 2020, shall be considered by the Tax Commissioner and
15 approved if the project and taxpayer qualify for benefits. Agreements may
16 be executed with regard to completed project applications filed on or
17 before December 31, 2019 2020. All project agreements pending, approved,
18 or entered into before such date shall continue in full force and effect;
19 (c) Tier 3, the hiring of at least thirty new employees. There shall
20 be no new project applications for benefits under this tier filed after
21 December 31, 2019 2020. All complete project applications filed on or
22 before December 31, 2019 2020, shall be considered by the Tax
23 Commissioner and approved if the project and taxpayer qualify for