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LEGISLATURE OF NEBRASKA
ONE HUNDRED SIXTH LEGISLATURE
FIRST SESSION
LEGISLATIVE BILL 497
Introduced by Friesen, 34; Albrecht, 17; Bostelman, 23; Brandt, 32;
Brewer, 43; Briese, 41; Dorn, 30; Erdman, 47; Gragert, 40;
Halloran, 33; Hughes, 44; Murman, 38.
Read first time January 22, 2019
Committee: Revenue
1 A BILL FOR AN ACT relating to revenue and taxation; to amend sections
2 77-201, 77-202, 77-382, 77-693, 77-801, 77-1238, 77-1248,
3 77-1601.02, 77-2602, 77-2701.16, 77-2704.24, 77-2704.67, 77-27,132,
4 77-3442, and 77-5023, Reissue Revised Statutes of Nebraska, and
5 sections 53-160, 53-187, 79-1003, 79-1015.01, 79-1016, and 79-1022,
6 Revised Statutes Cumulative Supplement, 2018; to adopt the School
7 District Property Tax Authority Act; to increase alcohol taxes; to
8 change the valuation of agricultural land and horticultural land for
9 school district taxation purposes; to terminate the exemptions
10 provided under the Personal Property Tax Relief Act and certain
11 sales tax exemptions; to increase the cigarette tax; to impose sales
12 and use taxes on certain services; to transfer certain revenue to
13 the Cash Reserve Fund; to change the levy limit for school districts
14 as prescribed; to change the Tax Equity and Educational
15 Opportunities Support Act; to harmonize provisions; to provide an
16 operative date; and to repeal the original sections.
17 Be it enacted by the people of the State of Nebraska,
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1 Section 1. Sections 1 to 4 of this act shall be known and may be
2 cited as the School District Property Tax Authority Act.
3 Sec. 2. For purposes of the School District Property Tax Authority
4 Act:
5 (1) Approved bonds means bonds that are issued by a school district
6 after the question of issuing such bonds has been approved by the voters
7 of such school district;
8 (2) Base growth percentage means whichever of the following
9 percentages is the highest:
10 (a) Two and one-half percent;
11 (b) The percentage increase in the Consumer Price Index for All
12 Urban Consumers, as prepared by the United States Department of Labor,
13 Bureau of Labor Statistics, for the twelve-month period ending on June 30
14 of the year in which the property tax authority is calculated; or
15 (c) The annual percentage increase in the student enrollment of the
16 school district;
17 (3) Department means the State Department of Education;
18 (4) Other resources means revenue of a school district from all
19 sources other than real and personal property taxes and state aid
20 distributed pursuant to section 79-1022;
21 (5) School board has the same meaning as in section 79-101;
22 (6) School district has the same meaning as in section 79-101; and
23 (7) Student enrollment means the total number of students in the
24 school district according to the fall school district membership report
25 described in subsection (4) of section 79-528.
26 Sec. 3. (1) For fiscal year 2020-21 and each fiscal year
27 thereafter, the total amount of property taxes levied by a school
28 district for a fiscal year shall not exceed the school district’s
29 property tax authority as determined pursuant to the School District
30 Property Tax Authority Act.
31 (2) The school board of each school district shall calculate the
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1 school district's property tax authority each fiscal year as follows:
2 (a) For fiscal year 2020-21, the following steps shall be taken:
3 (i) Step one: The school district's state and local resources shall
4 be calculated. Such amount shall be equal to the school district's
5 property tax request under section 77-1601.02 for fiscal year 2019-20
6 plus the state aid distributed to the school district in fiscal year
7 2019-20 pursuant to section 79-1022, with the sum increased by the base
8 growth percentage applicable to the school district;
9 (ii) Step two: The state aid to be distributed to the school
10 district pursuant to section 79-1022 for fiscal year 2020-21 shall be
11 subtracted from the school district's state and local resources
12 calculated under step one; and
13 (iii) Step three: The amount determined under step two shall then be
14 either:
15 (A) Decreased by the amount by which other resources for fiscal year
16 2020-21 are expected to exceed other resources for fiscal year 2019-20;
17 or
18 (B) Increased by the amount by which other resources for fiscal year
19 2019-20 are expected to exceed other resources for fiscal year 2020-21;
20 and
21 (b) For fiscal year 2021-22 and each fiscal year thereafter, the
22 following steps shall be taken:
23 (i) Step one: The school district's state and local resources shall
24 be calculated. Such amount shall be equal to the school district's state
25 and local resources from the prior fiscal year increased by the base
26 growth percentage applicable to the school district;
27 (ii) Step two: The state aid to be distributed to the school
28 district pursuant to section 79-1022 for the current fiscal year shall be
29 subtracted from the school district's state and local resources
30 calculated under step one; and
31 (iii) Step three: The amount determined under step two shall then be
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1 either:
2 (A) Decreased by the amount by which other resources for the current
3 fiscal year are expected to exceed other resources for the prior fiscal
4 year; or
5 (B) Increased by the amount by which other resources for the prior
6 fiscal year are expected to exceed other resources for the current fiscal
7 year.
8 Sec. 4. (1) The school board shall report the amount determined
9 under section 3 of this act to the department upon forms prescribed by
10 the department. The department shall review the amount reported to
11 determine if such amount was calculated correctly. If the department
12 determines that such amount was calculated correctly, it shall approve
13 and certify the amount to the school board. If the department determines
14 that such amount was not calculated correctly, it shall calculate the
15 correct amount and certify that amount to the school board. The amount
16 certified by the department shall be the school district's property tax
17 authority, which shall be used for setting the school district's maximum
18 levy rate pursuant to subdivision (2)(a) of section 77-3442. The school
19 board may set its property tax request under section 77-1601.02 at an
20 amount equal to or less than the school district's property tax
21 authority.
22 (2) Section 3 of this act shall not apply to that portion of a
23 school district's property tax request that is needed to pay the
24 principal and interest on approved bonds.
25 Sec. 5. Section 53-160, Revised Statutes Cumulative Supplement,
26 2018, is amended to read:
27 53-160 (1) For the purpose of raising revenue, a tax is imposed upon
28 the privilege of engaging in business as a manufacturer or a wholesaler
29 at a rate of one dollar and thirty-eight thirty-one cents per gallon on
30 all beer; three dollars and fifty-one ninety-five cents per gallon for
31 wine, except for wines produced and released from bond in farm wineries;
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1 two dollars and sixty-two six cents per gallon for wine produced and
2 released from bond in farm wineries; and twelve three dollars and twenty-
3 eight seventy-five cents per gallon on alcohol and spirits manufactured
4 and sold by such manufacturer or shipped for sale in this state by such
5 wholesaler in the course of such business. The gallonage tax imposed by
6 this subsection shall be imposed only on alcoholic liquor upon which a
7 federal excise tax is imposed.
8 (2) Manufacturers or wholesalers of alcoholic liquor shall be exempt
9 from the payment of the gallonage tax on such alcoholic liquor upon
10 satisfactory proof, including bills of lading furnished to the commission
11 by affidavit or otherwise as the commission may require, that such
12 alcoholic liquor was manufactured in this state but shipped out of the
13 state for sale and consumption outside this state.
14 (3) Dry wines or fortified wines manufactured or shipped into this
15 state solely and exclusively for sacramental purposes and uses shall not
16 be subject to the gallonage tax.
17 (4) The gallonage tax shall not be imposed upon any alcoholic
18 liquor, whether manufactured in or shipped into this state, when sold to
19 a licensed nonbeverage user for use in the manufacture of any of the
20 following when such products are unfit for beverage purposes: Patent and
21 proprietary medicines and medicinal, antiseptic, and toilet preparations;
22 flavoring extracts, syrups, food products, and confections or candy;
23 scientific, industrial, and chemical products, except denatured alcohol;
24 or products for scientific, chemical, experimental, or mechanical
25 purposes.
26 (5) The gallonage tax shall not be imposed upon the privilege of
27 engaging in any business in interstate commerce or otherwise, which
28 business may not, under the Constitution and statutes of the United
29 States, be made the subject of taxation by this state.
30 (6) The gallonage tax shall be in addition to all other occupation
31 or privilege taxes imposed by this state or by any municipal corporation
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1 or political subdivision thereof.
2 (7) The commission shall collect the gallonage tax and shall account
3 for and remit to the State Treasurer at least once each week all money
4 collected pursuant to this section. If any alcoholic liquor manufactured
5 in or shipped into this state is sold to a licensed manufacturer or
6 wholesaler of this state to be used solely as an ingredient in the
7 manufacture of any beverage for human consumption, the tax imposed upon
8 such manufacturer or wholesaler shall be reduced by the amount of the
9 taxes which have been paid as to such alcoholic liquor so used under the
10 Nebraska Liquor Control Act. The net proceeds of all revenue arising
11 under this section shall be credited to the General Fund.
12 Sec. 6. Section 53-187, Revised Statutes Cumulative Supplement,
13 2018, is amended to read:
14 53-187 No nonbeverage user shall sell, give away, or otherwise
15 dispose of any alcoholic liquor, purchased under his or her license as
16 such nonbeverage user, in any form fit for beverage purposes. Any
17 nonbeverage user who violates this section shall pay to the commission,
18 for the use of the General Fund, the sum of twelve three dollars and
19 twenty-eight seventy-five cents for each gallon of alcoholic liquor so
20 diverted, and in addition thereto shall be subject to the penalties
21 provided in section 53-1,100.
22 Sec. 7. Section 77-201, Reissue Revised Statutes of Nebraska, is
23 amended to read:
24 77-201 (1) Except as provided in subsections (2) through (4) of this
25 section, all real property in this state, not expressly exempt therefrom,
26 shall be subject to taxation and shall be valued at its actual value.
27 (2) Agricultural land and horticultural land as defined in section
28 77-1359 shall constitute a separate and distinct class of property for
29 purposes of property taxation, shall be subject to taxation, unless
30 expressly exempt from taxation, and shall be valued at seventy-five
31 percent of its actual value, except that for school district taxation
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1 purposes such land shall be valued at a percentage of its actual value as
2 determined from the table in subsection (6) of this section.
3 (3) Agricultural land and horticultural land actively devoted to
4 agricultural or horticultural purposes which has value for purposes other
5 than agricultural or horticultural uses and which meets the
6 qualifications for special valuation under section 77-1344 shall
7 constitute a separate and distinct class of property for purposes of
8 property taxation, shall be subject to taxation, and shall be valued for
9 taxation at seventy-five percent of its special valuation value as
10 defined in section 77-1343, except that for school district taxation
11 purposes such land shall be valued at a percentage of its special
12 valuation as determined from the table in subsection (6) of this section.
13 (4) Historically significant real property which meets the
14 qualifications for historic rehabilitation valuation under sections
15 77-1385 to 77-1394 shall be valued for taxation as provided in such
16 sections.
17 (5) Tangible personal property, not including motor vehicles,
18 trailers, and semitrailers registered for operation on the highways of
19 this state, shall constitute a separate and distinct class of property
20 for purposes of property taxation, shall be subject to taxation, unless
21 expressly exempt from taxation, and shall be valued at its net book
22 value. Tangible personal property transferred as a gift or devise or as
23 part of a transaction which is not a purchase shall be subject to
24 taxation based upon the date the property was acquired by the previous
25 owner and at the previous owner's Nebraska adjusted basis. Tangible
26 personal property acquired as replacement property for converted property
27 shall be subject to taxation based upon the date the converted property
28 was acquired and at the Nebraska adjusted basis of the converted property
29 unless insurance proceeds are payable by reason of the conversion. For
30 purposes of this subsection, (a) converted property means tangible
31 personal property which is compulsorily or involuntarily converted as a
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1 result of its destruction in whole or in part, theft, seizure,
2 requisition, or condemnation, or the threat or imminence thereof, and no
3 gain or loss is recognized for federal or state income tax purposes by
4 the holder of the property as a result of the conversion and (b)
5 replacement property means tangible personal property acquired within two
6 years after the close of the calendar year in which tangible personal
7 property was converted and which is, except for date of construction or
8 manufacture, substantially the same as the converted property.
9 (6) The applicable percentage to be used for purposes of subsections
10 (2) and (3) of this section shall be determined from the following table:
11 Tax Year Percentage
12 2020 55
13 2021 45
14 2022 and after