LB810 LB810
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LEGISLATURE OF NEBRASKA
ONE HUNDRED SIXTH LEGISLATURE
SECOND SESSION
LEGISLATIVE BILL 810
Introduced by McCollister, 20.
Read first time January 08, 2020
Committee: Revenue
1 A BILL FOR AN ACT relating to revenue and taxation; to amend sections
2 77-2704.24 and 77-27,132, Reissue Revised Statutes of Nebraska, and
3 section 71-7611, Revised Statutes Supplement, 2019; to impose sales
4 and use taxes on bottled water, candy, and soft drinks and provide
5 for the use of the additional revenue; to harmonize provisions; to
6 provide an operative date; and to repeal the original sections.
7 Be it enacted by the people of the State of Nebraska,
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1 Section 1. Section 71-7611, Revised Statutes Supplement, 2019, is
2 amended to read:
3 71-7611 (1) The Nebraska Health Care Cash Fund is created. The State
4 Treasurer shall transfer (a) sixty million three hundred thousand dollars
5 on or before July 15, 2014, (b) sixty million three hundred fifty
6 thousand dollars on or before July 15, 2015, (c) sixty million three
7 hundred fifty thousand dollars on or before July 15, 2016, (d) sixty
8 million seven hundred thousand dollars on or before July 15, 2017, (e)
9 five hundred thousand dollars on or before May 15, 2018, (f) sixty-one
10 million six hundred thousand dollars on or before July 15, 2018, (g)
11 sixty-two million dollars on or before July 15, 2019, (h) sixty-one
12 million four hundred fifty thousand dollars on or before July 15, 2020,
13 and (i) sixty-one million one hundred thousand dollars on or before every
14 July 15 thereafter from the Nebraska Medicaid Intergovernmental Trust
15 Fund and the Nebraska Tobacco Settlement Trust Fund to the Nebraska
16 Health Care Cash Fund, except that such amount shall be reduced by the
17 amount of the unobligated balance in the Nebraska Health Care Cash Fund
18 at the time the transfer is made. The state investment officer shall
19 advise the State Treasurer on the amounts to be transferred first from
20 the Nebraska Medicaid Intergovernmental Trust Fund until the fund balance
21 is depleted and from the Nebraska Tobacco Settlement Trust Fund
22 thereafter in order to sustain such transfers in perpetuity. The state
23 investment officer shall report electronically to the Legislature on or
24 before October 1 of every even-numbered year on the sustainability of
25 such transfers. The Nebraska Health Care Cash Fund shall also include
26 money received pursuant to sections section 77-2602 and 77-27,132. Except
27 as otherwise provided by law, no more than the amounts specified in this
28 subsection may be appropriated or transferred from the Nebraska Health
29 Care Cash Fund in any fiscal year.
30 The State Treasurer shall transfer ten million dollars from the
31 Nebraska Medicaid Intergovernmental Trust Fund to the General Fund on
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1 June 28, 2018, and June 28, 2019.
2 Except as otherwise provided in subsection (6) of this section, it
3 is the intent of the Legislature that no additional programs are funded
4 through the Nebraska Health Care Cash Fund until funding for all programs
5 with an appropriation from the fund during FY2012-13 are restored to
6 their FY2012-13 levels.
7 (2) Any money in the Nebraska Health Care Cash Fund available for
8 investment shall be invested by the state investment officer pursuant to
9 the Nebraska Capital Expansion Act and the Nebraska State Funds
10 Investment Act.
11 (3) The University of Nebraska and postsecondary educational
12 institutions having colleges of medicine in Nebraska and their affiliated
13 research hospitals in Nebraska, as a condition of receiving any funds
14 appropriated or transferred from the Nebraska Health Care Cash Fund,
15 shall not discriminate against any person on the basis of sexual
16 orientation.
17 (4) The State Treasurer shall transfer fifty thousand dollars on or
18 before July 15, 2016, from the Nebraska Health Care Cash Fund to the
19 Board of Regents of the University of Nebraska for the University of
20 Nebraska Medical Center. It is the intent of the Legislature that these
21 funds be used by the College of Public Health for workforce training.
22 (5) It is the intent of the Legislature that the cost of the staff
23 and operating costs necessary to carry out the changes made by Laws 2018,
24 LB439, and not covered by fees or federal funds shall be funded from the
25 Nebraska Health Care Cash Fund for fiscal years 2018-19 and 2019-20.
26 (6) It is the intent of the Legislature to fund the grants to be
27 awarded pursuant to section 75-1101 with the Nebraska Health Care Cash
28 Fund for FY2019-20 and FY2020-21.
29 Sec. 2. Section 77-2704.24, Reissue Revised Statutes of Nebraska, is
30 amended to read:
31 77-2704.24 (1) Sales and use taxes shall not be imposed on the gross
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1 receipts from the sale, lease, or rental of and the storage, use, or
2 other consumption in this state of food or food ingredients except for
3 prepared food and food sold through vending machines.
4 (2) For purposes of this section:
5 (a) Alcoholic beverages means beverages that are suitable for human
6 consumption and contain one-half of one percent or more of alcohol by
7 volume;
8 (b) Bottled water means water that is placed in a safety sealed
9 container or package for human consumption. Bottled water is calorie free
10 and does not contain sweeteners or other additives except that it may
11 contain: (i) Antimicrobial agents; (ii) fluoride; (iii) carbonation; (iv)
12 vitamins, minerals, and electrolytes; (v) oxygen; (vi) preservatives; and
13 (vii) only those flavors, extracts, or essences derived from a spice or
14 fruit. Bottled water includes water that is delivered to the buyer in a
15 reusable container that is not sold with the water;
16 (c) Candy means a preparation of sugar, honey, or other natural or
17 artificial sweeteners in combination with chocolate, fruits, nuts, or
18 other ingredients or flavorings in the form of bars, drops, or pieces.
19 Candy shall not include any preparation containing flour and shall
20 require no refrigeration;
21 (d) (b) Dietary supplement means any product, other than tobacco,
22 intended to supplement the diet that contains one or more of the
23 following dietary ingredients: (i) A vitamin, (ii) a mineral, (iii) an
24 herb or other botanical, (iv) an amino acid, (v) a dietary substance for
25 use by humans to supplement the diet by increasing the total dietary
26 intake, or (vi) a concentrate, metabolite, constituent, extract, or
27 combination of any ingredients described in subdivisions (2)(d)(i) (2)(b)
28 (i) through (v) of this section; that is intended for ingestion in
29 tablet, capsule, powder, softgel, gelcap, or liquid form or, if not
30 intended for ingestion in such a form, is not presented as conventional
31 food and is not represented for use as a sole item of a meal or of the
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1 diet; and that is required to be labeled as a dietary supplement,
2 identifiable by the supplemental facts box found on the label and as
3 required pursuant to 21 C.F.R. 101.36, as such regulation existed on
4 January 1, 2003;
5 (e) (c) Food and food ingredients means substances, whether in
6 liquid, concentrated, solid, frozen, dried, or dehydrated form, that are
7 sold for ingestion or chewing by humans and are consumed for their taste
8 or nutritional value. Food and food ingredients does not include
9 alcoholic beverages, dietary supplements, or tobacco, bottled water,
10 candy, or soft drinks;
11 (f) (d) Food sold through vending machines means food that is
12 dispensed from a machine or other mechanical device that accepts payment;
13 (g) (e) Prepared food means:
14 (i) Food sold with eating utensils provided by the seller, including
15 plates, knives, forks, spoons, glasses, cups, napkins, or straws. A plate
16 does not include a container or packaging used to transport the food; or
17 (ii) Two or more food ingredients mixed or combined by the seller
18 for sale as a single item and food sold in a heated state or heated by
19 the seller, except:
20 (A) Food that is only cut, repackaged, or pasteurized by the seller;
21 (B) Eggs, fish, meat, poultry, and foods containing these raw animal
22 foods requiring cooking by the consumer as recommended by the federal
23 Food and Drug Administration in chapter 3, part 401.11 of its Food Code,
24 as it existed on January 1, 2003, so as to prevent food borne illnesses;
25 (C) Food sold by a seller whose proper primary North American
26 Industry Classification System classification is manufacturing in sector
27 311, except subsector 3118, bakeries;
28 (D) Food sold in an unheated state by weight or volume as a single
29 item;
30 (E) Bakery items, including bread, rolls, buns, biscuits, bagels,
31 croissants, pastries, donuts, danish, cakes, tortes, pies, tarts,
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1 muffins, bars, cookies, and tortillas; and
2 (F) Food that ordinarily requires additional cooking to finish the
3 product to its desired final condition; and
4 (h) Soft drinks means nonalcoholic beverages that contain natural or
5 artificial sweeteners. Soft drinks do not include beverages that contain
6 milk or milk products, soy, rice or similar milk substitutes, or greater
7 than fifty percent of vegetable or fruit juice by volume; and
8 (i) (f) Tobacco means cigarettes, cigars, chewing or pipe tobacco,
9 or any other item that contains tobacco.
10 (3) The Governor may stay the collection of sales and use taxes on
11 bottled water for a period of sixty days in any area of the state
12 affected by a disaster, emergency, or civil defense emergency as such
13 terms are defined in section 81-829.39.
14 Sec. 3. Section 77-27,132, Reissue Revised Statutes of Nebraska, is
15 amended to read:
16 77-27,132 (1) There is hereby created a fund to be designated the
17 Revenue Distribution Fund which shall be set apart and maintained by the
18 Tax Commissioner. Revenue not required to be credited to the General Fund
19 or any other specified fund may be credited to the Revenue Distribution
20 Fund. Credits and refunds of such revenue shall be paid from the Revenue
21 Distribution Fund. The balance of the amount credited, after credits and
22 refunds, shall be allocated as provided by the statutes creating such
23 revenue.
24 (2) The Tax Commissioner shall pay to a depository bank designated
25 by the State Treasurer all amounts collected under the Nebraska Revenue
26 Act of 1967. The Tax Commissioner shall present to the State Treasurer
27 bank receipts showing amounts so deposited in the bank, and of the
28 amounts so deposited the State Treasurer shall:
29 (a) For transactions occurring on or after October 1, 2014, and
30 before October 1, 2022, credit to the Game and Parks Commission Capital
31 Maintenance Fund all of the proceeds of the sales and use taxes imposed
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1 pursuant to section 77-2703 on the sale or lease of motorboats as defined
2 in section 37-1204, personal watercraft as defined in section 37-1204.01,
3 all-terrain vehicles as defined in section 60-103, and utility-type
4 vehicles as defined in section 60-135.01;
5 (b) Credit to the Highway Trust Fund all of the proceeds of the
6 sales and use taxes derived from the sale or lease for periods of more
7 than thirty-one days of motor vehicles, trailers, and semitrailers,
8 except that the proceeds equal to any sales tax rate provided for in
9 section 77-2701.02 that is in excess of five percent derived from the
10 sale or lease for periods of more than thirty-one days of motor vehicles,
11 trailers, and semitrailers shall be credited to the Highway Allocation
12 Fund;
13 (c) For transactions occurring on or after July 1, 2013, and before
14 July 1, 2033, of the proceeds of the sales and use taxes derived from
15 transactions other than those listed in subdivisions (2)(a) and (b) of
16 this section from a sales tax rate of one-quarter of one percent, credit
17 monthly eighty-five percent to the State Highway Capital Improvement Fund
18 and fifteen percent to the Highway Allocation Fund; and
19 (d) Of the proceeds of the sales and use taxes derived from
20 transactions other than those listed in subdivisions (2)(a) and (b) of
21 this section, credit to the Property Tax Credit Cash Fund the amount
22 certified under section 77-27,237, if any such certification is made;
23 and .
24 (e) Credit to the Nebraska Health Care Cash Fund an amount equal to
25 the increase in state sales and use tax revenue received as a result of
26 the imposition of the sales and use tax on bottled water, candy, and soft
27 drinks, as such terms are defined in section 77-2704.24. The amount to be
28 credited under this subdivision shall be determined annually by the Tax
29 Commissioner.
30 The balance of all amounts collected under the Nebraska Revenue Act
31 of 1967 shall be credited to the General Fund.
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1 Sec. 4. This act becomes operative on October 1, 2020.
2 Sec. 5. Original sections 77-2704.24 and 77-27,132, Reissue Revised
3 Statutes of Nebraska, and section 71-7611, Revised Statutes Supplement,
4 2019, are repealed.
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Statutes affected:
Introduced: 71-7611, 77-2704.24