First Week of Session: +200 Bills Introduced
In the first three working days of the 2020 Nebraska Legislature, senators introduced 213 pieces of legislation. Here are a handful of bills that caught my eye with some basic descriptions, not to be construed as position statements or complete analysis.
Hearkening back to Laura Ebke’s recent post on how old Nebraskans should need to be smoke cigarettes, apparently Nebraska’s age of majority (19) also means 18-year-olds in the state cannot currently purchase or sell stocks and bonds for themselves. This bill would make 18 the starting age for dealing with those financial assets without parental supervision.
This bill broadly exempts retirement income from state income tax, including Social Security, 401(k)s, state and local government employee pensions, and military retirement benefits.
Sales taxes would be imposed on bottled water, candy, and soft drinks. The state’s share of the new revenue would be deposited into the Health Care Cash Fund.
Sen. Sue Crawford’s LB842
Motor vehicles owned by members of the armed forces who reside in Nebraska, or their spouses, would be exempt from the state’s motor vehicle tax, which is the part of your vehicle registration assessed based on the value and age of the vehicle. Currently, only non-resident service members can keep their out-of-state registrations, or get a Nebraska plate without paying the motor vehicle tax.
State agencies would conduct an annual review of regulations they adopt, looking back at whether they rules they passed comply with legislation and fulfilled their stated purpose over the previous ten years. The bill’s text seems to suggest it is a regulation sequel to Nebraska’s Occupational Board Reform Act, which reviews job licensing laws. However, the bill seems like a longer-term play than LB299, since the first regulatory review would not be submitted until 2031.
The bill seeks to prevent lawmakers from spending down the state’s Health Care Cash Fund, which is mostly supported by settlement funds from tobacco companies. New programs could not be funded with those dollars under this proposal. Instead, lawmakers seeking additional spending could only tap into investment earnings from the settlement portion of the fund from the previous year.
State income tax rates would stay the same under this proposal, but the marginal rates would increase at higher levels of income, particularly on the top two brackets. Essentially, a single filer would have to earn over $50,000 and married taxpayers filing jointly would have to make six figures before paying the state’s top income tax rate. The same structure would apply to businesses filing as individuals as well.
Licenses and renewals to be a hemp producer in Nebraska could not be denied unless the applicant or application doesn’t meet the minimum requirements or violates the rules for producers.
Basically, it’s a statutory lockbox for the property tax credit fund. The Legislature would be required to fund the credit at least $275 million every year, and any new money added to the fund by a future Legislature would be added to the minimum required. The Legislature would have to repeal the law to reduce the minimum amount required.
As I wrote before, this is the income tax repeal constitutional amendment that was said to be coming. The proposal would cut all income taxes by 25% a year for four years and then prohibit the state from levying the tax going forward.
Notably Absent: The Revenue Committee’s Property Tax Reform Proposal
The first three days of the Legislative session were surprisingly short on property tax proposals, but it’s especially notable that there still isn’t a bill out from the Revenue Committee itself. It could be that a new version of their plan is still being worked on after the committee had its recent lunch meeting with the governor.
To be sure, the plan will be different enough from last year’s proposals that a new legislative hearing on a tax reform plan can’t be too far off.