107th Nebraska Legislature, First Session Bill Introduction Concludes
The First Session of the 107th Nebraska Legislature convened on January 6, 2021. As of Friday, January 22, there are 78 days left in the session, which concludes on June 10, 2021.
An updated chart of all First Session bills related to related to economic development, energy and renewable energy, government and municipal law, healthcare, liquor, real estate and financial transactions, taxation, and telecommunications is available here.
Bill introduction concluded on January 20, 2021. In our last update, available here, we addressed 21 bills from days one through five of bill introduction. Following days five through ten of bill introduction, we identified 20 additional bills warranting particular attention. Below are summaries of those bills:
LB 544 – Adopt the Urban Redevelopment Act:
LB 544 proposes to adopt the Urban Redevelopment Act. The Act provides incentives for investment and job creation in “economic redevelopment areas” within cities of the metropolitan or primary class. Economic redevelopment area means an area where the average rate of unemployment is at least 150 percent of the state average, and the average poverty rate is 20 percent or more for the federal census tract in the area.
To receive incentives under the Act, an applicant must apply to the Director of Economic Development (the “Director”). The Director may not accept applications after December 31, 2031. There is also an $8,000,000 cumulative benefit limit.
There are two tiers of incentives under the Act. First, are applicants who: (i) commit to a cumulative investment in qualifying property of at least $150,000 and hire at least five new employees at the qualified location within two years of application; and (ii) pay a minimum qualifying wage of at least 70 percent of the statewide average to said employees. Such applicants may receive a tax credit of $3,000 for each qualifying employee and $4,000 for each qualifying employee who lives in an economic redevelopment area. Such applicants may also receive a tax credit of $2,750 for each $50,000 of qualifying investment.
Second, are applicants who commit to a cumulative investment in qualifying property of at least $50,000 within two years of application. Such applicants may receive a tax credit equal to five percent of the qualifying investment.
Applicants may not qualify for both tiers and in no case may an applicant’s tax credit exceed $50,000. Applicants must maintain their investment and employment levels for the duration of the term of their commitment. The Act sets forth a direct tax payment and refund procedure for any period in which an applicant fails to meet the required levels of investment and employment.
LB 332 proposes to amend statutes relating to city councils in cities of the metropolitan class. Beginning with the 2025 general election, the bill increases the number of city council districts in such cities, and therefore council members, from seven to nine. On January 15, 2021, the Legislature referred the bill to the Urban Affairs Committee.
LB 409 proposes to amend statutes relating to electric transmission line construction. First, the bill places a moratorium on transmission line construction by public power suppliers until January 1, 2023. In the interim, the bill creates the Electric Transmission Line Study Committee of the Legislature. The sevenmember committee would examine the necessity for construction of long-distance transmission lines, the benefits thereof, and the sufficiency of current regulations. The committee would report its findings to the Legislature prior to December 15, 2022 and terminate shortly thereafter. On January 20, 2021, the Legislature referred the bill to the Executive Board.
LB 412 proposes to amend the Nebraska Housing Agency Act. The Act currently provides a tax exemption for real and personal property of a local housing authority and any “wholly owned controlled affiliate” thereof. The bill eliminates the requirement that an agency controlled affiliate be “wholly owned” to qualify for the exemption. Thus, the exemption is expanded. To qualify, the bill requires said agency or affiliate to provide notice of the exemption to the county assessor on or before December 31 of the prior year. On January 20, 2021, the Legislature referred the bill to the Revenue Committee.
LB 415 proposes to amend provisions relating to a microdistillery license. The bill increases the amount of liquor a microdistillery may produce from 10,000 to 100,000 gallons per year. Unlike LB 311, which was discussed in our prior summary, and which has an identical increase in maximum production, the bill does not restrict a microdistillery’s sale of its product to another Nebraska retailer. On January 20, 2021, the Legislature referred the bill to the General Affairs Committee.
LB 422 proposes to amend sales tax provisions. The bill seeks to expand the sales tax base to offset a reduction in sales tax rate. It imposes sales tax on all services unless specifically exempt. Beginning October 1, 2022, the bill reduces the sales tax rate from five and one-half percent to five percent and provides for quarterly adjustment to a rate estimated to provide equal tax revenue to the state. Prospectively, an expanded sales tax base may result in a lower sales tax rate. On January 20, 2021, the Legislature referred the bill to the Revenue Committee.
LB 424 proposes to amend zoning restrictions relating to wind energy generation projects. Beginning September 1, 2021, the bill prevents construction of a wind energy generation project in any county unless such county currently has in place or adopts zoning regulations meeting minimum standards. The minimum standards include fixed-distance setbacks from residences and property lines, noise restrictions, decommissioning terms and conditions, and fees for conditional use permits. The bill also eliminates a county or municipality’s ability to grant exceptions or “variances” from such minimum standards for wind energy generation systems. The bill imposes identical restrictions on public and school lands. On January 20, 2021, the Legislature referred the bill to the Government, Military, and Veterans Affairs Committee.
LB 446 proposes to adopt the Nebraska Housing Index and Financing Investment Act. The Act creates a comprehensive index for data regarding state housing capacity and the availability of state and federal housing incentives. The Act further establishes a coordinator position and requires said coordinator to submit a summary housing report to the Legislature’s Urban Affairs Committee every two years. The bill’s stated intent is to better inform policymakers and developers on state housing matters so that they may improve housing access and allocate resources efficiently. On January 20, 2021, the Legislature referred the bill to the Urban Affairs Committee.
LB 482 proposes to expand the prohibition on a public official or employee’s use of public resources for campaign purposes. The bill prohibits a political subdivision’s transfer of affiliation assessments or membership dues to any private entity for use as a contribution to a candidate or committee. Thus, it closes a loophole to the aforementioned prohibition. On January 20, 2021, the Legislature referred the bill to the General Affairs Committee.
LB 483 proposes to require the University of Nebraska to develop and submit a strategic action plan to address the impacts of climate change in the state. The bill includes procedural methodology and funding to develop said plan. It also sets forth the measurements, assessments, and recommendations that the University must include therein. The plan has a submission deadline of December 15, 2022. On January 20, 2021, the Legislature referred the bill to the Natural Resources Committee.
LB 502 proposes to amend the Nebraska Advantage Act. The Act seeks to attract businesses to Nebraska by offering tiered tax incentives based on the level said businesses’ commitment for investment and job creation within the state. The Act expired on December 31, 2020, but applications filed on or before that date may continue to receive benefits under the Act. In lieu of the current tax refund, the bill creates a sales tax exemption for qualifying expenditures. It also sets forth a new direct payment and refund procedure for any period in which a business fails to meet the required levels of investment and employment.
LB 513 proposes to amend provisions relating to public power district board members. Beginning in 2022, the bill reduces the term of a board member from six to four years. It also requires a board member to be a retail customer of the applicable district to hold office.
LB 555 proposes to amend reporting requirements under the Municipal Density and Missing Middle Housing Act. The bill requires a city to include in its report the percentage of areas zoned for residential use which it declares substandard and blighted areas and extremely blighted areas under the Community Development Law.
LB 556 proposes to amend the Community Development Law by authorizing a city to place additional requirements on the division of ad valorem taxes under a redevelopment contract. The city must deem the requirements necessary to ensure that the redevelopment project complies with the city’s comprehensive development plan, affordable housing action plan, zoning regulations, or any other reasonable planning requirement or goal.
LB 573 and LB 683 propose to amend provisions relating to net metering of customer-owned energy sources. Net metering is when a customer receives credit against the energy they use for the energy they generate from customer owned renewable sources, typically solar and wind energy. The current law requires a qualifying customer-generator facility to have a maximum rated capacity at or below 25 kilowatts. LB 573 amends the definition of a qualifying facility by clarifying that measurement of said capacity should be in alternating current rather than direct current.
LB 683 would further expand rights relating to customer-owned energy sources. First, the bill grants an express right to install and use electricity generation systems, including non-renewable energy systems. Next, the bill limits administrative fees that a distribution utility may charge customer-generators and eliminates the 25 kilowatt maximum rated capacity. Instead, a qualifying facility’s maximum capacity would be 110 percent of the customer-generator’s average annual usage. The distribution utility may only limit the customer-generator below such capacity if it can show a risk to its distribution system or grid reliability. The bill does authorize a distribution utility to adopt insurance requirements and standards for installation and operation of a customer-generator facility.
LB 627 proposes to amend statutes relating to qualified voters in certain public power district elections. The bill expands the registered voter pool in such elections by including those voters that reside within the incorporated or unincorporated area of a county that includes a city of the metropolitan or primary class and which overlaps any portion of a public power district with an annual gross revenue of $150,000,000 or more.
LB 652 and LB 653 LB 652 proposes to adopt the Historically Underutilized Business Program Act. The Act seeks to make qualifying Historically Underutilized Businesses (“HUBs”) more likely to obtain government procurement contracts. It applies to procurement contracts of $200,000 or more. For such contracts, it requires government entities to set goals for HUB utilization and to grant priority to HUB bidders. Government entities must also identify HUB subcontractors and, if the same are available, require bidding contractors to grant priority to the same. Government entities may penalize contractors who do not comply with the Act by withholding payment or excluding them from future bidding.
LB 653 proposes to amend the Community Development Law. The bill requires cities to establish goals for HUB utilization for redevelopment projects for which the division of ad valorem taxes exceeds $200,000. It also incorporates HUB utilization into current reporting requirements and authorizes a city to make redevelopment contracts conditional upon HUB utilization.
LB 674 proposes to amend the Affordable Housing Tax Credit Act. For business entities, the bill limits tax credit eligibility to those partners, members, or shareholders who acquired their interest on or prior to the due date for filing the entity’s tax return. The bill also extends application of the tax credit to offset premium taxes for fire insurance providers.
All bills are available on the Nebraska Legislature’s website at http://www.nebraskalegislature.gov/bills/. Please contact us if you have any questions about these bills or any others the Nebraska Legislature is currently considering. Thank you.