Revenue cleanup package amended, advanced

A package of tax-related proposals advanced to the final round of debate April 10 after lawmakers amended several of its provisions, including those related to special retail districts and electric vehicle charging stations.

As amended on general file, LB1317, introduced by Elkhorn Sen. Lou Ann Linehan, contains the provisions of several other bills heard by the Revenue Committee this session.

The Good Life Transformational Projects Act, passed by the Legislature last year, authorizes the state Department of Economic Development to approve applications for “good life districts” that meet certain thresholds related to investment and job creation. Transactions within a district are subject to a reduced state sales tax rate of 2.75%.

Under LB1317, a city could — with voter approval — establish an economic development program for an area of the city included in a good life district and appropriate local sources of revenue to pay for development costs.

On select file, Sen. R. Brad von Gillern of Elkhorn introduced an amendment, adopted 32-1, that he said is intended to fill “gaps” in the current law.

A portion of the amendment — the specifications of which would apply only to the city of Gretna — would require a city to agree with the applicant of the good life district located there that the applicant will build and pay for infrastructure within the district and that the city will reduce its local option sales tax and levy occupation taxes within the district in an amount agreed to by the applicant and the city.

Among other changes, the amendment also would allow applicants to change district boundaries and require the department to approve those changes based on certain conditions. If the change would remove an area from the district, the department would be required to receive written consent from affected property owners or hold a public hearing.

Omaha Sen. Justin Wayne introduced an amendment, adopted 30-0, that would allow the department to consider any formal action taken by a city council or village board of trustees when determining whether removal of the affected property is consistent with the goals and purposes of the approved good life district application.

Additionally, von Gillern’s amendment would allow the applicant of a good life district that is at least 1,000 acres in size to apply to the department to establish development and design standards for the district.

The department could approve the standards after holding a hearing. The standards would apply to new construction and would be in addition to any local zoning, building code or other city requirements.

Finally, the amendment would require the department to terminate a good life district if commitments for a percentage of the required investment threshold have not been made, beginning within three years of the district’s establishment rather than the current 10 years.

Sen. Eliot Bostar of Lincoln supported the amendment, saying the Legislature “opened the door too far” when it authorized the creation of good life districts.

“Where it stands now, essentially anything can be a good life district,” he said. “The benefits of the good life districts … can be gained functionally without having to do much [if] any development.”

LB1317 also would impose an excise tax of 3 cents per kilowatt hour on the electricity used to charge electric and plug-in hybrid electric vehicles at a commercial electric vehicle charging station, beginning Jan. 1, 2028.

Under the bill, an electric supplier could own, maintain and operate a direct-current, fast-charging station for retail services only at a location that is at least 15 miles from a privately owned station and at least one mile from a federally designated alternative fuel corridor.

An electric supplier would have to conduct a right of first refusal process before beginning construction of a fast-charging station.

Bostar introduced an amendment, adopted 40-0, under which the requirements for electric suppliers would end Dec. 1, 2027.

Under the amendment, an electric supplier could not operate a fast-charging station within 10 miles of a privately owned station that already is in operation or has a building permit and interconnection request to the electric supplier. The provision would take effect Jan. 1, 2028.

Bostar said the amendment is intended to address concerns that the right of first refusal process would be unfair to public power utilities that might want to provide fast-charging stations.

Under von Gillern’s amendment, state agencies would, to the extent practical, require the recipient of state funds or any funds administered by a state agency used for the installation or purchase of commercial vehicle charging stations or fast-charging stations to certify that certain components are not produced, manufactured or assembled by a restricted entity.

Brainard Sen. Bruce Bostelman offered an amendment, adopted 36-0, to strike the phrase “to the extent practical.”

Bayard Sen. Steve Erdman introduced an amendment, adopted 33-0, to remove a provision in von Gillern’s amendment that would have allowed the governor to waive the requirement.

As amended, LB1317 includes provisions of LB863, sponsored by Linehan, which would eliminate an income tax deduction for amounts received as annuities under the Federal Employees Retirement System. Lawmakers provided the deduction — originally proposed by Sen. Carol Blood of Bellevue in LB38 — last year under LB754.

Linehan said the committee did not intend to allow all federal retirement income to be deducted, only the amounts received under the Civil Service Retirement System.

Von Gillern supported the amendment, saying the change would increase state revenue by approximately $12 million per year.

Blood offered an amendment to strike Linehan’s proposal and retain the FERS deduction. She said the intent of her original measure was to provide a deduction to all federal retirees.

The amendment failed on a vote of 6-32.

Blair Sen. Ben Hansen introduced an amendment, adopted 27-5, that would expand the definition of bullion and add or subtract net capital gains or losses to or from federal adjusted gross income unless the gain or loss is derived from the sale of bullion as a taxable distribution from a retirement plan account.

Bostar introduced another amendment, adopted 37-0, under which a publicly owned stadium in a metropolitan class city could qualify for state assistance under the Sports Arena Facility Financing Assistance Act.

Under the amendment, no more than $1.25 million in state assistance for a stadium could be approved in any year, and the total amount of assistance could be no more than $25 million.

Bostar offered a further amendment, adopted 35-0, under which no state assistance would be paid until after July 1, 2027.

Lawmakers then advanced LB1317 to final reading by voice vote.