Homestead exemption for partially disabled veterans removed

Lawmakers gave second-round approval April 10 to a bill related to valuation and property taxes after amending out provisions under which partially disabled veterans could have qualified for a homestead exemption.

As amended on general file, LB126, introduced by Sen. Jen Day of Omaha, would create a new exemption under which claimants would pay a minimum amount of property taxes based on their household income. The exemption would be available to each category of current homestead exemption claimants.

A veteran who was discharged under honorable conditions, is drawing compensation from the U.S. Department of Veterans Affairs because the veteran is at least 50% disabled due to a service-connected disability and is not eligible for a total homestead exemption also would qualify for the new exemption.

On select file, Elkhorn Sen. Lou Ann Linehan introduced an amendment, adopted 35-0, to strike the proposed exemption. She said the measure’s fiscal note was “just too big.”

The state Department of Revenue estimates that LB126 as amended on the first round of debate would reduce state general fund revenue by $71.3 million in fiscal year 2025-26 and $76.9 million in FY2026-27.

Linehan said another change in the amendment would allow current homestead exemption recipients to remain eligible for an exemption if a valuation increase pushes the value of their homestead above the allowed maximum.

LB126 also would update the definition of “occupy” under the homestead exemption program and require county assessors or county clerks to correct the assessment and tax rolls after a final order of an applicable administrative body or court.

Senators advanced LB126 to final reading by voice vote.