POLICY WATCH

NEFB Asks Delegation to Support Proposal to Freeze Flawed Wage Rate

Nebraska Farm Bureau (NEFB) joined a large group of state and national organizations in sending a letter to Congress urging them to support newly introduced legislation to disapprove of the Department of Labor’s (DOL’s) new and harmful H-2A regulation, entitled, “Adverse Effect Wage Rate (AEWR) Methodology for the Temporary Employment of H-2A Nonimmigrants in Non-Range Occupations in the United States.” 

The 2023 AEWR rule missed the mark by such a wide margin that farmers in some states experienced required wage increases of more than 10 percent after smaller increases last year. The AEWR has significantly outpaced increases in the national average wage for most workers in America for most of a decade.

In the letter, NEFB said the DOL’s regulation comes at a time when Nebraska farmers are reeling due to record high costs of production that have translated into thin and even negative margins, conditions the new regulation will greatly exacerbate.  Moreover, the regulation further complicates an already complex program and creates legal uncertainty for farmers who comply with requirements in good faith. The H-2A program is vitally important to American agriculture.  Yet, the regulation promulgated by the DOL will make it much harder for farmers to maintain an adequate workforce given the cost and complexity of the wage construct being proposed, putting U.S. farmers at an even greater disadvantage.

In asking delegates to support the measure, NEFB said that because of the H-2A program’s critical importance to America’s farmers, key reforms to the program that would make it work more effectively for farmers on the ground would be very beneficial.  Unfortunately, the new regulation would take the program in the opposite direction, harming the farmers who depend on it. 

The Farm Operations Support Act ensures valued farm employees are paid a consistent and fair wage without demanding farmers exceed the wage rates paid to other workers in America.

Judge Halts WOTUS Rule in Two States

Federal lawmakers and a federal judge recently sided against the Environmental Protection Agency’s new Waters of the U.S. (WOTUS) rule. Nebraska Farm Bureau President Mark McHargue commented on the U.S. District Court ruling to halt the rule in Texas and Idaho.

“The Biden administration’s new WOTUS rule is now in effect. This massive expansion of the Clean Water Act is unfortunately just another example of federal regulators creating more uncertainty, increasing costs, and trampling on private property rights. Just like all farmers and ranchers, we care about clean water and environmental stewardship. However, releasing and now enforcing a new WOTUS rule only weeks before the U.S. Supreme Court rules on the Sackett case, which will likely have a significant impact on this new rule, is as troubling as it is irresponsible. This action is clearly more of an example of politics vs. sound public policy. Farm and ranch families should not be forced to hire costly attorneys and consultants simply to determine what they can and cannot do with their own property,” said McHargue.

Read the U.S. District Court for the Southern District of Texas ruling here.

Nebraska Farm Bureau Priority Bills Starting to Take Shape

This week marked the end of committee hearings, with the last hearings held on Friday. Full-day debate will begin Tuesday, March 28. We want to thank everyone that took part in the committee hearing process this year. Your input and testimony were instrumental in creating a slate of bills that not only have the potential to pass, but to transform the Nebraska tax landscape among other issues. Now, we turn our attention to helping the Legislature put the pieces of this giant puzzle together. 

The following bills are some of the more notable measures we are working on. They can and will change, and do not represent every bill that we weighed in on. But they are either the bills that we are heavily involving ourselves in or that have a chance of seeing action on the floor this session in one form or another. 

Education Funding and Property Taxes

• LB681 Clements – Creates the $1 Billion Education Future Fund to provide foundation aid, additional special education aid, increase funding for school districts that results in direct property tax relief, and to create grant programs to address teacher turnover, increase technical educational opportunities, and offer mentorship for student’s professional growth.
  • Cost: $1 billion in FY2023-24 and $250 million/year for each year thereafter.
• LB583 Sanders – Provides $1,500 per student foundation aid and 80% of the cost to provide special education under the Tax Equity and Educational Opportunities Support Act.
  • Cost: $112 million in FY2023-24. $435 million in FY2024-25. And an estimated 6-9% growth annually thereafter.
• LB589 Briese – Places a cap on school district revenue growth. A school district may exceed its property tax authority, with a 75% majority vote of the school board. Additionally, a district may exceed their property tax request authority by any amount with a 60% vote of the people. The cap would not apply to property tax revenues required to pay bonded indebtedness.
  • Cost: $125,000/year for state to administer.
• LB242 Briese – Changes Nebraska Property Tax Incentive Act by establishing a floor of $1 billion in this fund for 2024.
  • Cost: $420 million in FY24-25. $434 million in FY25-26. $450 million in FY26-27.
• LB243 Briese – Prioritized by Sen. Briese, this changes the minimum amount of relief granted under the Property Tax Credit Act by setting the minimum property tax relief for 2024 at $700,000,000, plus a percentage increase based on the growth of total assessed value of all real property.
  • Cost: $450 million in FY24-25. $475 million in FY25-26. $501 million in FY26-27.
• LB244 Briese – Provides an additional tax credit under the Nebraska Property Tax Incentive Act for all real property that is taxed and does not currently have a tax credit in place (i.e., community colleges, public schools).
  • Cost: $200 million in FY24-25. $207 million in FY25-26. $214 million in FY26-27
• LB689 Linehan –  Provides 100% refundable income tax credit for community college taxes paid.
  • Cost: $92.4 million in FY26-27. $95.7 million in FY27-28. $99 million in FY28-29. $102.5 million in FY29-30.
• LB783 Murman – Eliminates the property tax levy authority of community colleges.
  • Cost: $149 m FY26-27. $303 m FY27-28. $313 m FY28-29. $324 m FY29-30. $336 m FY30-31.
• LB753 Linehan – Prioritized by Sen. Linehan, this creates the Opportunity Scholarships Act which would provide tax credits to individuals and business who provide scholarships to parents or guardians who enroll their children in privately operated elementary and secondary schools.
  • Cost: $25 million in FY24-25. $31.25 million in FY25-26. $39.1 million in FY26-27. And grows by 25% each year thereafter.
• LB580 Holdcroft – Prioritized by the Speaker, this changes provisions relating to agricultural or horticultural land receiving special valuation when it is annexed by a city or a sanitary improvement district. 
  • Annual property tax savings for owners of 888 acres of agricultural land in Sarpy County: Approximately $467,000.

Income Taxes

• LB754 Linehan – Prioritized by the Revenue Committee, this reduces individual and corporate income tax rates to 3.99% by 2029.
  • Cost: $221 m FY23-24. $293 m FY24-25. $424 m FY25-26. $575 m FY26-27. $696 m FY27-28. $735 m FY28-29.
• LB804 von Gillern – Reduces corporate income tax rates for income in excess of $100,000 to 5.84%.
  • Cost: $60 m FY23-24.$59 m FY24-25. $42 m FY25-26. $21 m FY26-27. $8 m FY 27-28. $1.5 m FY28-29.
• LB806 von Gillern – Reduces individual income tax rates to 5.84%.
  • Cost: $301 m FY23-24. $151 m FY24-25. $90 m FY25-26. $28 m FY26-27. 

Broadband

• LB61 Brandt – Prioritized by Sen. Brandt, this allows any public power district, city or village owning or operating electric generation or transmission facilities to license its dark fiber capacity.
• LB412 Geist – Prioritized by the Transportation and Telecommunications Committee, this provides powers for the Public Service Commission to allocate federal funds from the American Rescue Plan Act to any portion of a local exchange area containing a city of the second class or village.
• LB683 Transportation and Telecommunications Committee – Creates the Nebraska Broadband Office and create a Director of Broadband that is appointed by the Governor.

Beginning Farmer, Noxious Weeds, and Livestock

• LB116 Brandt – Prioritized by the Agriculture Committee, this bill:
  • Changes the Beginning Farmer Tax Credit eligibility by increasing the net worth limit to $750,000, removing retirement savings from net worth, and removing acreage restrictions.
    • Cost: $33.4 million over three years.
  • Increases funding for noxious weed eradication in flood plains from $3 m to $6 m over two years.
  • Adds $2 million to the Livestock Growth Act Cash Fund, further supporting Livestock Friendly Counties. 
• LB564 Dorn – Modifies the Economic Opportunity Program (EOP) of the Department of Transportation to include livestock production and processing as eligible uses of funding. Increases allowable expenditures from $20 million to $40 million over the life of the program.
• LB809 Murman – Increases funding to the Nebraska Advantage Rural Development Act from $1 million to $10 million annually for four years, allowing more agricultural companies with employees to take advantage of tax credits. 

• LB118 Brandt – Modifies the Nebraska Advantage Rural Development Act by decreasing the livestock modernization investment necessary to be eligible from $50k to $10k and lowers application fees accordingly. The goal of this bill is to allow smaller farmers to take advantage of the livestock modernization program without the $50,000 investment.
  • Cost is $8.4 million over three years.

Renewable Fuels

• LB562 Dorn – Prioritized by Sen. Dorn, this bill adopts the E-15 Access Standard Act which increases access to E-15 by having fuel stations advertise E-15 and supply it from at least 50% of their pumps. 
  • Cost: $30 million over three years.
• LB180 Brandt – Adopts the Nebraska Biodiesel Tax Credit Act which provides a $.14 income tax credit per gallon for gas stations to carry biodiesel fuel.
  • Cost: $5.5 million over three years.

Rural Economic Development

• LB249 Briese – Prioritized by Sen. Ibach, this modifies the Rural Workforce Housing Investment Act, allowing nonprofits to apply for more than one grant in rural workforce housing efforts.
  • Estimated cost: $31 million over two years.
• LB706 Moser – Prioritized by Sen. Moser, this authorizes the issuance of highway bonds under the Nebraska Highway Bond Act.
  • Cost: Bonds may not exceed $450 million in principal and $30 million in annual debt service for not more than 19 years.
• LB45 Dorn – Creates the Revitalize Rural Nebraska Grant Fund which allows a city of the second class (800-5,000 population), and a village (100-800 population) to apply for grants for the demolition of dilapidated commercial property. Cities and villages must have matching funds whether in-kind or cash donations.
  • Cost: $10 million/year for next five years.
• LB124 Moser – Extends the county bridge match program through 2029. It is currently set to expire in June 2023.
  • Cost: $0
• LB449 Brandt – Provides additional funding for the County Bridge Match Program by allocating $68 million per year to counties for an up to 55% coverage of costs to repair bridges.
  • Cost: $340 million over five years, plus $8 million/year for administrative costs.

There are many plates spinning all at once. If you have questions, please do not hesitate to ask. If you would like us to provide a legislative update for your county Farm Bureau, we are happy to do that. Thank you for your continued engagement in NEFB’s advocacy efforts!