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LB 650

Adopt the Community Development Assistance Act and change provisions relating to land banks, property tax exemptions, real property sold for delinquent taxes, sales tax provisions, and certain tax credits

109th Legislature (2025-2026) Introduced by Brad von Gillern

Creates the Community Development Assistance Act to certify distressed-area programs and grant tax credits for private donations, while sunsetting many other incentives.

Provisions/portions of LB270 amended into LB650 by AM923
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Bill Summary · LB 650

Summary — LB 650 (2025)

Title: Adopt the Community Development Assistance Act and change provisions relating to land banks, property tax exemptions, real property sold for delinquent taxes, sales tax provisions, and certain tax credits
Introduced by: Sen. R. Brad von Gillern (at the request of the Governor) — Approved by Governor: May 6, 2025 (includes emergency clause)

Purpose / Intent

LB 650 is a broad revenue and tax bill whose central aims are:
- Create the Community Development Assistance Act to incentivize private contributions to programs in designated areas of chronic economic distress; and
- Reduce state spending by sunsetting or modifying a wide range of tax credits, exemptions, and incentive program provisions and by changing several sales/use tax and tax‑administration rules.

The bill packages many separate changes — including provisions from multiple other bills that were amended into LB 650 — into one enacted statute.

Key provisions (high level)

  • Community Development Assistance Act: establishes definitions, certification process, and a program under the Department of Economic Development to certify community betterment programs in “community development areas” (distressed areas) so donations to certified programs can generate state tax credits.
  • Sunsets / repeals / limits on tax incentives: ends or limits many credits or income reductions (generally effective around January 1, 2026; timing varies by affected act). Affected programs include (but are not limited to):
    • Sustainable Aviation Fuel Tax Credit (eliminated)
    • Certain Nebraska Advantage incentives (changes to Rural Development Act caps/eligibility)
    • Relocation Incentive Act (changes and annual approval cap)
    • Creating High Impact Economic Futures Act
    • Cast and Crew Nebraska Act (caps adjusted)
    • Nebraska Shortline Rail Modernization Act
    • Reverse Osmosis System Tax Credit Act
    • Renewable Chemical Production Tax Credit Act
    • Nebraska Biodiesel Tax Credit Act
    • Urban Redevelopment Act, Good Life Transformational Projects Act (approval/sunset changes)
    • Food donation tax credits for grocers/restaurants/ag producers (termination date applied)
  • Sales and use tax changes:
    • Eliminates sales/use tax exemptions for certain items (examples called out: net wrap and twine; some tower lease/use exemptions adjusted)
    • Reduces the sales tax collection reimbursement to vendors from “3% of the first $5,000” to “2.5% of the first $3,000” (adjusts collector reimbursement caps)
  • Nonresident-income sourcing rules: clarifies when wages for services performed out-of-state are treated as Nebraska income (adds “convenience” rule language and conference/training income limits for nonresidents).
  • Purchasing‑agent / construction exemption: clarifies buyer-based exemption procedures and permits certain contractors to purchase tax-free as purchasing agents; contains an operative date (applies July 1, 2026).
  • Administrative and disclosure changes: authorizes audits by the Auditor of Public Accounts for suspected tax reporting irregularities and creates narrow exceptions for municipalities to disclose otherwise confidential tax information in certain circumstances.
  • Miscellaneous: updates to land bank, motor-vehicle/property exemptions for some disabled veterans, and procedural/filing amendments across several chapters of tax law.

Affected parties

  • Businesses and taxpayers who claimed the enumerated credits or exemptions (film producers, railroads/shortlines, renewable fuel producers, relocation beneficiaries, certain employers/employees claiming relocation or income exclusions).
  • Community betterment organizations and donors (new tax-credit certification program under the Community Development Assistance Act).
  • Retailers and vendors (changes to tax-collection reimbursement and exempt items).
  • Local governments and subdivisions (new review/certification interactions; limited disclosure exceptions).
  • Contractors and nonprofit clients (purchasing‑agent provisions).
  • State agencies: Department of Economic Development, Department of Revenue/Tax Commissioner, Auditor of Public Accounts.

Fiscal and timing notes

  • Multiple fiscal notes were prepared (dates listed April 16, 18 and April 29, 2025).
  • Many sunsets or limit changes take effect for taxable/calendar/fiscal years beginning on or after January 1, 2026 (the applicable year basis depends on the specific act). The purchasing‑agent change explicitly applies on and after July 1, 2026.
  • The enacted bill contains an emergency clause and was approved by the Governor on May 6, 2025, making certain provisions effective immediately as specified in the law.

Legislative history highlights

  • Referred to Revenue Committee (Jan 22, 2025); heard March 19, 2025; advanced with amendments.
  • Standing and floor amendments (notably AM923/Revenue committee amendments and Enrollment & Review ER45) incorporated provisions from numerous other bills (LB 270, 458, 494, 495, 547, etc.).
  • Passed Final Reading (with emergency clause) and enrolled; presented to Governor Apr 30, 2025; approved May 6, 2025.

For details on any specific program, tax credit cap, or operative/repealer language, consult the enacted slip law text or the Department of Revenue fiscal notes for program-level fiscal impacts.

Compiled from official sources — confirm details with the bill’s official record.

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