PREPARED BY: John Wiemer
LB 75 DATE PREPARED: August 07, 2024
PHONE: 402-471-0051
Revision: 01
Revised per Response from Dept. of Revenue FISCAL NOTE
LEGISLATIVE FISCAL ANALYST ESTIMATE
ESTIMATE OF FISCAL IMPACT – STATE AGENCIES (See narrative for political subdivision estimates)
FY 2024-25 FY 2025-26
EXPENDITURES REVENUE EXPENDITURES REVENUE
GENERAL FUNDS $540,764 $11,615,992
CASH FUNDS
FEDERAL FUNDS
OTHER FUNDS
TOTAL FUNDS $540,764 $11,615,992
Any Fiscal Notes received from state agencies and political subdivisions are attached following the Legislative Fiscal Analyst Estimate.
LB 75 would establish the Long-Term Owner Homestead Exemption Act.
Under the Act, homesteads of qualified owners would be assessed for taxation the same as other property, except that such
homesteads would be eligible to receive an exemption as follows: For purposes of any political subdivision taxes, the homestead of a
qualified owner would be valued at zero. Qualified owner would mean an owner who has owned a homestead or homesteads in
Nebraska for at least 40 years as of January 1 of the current assessment year and resides in a Nebraska homestead at such time.
A qualified owner could apply for a homestead exemption under this Act by submitting an application to the county assessor of the
county in which the homestead is located on a form prescribed by the Tax Commissioner. Once the owner has received approval of the
exemption, such owner would only be required to file a subsequent application in years evenly divisible by five. Any qualified owner who
receives an exemption under the Act for any year would not be eligible to receive a homestead exemption under sections 77-3501 to
77-3529 for the same year.
The county treasurer and county assessor would, on or before November 30 of each year, certify to the Tax Commissioner the total tax
revenue that will be lost to all political subdivisions within the county from taxes levied and assessed in that year because of exemptions
allowed under the Act. The Tax Commissioner would, on or before January 1 next following such certification, notify the Director of
Administrative Services of the amount so certified to be reimbursed by the state. Reimbursement of the funds lost would be made to
each county according to the certification and would be distributed in six as nearly as possible equal monthly payments on the last
business day of each month beginning in January. The Director of Administrative Service would, on the last business day of each
month, issue payments via electronic funds transfer. Out of the amount so received the county treasurer would distribute to each of the
political subdivisions within his or her county the full amount so lost by such political subdivision, except that 1% of such amount would
be deposited in the county general fund. Each political subdivision would, in preparing its annual or biennial budget, take into account
the amount to be received.
The Tax Commissioner could adopt and promulgate rules and regulations to carry out the Act.
The bill would become operative January 1, 2025.
The Department of Revenue (DOR) estimates the following increase to General Fund expenditures from people staying in one
homestead for at least 40 years as a result of the bill:
• FY25: $0
• FY26: $11,420,000
• FY27: $12,110,000
The DOR estimates a one-time cost of $ 368,964 to be paid to the Office of the Chief Information Officer (OCIO) with annual
maintenance costs of $73,792 as a result of the bill. The DOR estimates 1.0 FTE IT Business Systems Analyst and 1.0 FTE Revenue
Tax Specialist in FY25 as a result of the bill. In subsequent years, the DOR estimates 0.5 IT B usiness Systems Analyst and 1.0 FTE
Revenue Tax Specialist.
PAGE 1
LB 75_01 PAGE 2
LB 75_01
There is no basis to disagree with these estimates by the DOR. However, the DOR does not assume any salary or benefits increases
for FY25-26 and FY26-27 for the additional personnel needed pursuant to this bill’s provisions. While the actual salary and health
insurance increases for FY25- 26 and thereafter are not yet determined, it is important to note that any additional personnel in FY24- 25
will have ongoing rising costs associated with salary and health insurance increases, which are normally addressed in the biennial
budget process for all bargaining and non-bargaining employees.
Responding counties estimate IT costs to make the changes required by this bill and additional personnel to process the increase in
homestead applications.
ADMINISTRATIVE SERVICES STATE BUDGET DIVISION: REVIEW OF AGENCY & POLT. SUB. RESPONSE
LB: 75 AM: AGENCY/POLT. SUB: Tax Equalization & Review Commission
REVIEWED BY: Neil Sullivan DATE: 7/30/2024 PHONE: (402) 471-4179
COMMENTS: The Tax Equalization & Review Commission assessment of no fiscal impact from LB 75 appears reasonable.
Please complete ALL (5) blanks in the first three lines. 2024
LB
(1) 75—Special Session FISCAL NOTE
State Agency OR Political Subdivision Name:
(2)
Douglas County Assessor/Register of Deeds Office
Prepared by:
(3) Michael Goodwillie Date Prepared:
(4)
7/30/2024 Phone:
(5)
402 444-6703
ESTIMATE PROVIDED BY STATE AGENCY OR POLITICAL SUBDIVISION
FY 2024-25 FY 2025-26
EXPENDITURES REVENUE EXPENDITURES REVENUE
GENERAL FUNDS
$93,100.80
CASH FUNDS
FEDERAL FUNDS
OTHER FUNDS
TOTAL FUNDS
$93,100.80 $95,422.32
Explanation of Estimate:
LB 75 would provide a full exemption (a taxable value of zero) for people who have owned a homestead in
Nebraska for at least 40 years and resides in a Nebraska homestead as of January 1 of the assessment year.
For this bill homestead is defined in Neb. Rev. Stat. Section 77- 3202 as a residence or mobile home actually
occupied by a person who is the record owner from January 1 to August 15 each year. LB 75 requires an
application to the assessor’s office on a form prescribed by the Tax Commissioner. Although it uses the term
“homestead” it seems to have neither an income or a valuation test for eligibility. So, if a person who owns and
lives in a house in Nebraska has done so for at least forty years, they would qualify for full exemption. Any “tax
loss” under this program would be reimbursed from the State of Nebraska to the local political subdivisions.
The difficulty in estimating administrative costs or tax impacts for LB 75 is that assessment offices don’t keep
track of how long someone has owned a property, let alone multiple properties, potentially in several counties,
over a forty year span. If you purchased your first home in your mid- twenties, by the time you hit 65, you might
qualify under LB 75, so some of the people who would fit under LB 75 may already be getting homestead
under the current system. Because there is no eligibility test based on income or value, LB 75 would open the
door to additional applicants who might not qualify based on their income currently or who may own houses
whose value exceeds the maximum value for eligibility in Douglas County (currently a little more than
$507,000).
Using the over-65 class for the current homestead exemption program as a surrogate for 40- year home
ownership, for 2023, there were 717 applications that were denied from the over 65 class based on either
income or value. To the extent some of those people owned a homestead in Nebraska for 40 years, those
would be potential additional applications under LB 75. What is harder to estimate are those who might qualify
under LB 75 who have not applied in previous years because it was obvious they would not qualify under the
existing homestead program.
US Census Bureau indicates 106,997 owner-occupied homes in Douglas County. The percentage of those
over 65 in the county is 14.3%. Assuming that proportion applies to owner-occupied homes, the universe of
potential applicants under LB 75 would be 15,300, In 2023, there were 11,269 homesteads granted to the
over-65 classification. When added to the 717 denials, there were 11,986 applications from that class for
which there were no issues with ownership or occupancy . Potentially then, there could be an additional 3,314
applications filed under LB 75, over and above what our office already gets for the current homestead
exemption program. The review of these may be complicated by the potential for the applicant to have owned
multiple houses in Nebraska, adding up to forty years of home ownership. To the extent there was some
verification process to confirm that ownership history, each application would require a follow-up, probably with
the local recording office to verify ownership and that would be time consuming. Therefore, given the potential for new applicants and the effort involved in verifying ownership information, our office think we would need
two additional staffers for application review.
As for the potential tax loss, if all of those possible new applicants apply, using the average value for 2023 of a
single family residence in Douglas County ($253,990 x 3,314) that represents $841,722,860 in value and, at a
2.245 % rate, a tax loss to be reimbursed by the state of $18,896,678.
_____________________________________________________________________________________________________ _
BREAKDOWN BY MAJOR OBJECTS OF EXPENDITURE
Personal Services:
POSITION TITLE
NUMBER OF POSITIONS
24-25 25-26
2024-25
EXPENDITURES
2025-26
EXPENDITURES
Assessor Support Tech 2 2 $93,100.80 $95,422.32
Benefits………………………………...……
Operating…………………………...……….
Travel………………………………………. .
Capital outlay…………………...…………..
Aid…………………………………………...
Capital improvements……………………...
TOTAL……………………………… ..... $93,100.80 $95,422.32
Please complete ALL (5) blanks in the first three lines. 2024
LB
(1) 75 FISCAL NOTE
State Agency OR Political Subdivision Name:
(2)
Lancaster County Assessor/Register of Deeds
Prepared by:
(3) Dan Nolte Date Prepared:
(4)
07/30/24 Phone:
(5)
402-441-7463
ESTIMATE PROVIDED BY STATE AGENCY OR POLITICAL SUBDIVISION
FY 2024-25 FY 2025-26
EXPENDITURES REVENUE EXPENDITURES REVENUE
GENERAL FUNDS
75,000 65,000
CASH FUNDS
FEDERAL FUNDS
OTHER FUNDS
TOTAL FUNDS
Explanation of Estimate: $10,000 for computer programming changes, $65,000 for additional staff person to process and
verify applications. Estimates could be l ow based on amount of time necessary to research.
_____________________________________________________________________________________________________ _
BREAKDOWN BY MAJOR OBJECTS OF EXPENDITURE
Personal Services:
POSITION TITLE
NUMBER OF POSITIONS
24-25 25-26
2024-25
EXPENDITURES
2025-26
EXPENDITURES
Benefits………………………………...……
Operating…………………………...……….
Travel………………………………………..
Capital outlay…………………...…………..
Aid…………………………………………...
Capital improvements……………………...
TOTAL……………………………… .....
Please complete ALL (5) blanks in the first three lines. 2024
LB
(1) 75 FISCAL NOTE
State Agency OR Political Subdivision Name:
(2)
Lancaster County (Budget & Fiscal)
Prepared by:
(3) Kevin Nelson Date Prepared:
(4)
7/30/2024 Phone:
(5)
402-441-7448
ESTIMATE PROVIDED BY STATE AGENCY OR POLITICAL SUBDIVISION
FY 2024-25 FY 2025-26
EXPENDITURES REVENUE EXPENDITURES REVENUE
GENERAL FUNDS
CASH FUNDS
FEDERAL FUNDS
OTHER FUNDS
TOTAL FUNDS
Explanation of Estimate:
The passage of this this bill would result in a decrease in commissions collected for properties that receive the
long-term owner homestead exemption. The amount of this lost revenue cannot be easily determined at this
time. Lost property tax revenue would be reimbursed by the State of Nebraska. This bill would have m inimal
fiscal impact on the expenditures of Lancaster County .
_____________________________________________________________________________________________________ _
BREAKDOWN BY MAJOR OBJECTS OF EXPENDITURE
Personal Services:
POSITION TITLE
NUMBER OF POSITIONS
24-25 25-26
2024-25
EXPENDITURES
2025-26
EXPENDITURES
Benefits………………………………...……
Operating…………………………...……….
Travel………………………………………..
Capital outlay…………………...…………..
Aid…………………………………………...
Capital improvements……………………...
TOTAL ………………………………... ..
LB 75 Fiscal Note 2024
State Agency Estimate
State Agency Name: Department of Revenue Date Due LFO:
Approved by: James R. Kamm Date Prepared: 08/06/2024 Phone: 471-5896
FY 2024-2025 FY 2025-2026 FY 2026-2027
Expenditures Revenue Expenditures Revenue Expenditures Revenue
General Funds $540,764 $11,615,992 $12,305,992
Cash Funds
Federal Funds
Other Funds
Total Funds $540,764 $11,615,992 $12,305,992
Major Objects of Expenditure
24-25 25-26 26-27 24-25 25-26 26-27
Class Code Classification Title FTE FTE FTE Expenditures Expenditures Expenditures
A07081 Information Technology Business Systems Analyst 1.0 0.5 0.5 $59,600 $29,800 $29,800
A29621 Revenue Tax Specialist 1.0 1.0 1.0 $62,100 $62,100 $62,100
Benefits…………………………………………………………………………………………………………. $40,100 $30,300 $30,300
Operating Costs…………………………………………………………………………………………………. $368,964 $73,792 $73,792
Travel……………………………………………………………………………………………………………
Capital Outlay…………………………………………………………………………………………………... $10,000
Capital Improvements…………………………………………………………………………………………...
Total……………………………………………………………………………………………………………. $540,764 $195,992 $195,992
LB 75 creates the Long-Term Owner Homestead Exemption Act (Act). The Act creates a new homestead
exemption that values the homestead of a qualified owner at zero dollars for purposes of any political subdivision
taxing. LB 75 defines a qualified owner as an owner who has owned a homestead(s) in Nebraska for at least forty
years as of January 1 of the current assessment year and resides in Nebraska at that time. The Tax Commissioner
creates the application form for counties to use. If granted the exemption, an owner is only required to file a
subsequent application in years evenly divisible by 5. An individual who qualifies under this program is NOT
eligible for a homestead exemption under the current homestead statutes (77-3501 to 77-3529).
The county treasurer and county assessor certify to the Tax Commissioner the total tax revenue lost due to this
exemption on or before November 30 of each year. The Tax Commissioner then notifies the Director of
Administrative Services of this amount on or before January 1. Reimbursement of the funds will be distributed in
six as nearly as possible equal monthly payments on the last business day of each month beginning in January.
The Director of Administrative Services is responsible for issuing the funds to the counties.
The Tax Commissioner has the authority to adopt and promulgate regulations to carry out the new program.
It is estimated that LB 75 will have the following impact on the General Fund expenditures:
LB 75 will require a one-time programming change of $368,964 paid to OCIO for development, followed by
annual maintenance costs of $73,792. Additionally, staffing demands include 1.0 FTE tax specialist and 1.0 FTE
IT Business Analyst in the first year, reducing to 0.5 FTE for the IT analyst in subsequent years.
Fiscal Year
General Fund
expenditures
FY2024-25 $ -
FY2025-26 $ 11,420,000
FY2026-27 $ 12,110,000 LB 75, page 2 Fiscal Note 2024
The operative date for this bill is January 1, 2025.