PREPARED BY: John Wiemer
LB 699 DATE PREPARED: March 03, 2025
PHONE: 402-471-0051
Revision: 00
FISCAL NOTE
LEGISLATIVE FISCAL ANALYST ESTIMATE
ESTIMATE OF FISCAL IMPACT – STATE AGENCIES (See narrative for political subdivision estimates)
FY 2025-26 FY 2026-27
EXPENDITURES REVENUE EXPENDITURES REVENUE
GENERAL FUNDS ($669,000) ($84,000)
CASH FUNDS ($24,000) ($7,000)
FEDERAL FUNDS
OTHER FUNDS
TOTAL FUNDS ($693,000) ($91,000)
Any Fiscal Notes received from state agencies and political subdivisions are attached following the Legislative Fiscal Analyst Estimate.
LB 699 amends the ImagiNE Nebraska Act.
Under section 77-6831 (2)(b), the bill provides for an exemption from all sales and uses taxes under the Local Option Revenue Act, the
Nebraska Revenue Act of 1967, the Qualified Judgment Payment, and sections 13-319, and 13-2813 on the types of purchases,
including rentals, listed in subdivision (a) of this subsection for such purchases, including rentals, occurring during each year of the
performance period in which the taxpayer is at or above the required levels of employment and investment, except that the exemption
shall be for the actual materials purchased with respect to subdivisions (2)(iii), (iv), and (v) of this section. To the extent a contrac tor
purchasing materials pursuant to subdivisions (2)(iii), (iv), and (v) of this section has made an election to be taxed as a consumer of
building materials under subdivision (2) or (3) of section 77-2701.10 and has already paid sales tax or remitted use tax on such
property, then such contractor shall certify the amount paid to the taxpayer, and the taxpayer shall be entitled to a refund of such taxes
as if such taxes were incurred by the taxpayer. To the extent a contractor purchasing materials pursuant to subdivisions (2)(iii), (iv) , and
(v) of this section has made an election to be taxed as the consumer of building materials under subdivision (2) or (3) of section 77-
2701.10 and has not paid sales tax or remitted use tax, then such contractor’s purchases shall be exempt from such taxes as if such
purchases were made by the taxpayer.
The Department of Revenue (DOR) estimates a reduction to revenues as seen in the table below. The DOR estimates no fiscal impact
from this bill after the exem ption in section 77-2706.02 is operative on July 1, 2026.
There is estimated to be revenue decreases to the Highway Trust Fund and the Highway Allocation Fund, which is distributed to cities
and counties. The DOR also estimates decreases in tax revenue to local governments based upon a 1.5% sales and use tax rate.
The DOR estimates minimal costs to it to implement the bill.
There is no basis to disagree with these estimates by the DOR.
The Department of Economic Development estimates no fiscal impact to it as a result of the bill. There is no basis to disagree with this
estimate.
ADMINISTRATIVE SERVICES STATE BUDGET DIVISION: REVIEW OF AGENCY & POLT. SUB. RESPONSE
LB: 699 AM: AGENCY/POLT. SUB: Department of Revenue
REVIEWED BY: Ryan Yang DATE: 3/4/2025 PHONE: (402) 471- 4178
COMMENTS: Concur with the Department of Revenue assessment of General Fund and cash fund impacts to the State
by LB 699 as written, and minimal fiscal impact to the agency from LB 699.
ADMINISTRATIVE SERVICES STATE BUDGET DIVISION: REVIEW OF AGENCY & POLT. SUB. RESPONSE
LB: 699 AM: AGENCY/POLT. SUB: Nebraska Department of Transportation
REVIEWED BY: Ryan Yang DATE: 3/4/2025 PHONE: (402) 471- 4178
COMMENTS: Concur with the Department of Transportation assessment of cash fund impacts by LB 699.
ADMINISTRATIVE SERVICES STATE BUDGET DIVISION: REVIEW OF AGENCY & POLT. SUB. RESPONSE
LB: 699 AM: AGENCY/POLT. SUB: Department of Economic Development
REVIEWED BY: Ryan Yang DATE: 1/28/2025 PHONE: (402) 471-4178
COMMENTS: Concur with the Department of Economic Development assessment of no fiscal impact from LB 699.
LB 0699 Fiscal Note 2025
State Agency Estimate
State Agency Name: Department of Revenue Date Due LFO:
Approved by: James R. Kamm Date Prepared: 03/03/2025 Phone: 471-5896
FY 2025-2026 FY 2026-2027 FY 2027-2028
Expenditures Revenue Expenditures Revenue Expenditures Revenue
General Funds $(669,000) $(84,000) *
Cash Funds $(24,000) $(7,000)
Federal Funds
Other Funds $(4,000) $(1,000)
Total Funds $(697,000) $(92,000) *
Major Objects of Expenditure
25-26 26-27 27-28 25-26 26-27 27-28
Class Code Classification Title FTE FTE FTE Expenditures Expenditures Expenditures
Benefits………………………………………………………………………………………………………….
Operating Costs………………………………………………………………………………………………….
Travel……………………………………………………………………………………………………………
Capital Outlay…………………………………………………………………………………………………...
Capital Improvements…………………………………………………………………………………………...
Total…………………………………………………………………………………………………………….
LB 699 modifies § 77-6831 and provides for an exemption of sales/use tax on building materials purchased by a
contractor (option 2 or 3) for an ImagiNE applicant’s project.
LB 699 accomplishes the same result as 77-2706.02 (buyer-based exemption) for an ImagiNE applicant’s project,
which allows buyer-based tax exemptions for purchases made by a construction contractor (or purchasing agents)
of qualified materials for construction projects. The contractor who has been appointed as a purchasing agent may
purchase the materials tax free, or may apply for a refund of, or use as a credit, against a future use tax liability,
the tax paid on inventory items annexed to real estate in the construction, improvement, or repair of a project that
belongs to the client who is eligible for the buyer-based exemption.
Since LB 699 is effective on October 1, 2025, and 77- 2706.02 is effective on July 1, 2026, LB 699 is estimated
to have the following fiscal impact:
General Fund
Revenues
Highway
Trust Fund
Highway Allocation
Fund
Locals (assume
1.5%)
FY 2025-26 $ (669,000) $ (24,000) $ (4,000) $ (167,000)
FY 2026-27 $ (84,000) $ (7,000) $ (1,000) $ (48,000)
FY 2027-28 $ - $ - $ - $ -
It is estimated that there will be minimal costs to the Department of Revenue to implement this bill.
The operative date for this bill is October 1, 2025.
Please complete ALL (5) blanks in the first three lines. 2025
LB
(1) 699 FISCAL NOTE
State Agency OR Political Subdivision Name:
(2)
Department of Economic Development
Prepared by:
(3) Dave Dearmont Date Prepared:
(4)
1/28/2025 Phone:
(5)
(402) 471-3777
ESTIMATE PROVIDED BY STATE AGENCY OR POLITICAL SUBDIVISION
FY 2025-26 FY 2026-27
EXPENDITURES REVENUE EXPENDITURES REVENUE
GENERAL FUNDS
CASH FUNDS
FEDERAL FUNDS
OTHER FUNDS
TOTAL FUNDS
Explanation of Estimate:
LB 699 seeks to change the sales and use tax incentives under the ImagiNE Act by amending Neb. Rev. Stat.
§ 77-6831(2)(b) to allow for an exemption of sales and use taxes in the performance period for purchases
made by a contractor with purchasing agent authority.
LB699 would have no impact on DED’s portion of the administration of the ImagiNE act.
_____________________________________________________________________________________________________ _
BREAKDOWN BY MAJOR OBJECTS OF EXPENDITURE
Personal Services:
POSITION TITLE
NUMBER OF POSITIONS
25-26 26-27
2025-26
EXPENDITURES
2026-27
EXPENDITURES
Benefits………………………………...……
Operating…………………………...……….
Travel………………………………………..
Capital outlay…………………...…………..
Aid…………………………………………...
Capital improvements……………………...
TOTAL……………………………… .....
Please complete ALL (5) blanks in the first three lines. 2025
LB
(1) 699 FISCAL NOTE
State Agency OR Political Subdivision Name:
(2)
Nebraska Department of Transportation
Prepared by:
(3) Jenessa Boynton Date Prepared:
(4)
2/27/25 Phone:
(5)
402-479-4691
ESTIMATE PROVIDED BY STATE AGENCY OR POLITICAL SUBDIVISION
FY 2025-26 FY 2026-27
EXPENDITURES REVENUE EXPENDITURES REVENUE
GENERAL FUNDS
CASH FUNDS
($24,000) ($7,000)
FEDERAL FUNDS
OTHER FUNDS
($4,000) ($1,000)
TOTAL FUNDS
($28,000) ($8,000)
Explanation of Estimate:
LB 699 as proposed would modi fy Neb. Rev. Stat. §77-6831 as part of the ImagiNE Nebraska Act b y providing
an exemption of sales/use tax on building materials purchased by a contractor. The operative date of the bill is
October 1, 2025.
Revenue to Build Nebraska Act Funds
FY2025-26 FY2026-27
Highway Trust Fund ($24,000) ($7,000)
Highway Allocation Fund (cities and counties) ($4,000) ($1,000)
Total ($28,000) ($8,000)
This estimate of decreased tax revenue is from the Nebraska Department of Revenue. The reduction in the
sales tax base will divert revenues from the Build Nebraska Act Funds begi nning October 1, 2025, which is
prior to the July 1, 2026, effective date of Neb. Rev. Stat. §77- 2706.02 which accomplishes the same results.
If enacted, there will be less available funding to the Highway Trust Fund for NDOT and the Highway Allocation
Fund for cities and counties.
_____________________________________________________________________________________________________ _
BREAKDOWN BY MAJOR OBJECTS OF EXPENDITURE
Personal Services:
POSITION TITLE
NUMBER OF POSITIONS
25-26 26-27
2025-26
EXPENDITURES
2026-27
EXPENDITURES
Benefits………………………………...……
Operating…………………………...……….
Travel………………………………………..
Capital outlay…………………...…………..
Aid…………………………………………...
Capital improvements……………………...
TOTAL……………………………… .....