Banking, Commerce and Insurance Committee
February 4, 2025
Committee Chair: Sen. Mike Jacobson | Bills Heard: 4 | Full Transcript (PDF)
LB315: Repeal of Nebraska's biennial corporation occupation tax (capital stock tax)
Introduced by: Sen. Tony Sorrentino | Testimony: 2 proponents, 0 opponents, 1 neutral | Read bill text (PDF)
Sorrentino seeks to eliminate Nebraska's archaic capital stock tax, but committee questions whether the $10 million revenue is better spent elsewhere. The bill would repeal the biennial occupation tax on corporations' capital stock, a tax that only 15 states still levy. Proponents argue it's outdated and hinders capital formation; opponents worry about losing the filing requirement that tracks corporate officers and directors. Why it matters: Nebraska's business tax competitiveness is at stake, but the $10 million annual revenue could alternatively reduce income taxes—which businesses say matters more when choosing where to locate. What they're saying: Nicole Fox (Platte Institute) called it "especially uncompetitive and archaic," noting Connecticut, Mississippi, and Louisiana have recently phased theirs out. But Colleen Byelick (Secretary of State) warned that 90% of corporations pay just the $26 minimum fee, and eliminating the filing requirement could create a "black hole" for banking and compliance purposes. Sen. Jacobson suggested converting to a fee-for-service model instead. By the numbers: 90% of Nebraska's 46,000 active corporations pay the $26 minimum; the tax generates roughly $10 million every other year. What's next: No vote was taken. The bill remains in committee with questions unresolved about whether the revenue should fund income tax cuts or whether the filing requirement can be preserved separately.
Committee sentiment: Supportive: Sen. Mike Jacobson Skeptical: Sen. Merv Riepe, Sen. Eliot Bostar Unclear: Sen. Steve Dungan
Sentiment estimated from questions and comments — not stated positions.
LB293: Professional Employer Organization health benefit plan flexibility
Introduced by: Sen. Beau Ballard | Testimony: 2 proponents, 1 opponents, 1 neutral | Read bill text (PDF)
Ballard's bill would let PEOs offer self-insured health plans with strong guardrails, but history of failures gives opponents pause. LB293 would allow Professional Employer Organizations to sponsor self-insured health benefit plans—a flexibility that could help small businesses access affordable coverage. But a former PEO owner testified that three Nebraska PEOs offering self-insured plans before 2010 all failed, leaving hundreds with unpaid medical bills. Why it matters: Small businesses struggle to afford health insurance. PEOs help by pooling employees across multiple companies to negotiate better rates. Self-insured plans could lower costs further, but the risks are real. What they're saying: Amy Knobbe (Pando PEO) said self-insured plans would let her company serve clients more affordably. Michelle Sitorius (attorney) noted MEWA Act provisions don't fit PEO structure and the bill includes ERISA standards of care. But Mike Mapes countered: "I owned a PEO for 25 years. We didn't need self-insured plans. Three that tried it went out of business." By the numbers: Pando serves 240 clients with 5,000 worksite employees across 46 states, processing $230 million in wages. What's next: No vote taken. Amendment AM148 adds quarterly reporting and stop-loss requirements. Committee will likely wait for amendments addressing concerns before advancing.
Committee sentiment: Supportive: Sen. Brian Hardin, Sen. Bob Hallstrom, Sen. Brad von Gillern
Sentiment estimated from questions and comments — not stated positions.
LB527: Medicaid Access and Quality Act—HMO assessment to fund provider rate increases
Introduced by: Sen. Mike Jacobson | Testimony: 6 proponents, 0 opponents, 1 neutral | Read bill text (PDF)
Jacobson's Medicaid bill would tax HMOs to fund provider rate increases, but fiscal note confusion raises red flags about how it will appear on the Legislature's budget sheet. LB527 imposes a 6% assessment on HMO premiums to generate $246 million, which would be used to increase Medicaid reimbursement rates for primary care, maternal care, and other outpatient services. The bill aims to address rural healthcare deserts and declining federal Medicaid matching funds. Why it matters: Over half of Nebraska counties lack adequate maternity care. Low Medicaid reimbursement forces providers to limit Medicaid patients, increasing ER use and consolidation. Federal matching funds are declining from 58.6% to 54.36% by 2027. What they're saying: Dr. Robert Wergin (NMA) said physician operating costs rose 20% while revenues stagnated. Dr. Libby Crockett (Grand Island Clinic) testified she loses $90 per Medicaid visit. Jeremy Nordquist (Hospital Association) noted Medicaid pays for 33% of rural births and 43% of behavioral health visits. But Sen. Bostar worried the fiscal note doesn't show the full federal funds picture and could appear as a loss on the Legislature's green sheet. By the numbers: $246 million in HMO tax revenue; $40 million for provider rate increases (matched with ~$74 million federal); $5 million for primary care medical homes (matched with ~$10 million federal); ~$117 million offsets General Fund. What's next: No vote taken. Sen. Bostar requested the bill be reviewed on General File to see how it appears on the budget sheet before final judgment.
Committee sentiment: Supportive: Sen. Brad von Gillern, Sen. Steve Dungan Skeptical: Sen. Merv Riepe, Sen. Eliot Bostar
Sentiment estimated from questions and comments — not stated positions.
LB168: 340B Community Benefits Program—protect contract pharmacy access
Introduced by: Sen. Brian Hardin | Testimony: 10 proponents, 2 opponents, 0 neutral | Read bill text (PDF)
Hardin's 340B bill would protect rural hospital access to drug discounts, but committee signals it may exclude PBM-affiliated pharmacies to prevent profit-taking. LB168 would prohibit drug manufacturers from restricting contract pharmacy access under the 340B program, which allows safety net providers to buy medications at steep discounts and reinvest savings into community services. Since 2020, manufacturers have cut access, costing rural hospitals ~$800,000 annually on average. Why it matters: 54% of rural Nebraska hospitals operate at negative margins. 340B savings keep doors open for critical services like home health, EMS, and maternity care. Eight states have passed similar laws; Arkansas's law survived Supreme Court challenge. What they're saying: Olivia Little (Johnson County Hospital) testified her 18-bed hospital would have lost $1.8 million without $831,000 in 340B savings. Jeremy Nordquist (Hospital Association) called out pharma-funded ads falsely claiming hospitals use 340B for undocumented immigrant care. But Katelin Lucariello (PhRMA) countered that 70% of contract pharmacies are PBM-affiliated, making 72% profit on 340B drugs versus 22% for independents—suggesting the program has been hijacked by middlemen. By the numbers: 37 manufacturers have restrictions in place; 340B revenue dropped 50% on average since 2020; 67 Nebraska hospitals participate; 94% of critical access hospitals use the program. What's next: No vote taken. Committee signaled interest in amendments excluding PBM-affiliated pharmacies and removing wholesale distributors from bill language. Hardin said amendments will be considered; PhRMA indicated willingness to discuss options.
Committee sentiment: Supportive: Sen. Brian Hardin, Sen. Brad von Gillern, Sen. Bob Hallstrom, Sen. Mike Jacobson, Sen. Steve Dungan Skeptical: Sen. Merv Riepe
Sentiment estimated from questions and comments — not stated positions.
Session Notes
The committee heard four bills on February 4, 2025. Committee Chair Jacobson announced at the beginning that written position comments must be submitted by 8:00 a.m. the day of the hearing via nebraskalegislature.gov. The committee used a 3-minute light system for all testifiers. Committee members introduced themselves: Sen. Merv Riepe (District 12), Sen. Brad von Gillern (District 4), Sen. Eliot Bostar (District 29), Sen. Bob Hallstrom (District 1), Sen. Brian Hardin (District 48), and Sen. Dave Wordekemper (District 15). Legal counsel Joshua Christolear and committee clerk Natalie Schunk assisted. Pages were Ayden Topping (UNL junior, psychology) and Kathryn Singh (UNL junior, environmental studies). After LB527 hearing, Chair Jacobson turned the chair over to Vice Chair Hallstrom to hear LB527 (as Jacobson was introducing that bill). After LB527, Hallstrom returned the chair to Jacobson for LB168. At the conclusion of LB168, Jacobson announced the committee would go into executive session and asked all non-committee members to leave the room.
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