Revenue Committee
February 21, 2025
Committee Chair: Sen. Brad von Gillern | Bills Heard: 4 | Full Transcript (PDF)
LB328: Allow counties to retain full documentary stamp tax revenue
Introduced by: Sen. Rick Holdcroft | Testimony: 2 proponents, 13 opponents, 0 neutral | Read bill text (PDF)
Senator Holdcroft's bill to let counties keep all documentary stamp tax revenue faces steep opposition from housing and social service advocates. LB328 would allow counties to retain the full $2.25 per $1,000 of real estate value collected through the documentary stamp tax, up from the current $0.50, requiring the state to find $26 million in alternative funding for affordable housing, homeless services, and behavioral health programs.
Why it matters: The bill highlights a fundamental tension in Nebraska's tax policy: counties argue they're underfunded and deserve revenue from taxes they administer, while social service providers warn that losing this dedicated funding stream would devastate programs serving vulnerable populations and eliminate millions in federal matching funds.
What they're saying: - Proponents: "This is fundamentally a county tax collected for the county's recording system," said Jon Cannon of the Nebraska Association of County Officials. Sarpy County Commissioner Don Kelly testified the county spends $5.5 million annually processing documentary stamps but receives only $775,000 in revenue—a fairness issue. - Opponents: "Without replacement of the eliminated funds, the Homeless Shelter Assistance Trust Fund would no longer have funding available," according to the fiscal note. Tina Rockenbach of Community Action of Nebraska warned that loss of state matching funds would prevent agencies from accessing HUD Emergency Solutions Grants, multiplying the impact. Leah Droge of Friendship Home testified the organization served over 300 domestic violence survivors in 2024 with just $62,000 in state funding.
By the numbers: The Affordable Housing Trust Fund currently holds $36 million, but $24.8 million is already under contract and $25 million is set to transfer to workforce housing funds, leaving a projected $14 million deficit. Behavioral health regions have allocated $4 million to house 734 people, with 64 on the waitlist.
What's next: No vote was taken. Sen. Holdcroft indicated he would not recommend advancing the bill until alternative funding sources are identified. Committee members expressed skepticism about whether the bill would actually reduce property taxes without statutory guarantees.
Committee sentiment: Skeptical: Sen. George Dungan, Sen. Kathleen Kauth, Sen. Eliot Bostar, Sen. Brad von Gillern Unclear: Sen. Tony Sorrentino
Sentiment estimated from questions and comments — not stated positions.
LB622: Streamline Affordable Housing Trust Fund disbursement and implement recapture mechanism
Introduced by: Sen. Robert Dover | Testimony: 5 proponents, 0 opponents, 2 neutral | Read bill text (PDF)
Senator Dover's bill to streamline affordable housing fund disbursement draws unanimous support from housing advocates. LB622, as amended, would allow the Nebraska Affordable Housing Trust Fund to disburse money upfront to grantees upon contract execution rather than requiring extensive documentation, and would implement a recapture mechanism to recycle funds when properties are sold.
Why it matters: The bill addresses a practical bottleneck in Nebraska's affordable housing program: money sits in the state treasury while projects are underway, slowing development and creating administrative burden on nonprofits and developers trying to build affordable homes.
What they're saying: - Proponents: "We have four grants that are open, and the dollars are still sitting in the state treasury," said Roger Nadrchal of NeighborWorks Northeast Nebraska, which has developed over 1,300 units using trust fund grants. Amanda Brewer of Habitat for Humanity testified that upfront payment and third-party cost certification would save one FTE at her organization and multiple FTEs at the state. Emma Craig of NIFA noted that $12 million invested in 2023 created 263 housing units and 173 jobs, representing a strong return on investment. - Neutral testimony: Jon Cannon of NACO noted that if the documentary stamp tax increases elsewhere, counties' share would decrease from 22% to 19.6% of total collections.
By the numbers: Habitat for Humanity created 310 homeownership and home repair projects using NAFT funds in the past five years, leveraging that support to create 1,640 total homes. The Affordable Housing Trust Fund awarded over $12 million in grants in fiscal year 2023 alone.
What's next: No vote was taken. Sen. Jacobson raised concerns about the recapture mechanism using liens on property, suggesting it could create secondary market problems. He recommended working offline to find an alternative approach. The bill appears to have broad support pending resolution of the recapture mechanism details.
Committee sentiment: Supportive: Sen. Mike Jacobson, Sen. Kathleen Ibach Unclear: Sen. Eliot Bostar
Sentiment estimated from questions and comments — not stated positions.
LB269: Require address-based boundary database for sales tax collection
Introduced by: Sen. Victor Rountree | Testimony: 2 proponents, 0 opponents, 0 neutral | Read bill text (PDF)
Sarpy County mayors push for address-based sales tax system to fix zip code chaos. LB269 would require Nebraska to use an address-based boundary database instead of zip codes to determine which city receives sales tax revenue from real estate transactions, addressing a problem where sales tax is frequently remitted to the wrong jurisdiction.
Why it matters: As municipalities increasingly rely on sales tax to offset property tax reductions, accurate collection is critical. Currently, zip codes that cross city boundaries cause revenue to go to the wrong jurisdiction unpredictably, making sales tax an unreliable budgeting tool.
What they're saying: - Proponents: "My address is not Papillion, 68046. My address is 1215 Buckboard Boulevard," said Mayor David Black of Papillion. He testified that Sarpy County has 13 zip codes with 9 crossing jurisdictional boundaries, and two of Papillion's zip codes aren't even recognized by the post office as Papillion. "The technology's there. It's just the state needs to move from 1970 computer system to modern technology." Christy Abraham of the League of Nebraska Municipalities noted the issue extends beyond Sarpy County, citing South Sioux City and Dakota City sharing a zip code with different sales tax rates. - Committee response: Sen. Jacobson noted that under the current system, online retailers might be collecting local option sales tax for cities on people living outside city limits, suggesting the problem is broader than realized.
By the numbers: Sarpy County has 13 zip codes; 9 cross jurisdictional boundaries. Two of Papillion's zip codes are not recognized by the post office as Papillion.
What's next: No vote was taken. The bill received no opposition testimony. Sen. Rountree indicated he would like to see the bill move to General File for debate.
Committee sentiment: Supportive: Sen. Brad von Gillern, Sen. Mike Jacobson, Sen. Tony Sorrentino Unclear: Sen. Kathleen Kauth
Sentiment estimated from questions and comments — not stated positions.
LB583: Increase documentary stamp tax and allocate to child care, veterans, health, and economic development
Introduced by: Sen. Ashlei Spivey | Testimony: 2 proponents, 1 opponents, 1 neutral | Read bill text (PDF)
Senator Spivey proposes $1.05 increase to documentary stamp tax to fund child care, health, and veterans services. LB583 would raise the documentary stamp tax from $2.25 to $3.30 per $1,000 of real estate value, generating approximately $7.5 million in fiscal year 2025-26 and $12.8 million in subsequent years for programs supporting housing security and community stability.
Why it matters: The bill represents a comprehensive approach to interconnected social challenges, arguing that housing security cannot be achieved without addressing child care access, behavioral health, and economic opportunity. It comes as Nebraska faces a child care crisis with a 13% decline in licensed programs since 2019.
What they're saying: - Proponents: "Housing goes hand in hand with other social drivers of health," said Senator Spivey. Kenny McMorris of Charles Drew Health Center testified that 80% of the center's 12,000 patients have incomes at or below federal poverty level, with 17% having experienced homelessness. Mitchell Clark of First Five Nebraska noted that child care workers earn $13.99 per hour compared to $22.33 for all other occupations, and that the state has lost 13% of licensed child care programs since 2019. - Opponents: Korby Gilbertson of the Nebraska Realtors Association expressed concern about a slippery slope: "once you say yes to one thing, then all of a sudden it becomes a $5 doc stamp tax." He argued for examining what the Affordable Housing Trust Fund is being used for rather than increasing the tax.
By the numbers: The $1.05 increase represents the first documentary stamp tax increase in 20 years. Fiscal note projects $7.5 million in revenue for fiscal year 2025-26 and $12.8 million in subsequent years. Charles Drew Health Center served 12,000 patients in 2024 with 39,000 encounters; 80% have incomes at or below federal poverty level. Nebraska has experienced 13% decline in licensed child care programs since 2019.
What's next: No vote was taken. Senator Spivey noted that three of the five opponent letters were for a different bill. She indicated willingness to work with the Nebraska Realtors Association on broader conversations about documentary stamp tax policy if the committee chooses to advance the bill.
Committee sentiment: Supportive: Sen. Mike Jacobson Skeptical: Sen. Brad von Gillern Unclear: Sen. Kathleen Ibach, Sen. George Dungan, Sen. Eliot Bostar
Sentiment estimated from questions and comments — not stated positions.
Session Notes
The Revenue Committee heard four bills on February 21, 2025. Three bills (LB328, LB583, and LB622) involved the documentary stamp tax, reflecting ongoing debate about how to balance county funding needs, state program funding, and housing affordability. LB328, which would allow counties to retain the full documentary stamp tax revenue, faced significant opposition from housing and social service advocates concerned about loss of funding for affordable housing, homeless services, and behavioral health programs. LB622, which streamlines the Affordable Housing Housing Trust Fund disbursement process, received unanimous support. LB269, addressing sales tax collection accuracy through address-based boundary databases, received no opposition. Committee Chair von Gillern noted the late hour and encouraged brevity from testifiers. The committee took no votes on any bills during this hearing.
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