Property tax relief bill passed
By Jerry Purvis
LINCOLN — Property owners who suffered a major loss due to natural disaster can now get some tax relief from the State of Nebraska.
LB 512 passed unanimously by the Legislature on May 24 and takes effect immediately. Under the bill’s definition, destroyed real property is caused by calamities such as fire, earthquake, flood, tornado or other natural event that occurred on or after Jan. 1, 2019, and before July 1 of the current assessment year.
The bill also incorporated earlier legislation introduced by District 47 State Senator Steve Erdman of Bayard. Erdman said he attached his legislation to LB 512, a priority bill from the Revenue Committee.
“My original bill was written so that if your property was destroyed anytime during the calendar year up to Oct. 1, it would be removed from the tax rolls and the property value would be zero,” he said.
As it turned out, there were come constitutional issues with the bill. Because it time constraints, the Erdman bill was found unconstitutional. There were also issues with setting the value at zero because even if structures were destroyed, the land has its own value.
“The problem we had with the time constraint was that any revaluation has to be done by the time counties set their mill levy in September,” Erdman said. "So we had to cut the deadline back to July 1.”
After a month of negotiations with the governor’s office, Erdman’s new version was accepted. Significant property damage was redefined to include damage of more than 20 percent of the property’s assessed valuation. In that case, the owner has the right to have the property reassessed.
“If a property owner in eastern Nebraska had his house washed away in the March flooding, he could apply for a review,” Erdman said. “The value would be reassessed for whatever was left on the land, which would be just the land itself.”
The reassessed property valuation would be retroactive back to Jan. 1, 2019. The change in value would only be valid for the calendar year in which the disaster occurred.
Erdman said that overall, he’s pleased with the new bill.
“Before this passed, if your house burned down on Jan. 2 you’d be paying property tax the whole year. This gives people a chance to have the value readjusted.”
Ironically, the topic came up during a Memorial Day observance in Ogallala. A woman told Erdman her home had burned down the week before. She had no idea the Legislature had just passed a bill to help her.
Erdman urged property owners that suffered severe damage due to natural disasters to contact their county assessor by July 1 to make application.