The 2018 session of the Nebraska Unicameral adjourned on April 18. We monitor numerous bills each session that could have an impact on our membership and determine whether to support, oppose, or take a neutral position. Here are some of the important areas addressed in the 2018 Session:
Mandatory Use of the Federal E-Verify program
We successfully opposed legislation that would have required mandatory use of the federal E-Verify program and an additional license, renewable on an annual basis, for all Nebraska business units with more than twenty-five employees. We testified and worked in opposition. The bill did not advance.
Increase Minimum Tip Wage
We successfully opposed legislation to increase the minimum hourly tip wage. This has been an issue in the past several sessions. It would have eventually raised the minimum tip wage from $2.13/hour to at $4.50/hour. We testified against the bill at the committee hearing. In spite of our active opposition, it was advanced by the committee to General File and was discussed by the entire body on the floor of the Legislature in the 2018 session. We worked to inform Senators and were confident that there were not enough votes to pass the bill. Time ran out before it came to a vote and it did not advance in the 2018 session.
We successfully supported the Music Licensing Agency Act which provides protections for those entities that are being aggressively contacted by agencies claiming to hold the copyrights to the music being performed and demanding a licensing fee. It was passed by the body in the 2018 session.
Clarify Employees of Franchisees are not Employees of Franchisors
There have been efforts nationally to blur the fact that employees of franchisees are not employees of franchisors. To clarify this in Nebraska law, legislation was introduced at our request to clarify that persons who work for a franchisee are employees of only the franchisee and not the franchisor. The legislation did not advance in the 2018 session.
Credit Card Fees on Sales Tax
The cost to restaurants to collect sales tax is significant – especially on credit card sales as the restaurant is forced to pay the credit card swipe fee on the sales tax portion of the charge. Bills have been introduced at our request in past sessions to increase the amount Nebraska’s restaurants receive for collecting and remitting sales tax but we have not been able to overcome the millions this would cost the State of Nebraska. To address the problem without costing the State any money, legislation was introduced at our request to prohibit payment card networks from imposing interchange or swipe fees on the sales tax portion of a purchase made using a debit or credit card. It did not advance in the 2018 session.
While any legislation that did not advance is officially dead and will have to be reintroduced in the 2019 session to be considered, we fully expect to see many of the issues back. We are almost certain that increasing the minimum tip wage will be reintroduced. With the continued immigration reform concerns, there could be several immigration bills on the state level. We are always concerned about the impact of liquor legislation on our membership and will be watching that closely.
For the past several sessions, rancor and acrimony among members of the body has increased and we expect this to continue. While there are several factors contributing to this trend, a major dynamic is the clash between income tax reform and property tax reform. Urban business interests believe income tax reform is necessary to lure more businesses to Nebraska and help existing businesses thrive and increase employment. The rural sector wants property tax reform. Agriculture is a huge part of Nebraska’s economy and Nebraska is a high property tax state. Agricultural land owners feel they are shouldering an unfair portion of the tax burden. The Nebraska Farm Bureau and other Ag organizations started a petition drive earlier this year to take property tax reduction to a vote of the people. The petition as drafted would have severely cut property taxes with no balancing increase in other revenue and created a huge budget shortfall. Fortunately, sponsors have since announced that they have put the petition effort on hold. While this provides a temporary breather, the conflict between property tax relief and income tax relief promises to dominate the 2019 session. With current budget projections it will be very difficult to achieve either without higher sales taxes and the elimination of many sales tax exemptions. We will be closely watching the tax reform issue for potential impact on the restaurant industry in Nebraska.