All Roll Calls
Yes: 83 • No: 6
NebraskaLB647A109th Legislature 1st and 2nd SessionslegislatureWALLET
Appropriation Bill
Sponsored By: R. Brad von Gillern
Signed by Governor
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Bill Overview
Analyzed Economic Effects
15 provisions identified: 9 benefits, 3 costs, 3 mixed.
New state adoption tax credit
Beginning January 1, 2026, you can claim a Nebraska refundable income tax credit equal to 10% of your federal adoption expenses credit. You must qualify for the federal adoption credit for the same tax year. The Department of Revenue can set rules, forms, and procedures to run the credit.
Tighter 529 withdrawals and rollovers
If you cancel your 529 agreement, take a nonqualified withdrawal, or roll assets to an out‑of‑state plan, Nebraska can recapture past state income tax deductions. Transfers between Nebraska‑sponsored plans do not count as rollovers for recapture. From October 1, 2025 through December 31, 2028, 529 withdrawals for K–12 costs are nonqualified, which can trigger taxes or penalties.
Stronger protections and oversight for 529s
Nebraska’s college savings trust is a tax‑qualified 529 plan and follows federal 529 rules. Contributions are treated as completed gifts for federal gift tax purposes. Money in 529 accounts is held in trust and protected from most creditors and state seizure. Each year by November 1, the State Treasurer files an audited report showing costs, number of participants and beneficiaries, and investment performance.
Education funds ignored for SNAP and aid
For TANF, LIHEAP, SNAP, and state child care help, the law stops counting 529s, Coverdell accounts, scholarships, grants, and postsecondary work‑study pay. Certain grant‑funded research income is also excluded up to $4,000 per year for up to eight years, through December 31, 2026. Income from School Readiness tax credits is excluded too.
Large school property tax credits
The state provides big school property tax credits on your tax bill. Totals are $750 million (2024), $780 million (2025), $808 million (2026), $838 million (2027), $870 million (2028), and $902 million (2029). From 2030 on, the total rises 3% each year. County amounts are certified by September 15, with payments by January 31 and April 1. Homestead exemptions are applied first; any credit that makes a homestead’s bill negative is returned to the state by July 1.
Property tax break for trail easements
If you record a perpetual recreational trail easement on part of your land, that part is exempt from property tax. The exemption stays as long as the easement remains in place and is held by an eligible city, county, accredited land trust, or qualifying nonprofit. Applications must include the recorded easement and a certification from the holder, and the Department of Revenue writes rules to run the program.
529 use expands in 2029 and beyond
Residents and nonresidents can use Nebraska’s 529 plan, and funds work at any eligible college. Starting January 1, 2029, you can also use 529 money at elementary and high schools. If a beneficiary graduates and money remains, you may pay siblings’ qualified student loans with the leftover funds. Beginning January 1, 2029, K–12 schools own payments when they receive them.
More college savings help for families
Low‑income families can get matching scholarships: 200% up to $1,000 a year at ≤200% of poverty, or 100% up to $1,000 at >200%–≤250% of poverty. You must reapply each year, use funds at in‑state colleges, and spend them before age 30. The state caps total scholarships at $250,000 each year. The Meadowlark Program opens college savings accounts for Nebraska children born on or after January 1, 2020 unless parents opt out, and shares Endowment investment income evenly to new accounts each April. The state matches private gifts to the Endowment each year with transfers by April 1. State programs cannot count 529 balances or employer 529 contributions in need tests unless federal law requires.
Cash incentives for employer 529 matches
Approved employers can get a cash payment equal to 25% of last year’s matching contributions to employee 529 accounts. The payment is capped at $2,000 per contributing employee per year. You cannot get this payment if you took a Nebraska income tax deduction for those contributions, and only one incentive is allowed per beneficiary. Apply January 1 to June 1; the state can pay up to $250,000 total each year and pays by June 30.
New tax rules for pass-through owners
If a tax notice about entity income is mailed to your partnership, S‑corp, or LLC or its federal tax matters person, it counts as received by each owner. If you were a nonresident partner at any time during the year, you must file a Nebraska return for Nebraska‑source income and give the partnership a written agreement by the partnership’s original due date promising to file and pay Nebraska tax.
New local budget and property tax rules
For fiscal years starting on or after July 1, 2025, counties, cities, and villages are excluded from certain “governing body” and “governmental unit” definitions used in allowable growth and related laws. Some local taxes change budget treatment: one listed tax becomes a restricted fund starting in the second full‑receipt year, while nameplate capacity tax money from new renewable plants is nonrestricted for the first five years after production starts. Political subdivisions can carry forward unused property tax request authority, but the total carryforward cannot exceed 5% of last year’s authority. They may convert certain unused restricted funds as of June 30, 2025 into carryforward for fiscal years beginning July 1, 2025, up to 5% of their 2024 property taxes.
New rules for arena and stadium aid
For large public stadium applications approved on or after July 19, 2024, state assistance can fund up to 100% of the final project cost. The law sets clear limits on what state help can pay for: public arenas may repay bonds for facilities and parking; private venues face tighter limits, fair‑market rent rules for any public leases (up to 20 years), voter approval for some repayments, and caps on years of promotional funding. Temporary state‑aid approvals become permanent if voters approve the related bonds or if a building permit issues within 24 months; otherwise they are void.
Cities must post occupation tax reports
If a city starts or raises an occupation tax after this law takes effect, it must publish an annual report within 90 days after its fiscal year ends. The report must list taxes collected, amounts, whether money went to the general fund or was dedicated, and any end dates. It must be posted online or available for public inspection.
529 accounts can be frozen for fraud
Starting October 1, 2025, the State Treasurer may freeze, suspend, or end your 529 participation if you gave false or misleading information that harmed the trust, if your account has a zero balance, or if your identity cannot be verified.
Old sections repealed to update law
The law repeals listed state statutes across tax and education areas and replaces them with the new rules in this act. The practical effects depend on the new provisions now in place.
Sponsors & Cosponsors
Sponsor
R. Brad von Gillern
legislature
Cosponsors
There are no cosponsors for this bill.
Roll Call Votes
legislature vote • 5/30/2025
Final Reading
Yes: 42 • No: 6
legislature vote • 5/8/2025
Vote
Yes: 41 • No: 0 • Other: 8
Actions Timeline
Approved by Governor on June 4, 2025
6/6/2025legislaturePassed on Final Reading with Emergency Clause 42-6*-1
5/30/2025legislaturePresident/Speaker signed
5/30/2025legislaturePresented to Governor on May 30, 2025
5/30/2025legislaturePlaced on Final Reading
5/19/2025legislatureAdvanced to Enrollment and Review for Engrossment
5/14/2025legislaturePlaced on Select File
5/12/2025legislatureAdvanced to Enrollment and Review Initial
5/8/2025legislatureDate of introduction
5/6/2025legislaturePlaced on General File
5/6/2025legislature
Bill Text
Introduced
6/6/2025
Enrolled / Slip Law
Final / Enacted