Change provisions relating to the combined tax rate under the Employment Security Law
Summary
LB297 amends Nebraska’s Employment Security Law provisions governing the unemployment insurance “combined tax rate” for employers. The bill revises how employer experience ratings, reserve ratios, and the state reserve ratio are used to assign employers to one of twenty rate categories, and it updates the formulas and tables used to calculate the average combined tax rate for the upcoming rate year. It also preserves rules for voluntary contributions, delinquent filers, and category assignment, while making technical and timing changes to the rate-setting process.
A notable substantive change is that, beginning January 1, 2026, the final average combined tax rate is reduced by five percent. The bill also includes a special rule for tax year 2026, in which only category twelve is set at the average combined tax rate and the remaining categories are calculated using the applicable experience factors. In addition, the bill repeals the original section being amended and declares an emergency, allowing it to take effect immediately upon passage and approval.
Impact
LB297 changes the unemployment insurance contribution rate structure for Nebraska employers by modifying the Employment Security Law’s combined tax rate calculation. It affects employer experience-rated accounts, the assignment of employers into rate categories, the state reserve ratio calculation, and the resulting tax rates paid into the unemployment trust funds. Employers that are delinquent in filing combined tax reports remain subject to category twenty, and voluntary contributions continue to be allowed to reduce an employer’s rate category under existing rules.
Sentiment
The bill appears to have had broad support and little visible opposition. It advanced from the Legislature 37-0 and passed final reading 45-0, indicating unanimous support among voting members. The absence of committee transcript material suggests no recorded controversy in the provided materials, and the emergency clause indicates lawmakers wanted the changes to take effect without delay.
Contention
No major points of contention are reflected in the provided record. The only potentially sensitive policy issue is the five percent reduction in the final average combined tax rate, which lowers unemployment insurance tax rates for employers and could affect trust fund revenues, but the unanimous votes suggest that any concerns about fiscal impact or fund solvency were not enough to generate opposition. The bill also makes technical changes to rate-category formulas, but no specific disputes are documented here.