Senator Hadley and Members of the Revenue Committee:
I am before you today on behalf of the Lincoln Independent Business Association (LIBA) in support of LB 885.
LB 885 allows property held for development to be taxed using the income valuation approach and removes artificial and inconsistently applied barriers to development.
Previously, county assessors have considered market forces in their valuation of property held for development and assessed the property accordingly. However, in 2013 the interpretation and application of state law changed. Many properties suddenly doubled in assessed value imposing huge carrying costs on developers and builders. This new interpretation of valuation assigns property values unsupported by the market.
The effects of this valuation policy are devastating the growth potential of Nebraska’s communities. As the carrying costs of holding properties increases, developers and builders are readying and holding less property for development. This lack of shovel ready property slows growth in Nebraska. LB 885 clarifies current law and allows for appropriate valuation of property held for development by taking into consideration actual market forces and the value of the property in its current state.
LB 885 allows builders to ready land for development and removes barriers to growth. Growth is essential to a healthy economy. Growth through new construction and new development creates construction jobs, creates the facilities and infrastructure to attract new residents and new jobs, and it increases both supply and demand levels in the local economy leading to larger and healthier economies in Nebraska’s communities and throughout the state.
For these reasons LIBA supports LB 885 and asks this committee to do the same.