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Revenue Commissioner Sees Shift to Cash Funding; Outlines Nameplate Fee Proposal and Office Restructuring

Nebraska Unicameral Appropriations Committee · February 5, 2026

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Summary

Tax Commissioner James Kam told the Appropriations Committee that structural changes and pending bills (LB 890, LB 1021, LB 1110) would move more Department of Revenue activity to cash‑funding, potentially freeing about $30 million to the general fund in FY2627; he also described a reduction in force that closed the Scottsbluff office and early signs of maintained collections.

James (Jim) Kam, Nebraska’s tax commissioner, presented the Department of Revenue’s funding and operational changes to the Appropriations Committee, saying the agency supports several bills that would alter fee and enforcement revenue flows and shift the department toward cash funding for many functions.

Kam highlighted three bills the department is working with senators on: LB 890 (cash device and mechanical amusement device fees), LB 1021 (administration and a 3% collection commission on nameplate capacity tax), and LB 1110 (changes to the DOR enforcement fund). He said the combined structural changes and governor’s recommendations would reduce DOR general fund impact by roughly $13.4 million in FY2526 and could free about $30 million to the general fund in FY2627 as tobacco administration and other receipts are reallocated to the DOR enforcement fund.

Kam also described a recent reduction in force: the department laid off 13 positions, closed the Scottsbluff office and is investing in automation and process improvements; early month‑to‑month collection data for November–January showed year‑over‑year increases for some collection lines, which Kam described as encouraging but not definitive.

Nameplate capacity and local impacts: Kam and county association representatives discussed LB 1021 and the proposal for a commission to the DOR for administrating nameplate capacity taxes. County and city officials warned about distribution mechanics and the effect on county admin commissions; NACO asked the committee to consider a 1% county commission alternative and cautioned against using nameplate receipts as a general‑fund source in hardship periods (citing statute 77‑6201).

What happens next: Kam offered to follow up with staff for detailed transfer amounts and technical fixes; the committee will review fiscal notes and pending bills as they move through the process.