I hope you were able to enjoy time with your family during the Easter weekend. I know I sure enjoyed time to get away and enjoy Easter with mine.

This past week we were very busy in the Legislature working through as many bills as we could. Each bill was discussed for eight hours before being voted on.

Bills to Watch
We started the week with Senator Tom Briese’s priority bill, LB243–Property Tax package. This bill was heard in the Revenue Committee in February and a package was created. The following bills are included through Amendment 977:

• LB243–Change the minimum amount of relief granted under the Property Tax Credit Act. This bill amends Nebraska Revised Statute 77-4212 to increase amounts per year available under the Property Tax Credit Act per the following table:
  • Tax Year 2024: $388,000,000
  • Tax Year 2025: $428,000,000
  • Tax Year 2026: $468,000,000
  • Tax Year 2027: $488,000,000
  • Tax Year 2028: $515,000,000
  • Tax Year 2029: $560,000,000

After this table is completed, growth per year is equal to the percentage increase in the total assessed value of all real property in the state from the prior year to the current year.

• LB28–Change provisions relating to decisions on appeals under the Tax Equalization and Review Commission (TERC) Act brought by Senator Erdman. This bill reverts the valuation of a property under appeal to the Tax Equalization and Review Commission if not decided prior to the first half the following year’s taxes becoming due. This requires interest to be paid on the tax liability of additional valuation if the TERC decision is returned at a higher value.
• LB242–Change provisions of the Nebraska Property Tax Incentive Act brought by Senator Briese. This bill amends the Nebraska Property Tax Incentive Act and eliminates the cap on allowable growth percentage. Credits will be the prior year’s credits plus the annual growth percentage defined under the Act as the percentage increase, if any, in the total assessed value of all real property in the state from the year to the current year. As amended by AM956 it also removes the current five percent (5%) cap on the allowable growth percentage on the 1107 refundable income tax credit.
• LB309–Change an interest rate relating to property tax refunds brought by Senator Bostar. This changes the interest percent on refunds of property tax from nine percent (9%) currently to fourteen percent (14%).
• LB589–Adopt the School District Property Tax Limitation Act brought by Senator Briese. This is a key part of the total package. This generally creates a 3% cap on a school district’s revenue growth with some exceptions. The district’s property tax request authority is adjusted to reflect this limit. So how does this work:
  • We calculate the total of property tax and non property tax revenue from the previous year.
  • We adjust it upward by 3% to arrive at a total for the current year.
  • We then subtract the non-property tax revenue for the current year from this total to arrive at the property tax request authority.

There are several caveats:

1. The base growth percentage of 3% is increased by a percentage of enrollment growth, poverty growth, and LEP (Limited English Proficient) growth in the student population.
   Accommodation for fast growing districts.
2. Revenue from bonds (including Qualified Capital Purpose Undertaking Fund or QCPUF), grants and donations are excluded.
3. It also allows for such a request to override by 1) 70% vote of the school board or 2) a
   vote of the people after a 60% of the school board petition request.

• LB783–Eliminate the levy authority of community college areas brought by Senator Murman. This ends the levying authority of community colleges with the fiscal year 2025-2026, and provides a state mechanism for funding community colleges through the state’s budgeting system. The amendment restores the levying authority for capital improvement funds and levying authority, if authorized by the community college board of governors, to allow additional funding beyond what the State of Nebraska provides if funding does not fully fund the community college.

This bill was advanced to Enrollment and Review Initial and then to Select File.

The other bill we spent time on was Senator Sanders’ priority bill at the request of the Governor. This bill, LB583–Provide for foundation aid and special education supplemental aid under the Tax Equity and Educational Support Act (TEEOSA) was amended by the Education Committee with AM970. This bill does the following:

• Special Education: 80% of Special Education costs will be funded by the State of Nebraska. This additional funding will run through the existing TEEOSA Formula.
• Foundation Aid: This will provide $1500 per formula student. Foundation Aid will not follow a net option student. Years 1 and 2 will be 100% resource; Year 3 and every year thereafter will be 60% resource.
• Reporting Requirement: A yearly report to the Governor, Education Chair, and Clerk. The amount of additional state aid and how much property taxes were requested.
• The Impact: Every School District in the State of Nebraska will be receiving some funding by the state. Special Education Funding will reach 80% funding. Every student is invested in by Nebraska.

This bill was advanced to Enrollment and Review Initial and then to Select File.

As always, I invite you to let me know your thoughts, ideas, concerns, or suggestions by contacting me by calling (402) 471-2716 or emailing me at jalbrecht@leg.ne.gov.