LB518 LB518
2023 2023
LEGISLATURE OF NEBRASKA
ONE HUNDRED EIGHTH LEGISLATURE
FIRST SESSION
LEGISLATIVE BILL 518
Introduced by Walz, 15.
Read first time January 17, 2023
Committee: Education
1 A BILL FOR AN ACT relating to school funding; to amend section 9-1204,
2 Reissue Revised Statutes of Nebraska, and sections 79-1001, 79-1003,
3 and 79-1022, Revised Statutes Cumulative Supplement, 2022; to adopt
4 the Reducing Education Risk Factors and Property Tax Relief Act; to
5 change the distribution of certain tax proceeds; to define terms,
6 provide certain aid, and create a fund under the Tax Equity and
7 Educational Opportunities Support Act; to harmonize provisions; and
8 to repeal the original sections.
9 Be it enacted by the people of the State of Nebraska,
-1-
LB518 LB518
2023 2023
1 Section 1. Sections 1 to 6 of this act shall be known and may be
2 cited as the Reducing Education Risk Factors and Property Tax Relief Act.
3 Sec. 2. For purposes of the Reducing Education Risk Factors and
4 Property Tax Relief Act:
5 (1) Eligible student means a student attending a public elementary
6 or secondary school who meets one or more of the following criteria:
7 (a) The student is not meeting the requirements necessary for
8 promotion to the next grade or is failing subjects or courses of study;
9 (b) The student is not meeting the requirements necessary for
10 graduation from high school or has the potential to drop out of school;
11 (c) The student has insufficient mastery of skills or is not meeting
12 state standards;
13 (d) The student is repeating a grade;
14 (e) The student has a high rate of absenteeism;
15 (f) The student has repeated suspensions or expulsions from school;
16 (g) The student is homeless or migrant;
17 (h) The student is identified as an English language learner;
18 (i) The student has social and emotional needs that cause the
19 student to be unsuccessful in school; or
20 (j) The student is identified as having dyslexia or characteristics
21 of dyslexia;
22 (2) Evidence-based means based on any educational research or
23 metrics of school, teacher, or student performance;
24 (3) Evidence-based instruction means an educational delivery system
25 based on peer-reviewed research that consistently produces better student
26 outcomes over a five-year period than would otherwise be achieved;
27 (4) Provisional reducing risk factors education program means an
28 evidenced-based reducing risk factors education program identified or
29 developed by a school district as producing or likely to produce
30 measurable success that has been submitted to the state board for review;
31 (5) Reducing risk factors education program means a program or
-2-
LB518 LB518
2023 2023
1 service that provides additional opportunities, interventions, and
2 evidence-based instruction to eligible students;
3 (6) School board has the same meaning as in section 79-101;
4 (7) School district has the same meaning as in section 79-101; and
5 (8) State board means the State Board of Education.
6 Sec. 3. (1) The state board shall identify and approve reducing
7 risk factors education programs that may be offered by school districts.
8 The state board may approve a program under this section if the program:
9 (a) Provides evidenced-based instruction and support services to
10 eligible students inside and outside of the school setting; and
11 (b) Evaluates outcome data for eligible students, including, but not
12 limited to, school attendance, academic progress, graduation rates, and
13 pursuit of post-secondary education or career advancement.
14 (2) The state board shall provide a list of approved reducing risk
15 factors education programs to each school district.
16 Sec. 4. (1) Each school district shall implement a reducing risk
17 factors education program that has been approved by the state board under
18 section 3 of this act or a provisional reducing risk factors education
19 program.
20 (2) The implementation of such a program may be accomplished through
21 any of the following:
22 (a) Extended school year;
23 (b) Before-school programs and services;
24 (c) After-school programs and services;
25 (d) Summer school;
26 (e) Extra support within a class;
27 (f) Tutorial assistance; or
28 (g) Offering a class within a class.
29 Sec. 5. (1) The school board of each school district shall
30 establish a reducing education risk factors and property tax relief aid
31 fund that shall consist of all money deposited therein or transferred
-3-
LB518 LB518
2023 2023
1 thereto according to law. The expenses of a school district directly
2 attributable to providing a reducing risk factors education program shall
3 be paid from the reducing education risk factors and property tax relief
4 aid fund.
5 (2) Any balance remaining in the reducing education risk factors and
6 property tax relief aid fund at the end of a budget year shall be carried
7 forward into the fund for succeeding budget years.
8 (3) Expenditures from the reducing education risk factors and
9 property tax relief aid fund of a school district shall only be made for:
10 (a) Reducing risk factors education programs that have been approved
11 by the state board under section 3 of this act and provisional reducing
12 risk factors education programs;
13 (b) Personnel providing educational services in conjunction with
14 such programs;
15 (c) Support for instructional classroom personnel to provide
16 training for evidence-based best practices relating to such programs; or
17 (d) Services contracted for by the school district to provide such
18 programs.
19 Sec. 6. Each year the school board of each school district shall
20 prepare and submit to the state board a report on the reducing risk
21 factors education programs and provisional reducing risk factors
22 education programs provided by the school district. Such report shall
23 include:
24 (1) The number of eligible students who were served or provided
25 assistance;
26 (2) The type of reducing risk factors education program or
27 provisional reducing risk factors education program provided, including
28 the number of eligible students provided assistance under each type of
29 program;
30 (3) The data and research the school district utilized in
31 determining what programs and services were needed to implement the
-4-
LB518 LB518
2023 2023
1 reducing risk factors education program or provisional reducing risk
2 factors education program; and
3 (4) Any other information required by the state board.
4 Sec. 7. Section 9-1204, Reissue Revised Statutes of Nebraska, is
5 amended to read:
6 9-1204 Of the tax imposed by section 9-1203, seventy-five percent
7 shall be remitted to the State Treasurer for credit as follows: Two and
8 one-half percent to the Compulsive Gamblers Assistance Fund, two and one-
9 half percent to the General Fund, thirty-five and seventy percent to the
10 Reducing Education Risk Factors and Property Tax Relief Aid Trust Fund,
11 and thirty-five percent to the Property Tax Credit Cash Fund. The
12 remaining twenty-five percent of the tax shall be remitted to the county
13 treasurer of the county in which the licensed racetrack enclosure is
14 located to be distributed as follows: (1) If the licensed racetrack
15 enclosure is located completely within an unincorporated area of a
16 county, the remaining twenty-five percent shall be distributed to the
17 county in which such licensed racetrack enclosure is located; or (2) if
18 the licensed racetrack enclosure is located at least partially within the
19 limits of a city or village in such county, one-half of the remaining
20 twenty-five percent shall be distributed to such county and one-half of
21 the remaining twenty-five percent to the city or village in which such
22 licensed racetrack enclosure is at least partially located.
23 Sec. 8. Section 79-1001, Revised Statutes Cumulative Supplement,
24 2022, is amended to read:
25 79-1001 Sections 79-1001 to 79-1033 and sections 11 and 12 of this
26 act shall be known and may be cited as the Tax Equity and Educational
27 Opportunities Support Act.
28 Sec. 9. Section 79-1003, Revised Statutes Cumulative Supplement,
29 2022, is amended to read:
30 79-1003 For purposes of the Tax Equity and Educational Opportunities
31 Support Act:
-5-
LB518 LB518
2023 2023
1 (1) Adjusted general fund operating expenditures means the
2 difference of the general fund operating expenditures increased by the
3 cost growth factor calculated pursuant to section 79-1007.10, minus the
4 transportation allowance, special receipts allowance, poverty allowance,
5 limited English proficiency allowance, distance education and
6 telecommunications allowance, elementary site allowance, summer school
7 allowance, community achievement plan allowance, and focus school and
8 program allowance;
9 (2) Adjusted valuation means the assessed valuation of taxable
10 property of each local system in the state, adjusted pursuant to the
11 adjustment factors described in section 79-1016. Adjusted valuation means
12 the adjusted valuation for the property tax year ending during the school
13 fiscal year immediately preceding the school fiscal year in which the aid
14 based upon that value is to be paid. For purposes of determining the
15 local effort rate yield pursuant to section 79-1015.01, adjusted
16 valuation does not include the value of any property which a court, by a
17 final judgment from which no appeal is taken, has declared to be
18 nontaxable or exempt from taxation;
19 (3) Allocated income tax funds means the amount of assistance paid
20 to a local system pursuant to section 79-1005.01;
21 (4) Average daily membership means the average daily membership for
22 grades kindergarten through twelve attributable to the local system, as
23 provided in each district's annual statistical summary, and includes the
24 proportionate share of students enrolled in a public school instructional
25 program on less than a full-time basis;
26 (5) Base fiscal year means the first school fiscal year following
27 the school fiscal year in which the reorganization or unification
28 occurred;
29 (6) Board means the school board of each school district;
30 (7) Categorical funds means funds limited to a specific purpose by
31 federal or state law, including, but not limited to, Title I funds, Title
-6-
LB518 LB518
2023 2023
1 VI funds, federal career and technical education funds, federal school
2 lunch funds, Indian education funds, Head Start funds, and funds received
3 prior to July 1, 2022, from the Nebraska Education Improvement Fund;
4 (8) Consolidate means to voluntarily reduce the number of school
5 districts providing education to a grade group and does not include
6 dissolution pursuant to section 79-498;
7 (9) Converted contract means an expired contract that was in effect
8 for at least fifteen school years beginning prior to school year 2012-13
9 for the education of students in a nonresident district in exchange for
10 tuition from the resident district when the expiration of such contract
11 results in the nonresident district educating students, who would have
12 been covered by the contract if the contract were still in effect, as
13 option students pursuant to the enrollment option program established in
14 section 79-234;
15 (10) Converted contract option student means a student who will be
16 an option student pursuant to the enrollment option program established
17 in section 79-234 for the school fiscal year for which aid is being
18 calculated and who would have been covered by a converted contract if the
19 contract were still in effect and such school fiscal year is the first
20 school fiscal year for which such contract is not in effect;
21 (11) Department means the State Department of Education;
22 (12) District means any school district or unified system as defined
23 in section 79-4,108;
24 (13) Ensuing school fiscal year means the school fiscal year
25 following the current school fiscal year;
26 (14) Equalization aid means the amount of assistance calculated to
27 be paid to a local system pursuant to section 79-1008.01;
28 (15) Fall membership means the total membership in kindergarten
29 through grade twelve attributable to the local system as reported on the
30 fall school district membership reports for each district pursuant to
31 section 79-528;
-7-
LB518 LB518
2023 2023
1 (16) Fiscal year means the state fiscal year which is the period
2 from July 1 to the following June 30;
3 (17) Formula students means:
4 (a) For state aid certified pursuant to section 79-1022, the sum of
5 the product of fall membership from the school fiscal year immediately
6 preceding the school fiscal year in which the aid is to be paid
7 multiplied by the average ratio of average daily membership to fall
8 membership for the second school fiscal year immediately preceding the
9 school fiscal year in which the aid is to be paid and the prior two
10 school fiscal years plus sixty percent of the qualified early childhood
11 education fall membership plus tuitioned students from the school fiscal
12 year immediately preceding the school fiscal year in which aid is to be
13 paid minus the product of the number of students enrolled in kindergarten
14 that is not full-day kindergarten from the fall membership multiplied by
15 0.5; and
16 (b) For the final calculation of state aid pursuant to section
17 79-1065, the sum of average daily membership plus sixty percent of the
18 qualified early childhood education average daily membership plus
19 tuitioned students minus the product of the number of students enrolled
20 in kindergarten that is not full-day kindergarten from the average daily
21 membership multiplied by 0.5 from the school fiscal year immediately
22 preceding the school fiscal year in which aid was paid;
23 (18) Free lunch and free milk calculated students means, using the
24 most recent data available on November 1 of the school fiscal year
25 immediately preceding the school fiscal year in which aid is to be paid,
26 (a) for schools that did not provide free meals to all students pursuant
27 to the community eligibility provision, students who individually
28 qualified for free lunches or free milk pursuant to the federal Richard
29 B. Russell National School Lunch Act, 42 U.S.C. 1751 et seq., and the
30 federal Child Nutrition Act of 1966, 42 U.S.C. 1771 et seq., as such acts
31 and sections existed on January 1, 2021, and rules and regulations
-8-
LB518 LB518
2023 2023
1 adopted thereunder, plus (b) for schools that provide