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LEGISLATURE OF NEBRASKA
ONE HUNDRED EIGHTH LEGISLATURE
FIRST SESSION
LEGISLATIVE BILL 589
Introduced by Briese, 41; at the request of the Governor.
Read first time January 17, 2023
Committee: Revenue
1 A BILL FOR AN ACT relating to revenue and taxation; to amend sections
2 77-1632 and 77-1633, Revised Statutes Cumulative Supplement, 2022;
3 to adopt the School District Property Tax Limitation Act; to
4 harmonize provisions; to provide an operative date; and to repeal
5 the original sections.
6 Be it enacted by the people of the State of Nebraska,
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1 Section 1. Sections 1 to 8 of this act shall be known and may be
2 cited as the School District Property Tax Limitation Act.
3 Sec. 2. For purposes of the School District Property Tax Limitation
4 Act:
5 (1) Approved bonds means bonds that are issued by a school district
6 after the question of issuing such bonds has been approved by the voters
7 of such school district;
8 (2) Average daily membership has the same meaning as in section
9 79-1003;
10 (3) Base growth percentage means three percent;
11 (4) Department means the State Department of Education;
12 (5) Non-property-tax revenue means revenue of a school district from
13 all state and local sources other than real and personal property taxes.
14 Non-property-tax revenue does not include reimbursements for special
15 education programs and support services pursuant to sections 79-1129,
16 79-1132, and 79-1144 and does not include grants and donations;
17 (6) Property tax request means the total amount of property taxes
18 requested to be raised for a school district through the levy imposed
19 pursuant to section 77-1601;
20 (7) Property tax request authority means the amount that may be
21 included in a property tax request as determined pursuant to the School
22 District Property Tax Limitation Act;
23 (8) School board has the same meaning as in section 79-101;
24 (9) School district has the same meaning as in section 79-101; and
25 (10) Student enrollment means the total number of students in the
26 school district according to the fall school district membership report
27 described in subsection (4) of section 79-528.
28 Sec. 3. (1) Except as provided in sections 4 and 5 of this act, a
29 school district's property tax request for any year shall not exceed the
30 school district's property tax request authority.
31 (2) The department shall calculate each school district's property
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1 tax request authority on an annual basis as follows:
2 (a) The school district's property tax request from the prior year
3 shall be added to the non-property-tax revenue from the prior year, and
4 the total shall be increased by whichever of the following percentages is
5 the highest:
6 (i) The base growth percentage;
7 (ii) The annual percentage increase in the student enrollment of the
8 school district multiplied by four-tenths;
9 (iii) The percentage obtained by first dividing the annual increase
10 in the total number of limited English proficiency students in the school
11 district by the student enrollment of the school district and then
12 multiplying the quotient by twenty-five hundredths; or
13 (iv) The percentage obtained by first dividing the annual increase
14 in the total number of poverty students in the school district by the
15 student enrollment of the school district and then multiplying the
16 quotient by twenty-five hundredths; and
17 (b) The amount determined under subdivision (2)(a) of this section
18 shall then be decreased by the amount of total non-property-tax revenue
19 for the current year. In determining the total non-property-tax revenue
20 for the current year, any category of non-property-tax revenue for which
21 there is insufficient data as of August 1 to make an accurate
22 determination shall be deemed to be equal to the prior year's amount.
23 (3) The department shall certify the amount determined for each
24 school district under this section to the school board of such school
25 district. Such certified amount shall be the school district's property
26 tax request authority.
27 Sec. 4. The School District Property Tax Limitation Act shall not
28 apply to that portion of a school district's property tax request that is
29 needed to pay the principal and interest on approved bonds.
30 Sec. 5. (1) A school district's property tax request may exceed its
31 property tax request authority by an amount approved by a sixty percent
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1 majority of legal voters voting on the issue at a special election called
2 for such purpose upon the recommendation of the school board of such
3 school district or upon the receipt by the county clerk or election
4 commissioner of a petition requesting an election signed by at least five
5 percent of the legal voters of the school district. The recommendation of
6 the school board or the petition of the legal voters shall include the
7 amount by which the school board would increase its property tax request
8 for the year over and above the property tax request authority of such
9 school district. The county clerk or election commissioner shall call for
10 a special election on the issue within thirty days after the receipt of
11 such school board recommendation or legal voter petition. The election
12 shall be held pursuant to the Election Act, and all costs shall be paid
13 by the school district.
14 (2) A school district's property tax request may exceed its property
15 tax request authority by a percentage approved by an affirmative vote of
16 at least seventy-five percent of the school board of such school
17 district. Such percentage shall not exceed:
18 (a) Seven percent for school districts with an average daily
19 membership of no more than four hundred seventy-one students;
20 (b) Six percent for school districts with an average daily
21 membership of more than four hundred seventy-one students but no more
22 than three thousand forty-four students;
23 (c) Five percent for school districts with an average daily
24 membership of more than three thousand forty-four students but no more
25 than ten thousand students; or
26 (d) Four percent for school districts with an average daily
27 membership of more than ten thousand students.
28 (3) A school district's property tax request may exceed its property
29 tax request authority pursuant to any property tax authority approved by
30 the voters at a levy override election under section 77-3444 held prior
31 to January 1, 2024.
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1 Sec. 6. A school district may choose not to increase its property
2 tax request by the full amount allowed by the school district's property
3 tax request authority in a particular year. In such cases, the school
4 district may carry forward to future years the amount of unused property
5 tax request authority. The department shall calculate each school
6 district's unused property tax request authority and shall submit an
7 accounting of such amount to the school board of the school district.
8 Such unused property tax request authority may then be used in later
9 years for increases in the school district's property tax request.
10 Sec. 7. The department shall prepare documents to be submitted by
11 school districts to aid the department in calculating each school
12 district's property tax request authority and unused property tax request
13 authority. Each school district shall submit such documents to the
14 department on or before September 20 of each year. If a school district
15 fails to submit such documents to the department or if the department
16 determines from such documents that a school district is not complying
17 with the limits provided in the School District Property Tax Limitation
18 Act, the department shall notify the school district of its
19 determination. The Commissioner of Education shall then direct that any
20 state aid granted pursuant to the Tax Equity and Educational
21 Opportunities Support Act be withheld until such time as the school
22 district submits the required documents or complies with the School
23 District Property Tax Limitation Act. The state aid shall be held for six
24 months. If the school district complies within the six-month period, it
25 shall receive the suspended state aid. If the school district fails to
26 comply within the six-month period, the suspended state aid shall revert
27 to the General Fund.
28 Sec. 8. The department may adopt and promulgate rules and
29 regulations to carry out the School District Property Tax Limitation Act.
30 Sec. 9. Section 77-1632, Revised Statutes Cumulative Supplement,
31 2022, is amended to read:
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1 77-1632 (1) If the annual assessment of property would result in an
2 increase in the total property taxes levied by a county, city, village,
3 school district, learning community, sanitary and improvement district,
4 natural resources district, educational service unit, or community
5 college, as determined using the previous year's rate of levy, such
6 political subdivision's property tax request for the current year shall
7 be no more than its property tax request in the prior year, and the
8 political subdivision's rate of levy for the current year shall be
9 decreased accordingly when such rate is set by the county board of
10 equalization pursuant to section 77-1601. The governing body of the
11 political subdivision shall pass a resolution or ordinance to set the
12 amount of its property tax request after holding the public hearing
13 required in subsection (3) of this section. If the governing body of a
14 political subdivision seeks to set its property tax request at an amount
15 that exceeds its property tax request in the prior year, it may do so to
16 the extent allowed by law after holding the public hearing required in
17 subsection (3) of this section and by passing a resolution or ordinance
18 that complies with subsection (4) of this section. If any county, city,
19 school district, or community college seeks to increase its property tax
20 request by more than the allowable growth percentage, such political
21 subdivision shall comply with the requirements of section 77-1633 in lieu
22 of the requirements in subsections (3) and (4) of this section.
23 (2) If the annual assessment of property would result in no change
24 or a decrease in the total property taxes levied by a county, city,
25 village, school district, learning community, sanitary and improvement
26 district, natural resources district, educational service unit, or
27 community college, as determined using the previous year's rate of levy,
28 such political subdivision's property tax request for the current year
29 shall be no more than its property tax request in the prior year, and the
30 political subdivision's rate of levy for the current year shall be
31 adjusted accordingly when such rate is set by the county board of
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1 equalization pursuant to section 77-1601. The governing body of the
2 political subdivision shall pass a resolution or ordinance to set the
3 amount of its property tax request after holding the public hearing
4 required in subsection (3) of this section. If the governing body of a
5 political subdivision seeks to set its property tax request at an amount
6 that exceeds its property tax request in the prior year, it may do so to
7 the extent allowed by law after holding the public hearing required in
8 subsection (3) of this section and by passing a resolution or ordinance
9 that complies with subsection (4) of this section. If any county, city,
10 school district, or community college seeks to increase its property tax
11 request by more than the allowable growth percentage, such political
12 subdivision shall comply with the requirements of section 77-1633 in lieu
13 of the requirements in subsections (3) and (4) of this section.
14 (3) The resolution or ordinance required under this section shall
15 only be passed after a special public hearing called for such purpose is
16 held and after notice is published in a newspaper of general circulation
17 in the area of the political subdivision at least four calendar days
18 prior to the hearing. For purposes of such notice, the four calendar days
19 shall include the day of publication but not the day of hearing. If the
20 political subdivision's total operating budget, not including reserves,
21 does not exceed ten thousand dollars per year or twenty thousand dollars
22 per biennial period, the notice may be posted at the governing body's
23 principal headquarters. The hearing notice shall contain the following
24 information: The certified taxable valuation under section 13-509 for the
25 prior year, the certified taxable valuation under section 13-509 for the
26 current year, and the percentage increase or decrease in such valuations
27 from the prior year to the current year; the dollar amount of the prior
28 year's tax request and the property tax rate that was necessary to fund
29 that tax request; the property tax rate that would be necessary to fund
30 last year's tax request if applied to the current year's valuation; the
31 proposed dollar amount of the tax request for the current year and the
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1 property tax rate that will be necessary to fund that tax request; the
2 percentage increase or decrease in the property tax rate from the prior
3 year to the current year; and the percentage increase or decrease in the
4 total operating budget from the prior year to the current year.
5 (4) Any resolution or ordinance setting a political subdivision's
6 property tax request under this section at an amount that exceeds the
7 political subdivision's property tax request in the prior year shall
8 include, but not be limited to, the following information:
9 (a) The name of the political subdivision;
10 (b) The amount of the property tax request;
11 (c) The following statements:
12 (i) The total assessed value of property differs from last year's
13 total assessed value by ..... percent;
14 (ii) The tax rate which would levy the same amount of property taxes
15 as last year, when multiplied by the new total assessed value of
16 property, would be $..... per $100 of assessed value;
17 (iii) The (name of political subdivision) proposes to adopt a
18 property tax request that will cause its tax rate to be $..... per $100
19 of assessed value; and
20 (iv) Based on the proposed property tax request and changes in other
21 revenue, the total operating budget of (name of political subdivision)
22 will (increase or decrease) last year's budget by ..... percent; and
23 (d) The record vote of the governing body in passing such resolution
24 or ordinance.
25 (5) Any resolution or ordinance setting a property tax request under
26 this section shall be certified and forwarded to the county clerk on or
27 be