LB1402 LB1402
2024 2024
LEGISLATIVE BILL 1402
Approved by the Governor April 24, 2024
Introduced by Linehan, 39; Slama, 1.
A BILL FOR AN ACT relating to education scholarships; to amend sections
77-2715.07, 77-2717, and 77-2734.03, Revised Statutes Supplement, 2023; to provide for education scholarships; to repeal the Opportunity Scholarships Act; to harmonize provisions; to provide operative dates; to repeal the original sections; and to outright repeal sections 77-7101, 77-7102,
77-7103, 77-7104, 77-7105, 77-7106, 77-7107, 77-7108, 77-7109, 77-7110,
77-7111, 77-7112, and 77-7113, Revised Statutes Supplement, 2023.
Be it enacted by the people of the State of Nebraska,
Section 1. (1) The Legislature finds that:
(a) Funds appropriated for the education of students in kindergarten through twelfth grade are for a fundamental public purpose of state government and constitute an ordinary expense of state government;
(b) Enabling the greatest number of parents and legal guardians to choose among quality educational opportunities for children will improve the quality of education available to all children;
(c) Privately operated elementary and secondary schools in Nebraska satisfy the state's requirements for legal operation and provide quality educational opportunities for children;
(d) Parents and legal guardians of limited means are less able to choose among quality educational opportunities for their children; and
(e) Making it possible for more parents and legal guardians to be able to
choose privately operated schools benefits Nebraska parents and taxpayers.
(2) For purposes of this section:
(a) Education scholarship means a financial grant-in-aid to be used to pay all or part of the cost to educate an eligible student attending a qualified school;
(b) Eligible student means a resident of Nebraska who:
(i) Is receiving an education scholarship for the first time and is (A)
entering kindergarten or ninth grade in a qualified school or the first grade level offered by the qualified school, (B) transferring from a public school at
which the student was enrolled for at least one semester immediately preceding the first semester for which the student receives an education scholarship to a qualified school and is entering any of grades kindergarten through twelve, or
(C) a member of an active duty or reserve military family transferring into Nebraska from another state or another country and is entering any of grades kindergarten through twelve in a qualified school;
(ii) Has previously received an education scholarship under this section and is continuing education at a qualified school until such student graduates from high school or reaches twenty-one years of age, whichever comes first;
(iii) Has previously received an education scholarship under the Opportunity Scholarships Act, as such act existed prior to its repeal by this legislative bill, and is continuing education at a qualified school until such student graduates from high school or reaches twenty-one years of age,
whichever comes first;
(iv) Is the sibling of a student who is receiving an education scholarship and resides in the same household as such student; or
(v) Is currently enrolled in a qualified school and is a member of a family whose household income is no more than two hundred thirteen percent of
the federal poverty level; and
(c) Qualified school means any nongovernmental, privately operated elementary or secondary school located in this state that (i) is operated not for profit, (ii) complies with the antidiscrimination provisions of 42 U.S.C.
1981, as such section existed on January 1, 2024, (iii) complies with all health and life safety laws or codes that apply to privately operated schools,
and (iv) fulfills the applicable accreditation or approval requirements established by the State Board of Education pursuant to section 79-318.
(3) The State Treasurer shall establish a program to provide education scholarships to eligible students to pay the costs associated with attending a qualified school. Under such program, the State Treasurer shall:
(a) Establish a priority system for awarding education scholarships under the program. Such priority system shall:
(i) Give first priority to:
(A) Eligible students who received an education scholarship under this section or under the Opportunity Scholarships Act, as such act existed prior to
its repeal by this legislative bill, during the previous school year; and
(B) The sibling of a student who is receiving an education scholarship, so long as the sibling resides in the same household as such student;
(ii) Give second priority to:
(A) Eligible students whose household income levels do not exceed one hundred eighty-five percent of the federal poverty level;
(B) Eligible students whose application for the enrollment option program established in section 79-234 has been denied;
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(C) Eligible students who have an individualized education program;
(D) Eligible students who are experiencing bullying, harassment, hazing,
assault, battery, kidnapping, robbery, sexual offenses, threat or intimidation,
or fighting at school;
(E) Eligible students who are in foster care; and
(F) Eligible students who are in a family with a parent or guardian in an active duty role in a branch of the armed forces of the United States or in the National Guard, or whose parent or guardian was killed serving in the line of
duty;
(iii) Give third priority to eligible students whose household income levels exceed one hundred eighty-five percent of the federal poverty level but do not exceed two hundred thirteen percent of the federal poverty level; and
(iv) Give fourth priority to eligible students whose household income levels exceed two hundred thirteen percent of the federal poverty level but do
not exceed three hundred percent of the income indicated in the income eligibility guidelines for reduced price meals under the National School Lunch Program in 7 C.F.R. part 210;
(b) Limit the maximum scholarship amount awarded to any eligible student to the cost necessary to educate the eligible student at the qualified school such student attends; and
(c) Limit scholarship amounts awarded to eligible students in a manner that assures that the average of the scholarship amounts awarded per student does not exceed seventy-five percent of the statewide average general fund operating expenditures per formula student for the most recently available complete data year as such terms are defined in section 79-1003.
(4) The annual limit on the total amount of education scholarships awarded under this section for fiscal year 2024-25 and each fiscal year thereafter shall be ten million dollars.
(5) On or before December 1, 2025, and on or before December 1 of each year thereafter, the State Treasurer shall electronically submit a report to
the Governor and the Legislature that includes the following:
(a) A summary description of the State Treasurer's policies and procedures for awarding education scholarships;
(b) The number of eligible students receiving education scholarships in
the most recent fiscal year;
(c) The total amount of education scholarships awarded in the most recent fiscal year;
(d) The number of eligible students currently wait-listed or denied from receiving an education scholarship and the reason for the wait-listing or
denial; and
(e) The demographic information of eligible students receiving education scholarships, including, but not limited to:
(i) Income level;
(ii) Grade level; and
(iii) Geographic location.
(6) The State Treasurer may enter into contracts with up to three program managers for the purposes of carrying out the education scholarship program described in this section.
(7) It is the intent of the Legislature to appropriate ten million dollars from the General Fund for fiscal year 2024-25 and each fiscal year thereafter to the State Treasurer for the purpose of providing education scholarships as
provided in this section.
(8) Up to seven and one-half percent of the funds appropriated for purposes of this section may be used by the State Treasurer, or by the program managers with which the State Treasurer contracts, for administrative expenses.
(9) This section shall not be construed as granting any expanded or
additional authority to the State of Nebraska to control or influence the governance or policies of any qualified school due to the fact that the qualified school admits and enrolls students who receive education scholarships or as requiring any such qualified school to admit or, once admitted, to continue the enrollment of any student receiving an education scholarship.
Sec. 2. Section 77-2715.07, Revised Statutes Supplement, 2023, is amended to read:
77-2715.07 (1) There shall be allowed to qualified resident individuals as
a nonrefundable credit against the income tax imposed by the Nebraska Revenue Act of 1967:
(a) A credit equal to the federal credit allowed under section 22 of the Internal Revenue Code; and
(b) A credit for taxes paid to another state as provided in section
77-2730.
(2) There shall be allowed to qualified resident individuals against the income tax imposed by the Nebraska Revenue Act of 1967:
(a) For returns filed reporting federal adjusted gross incomes of greater than twenty-nine thousand dollars, a nonrefundable credit equal to twenty-five percent of the federal credit allowed under section 21 of the Internal Revenue Code of 1986, as amended, except that for taxable years beginning or deemed to
begin on or after January 1, 2015, such nonrefundable credit shall be allowed only if the individual would have received the federal credit allowed under section 21 of the code after adding back in any carryforward of a net operating loss that was deducted pursuant to such section in determining eligibility for the federal credit;
(b) For returns filed reporting federal adjusted gross income of twenty-
nine thousand dollars or less, a refundable credit equal to a percentage of the
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federal credit allowable under section 21 of the Internal Revenue Code of 1986,
as amended, whether or not the federal credit was limited by the federal tax liability. The percentage of the federal credit shall be one hundred percent for incomes not greater than twenty-two thousand dollars, and the percentage shall be reduced by ten percent for each one thousand dollars, or fraction thereof, by which the reported federal adjusted gross income exceeds twenty-two thousand dollars, except that for taxable years beginning or deemed to begin on
or after January 1, 2015, such refundable credit shall be allowed only if the individual would have received the federal credit allowed under section 21 of the code after adding back in any carryforward of a net operating loss that was deducted pursuant to such section in determining eligibility for the federal credit;
(c) A refundable credit as provided in section 77-5209.01 for individuals who qualify for an income tax credit as a qualified beginning farmer or
livestock producer under the Beginning Farmer Tax Credit Act for all taxable years beginning or deemed to begin on or after January 1, 2006, under the Internal Revenue Code of 1986, as amended;
(d) A refundable credit for individuals who qualify for an income tax credit under the Angel Investment Tax Credit Act, the Nebraska Advantage Microenterprise Tax Credit Act, the Nebraska Advantage Research and Development Act, or the Volunteer Emergency Responders Incentive Act; and
(e) A refundable credit equal to ten percent of the federal credit allowed under section 32 of the Internal Revenue Code of 1986, as amended, except that for taxable years beginning or deemed to begin on or after January 1, 2015,
such refundable credit shall be allowed only if the individual would have received the federal credit allowed under section 32 of the code after adding back in any carryforward of a net operating loss that was deducted pursuant to
such section in determining eligibility for the federal credit.
(3) There shall be allowed to all individuals as a nonrefundable credit against the income tax imposed by the Nebraska Revenue Act of 1967:
(a) A credit for personal exemptions allowed under section 77-2716.01;
(b) A credit for contributions to certified community betterment programs as provided in the Community Development Assistance Act. Each partner, each shareholder of an electing subchapter S corporation, each beneficiary of an estate or trust, or each member of a limited liability company shall report his or her share of the credit in the same manner and proportion as he or she reports the partnership, subchapter S corporation, estate, trust, or limited liability company income;
(c) A credit for investment in a biodiesel facility as provided in section
77-27,236;
(d) A credit as provided in the New Markets Job Growth Investment Act;
(e) A credit as provided in the Nebraska Job Creation and Mainstreet Revitalization Act;
(f) A credit to employers as provided in sections 77-27,238 and 77-27,240;
(g) A credit as provided in the Affordable Housing Tax Credit Act; and
(h) A credit to grocery store retailers, restaurants, and agricultural producers as provided in section 77-27,241. ; and
(i) A credit as provided in the Opportunity Scholarships Act.
(4) There shall be allowed as a credit against the income tax imposed by
the Nebraska Revenue Act of 1967:
(a) A credit to all resident estates and trusts for taxes paid to another state as provided in section 77-2730;
(b) A credit to all estates and trusts for contributions to certified community betterment programs as provided in the Community Development Assistance Act; and
(c) A refundable credit for individuals who qualify for an income tax credit as an owner of agricultural assets under the Beginning Farmer Tax Credit Act for all taxable years beginning or deemed to begin on or after January 1,
2009, under the Internal Revenue Code of 1986, as amended. The credit allowed for each partner, shareholder, member, or beneficiary of a partnership,
corporation, limited liability company, or estate or trust qualifying for an
income tax credit as an owner of agricultural assets under the Beginning Farmer Tax Credit Act shall be equal to the partner's, shareholder's, member's, or beneficiary's portion of the amount of tax credit distributed pursuant to
subsection (6) of section 77-5211.
(5)(a) For all taxable years beginning on or after January 1, 2007, and before January 1, 2009, under the Internal Revenue Code of 1986, as amended,
there shall be allowed to each partner, shareholder, member, or beneficiary of
a partnership, subchapter S corporation, limited liability company, or estate or trust a nonrefundable credit against the income tax imposed by the Nebraska Revenue Act of 1967 equal to fifty percent of the partner's, shareholder's,
member's, or beneficiary's portion of the amount of franchise tax paid to the state under sections 77-3801 to 77-3807 by a financial institution.
(b) For all taxable years beginning on or after January 1, 2009, under the Internal Revenue Code of 1986, as amended, there shall be allowed to each partner, shareholder, member, or beneficiary of a partnership, subchapter S
corporation, limited liability company, or estate or trust a nonrefundable credit against the income tax imposed by the Nebraska Revenue Act of 1967 equal to the partner's, shareholder's, member's, or beneficiary's portion of the amount of franchise tax paid to the state under sections 77-3801 to 77-3807 by
a financial institution.
(c) Each partner, shareholder, member, or beneficiary shall report his or
her share of the credit in the same manner and proportion as he or she reports
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the partnership, subchapter S corporation, limited liability company, or estate or trust income. If any partner, shareholder, member, or beneficiary cannot fully utilize the credit for that year, the credit may not be carried forward or back.
(6) There shall be allowed to all individuals nonrefundable credits against the income tax imposed by the Nebraska Revenue Act of 1967 as provided in section 77-3604 and refundable credits against the income tax imposed by the Nebraska Revenue Act of 1967 as provided in section 77-3605.
(7)(a) For taxable years beginning or deemed to begin on or after January
1, 2020, and before January 1, 2026, under the Internal Revenue Code of 1986,
as amended, a nonrefundable credit against the income tax imposed by the Nebraska Revenue Act of 1967 in the amount of five thousand dollars shall be
allowed to any individual who purchases a residence during the taxable year if
such residence:
(i) Is located within an area that has been declared an extremely blighted area under section 18-2101.02;
(ii) Is the individual's primary residence; and
(iii) Was not purchased from a family member of the individual or a family member of the individual's spouse.
(b) The credit provided in this subsection shall be claimed for the taxable year in which the residence is purchased. If the individual cannot fully utilize the credit for such year, the credit may be carried forward to
subsequent taxable years until fully utilized.
(c) No more than one credit may be claimed under this subsection with respect to a single residence.
(d) The credit provided in this subsection shall be subject to recapture by the Department of Revenue if the individual claiming the credit sells or
otherwise transfers the residence or quits using the residence as his or her primary residence within five years after the end of the taxable year in which the credit was claimed.
(e) For purposes of this subsection, family member means an individual's spouse, child, parent, brother, sister, grandchild, or grandparent, whether by
blood, marriage, or adoption.
(8) There shall be allowed to all individuals refundable credits against the income tax imposed by the Nebraska Revenue Act of 19