LB34 LB34
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LEGISLATIVE BILL 34
Approved by the Governor August 20, 2024
Introduced by Brewer, 43; Conrad, 46; Halloran, 33; Linehan, 39; Murman, 38;
Raybould, 28.
A BILL FOR AN ACT relating to revenue and taxation; to amend sections 13-508,
13-518, 13-2817, 29-3933, 72-2305, 72-2306, and 77-27,142, Reissue Revised Statutes of Nebraska, sections 77-1776, 77-27,144, 77-4602, and 81-12,193,
Revised Statutes Cumulative Supplement, 2022, and sections 77-1632,
77-1633, 77-1701, 77-6702, and 77-6703, Revised Statutes Supplement, 2023;
to adopt the Property Tax Growth Limitation Act and the School District Property Tax Relief Act; to change provisions relating to the Nebraska Budget Act, budget limitations, payments to municipal counties, county reimbursement for indigent defense systems, the Public Facilities Construction and Finance Act, the Property Tax Request Act, collection of
taxes, the Local Option Revenue Act, revenue forecasting, the Nebraska Property Tax Incentive Act, and the Nebraska Transformational Project Fund; to redefine terms; to harmonize provisions; to provide severability;
to repeal the original sections; and to declare an emergency.
Be it enacted by the people of the State of Nebraska,
Section 1. Sections 1 to 8 of this act shall be known and may be cited as
the Property Tax Growth Limitation Act.
Sec. 2. For purposes of the Property Tax Growth Limitation Act:
(1) Approved bonds means bonds as defined in subdivision (1) of section
10-134 that are approved according to law, excluding any bonds issued to
finance a project or projects if the issuance of bonds for such project or
projects was the subject of a general obligation bond election held at the most recent regularly scheduled election and was not approved at such election;
(2) Auditor means the Auditor of Public Accounts;
(3) Emergency means an emergency, as defined in section 81-829.39, for which a state of emergency proclamation or local state of emergency proclamation has been issued under the Emergency Management Act;
(4) Growth percentage means the percentage obtained by dividing (a) the political subdivision's growth value by (b) the political subdivision's total property valuation from the prior year;
(5) Growth value means the increase in a political subdivision's total property valuation from the prior year to the current year due to (a)
improvements to real property as a result of new construction and additions to
existing buildings, (b) any other improvements to real property which increase the value of such property, (c) annexation of real property by the political subdivision, (d) a change in the use of real property, (e) any increase in
personal property valuation over the prior year, and (f) the increase in excess valuation over the redevelopment project valuation described in section 18-2147
for redevelopment projects within the political subdivision, provided the accumulated excess valuation which exists as of July 1, 2025, shall be included in the calculation of the increase in excess valuation for the political subdivision's first fiscal year beginning on or after July 1, 2025;
(6) Inflation percentage means the annual percentage change in the State and Local Consumption Expenditures and Gross Investment, as reported for December of the prior calendar year for the preceding twelve-month period;
(7) Political subdivision means any county, city, or village;
(8) Property tax request means the total amount of property taxes requested to be raised for a political subdivision through the levy imposed pursuant to section 77-1601;
(9) Property tax request authority means the amount that may be included in a political subdivision's property tax request as determined pursuant to the Property Tax Growth Limitation Act; and
(10) State aid means:
(a) For all political subdivisions, state aid paid pursuant to sections
60-3,202 and 77-3523 and reimbursement provided pursuant to section 77-1239;
(b) For cities and villages, state aid to cities and villages paid pursuant to sections 39-2501 to 39-2520, 60-3,190, and 77-27,139.04 and insurance premium tax paid to cities and villages; and
(c) For counties, state aid to counties paid pursuant to sections 60-3,184
to 60-3,190, insurance premium tax paid to counties, and reimbursements to
counties from funds appropriated pursuant to section 29-3933.
Sec. 3. (1) Except as otherwise provided in the Property Tax Growth Limitation Act, for fiscal years beginning on or after July 1, 2025, a political subdivision's property tax request for any year shall not exceed its property tax request authority as determined under this section. The preliminary property tax request authority for each political subdivision shall be the amount of property taxes levied by the county board of equalization pursuant to section 77-1601 for such political subdivision in the prior fiscal year, less the sum of exceptions utilized in the prior year pursuant to section
4 of this act.
(2) In addition to the preliminary property tax request authority, the
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political subdivision's property tax request authority may be increased by the product of:
(a) The amount of property taxes levied in the prior year increased by the political subdivision's growth percentage, less the sum of exceptions utilized in the prior year pursuant to subdivisions (1) and (2) of section 4 of this act; and
(b) The greater of zero or the inflation percentage.
Sec. 4. A political subdivision may increase its property tax request authority over the amount determined under section 3 of this act by:
(1) The amount of property taxes budgeted for approved bonds;
(2) The amount of property taxes needed to respond to an emergency declared in the preceding year, as certified to the auditor;
(3) The amount of unused property tax request authority determined in
accordance with section 6 of this act;
(4) The amount of property taxes budgeted in support of (a) a service relating to an imminent and significant threat to public safety that (i) was not previously provided by the political subdivision and (ii) is the subject of
an agreement or a modification of an existing agreement executed after the effective date of this act, whether provided by one of the parties to the agreement or by an independent joint entity or joint public agency or (b) an interlocal agreement relating to public safety;
(5) The increase in property tax request authority approved by the legal voters as provided in section 5 of this act;
(6) The amount of property taxes budgeted for public safety services as
defined in section 13-320; and
(7) The amount of property taxes budgeted for county attorneys and public defenders.
Sec. 5. (1) A political subdivision may increase its property tax request authority over the amount determined under section 3 of this act if such increase is approved by a majority of legal voters voting on the issue at an election described in subsection (2) of this section. Such issue shall be
placed on the ballot (a) upon the recommendation of the governing body of such political subdivision or (b) upon the receipt by the county clerk or election commissioner of a petition requesting such issue to be placed on the ballot which is signed by at least five percent of the legal voters of the political subdivision. The recommendation of the governing body or the petition of the legal voters shall include the amount by which the political subdivision would increase its property tax request authority over and above the amount determined under section 3 of this act.
(2) Upon receipt of such recommendation or legal voter petition, the county clerk or election commissioner shall place such issue on the ballot at
the next regularly scheduled election or a special election called for such purpose and held on the first Tuesday after the second Monday in May of an odd-
numbered year. The election shall be held pursuant to the Election Act, and all costs shall be paid by the political subdivision. The issue may be approved on
the same question as a vote to exceed the levy limits provided in section
77-3444. If a majority of the votes cast on the issue are in favor of
increasing the political subdivision's property tax request authority, the political subdivision shall be empowered to do so.
Sec. 6. A political subdivision may choose not to increase its total property taxes levied by the full amount of the property tax request authority allowed in a particular year. In such cases, the political subdivision may carry forward to future budget years the amount of unused property tax request authority, but accumulation of unused property tax request authority shall not exceed an aggregate of five percent of the total property tax request authority from the prior year.
Sec. 7. The auditor shall prepare forms to be used by political subdivisions for the purpose of calculating property tax request authority and unused property tax request authority. Each political subdivision shall calculate such amounts and submit the forms to the auditor on or before September 30, 2025, and on or before September 30 of each year thereafter. If a political subdivision fails to submit such forms to the auditor or if the auditor determines from such forms that a political subdivision is not complying with the limits provided in the Property Tax Growth Limitation Act,
the auditor shall notify the political subdivision and the State Treasurer of
the noncompliance. The State Treasurer shall then suspend distribution of state aid allocated to the political subdivision until the political subdivision complies. The funds shall be held for six months. If the political subdivision complies within the six-month period, it shall receive the suspended funds. If the political subdivision fails to comply within the six-month period, the suspended funds shall be forfeited and shall be redistributed to other recipients of the state aid or, in the case of homestead exemption reimbursement, returned to the General Fund.
Sec. 8. The auditor may adopt and promulgate rules and regulations to
carry out the Property Tax Growth Limitation Act.
Sec. 9. Sections 9 to 13 of this act shall be known and may be cited as
the School District Property Tax Relief Act.
Sec. 10. The purpose of the School District Property Tax Relief Act is to provide property tax relief for property taxes levied against real property by
school districts. The property tax relief will be made to owners of real property in the form of a property tax credit.
Sec. 11. For purposes of the School District Property Tax Relief Act:
(1) School district has the same meaning as in section 79-101; and
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(2) School district taxes means property taxes levied on real property in
this state by a school district or multiple-district school system, excluding any property taxes levied for bonded indebtedness and any property taxes levied as a result of an override of limits on property tax levies approved by voters pursuant to section 77-3444.
Sec. 12. (1) The School District Property Tax Relief Credit Fund is
created. The fund shall only be used pursuant to the School District Property Tax Relief Act. Any money in the fund available for investment shall be
invested by the state investment officer pursuant to the Nebraska Capital Expansion Act and the Nebraska State Funds Investment Act.
(2)(a) The State Treasurer shall transfer seven hundred fifty million dollars from the General Fund to the School District Property Tax Relief Credit Fund in fiscal year 2024-25, on such dates and in such amounts as directed by
the budget administrator of the budget division of the Department of
Administrative Services.
(b) It is the intent of the Legislature that seven hundred eighty million dollars be transferred from the General Fund to the School District Property Tax Relief Credit Fund in fiscal year 2025-26.
(c) It is the intent of the Legislature that eight hundred eight million dollars be transferred from the General Fund to the School District Property Tax Relief Credit Fund in fiscal year 2026-27.
(d) It is the intent of the Legislature that eight hundred thirty-eight million dollars be transferred from the General Fund to the School District Property Tax Relief Credit Fund in fiscal year 2027-28.
(e) It is the intent of the Legislature that eight hundred seventy million dollars be transferred from the General Fund to the School District Property Tax Relief Credit Fund in fiscal year 2028-29.
(f) It is the intent of the Legislature that nine hundred two million dollars be transferred from the General Fund to the School District Property Tax Relief Credit Fund in fiscal year 2029-30.
(g) It is the intent of the Legislature that the amount transferred from the General Fund to the School District Property Tax Relief Credit Fund in
fiscal year 2030-31 and each fiscal year thereafter be equal to the total amount transferred in the preceding fiscal year increased by three percent.
Sec. 13. (1) The School District Property Tax Relief Act shall apply to
tax year 2024 and each tax year thereafter. For tax year 2024, the total amount of relief granted under the act shall be seven hundred fifty million dollars.
For tax year 2025, the total amount of relief granted under the act shall be
seven hundred eighty million dollars. For tax year 2026, the total amount of
relief granted under the act shall be eight hundred eight million dollars. For tax year 2027, the total amount of relief granted under the act shall be eight hundred thirty-eight million dollars. For tax year 2028, the total amount of
relief granted under the act shall be eight hundred seventy million dollars.
For tax year 2029, the total amount of relief granted under the act shall be
nine hundred two million dollars. For tax year 2030 and each tax year thereafter, the total amount of relief granted under the act shall be the total amount of relief from the prior year increased by three percent. The relief shall be in the form of property tax credits which appear on property tax statements. Property tax credits granted under the act shall be credited against the amount of property taxes owed to school districts.
(2) To determine the amount of the property tax credit for each parcel,
the county treasurer shall multiply the amount disbursed to the county under subsection (4) of this section by the ratio of the school district taxes levied in the prior year on the parcel to the school district taxes levied in the prior year on all real property in the county. The amount so determined shall be the property tax credit for that parcel.
(3) If the real property owner qualifies for a homestead exemption under sections 77-3501 to 77-3529, the owner shall also be qualified for the property tax credit provided in this section to the extent of any remaining liability after calculation of the homestead exemption. If the property tax credit provided in this section results in a property tax liability on the homestead that is less than zero, the amount of the credit which cannot be used by the taxpayer shall be returned to the Property Tax Administrator by July 1 of the year the amount disbursed to the county was disbursed. The Property Tax Administrator shall immediately credit any funds returned under this subsection to the School District Property Tax Relief Credit Fund. Upon the return of any funds under this subsection, the county treasurer shall electronically file a report with the Property Tax Administrator, on a form prescribed by the Tax Commissioner, indicating the amount of funds distributed to each school district in the county in the year the funds were returned and the amount of
unused credits returned.
(4) The amount disbursed to each county under this section shall be equal to the amount available for disbursement under subsection (1) of this section multiplied by the ratio of the school district taxes levied in the prior year on all real property in the county to the school district taxes levied in the prior year on all real property in the state. By September 15, 2024, and by
September 15 of each year thereafter, the Property Tax Administrator shall determine the amount to be disbursed under this subsection to each county and shall certify such amounts to the State Treasurer and to each county. The disbursements to the counties shall occur in two equal payments, the first on
or before January 31 and the second on or before April 1.
(5) The county treasurer shall disburse amounts received under subsection
(4) of this section, which are credited against the amount of property taxes
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owed to school districts, in the same manner as if such funds had been received in the form of property tax payments for property taxes owed to school districts, meaning any amounts attributable to divided taxes pursuant to
section 18-2147 of the Community Development Law shall be remitted to the applicable authority for which such taxes were divided.
(6) The School District Property Tax Relief Credit Fund shall be used for purposes of making the disbursements to counties required under subsection (4)
of this section.
Sec. 14. Section 13-508, Reissue Revised Statutes of Nebraska, is amended to read:
13-508 (1) After publication and hearing thereon and within the time prescribed by law, each governing body shall file with and certify to the levying board or boards on or before September 30 of each year or September 30
of the final year of a biennial period and file with the auditor a copy of the adopted budget statement which complies with sections 13-518 to 13-522 or
79-1023 to 79-1030, if applicable, together with the amount of the tax required to fund the adopted budget, setting out separately (a) the amount to be levied for the payment of principal or interest on bonds issued or authorized to be issued by the governing body or the legal voters of the political subdivision and (b) the amount to be levied for all other purposes. Proof of publication shall be attached to the statements. For fiscal years prior to fiscal year
2017-18, learning communities shall also file a copy of such adopted budget statement with member school