This bill amends Nebraska statutes to eliminate the property tax levy authority of educational service units (ESUs) and replace it with state funding. It modifies sections 79-1201, 79-1225, and 77-3442 to allow ESUs to levy a maximum of one and one-half cents per one hundred dollars of taxable valuation through fiscal year 2027-28. However, starting in fiscal year 2028-29, ESUs will no longer have the authority to levy property taxes. The bill introduces state funding provisions to compensate for the loss of revenue from this elimination, ensuring that ESUs receive adequate financial support.

Furthermore, the bill establishes a new funding mechanism for ESUs beginning in 2029, which will distribute funds based on the amount of property taxes levied in 2027, with an initial increase of three and one-half percent for the first year and continued increases in subsequent years. The Department of Revenue will determine and certify the annual distribution amounts, with payments made in two installments each year. The bill also repeals the original sections related to the levy authority of ESUs, reflecting a significant shift in their funding structure to ensure consistent financial support from the state.

Statutes affected:
Introduced: 77-3442, 79-1201, 79-1225