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. To address the revenue loss from this change, the bill introduces provisions for state funding to ensure ESUs maintain their operational capabilities.

Furthermore, the bill establishes a new funding mechanism for ESUs that will begin in 2029, compensating for the loss of their levy authority. It mandates that funding be distributed based on the amount of property taxes levied in 2027, with an annual increase of three and one-half percent in subsequent years. The Department of Revenue will determine and certify the distribution amounts, which will be paid in two equal installments each year. The bill also repeals certain sections of the Revised Statutes related to the previous levy authority of ESUs, reflecting a significant shift in their funding structure.

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