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 provisions for state funding to compensate for the loss of revenue due to the elimination of levy authority, ensuring that ESUs receive adequate financial support.

Furthermore, the bill establishes a new funding mechanism for ESUs that will begin in 2029, based on their property tax levies from the 2027 tax year, with an annual increase of three and one-half percent. 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 sections of the Revised Statutes related to the previous levy authority of ESUs, streamlining the funding process and providing stable and predictable financial support for these educational units.

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