LB549 LB549
2021 2021
LEGISLATURE OF NEBRASKA
ONE HUNDRED SEVENTH LEGISLATURE
FIRST SESSION
LEGISLATIVE BILL 549
Introduced by Wayne, 13.
Read first time January 19, 2021
Committee: Urban Affairs
1 A BILL FOR AN ACT relating to municipalities; to amend section 13-522,
2 Reissue Revised Statutes of Nebraska, and section 13-518, Revised
3 Statutes Cumulative Supplement, 2020; to adopt the Aid to
4 Municipalities Act; to create a fund; to harmonize provisions; to
5 provide a duty for the Revisor of Statutes; and to repeal the
6 original sections.
7 Be it enacted by the people of the State of Nebraska,
-1-
LB549 LB549
2021 2021
1 Section 1. Sections 1 to 7 of this act shall be known and may be
2 cited as the Aid to Municipalities Act.
3 Sec. 2. The purpose of the Aid to Municipalities Act is to provide
4 state aid to municipalities in the form of grants which may be used to
5 pay for infrastructure projects within the municipalities.
6 Sec. 3. For purposes of the Aid to Municipalities Act:
7 (1) Department means the Department of Economic Development;
8 (2) Infrastructure project means any of the following projects, or
9 any combination thereof, to be owned or operated by a municipality: Solid
10 waste management facilities; wastewater, storm water, and water treatment
11 works and systems, water distribution facilities, and water resources
12 projects, including, but not limited to, pumping stations, transmission
13 lines, and mains and their appurtenances; hazardous waste disposal
14 systems; resource recovery systems; airports; port facilities; buildings
15 and capital equipment used in the operations and activities of municipal
16 government and to provide services to the residents of the municipality;
17 convention and tourism facilities; redevelopment projects as defined in
18 section 18-2103; and mass transit and other transportation systems,
19 including parking facilities and excluding public highways and bridges
20 and municipal roads, streets, and bridges; and
21 (3) Municipality means any city or village in this state.
22 Sec. 4. (1) A municipality may apply for a grant under the Aid to
23 Municipalities Act by submitting an application to the department on a
24 form prescribed by the department. The application shall include:
25 (a) The amount of grant funds requested; and
26 (b) A description of the infrastructure projects to be funded by the
27 grant.
28 (2) The department shall consider applications in the order in which
29 they are received and may approve applications within the limits of
30 available appropriations, except that in no case shall any grant exceed
31 ten million dollars.
-2-
LB549 LB549
2021 2021
1 (3) A municipality receiving a grant under this section shall use
2 the grant funds exclusively to:
3 (a) Pay for the construction, acquisition, or equipping of
4 infrastructure projects or portions thereof; or
5 (b) Pay principal, interest, premium, and costs of issuance on bonds
6 issued by the municipality to finance the construction, acquisition, or
7 equipping of infrastructure projects or portions thereof.
8 (4) Grant funds received under this section shall be placed in a
9 separate fund and shall not be commingled with other money of the
10 municipality.
11 Sec. 5. The Aid to Municipalities Fund is created. The fund shall
12 be used by the department to make grants under the Aid to Municipalities
13 Act and to defray the administrative expenses incurred by the department
14 in carrying out the act. Any money in the fund available for investment
15 shall be invested by the state investment officer pursuant to the
16 Nebraska Capital Expansion Act and the Nebraska State Funds Investment
17 Act.
18 Sec. 6. It is the intent of the Legislature to appropriate XX
19 dollars each fiscal year for purposes of carrying out the Aid to
20 Municipalities Act.
21 Sec. 7. The department may adopt and promulgate rules and
22 regulations to carry out the Aid to Municipalities Act.
23 Sec. 8. Section 13-518, Revised Statutes Cumulative Supplement,
24 2020, is amended to read:
25 13-518 For purposes of sections 13-518 to 13-522:
26 (1) Allowable growth means (a) for governmental units other than
27 community colleges, the percentage increase in taxable valuation in
28 excess of the base limitation established under section 77-3446, if any,
29 due to improvements to real property as a result of new construction,
30 additions to existing buildings, any improvements to real property which
31 increase the value of such property, and any increase in valuation due to
-3-
LB549 LB549
2021 2021
1 annexation and any personal property valuation over the prior year and
2 (b) for community colleges, the percentage increase in excess of the base
3 limitation, if any, in full-time equivalent students from the second year
4 to the first year preceding the year for which the budget is being
5 determined;
6 (2) Capital improvements means (a) acquisition of real property or
7 (b) acquisition, construction, or extension of any improvements on real
8 property;
9 (3) Governing body has the same meaning as in section 13-503;
10 (4) Governmental unit means every political subdivision which has
11 authority to levy a property tax or authority to request levy authority
12 under section 77-3443 except sanitary and improvement districts which
13 have been in existence for five years or less and school districts;
14 (5) Qualified sinking fund means a fund or funds maintained
15 separately from the general fund to pay for acquisition or replacement of
16 tangible personal property with a useful life of five years or more which
17 is to be undertaken in the future but is to be paid for in part or in
18 total in advance using periodic payments into the fund. The term includes
19 sinking funds under subdivision (13) of section 35-508 for firefighting
20 and rescue equipment or apparatus;
21 (6) Restricted funds means (a) property tax, excluding any amounts
22 refunded to taxpayers, (b) payments in lieu of property taxes, (c) local
23 option sales taxes, (d) motor vehicle taxes, (e) state aid, (f) transfers
24 of surpluses from any user fee, permit fee, or regulatory fee if the fee
25 surplus is transferred to fund a service or function not directly related
26 to the fee and the costs of the activity funded from the fee, (g) any
27 funds excluded from restricted funds for the prior year because they were
28 budgeted for capital improvements but which were not spent and are not
29 expected to be spent for capital improvements, (h) the tax provided in
30 sections 77-27,223 to 77-27,227 beginning in the second fiscal year in
31 which the county will receive a full year of receipts, and (i) any excess
-4-
LB549 LB549
2021 2021
1 tax collections returned to the county under section 77-1776. Funds
2 received pursuant to the nameplate capacity tax levied under section
3 77-6203 for the first five years after a renewable energy generation
4 facility has been commissioned are nonrestricted funds; and
5 (7) State aid means:
6 (a) For all governmental units, state aid paid pursuant to sections
7 60-3,202 and 77-3523 and reimbursement provided pursuant to section
8 77-1239;
9 (b) For municipalities, state aid to municipalities paid pursuant to
10 the Aid to Municipalities Act and sections 18-2605, 39-2501 to 39-2520,
11 60-3,190, and 77-27,139.04 and insurance premium tax paid to
12 municipalities;
13 (c) For counties, state aid to counties paid pursuant to sections
14 60-3,184 to 60-3,190, insurance premium tax paid to counties, and
15 reimbursements to counties from funds appropriated pursuant to section
16 29-3933;
17 (d) For community colleges, state aid to community colleges paid
18 pursuant to the Community College Aid Act;
19 (e) For educational service units, state aid appropriated under
20 sections 79-1241.01 and 79-1241.03; and
21 (f) For local public health departments as defined in section
22 71-1626, state aid as distributed under section 71-1628.08.
23 Sec. 9. Section 13-522, Reissue Revised Statutes of Nebraska, is
24 amended to read:
25 13-522 The Auditor of Public Accounts shall prepare budget documents
26 to be submitted by governmental units which calculate the restricted
27 funds authority for each governmental unit. Each governmental unit shall
28 submit its calculated restricted funds authority with its budget
29 documents at the time the budgets are due to the Auditor of Public
30 Accounts. If the Auditor of Public Accounts determines from the budget
31 documents that a governmental unit is not complying with the budget
-5-
LB549 LB549
2021 2021
1 limits provided in sections 13-518 to 13-522, he or she shall notify the
2 governing body of his or her determination and notify the State Treasurer
3 and the Department of Economic Development of the noncompliance. The
4 State Treasurer and the department shall then suspend distribution of
5 state aid allocated to the governmental unit until such sections are
6 complied with. The funds shall be held for six months until the
7 governmental unit complies, and if the governmental unit complies within
8 the six-month period, it shall receive the suspended funds, but after six
9 months, if the governmental unit fails to comply, the suspended funds
10 shall be forfeited and shall be redistributed to other recipients of the
11 state aid or, in the case of homestead exemption reimbursement, returned
12 to the General Fund.
13 Sec. 10. The Revisor of Statutes shall assign sections 1 to 7 of
14 this act to a new article in Chapter 18.
15 Sec. 11. Original section 13-522, Reissue Revised Statutes of
16 Nebraska, and section 13-518, Revised Statutes Cumulative Supplement,
17 2020, are repealed.
-6-


Statutes affected:
Introduced: 13-518, 13-522