LB243 LB243
2023 2023
LEGISLATIVE BILL 243
Approved by the Governor May 31, 2023
Introduced by Briese, 41; Ballard, 21; Lippincott, 34.
A BILL FOR AN ACT relating to revenue and taxation; to amend sections 77-5003,
77-5015.02, 85-1517, and 85-2231, Reissue Revised Statutes of Nebraska,
and sections 77-1632, 77-1633, 77-1736.06, 77-3442, 77-4212, 77-5004,
77-6702, 77-6703, and 77-6706, Revised Statutes Cumulative Supplement,
2022; to adopt the School District Property Tax Limitation Act; to change provisions of the Property Tax Request Act, the interest rate for refunds or claims relating to taxes, community college area levying authority,
provisions of the Property Tax Credit Act, provisions relating to the Tax Equalization and Review Commission, and provisions of the Nebraska Property Tax Incentive Act; to provide for distribution of aid and levying authority to community college areas as prescribed; to create a fund; to provide duties for the Coordinating Commission for Postsecondary Education and the State Treasurer; to harmonize provisions; to provide operative dates; 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 School District Property Tax Limitation Act.
Sec. 2. For purposes of the School District Property Tax Limitation Act,
unless the context otherwise requires:
(1) Approved bonds means (a) bonds that are issued by a school district after the question of issuing such bonds has been approved by the voters of
such school district and (b) bonds that are issued by a school district pursuant to section 79-10,110, 79-10,110.01, or 79-10,110.02;
(2) Average daily membership has the same meaning as in section 79-1003;
(3) Base growth percentage means the sum of:
(a) Three percent;
(b) The annual percentage increase in the student enrollment of the school district multiplied by:
(i) One if the school district's student enrollment has grown by an average of at least three percent and by at least one hundred fifty students over the preceding three years;
(ii) Seven-tenths if the school district's student enrollment has grown by
an average of at least three percent over the preceding three years; or
(iii) Four-tenths if subdivisions (3)(b)(i) and (3)(b)(ii) of this section do not apply;
(c) The percentage obtained by first dividing the annual increase in the total number of limited English proficiency students in the school district by
the student enrollment of the school district and then multiplying the quotient by fifteen hundredths; and
(d) The percentage obtained by first dividing the annual increase in the total number of poverty students in the school district by the student enrollment of the school district and then multiplying the quotient by fifteen hundredths;
(4) Department means the State Department of Education;
(5) Non-property-tax revenue means revenue of a school district from all state and local sources other than real and personal property taxes. Non-
property-tax revenue does not include grants, donations, bonds, all revenue from a school district that has been merged into another school district or
dissolved, activity funds, bond funds, cooperative funds, depreciation funds,
employee benefit funds, nutrition funds, qualified capital purpose undertaking funds, or student fee funds, insurance proceeds, proceeds from the sale of
property including land, buildings, or capital assets in special building funds, or proceeds of financing;
(6) Property tax request means the total amount of property taxes for the general and special building funds requested to be raised for a school district through the levy imposed pursuant to section 77-1601;
(7) Property tax request authority means the amount that may be included in a property tax request for the general or special building funds of the school district as determined pursuant to the School District Property Tax Limitation Act;
(8) School board has the same meaning as in section 79-101;
(9) School district has the same meaning as in section 79-101; and
(10) Student enrollment means the total number of students in the school district according to the fall school district membership report described in
subsection (4) of section 79-528.
Sec. 3. (1) Except as provided in sections 4 and 5 of this act, a school district's property tax request for any year shall not exceed the school district's property tax request authority.
(2) The department shall calculate each school district's property tax request authority on an annual basis as follows:
(a) The school district's property tax request from the prior year shall
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be added to the non-property-tax revenue from the prior year minus any investment income from special building funds from the prior year, and the total shall be increased by the school district's base growth percentage; and
(b) The amount determined under subdivision (2)(a) of this section shall then be decreased by the amount of total non-property-tax revenue for the current year and adjusted for any known or documented errors in documentation received by the department from the school district. In determining the total non-property-tax revenue for the current year, any category of non-property-tax revenue for which there is insufficient data as of June 1 to make an accurate determination shall be deemed to be equal to the prior year's amount.
(3) The department shall certify the amount determined for each school district under this section to the school board of such school district. Such certified amount shall be the school district's property tax request authority.
Sec. 4. The School District Property Tax Limitation Act shall not apply to that portion of a school district's property tax request that is needed to
pay the principal and interest on approved bonds.
Sec. 5. (1) A school district's property tax request may exceed its property tax request authority by an amount approved by a sixty percent majority of legal voters voting on the issue at a special election called for such purpose upon the recommendation of the school board of such school district or upon the receipt by the county clerk or election commissioner of a petition requesting an election signed by at least five percent of the legal voters of the school district. The recommendation of the school board or the petition of the legal voters shall include the amount by which the school board would increase its property tax request for the year over and above the property tax request authority of such school district. The county clerk or
election commissioner shall call for a special election on the issue within thirty days after the receipt of such school board recommendation or legal voter petition. The election shall be held pursuant to the Election Act, and all costs shall be paid by the school district.
(2)(a) A school district may increase the base growth percentage used to
determine its property tax request authority under section 3 of this act by a percentage approved by an affirmative vote of at least seventy percent of the school board of such school district. The maximum base growth percentage that may be approved under this subsection shall be:
(i) The base growth percentage that would otherwise be applicable plus an
additional seven percent for school districts with an average daily membership of no more than four hundred seventy-one students;
(ii) The base growth percentage that would otherwise be applicable plus an
additional six percent for school districts with an average daily membership of
more than four hundred seventy-one students but no more than three thousand forty-four students;
(iii) The base growth percentage that would otherwise be applicable plus an additional five percent for school districts with an average daily membership of more than three thousand forty-four students but no more than ten thousand students; or
(iv) The base growth percentage that would otherwise be applicable plus an
additional four percent for school districts with an average daily membership of more than ten thousand students.
(b) Before a school board votes to increase a school district's base growth percentage under this subsection, the school board shall publish notice of the upcoming vote in a legal newspaper of general circulation in the school district. Such publication shall occur at least one week prior to the public meeting at which the vote will be taken.
(3) A school district's property tax request may exceed its property tax request authority pursuant to any property tax authority approved by the voters at a levy override election under section 77-3444 held prior to January 1,
2024.
Sec. 6. A school district may choose not to increase its property tax request by the full amount allowed by the school district's property tax request authority in a particular year. In such cases, the school district may carry forward to future years the amount of unused property tax request authority. The department shall calculate each school district's unused property tax request authority and shall submit an accounting of such amount to
the school board of the school district. Such unused property tax request authority may then be used in later years for increases in the school district's property tax request.
Sec. 7. The department shall prepare documents to be submitted by school districts to aid the department in calculating each school district's property tax request authority and unused property tax request authority. Each school district shall submit such documents to the department on or before September
30 of each year. If a school district fails to submit such documents to the department or if the department determines from such documents that a school district is not complying with the limits provided in the School District Property Tax Limitation Act, the department shall notify the school district of
its determination. The Commissioner of Education shall then direct that any state aid granted pursuant to the Tax Equity and Educational Opportunities Support Act be withheld until such time as the school district submits the required documents or complies with the School District Property Tax Limitation Act. The state aid shall be held for six months. If the school district complies within the six-month period, it shall receive the suspended state aid.
If the school district fails to comply within the six-month period, the suspended state aid shall revert to the General Fund.
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Sec. 8. The department may adopt and promulgate rules and regulations to
carry out the School District Property Tax Limitation Act.
Sec. 9. Section 77-1632, Revised Statutes Cumulative Supplement, 2022, is amended to read:
77-1632 (1) If the annual assessment of property would result in an increase in the total property taxes levied by a county, city, village, school district, learning community, sanitary and improvement district, natural resources district, educational service unit, or community college, as determined using the previous year's rate of levy, such political subdivision's property tax request for the current year shall be no more than its property tax request in the prior year, and the political subdivision's rate of levy for the current year shall be decreased accordingly when such rate is set by the county board of equalization pursuant to section 77-1601. The governing body of
the political subdivision shall pass a resolution or ordinance to set the amount of its property tax request after holding the public hearing required in
subsection (3) of this section. If the governing body of a political subdivision seeks to set its property tax request at an amount that exceeds its property tax request in the prior year, it may do so to the extent allowed by
law after holding the public hearing required in subsection (3) of this section and by passing a resolution or ordinance that complies with subsection (4) of this section. If any county, city, school district, or community college seeks to increase its property tax request by more than the allowable growth percentage, such political subdivision shall comply with the requirements of
section 77-1633 in lieu of the requirements in subsections (3) and (4) of this section.
(2) If the annual assessment of property would result in no change or a decrease in the total property taxes levied by a county, city, village, school district, learning community, sanitary and improvement district, natural resources district, educational service unit, or community college, as determined using the previous year's rate of levy, such political subdivision's property tax request for the current year shall be no more than its property tax request in the prior year, and the political subdivision's rate of levy for the current year shall be adjusted accordingly when such rate is set by the county board of equalization pursuant to section 77-1601. The governing body of
the political subdivision shall pass a resolution or ordinance to set the amount of its property tax request after holding the public hearing required in
subsection (3) of this section. If the governing body of a political subdivision seeks to set its property tax request at an amount that exceeds its property tax request in the prior year, it may do so to the extent allowed by
law after holding the public hearing required in subsection (3) of this section and by passing a resolution or ordinance that complies with subsection (4) of this section. If any county, city, school district, or community college seeks to increase its property tax request by more than the allowable growth percentage, such political subdivision shall comply with the requirements of
section 77-1633 in lieu of the requirements in subsections (3) and (4) of this section.
(3) The resolution or ordinance required under this section shall only be
passed after a special public hearing called for such purpose is held and after notice is published in a newspaper of general circulation in the area of the political subdivision at least four calendar days prior to the hearing. For purposes of such notice, the four calendar days shall include the day of
publication but not the day of hearing. If the political subdivision's total operating budget, not including reserves, does not exceed ten thousand dollars per year or twenty thousand dollars per biennial period, the notice may be
posted at the governing body's principal headquarters. The hearing notice shall contain the following information: The certified taxable valuation under section 13-509 for the prior year, the certified taxable valuation under section 13-509 for the current year, and the percentage increase or decrease in
such valuations from the prior year to the current year; the dollar amount of
the prior year's tax request and the property tax rate that was necessary to
fund that tax request; the property tax rate that would be necessary to fund last year's tax request if applied to the current year's valuation; the proposed dollar amount of the tax request for the current year and the property tax rate that will be necessary to fund that tax request; the percentage increase or decrease in the property tax rate from the prior year to the current year; and the percentage increase or decrease in the total operating budget from the prior year to the current year.
(4) Any resolution or ordinance setting a political subdivision's property tax request under this section at an amount that exceeds the political subdivision's property tax request in the prior year shall include, but not be
limited to, the following information:
(a) The name of the political subdivision;
(b) The amount of the property tax request;
(c) The following statements:
(i) The total assessed value of property differs from last year's total assessed value by ..... percent;
(ii) The tax rate which would levy the same amount of property taxes as
last year, when multiplied by the new total assessed value of property, would be $..... per $100 of assessed value;
(iii) The (name of political subdivision) proposes to adopt a property tax request that will cause its tax rate to be $..... per $100 of assessed value;
and
(iv) Based on the proposed property tax request and changes in other
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revenue, the total operating budget of (name of political subdivision) will
(increase or decrease) last year's budget by ..... percent; and
(d) The record vote of the governing body in passing such resolution or
ordinance.
(5) Any resolution or ordinance setting a property tax request under this section shall be certified and forwarded to the county clerk on or before October 15 of the year for which the tax request is to apply.
Sec. 10. Section 77-1633, Revised Statutes Cumulative Supplement, 2022, is amended to read:
77-1633 (1) For purposes of this section, political subdivision means any county, city, school district, or community college.
(2) If any political subdivision seeks to increase its property tax request by more than the allowable growth percentage, such political subdivision may do so to the extent allowed by law if:
(a) A public hearing is held and notice of such hearing is provided in
compliance with subsection (3) of this section; and
(b) The governing body of such political subdivision passes a resolution or an ordinance that complies with subsection (4) of this section.
(3)(a) Each political subdivision within a county that seeks to increase its property tax request by more than the allowable growth percentage shall participate in a joint public hearing. Each such political subdivision shall designate one representative to attend the joint public hearing on behalf of
the political subdivision. If a political subdivision includes area in more than one county, the political subdivision shall be deemed to be within the county in which the political subdivision's principal headquarters are located.
At such hearing, there shall be no items on the agenda other than discussion on
each political subdivision's intent to increase its property tax r