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LEGISLATURE OF NEBRASKA
ONE HUNDRED EIGHTH LEGISLATURE
SECOND SESSION
LEGISLATIVE BILL 1011
Introduced by Walz, 15; Conrad, 46.
Read first time January 05, 2024
Committee: Education
1 A BILL FOR AN ACT relating to the Tax Equity and Educational
2 Opportunities Support Act; to amend sections 79-1003 and 79-1007.11,
3 Revised Statutes Cumulative Supplement, 2022, and sections 79-1001
4 and 79-1017.01, Revised Statutes Supplement, 2023; to redefine
5 terms; to provide for early childhood education aid; to provide a
6 new allowance; to harmonize provisions; and to repeal the original
7 sections.
8 Be it enacted by the people of the State of Nebraska,
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1 Section 1. Section 79-1001, Revised Statutes Supplement, 2023, is
2 amended to read:
3 79-1001 Sections 79-1001 to 79-1033 and section 3 of this act shall
4 be known and may be cited as the Tax Equity and Educational Opportunities
5 Support Act.
6 Sec. 2. Section 79-1003, Revised Statutes Cumulative Supplement,
7 2022, is amended to read:
8 79-1003 For purposes of the Tax Equity and Educational Opportunities
9 Support Act:
10 (1) Adjusted general fund operating expenditures means (a) for
11 school fiscal years prior to school fiscal year 2025-26, the difference
12 of the general fund operating expenditures increased by the cost growth
13 factor calculated pursuant to section 79-1007.10, minus the
14 transportation allowance, special receipts allowance, poverty allowance,
15 limited English proficiency allowance, distance education and
16 telecommunications allowance, elementary site allowance, summer school
17 allowance, community achievement plan allowance, and focus school and
18 program allowance and (b) for school fiscal year 2025-26 and each school
19 fiscal year thereafter, the difference of the general fund operating
20 expenditures increased by the cost growth factor calculated pursuant to
21 section 79-1007.10, minus the transportation allowance, special receipts
22 allowance, poverty allowance, limited English proficiency allowance,
23 distance education and telecommunications allowance, elementary site
24 allowance, summer school allowance, early childhood education allowance,
25 community achievement plan allowance, and focus school and program
26 allowance;
27 (2) Adjusted valuation means the assessed valuation of taxable
28 property of each local system in the state, adjusted pursuant to the
29 adjustment factors described in section 79-1016. Adjusted valuation means
30 the adjusted valuation for the property tax year ending during the school
31 fiscal year immediately preceding the school fiscal year in which the aid
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1 based upon that value is to be paid. For purposes of determining the
2 local effort rate yield pursuant to section 79-1015.01, adjusted
3 valuation does not include the value of any property which a court, by a
4 final judgment from which no appeal is taken, has declared to be
5 nontaxable or exempt from taxation;
6 (3) Allocated income tax funds means the amount of assistance paid
7 to a local system pursuant to section 79-1005.01;
8 (4) Average daily membership means the average daily membership for
9 grades kindergarten through twelve attributable to the local system, as
10 provided in each district's annual statistical summary, and includes the
11 proportionate share of students enrolled in a public school instructional
12 program on less than a full-time basis;
13 (5) Base fiscal year means the first school fiscal year following
14 the school fiscal year in which the reorganization or unification
15 occurred;
16 (6) Board means the school board of each school district;
17 (7) Categorical funds means funds limited to a specific purpose by
18 federal or state law, including, but not limited to, Title I funds, Title
19 VI funds, federal career and technical education funds, federal school
20 lunch funds, Indian education funds, Head Start funds, and funds received
21 prior to July 1, 2022, from the Nebraska Education Improvement Fund;
22 (8) Consolidate means to voluntarily reduce the number of school
23 districts providing education to a grade group and does not include
24 dissolution pursuant to section 79-498;
25 (9) Converted contract means an expired contract that was in effect
26 for at least fifteen school years beginning prior to school year 2012-13
27 for the education of students in a nonresident district in exchange for
28 tuition from the resident district when the expiration of such contract
29 results in the nonresident district educating students, who would have
30 been covered by the contract if the contract were still in effect, as
31 option students pursuant to the enrollment option program established in
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1 section 79-234;
2 (10) Converted contract option student means a student who will be
3 an option student pursuant to the enrollment option program established
4 in section 79-234 for the school fiscal year for which aid is being
5 calculated and who would have been covered by a converted contract if the
6 contract were still in effect and such school fiscal year is the first
7 school fiscal year for which such contract is not in effect;
8 (11) Department means the State Department of Education;
9 (12) District means any school district or unified system as defined
10 in section 79-4,108;
11 (13) Ensuing school fiscal year means the school fiscal year
12 following the current school fiscal year;
13 (14) Equalization aid means the amount of assistance calculated to
14 be paid to a local system pursuant to section 79-1008.01;
15 (15) Fall membership means the total membership in kindergarten
16 through grade twelve attributable to the local system as reported on the
17 fall school district membership reports for each district pursuant to
18 section 79-528;
19 (16) Fiscal year means the state fiscal year which is the period
20 from July 1 to the following June 30;
21 (17) Formula students means:
22 (a) For state aid certified pursuant to section 79-1022, the sum of
23 the product of fall membership from the school fiscal year immediately
24 preceding the school fiscal year in which the aid is to be paid
25 multiplied by the average ratio of average daily membership to fall
26 membership for the second school fiscal year immediately preceding the
27 school fiscal year in which the aid is to be paid and the prior two
28 school fiscal years plus sixty percent of the qualified early childhood
29 education fall membership plus tuitioned students from the school fiscal
30 year immediately preceding the school fiscal year in which aid is to be
31 paid minus the product of the number of students enrolled in kindergarten
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1 that is not full-day kindergarten from the fall membership multiplied by
2 0.5; and
3 (b) For the final calculation of state aid pursuant to section
4 79-1065, the sum of average daily membership plus sixty percent of the
5 qualified early childhood education average daily membership plus
6 tuitioned students minus the product of the number of students enrolled
7 in kindergarten that is not full-day kindergarten from the average daily
8 membership multiplied by 0.5 from the school fiscal year immediately
9 preceding the school fiscal year in which aid was paid;
10 (18) Free lunch and free milk calculated students means, using the
11 most recent data available on November 1 of the school fiscal year
12 immediately preceding the school fiscal year in which aid is to be paid,
13 (a) for schools that did not provide free meals to all students pursuant
14 to the community eligibility provision, students who individually
15 qualified for free lunches or free milk pursuant to the federal Richard
16 B. Russell National School Lunch Act, 42 U.S.C. 1751 et seq., and the
17 federal Child Nutrition Act of 1966, 42 U.S.C. 1771 et seq., as such acts
18 and sections existed on January 1, 2021, and rules and regulations
19 adopted thereunder, plus (b) for schools that provided free meals to all
20 students pursuant to the community eligibility provision, the greater of
21 the number of students in such school who individually qualified for free
22 lunch or free milk using the most recent school fiscal year for which the
23 school did not provide free meals to all students pursuant to the
24 community eligibility provision or one hundred ten percent of the product
25 of the students who qualified for free meals at such school pursuant to
26 the community eligibility provision multiplied by the identified student
27 percentage calculated pursuant to such federal provision, except that the
28 free lunch and free milk calculated students for any school pursuant to
29 subdivision (18)(b) of this section shall not exceed one hundred percent
30 of the students qualified for free meals at such school pursuant to the
31 community eligibility provision;
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1 (19) Full-day kindergarten means kindergarten offered by a district
2 for at least one thousand thirty-two instructional hours;
3 (20) General fund budget of expenditures means the total budget of
4 disbursements and transfers for general fund purposes as certified in the
5 budget statement adopted pursuant to the Nebraska Budget Act, except that
6 for purposes of the limitation imposed in section 79-1023, the general
7 fund budget of expenditures does not include any special grant funds,
8 exclusive of local matching funds, received by a district;
9 (21) General fund expenditures means all expenditures from the
10 general fund;
11 (22) General fund operating expenditures means, for state aid
12 calculated for each school fiscal year, as reported on the annual
13 financial report for the second school fiscal year immediately preceding
14 the school fiscal year in which aid is to be paid, the total general fund
15 expenditures minus (a) the amount of all receipts to the general fund, to
16 the extent that such receipts are not included in local system formula
17 resources, from early childhood education tuition, summer school tuition,
18 educational entities as defined in section 79-1201.01 for providing
19 distance education courses through the Educational Service Unit
20 Coordinating Council to such educational entities, private foundations,
21 individuals, associations, charitable organizations, the textbook loan
22 program authorized by section 79-734, federal impact aid, and levy
23 override elections pursuant to section 77-3444, (b) the amount of
24 expenditures for categorical funds, tuition paid to other school
25 districts, tuition paid to postsecondary institutions for college credit,
26 transportation fees paid to other districts, adult education, community
27 services, redemption of the principal portion of general fund debt
28 service, retirement incentive plans authorized by section 79-855, and
29 staff development assistance authorized by section 79-856, (c) the amount
30 of any transfers from the general fund to any bond fund and transfers
31 from other funds into the general fund, (d) any legal expenses in excess
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1 of fifteen-hundredths of one percent of the formula need for the school
2 fiscal year in which the expenses occurred, (e) expenditures to pay for
3 incentives agreed to be paid by a school district to certificated
4 employees in exchange for a voluntary termination of employment for which
5 the State Board of Education approved an exclusion pursuant to
6 subdivision (1)(h), (i), (j), or (k) of section 79-1028.01, (f)(i)
7 expenditures to pay for employer contributions pursuant to subsection (2)
8 of section 79-958 to the School Employees Retirement System of the State
9 of Nebraska to the extent that such expenditures exceed the employer
10 contributions under such subsection that would have been made at a
11 contribution rate of seven and thirty-five hundredths percent or (ii)
12 expenditures to pay for school district contributions pursuant to
13 subdivision (1)(c)(i) or (1)(d)(i) of section 79-9,113 to the retirement
14 system established pursuant to the Class V School Employees Retirement
15 Act to the extent that such expenditures exceed the school district
16 contributions under such subdivision that would have been made at a
17 contribution rate of seven and thirty-seven hundredths percent, and (g)
18 any amounts paid by the district for lobbyist fees and expenses reported
19 to the Clerk of the Legislature pursuant to section 49-1483.
20 For purposes of this subdivision (22) of this section, receipts from
21 levy override elections shall equal ninety-nine percent of the difference
22 of the total general fund levy minus a levy of one dollar and five cents
23 per one hundred dollars of taxable valuation multiplied by the assessed
24 valuation for school districts that have voted pursuant to section
25 77-3444 to override the maximum levy provided pursuant to section
26 77-3442;
27 (23) Income tax liability means the amount of the reported income
28 tax liability for resident individuals pursuant to the Nebraska Revenue
29 Act of 1967 less all nonrefundable credits earned and refunds made;
30 (24) Income tax receipts means the amount of income tax collected
31 pursuant to the Nebraska Revenue Act of 1967 less all nonrefundable
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1 credits earned and refunds made;
2 (25) Limited English proficiency students means the number of
3 students with limited English proficiency in a district from the most
4 recent data available on November 1 of the school fiscal year preceding
5 the school fiscal year in which aid is to be paid plus the difference of
6 such students with limited English proficiency minus the average number
7 of limited English proficiency students for such district, prior to such
8 addition, for the three immediately preceding school fiscal years if such
9 difference is greater than zero;
10 (26) Local system means a unified system or a school district;
11 (27) Low-income child means a child under nineteen years of age
12 living in a household having an annual adjusted gross income for the
13 second calendar year preceding the beginning of the school fiscal year
14 for which aid is being calculated equal to or less than the maximum
15 household income pursuant to sections 9(b)(1) and 17(c)(4) of the Richard
16 B. Russell National School Lunch Act, 42 U.S.C. 1758(b)(1) and 42 U.S.C.
17 1766(c)(4), respectively, and sections 3(a)(6) and 4(e)(1)(A) of the
18 Child Nutrition Act of 1966, 42 U.S.C. 1772(a)(6) and 42 U.S.C. 1773(e)
19 (1)(A), respectively, as such acts and sections existed on January 1,
20 2021, for a household of that size that would have allowed the child to
21 meet the income qualifications for free meals during the school fiscal
22 year immediately preceding the school fiscal year for which aid is being
23 calculated;
24 (28) Low-income students means the number of low