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--- version:Introduced+++ version:(document, no version)@@ -1,374 +1,124 @@-LEGISLATURE OF NEBRASKA-ONE HUNDRED NINTH LEGISLATURE-FIRST SESSION-LEGISLATIVE BILL 142+PREPARED BY: Bill Biven, Jr.+LB 142 DATE PREPARED: February 26, 2025+PHONE: 402-471-0054-Introduced by Hughes, 24.-Read first time January 13, 2025-Committee: Education-A BILL FOR AN ACT relating to the Tax Equity and Educational1-Opportunities Support Act; to amend section 79-1003, Reissue Revised2-Statutes of Nebraska; to redefine a term; and to repeal the original3-section. 4-Be it enacted by the people of the State of Nebraska,5-LB142-2025-LB142-2025--1--Section 1. Section 79-1003, Reissue Revised Statutes of Nebraska, is1-amended to read: 2-79-1003 For purposes of the Tax Equity and Educational Opportunities3-Support Act: 4-(1) Adjusted general fund operating expenditures means the5-difference of the general fund operating expenditures increased by the6-cost growth factor calculated pursuant to section 79-1007.10, minus the7-transportation allowance, special receipts allowance, poverty allowance,8-limited English proficiency allowance, distance education and9-telecommunications allowance, elementary site allowance, summer school10-allowance, community achievement plan allowance, and focus school and11-program allowance; 12-(2) Adjusted valuation means the assessed valuation of taxable13-property of each local system in the state, adjusted pursuant to the14-adjustment factors described in section 79-1016. Adjusted valuation means15-the adjusted valuation for the property tax year ending during the school16-fiscal year immediately preceding the school fiscal year in which the aid17-based upon that value is to be paid. For purposes of determining the18-local effort rate yield pursuant to section 79-1015.01, adjusted19-valuation does not include the value of any property which a court, by a20-final judgment from which no appeal is taken, has declared to be21-nontaxable or exempt from taxation; 22-(3) Allocated income tax funds means the amount of assistance paid23-to a local system pursuant to section 79-1005.01; 24-(4) Average daily membership means the average daily membership for25-grades kindergarten through twelve attributable to the local system, as26-provided in each district's annual statistical summary, and includes the27-proportionate share of students enrolled in a public school instructional28-program on less than a full-time basis; 29-(5) Base fiscal year means the first school fiscal year following30-the school fiscal year in which the reorganization or unification31-LB142-2025-LB142-2025--2--occurred; 1-(6) Board means the school board of each school district;2-(7) Categorical funds means funds limited to a specific purpose by3-federal or state law, including, but not limited to, Title I funds, Title4-VI funds, federal career and technical education funds, federal school5-lunch funds, Indian education funds, Head Start funds, and funds received6-prior to July 1, 2022, from the Nebraska Education Improvement Fund;7-(8) Consolidate means to voluntarily reduce the number of school8-districts providing education to a grade group and does not include9-dissolution pursuant to section 79-498; 10-(9) Converted contract means an expired contract that was in effect11-for at least fifteen school years beginning prior to school year 2012-1312-for the education of students in a nonresident district in exchange for13-tuition from the resident district when the expiration of such contract14-results in the nonresident district educating students, who would have15-been covered by the contract if the contract were still in effect, as16-option students pursuant to the enrollment option program established in17-section 79-234; 18-(10) Converted contract option student means a student who will be19-an option student pursuant to the enrollment option program established20-in section 79-234 for the school fiscal year for which aid is being21-calculated and who would have been covered by a converted contract if the22-contract were still in effect and such school fiscal year is the first23-school fiscal year for which such contract is not in effect;24-(11) Department means the State Department of Education;25-(12) District means any school district or unified system as defined26-in section 79-4,108; 27-(13) Ensuing school fiscal year means the school fiscal year28-following the current school fiscal year; 29-(14) Equalization aid means the amount of assistance calculated to30-be paid to a local system pursuant to section 79-1008.01;31-LB142-2025-LB142-2025--3--(15) Fall membership means the total membership in kindergarten1-through grade twelve attributable to the local system as reported on the2-fall school district membership reports for each district pursuant to3-section 79-528; 4-(16) Fiscal year means the state fiscal year which is the period5-from July 1 to the following June 30; 6-(17) Formula students means: 7-(a) For state aid certified pursuant to section 79-1022, the sum of8-the product of fall membership from the school fiscal year immediately9-preceding the school fiscal year in which the aid is to be paid10-multiplied by the average ratio of average daily membership to fall11-membership for the second school fiscal year immediately preceding the12-school fiscal year in which the aid is to be paid and the prior two13-school fiscal years plus sixty percent of the qualified early childhood14-education fall membership plus tuitioned students from the school fiscal15-year immediately preceding the school fiscal year in which aid is to be16-paid minus the product of the number of students enrolled in kindergarten17-that is not full-day kindergarten from the fall membership multiplied by18-0.5; and 19-(b) For the final calculation of state aid pursuant to section20-79-1065, the sum of average daily membership plus sixty percent of the21-qualified early childhood education average daily membership plus22-tuitioned students minus the product of the number of students enrolled23-in kindergarten that is not full-day kindergarten from the average daily24-membership multiplied by 0.5 from the school fiscal year immediately25-preceding the school fiscal year in which aid was paid;26-(18) Free lunch and free milk calculated students means, using the27-most recent data available on November 1 of the school fiscal year28-immediately preceding the school fiscal year in which aid is to be paid,29-(a) for schools that did not provide free meals to all students pursuant30-to the community eligibility provision, students who individually31-LB142-2025-LB142-2025--4--qualified for free lunches or free milk pursuant to the federal Richard1-B. Russell National School Lunch Act, 42 U.S.C. 1751 et seq., and the2-federal Child Nutrition Act of 1966, 42 U.S.C. 1771 et seq., as such acts3-and sections existed on January 1, 2021, and rules and regulations4-adopted thereunder, plus (b) for schools that provided free meals to all5-students pursuant to the community eligibility provision, the greater of6-the number of students in such school who individually qualified for free7-lunch or free milk using the most recent school fiscal year for which the8-school did not provide free meals to all students pursuant to the9-community eligibility provision or one hundred ten percent of the product10-of the students who qualified for free meals at such school pursuant to11-the community eligibility provision multiplied by the identified student12-percentage calculated pursuant to such federal provision, except that the13-free lunch and free milk calculated students for any school pursuant to14-subdivision (18)(b) of this section shall not exceed one hundred percent15-of the students qualified for free meals at such school pursuant to the16-community eligibility provision; 17-(19) Full-day kindergarten means kindergarten offered by a district18-for at least one thousand thirty-two instructional hours;19-(20) General fund budget of expenditures means the total budget of20-disbursements and transfers for general fund purposes as certified in the21-budget statement adopted pursuant to the Nebraska Budget Act, except that22-for purposes of the limitation imposed in section 79-1023, the general23-fund budget of expenditures does not include any special grant funds,24-exclusive of local matching funds, received by a district;25-(21) General fund expenditures means all expenditures from the26-general fund; 27-(22) General fund operating expenditures means, for state aid28-calculated for each school fiscal year, as reported on the annual29-financial report for the second school fiscal year immediately preceding30-the school fiscal year in which aid is to be paid, the total general fund31-LB142-2025-LB142-2025--5--expenditures minus (a) the amount of all receipts to the general fund, to1-the extent that such receipts are not included in local system formula2-resources, from early childhood education tuition, summer school tuition,3-educational entities as defined in section 79-1201.01 for providing4-distance education courses through the Educational Service Unit5-Coordinating Council to such educational entities, private foundations,6-individuals, associations, charitable organizations, the textbook loan7-program authorized by section 79-734, federal impact aid, and levy8-override elections pursuant to section 77-3444, (b) the amount of9-expenditures for categorical funds, tuition paid to other school10-districts, tuition paid to postsecondary institutions for college credit,11-transportation fees paid to other districts, adult education, community12-services, redemption of the principal portion of general fund debt13-service, retirement incentive plans authorized by section 79-855, and14-staff development assistance authorized by section 79-856, (c) the amount15-of any transfers from the general fund to any bond fund and transfers16-from other funds into the general fund, (d) any legal expenses in excess17-of fifteen-hundredths of one percent of the formula need for the school18-fiscal year in which the expenses occurred, (e) expenditures to pay for19-incentives agreed to be paid by a school district to certificated20-employees in exchange for a voluntary termination of employment for which21-the State Board of Education approved an exclusion pursuant to22-subdivision (1)(h), (i), (j), or (k) of section 79-1028.01, (f)(i)23-expenditures to pay for employer contributions pursuant to subsection (2)24-of section 79-958 to the School Employees Retirement System of the State25-of Nebraska to the extent that such expenditures exceed the employer26-contributions under such subsection that would have been made at a27-contribution rate of seven and thirty-five hundredths percent or (ii)28-expenditures to pay for school district contributions pursuant to29-subdivision (1)(c)(i) or (1)(d)(i) of section 79-9,113 to the retirement30-system established pursuant to the Class V School Employees Retirement31-LB142-2025-LB142-2025--6--Act to the extent that such expenditures exceed the school district1-contributions under such subdivision that would have been made at a2-contribution rate of seven and thirty-seven hundredths percent, and (g)3-any amounts paid by the district for lobbyist fees and expenses reported4-to the Clerk of the Legislature pursuant to section 49-1483.5-For purposes of this subdivision (22) of this section, receipts from6-levy override elections shall equal ninety-nine percent of the difference7-of the total general fund levy minus a levy of one dollar and five cents8-per one hundred dollars of taxable valuation multiplied by the assessed9-valuation for school districts that have voted pursuant to section10-77-3444 to override the maximum levy provided pursuant to section11-77-3442; 12-(23) Income tax liability means the amount of the reported income13-tax liability for resident individuals pursuant to the Nebraska Revenue14-Act of 1967 less all nonrefundable credits earned and refunds made;15-(24) Income tax receipts means the amount of income tax collected16-pursuant to the Nebraska Revenue Act of 1967 less all nonrefundable17-credits earned and refunds made; 18-(25) Limited English proficiency students means the number of19-students with limited English proficiency in a district from the most20-recent data available on November 1 of the school fiscal year preceding21-the school fiscal year in which aid is to be paid plus the difference of22-such students with limited English proficiency minus the average number23-of limited English proficiency students for such district, prior to such24-addition, for the three immediately preceding school fiscal years if such25-difference is greater than zero; 26-(26) Local system means a unified system or a school district;27-(27) Low-income child means a child under nineteen years of age28-living in a household having an annual adjusted gross income for the29-second calendar year preceding the beginning of the school fiscal year30-for which aid is being calculated equal to or less than the maximum31-LB142-2025-LB142-2025--7--household income pursuant to sections 9(b)(1) and 17(c)(4) of the Richard1-B. Russell National School Lunch Act, 42 U.S.C. 1758(b)(1) and 42 U.S.C.2-1766(c)(4), respectively, and sections 3(a)(6) and 4(e)(1)(A) of the3-Child Nutrition Act of 1966, 42 U.S.C. 1772(a)(6) and 42 U.S.C. 1773(e)4-(1)(A), respectively, as such acts and sections existed on January 1,5-2021, for a household of that size that would have allowed the child to6-meet the income qualifications for free meals during the school fiscal7-year immediately preceding the school fiscal year for which aid is being8-calculated; 9-(28) Low-income students means the number of low-income children10-within the district multiplied by the ratio of the formula students in11-the district divided by the total children under nineteen years of age12-residing in the district as derived from income tax information;13-(29) Most recently available complete data year means the most14-recent single school fiscal year for which the annual financial report,15-fall school district membership report, annual statistical summary,16-Nebraska income tax liability by school district for the calendar year in17-which the majority of the school fiscal year falls, and adjusted18-valuation data are available; 19-(30) Poverty students means the unadjusted poverty students plus the20-difference of such unadjusted poverty students minus the average number21-of poverty students for such district, prior to such addition, for the22-three immediately preceding school fiscal years if such difference is23-greater than zero; 24-(31) Qualified early childhood education average daily membership25-means the product of the average daily membership of students who will be26-eligible or required to attend kindergarten the following school year and27-are enrolled in an early childhood education program approved by the28-department pursuant to section 79-1103 for such school district for such29-school year multiplied by the ratio of the actual instructional hours of30-the program divided by one thousand thirty-two if: (a) The program is31-LB142-2025-LB142-2025--8--receiving a grant pursuant to such section for the third year; (b) the1-program has already received grants pursuant to such section for three2-years; or (c) the program has been approved pursuant to subsection (5) of3-section 79-1103 for such school year and the two preceding school years,4-including any such students in portions of any of such programs receiving5-an expansion grant; 6-(32) Qualified early childhood education fall membership means the7-product of membership on October 1 of each school year of students who8-will be eligible or required to attend kindergarten the following school9-year and are enrolled in an early childhood education program approved by10-the department pursuant to section 79-1103 for such school district for11-such school year multiplied by the ratio of the planned instructional12-hours of the program divided by one thousand thirty-two if: (a) The13-program is receiving a grant pursuant to such section for the third year;14-(b) the program has already received grants pursuant to such section for15-three years; or (c) the program has been approved pursuant to subsection16-(5) of section 79-1103 for such school year and the two preceding school17-years, including any such students in portions of any of such programs18-receiving an expansion grant; 19-(33) Regular route transportation means the transportation of20-students on regularly scheduled daily routes to and from the schools such21-students attend; 22-(34) Reorganized district means any district involved in a23-consolidation and currently educating students following consolidation;24-(35) School year or school fiscal year means the fiscal year of a25-school district as defined in section 79-1091; 26-(36) Sparse local system means a local system that is not a very27-sparse local system but which meets the following criteria:28-(a)(i) Less than two students per square mile in the county in which29-each high school is located, based on the school district census, (ii)30-less than one formula student per square mile in the local system, and31-LB142-2025-LB142-2025--9--(iii) more than ten miles between each high school and the next closest1-high school on paved roads; 2-(b)(i) Less than one and one-half formula students per square mile3-in the local system and (ii) more than fifteen miles between each high4-school and the next closest high school on paved roads;5-(c)(i) Less than one and one-half formula students per square mile6-in the local system and (ii) more than two hundred seventy-five square7-miles in the local system; or 8-(d)(i) Less than two formula students per square mile in the local9-system and (ii) the local system includes an area equal to ninety-five10-percent or more of the square miles in the largest county in which a high11-school is located in the local system; 12-(37) Special education means specially designed kindergarten through13-grade twelve instruction pursuant to section 79-1125, and includes14-special education transportation; 15-(38) Special grant funds means the budgeted receipts for grants,16-including, but not limited to, categorical funds, reimbursements for17-wards of the court, short-term borrowings including, but not limited to,18-registered warrants and tax anticipation notes, interfund loans,19-insurance settlements, and reimbursements to county government for20-previous overpayment. The state board shall approve a listing of grants21-that qualify as special grant funds; 22-(39) State aid means the amount of assistance paid to a district23-pursuant to the Tax Equity and Educational Opportunities Support Act;24-(40) State board means the State Board of Education;25-(41) State support means all funds provided to districts by the26-State of Nebraska for the general fund support of elementary and27-secondary education; 28-(42) Statewide average basic funding per formula student means the29-statewide total basic funding for all districts divided by the statewide30-total formula students for all districts; 31-LB142-2025-LB142-2025--10--(43) Statewide average general fund operating expenditures per1-formula student means the statewide total general fund operating2-expenditures for all districts divided by the statewide total formula3-students for all districts; 4-(44) Teacher has the definition found in section 79-101;5-(45) Tuition receipts from converted contracts means tuition6-receipts received by a district from another district in the most7-recently available complete data year pursuant to a converted contract8-prior to the expiration of the contract; 9-(46) Tuitioned students means students in kindergarten through grade10-twelve of the district whose tuition is paid by the district to some11-other district or education agency; 12-(47) Unadjusted poverty students means the greater of the number of13-low-income students or the free lunch and free milk calculated students14-in a district; and 15-(48) Very sparse local system means a local system that has:16-(a)(i) Less than one-half student per square mile in each county in17-which each high school is located based on the school district census,18-(ii) less than one formula student per square mile in the local system,19-and (iii) more than fifteen miles between the high school and the next20-closest high school on paved roads; or 21-(b)(i) More than four hundred fifty square miles in the local22-system, (ii) less than one-half student per square mile in the local23-system, and (iii) more than fifteen miles between each high school and24-the next closest high school on paved roads. 25-Sec. 2. Original section 79-1003, Reissue Revised Statutes of26-Nebraska, is repealed. 27-LB142-2025-LB142-2025--11-+Revision: 00+ FISCAL NOTE+ LEGISLATIVE FISCAL ANALYST ESTIMATE++ESTIMATE OF FISCAL IMPACT – STATE AGENCIES (See narrative for political subdivision estimates)+ FY 2025-26 FY 2026-27+EXPENDITURES REVENUE EXPENDITURES REVENUE+GENERAL FUNDS+CASH FUNDS+FEDERAL FUNDS+OTHER FUNDS+TOTAL FUNDS++Any Fiscal Notes received from state agencies and political subdivisions are attached following the Legislative Fiscal Analyst Estimate.++LB142 amends §79-1003 to redefine a term within the Tax Equity and Educational Opportunities Support Act (TEEOSA).++Beginning with the FY2026-27 TEEOSA calculation, the one hundred ten percent multiplier that is used to increase the free lunch+counts within the schools that are utilizing the community eligibility provision (CEP) is eliminated.++FISCAL IMPACT:+The impact to the TEEOSA calculation cannot be determined at this time but is estimated to be nominal.++ADMINISTRATIVE SERVICES STATE BUDGET DIVISION: REVIEW OF AGENCY & POLT. SUB. RESPONSE+LB: 142 AM: AGENCY/POLT. SUB: Nebraska Department of Education+REVIEWED BY: Kimberly Burns DATE: 02/27/2025 PHONE: (402) 471-4171+COMMENTS: Concur with the Department of Education’s estimate of no fiscal impact for their agency and a minimal, but+indeterminate, potential fiscal impact for the State from LB 142.++ADMINISTRATIVE SERVICES STATE BUDGET DIVISION: REVIEW OF AGENCY & POLT. SUB. RESPONSE+LB: 142 AM: AGENCY/POLT. SUB: Department of Revenue+REVIEWED BY: Kimberly Burns DATE: 02/27/2025 PHONE: (402) 471-4171+COMMENTS: The Department of Revenue’s estimate of minimal fiscal impact for their agency resulting+from LB 142 appears reasonable.++Please complete ALL (5) blanks in the first three lines. 2025+LB(1) 142 FISCAL NOTE++State Agency OR Political Subdivision Name: (2) Nebraska Department of Education++Prepared by: (3) Bryce Wilson Date Prepared: (4) 1/16/25 Phone: (5) 402-471-4320++ ESTIMATE PROVIDED BY STATE AGENCY OR POLITICAL SUBDIVISION++ FY 2025-26 FY 2026-27+ EXPENDITURES REVENUE EXPENDITURES REVENUE+GENERAL FUNDS+CASH FUNDS+FEDERAL FUNDS+OTHER FUNDS+TOTAL FUNDS++Explanation of Estimate:++LB 142 eliminates the 1.1 multiplier used to increase the free lunch counts at schools that have elected the+community eligibility provision (CEP).++This change would be implemented in the 2026/27 TEEOSA certification so the actual impact cannot be+determined but when applied to the current year TEEOSA calculation the impact reduced the total TEEOSA+funding amount by just over $60 thousand and only changed one districts poverty allowance amount. The overall+impact to the State would be very minimal.++No fiscal cost to NDE.++_____________________________________________________________________________________________________ _+BREAKDOWN BY MAJOR OBJECTS OF EXPENDITURE+Personal Services:+POSITION TITLE+NUMBER OF POSITIONS+25-26 26-27+2025-26+EXPENDITURES+2026-27+EXPENDITURES++Benefits………………………………...……+Operating…………………………...……….+Travel………………………………………..+Capital outlay…………………...…………..+Aid…………………………………………...+Capital improvements……………………...+ TOTAL……………………………….....++LB 0142 Fiscal Note 2025+ State Agency Estimate+State Agency Name: Department of Revenue Date Due LFO:+Approved by: James R. Kamm Date Prepared: 02/26/2025 Phone: 471-5896+ FY 2025-2026 FY 2026-2027 FY 2027-2028+ Expenditures Revenue Expenditures Revenue Expenditures Revenue+General Funds $ 0 $ 0 $ 0+Cash Funds+Federal Funds+Other Funds+Total Funds $ 0 $ 0 $ 0++ Major Objects of Expenditure+ 25-26 26-27 27-28 25-26 26-27 27-28+Class Code Classification Title FTE FTE FTE Expenditures Expenditures Expenditures++Benefits………………………………………………………………………………………………………….+Operating Costs………………………………………………………………………………………………….+Travel……………………………………………………………………………………………………………+Capital Outlay…………………………………………………………………………………………………...+Capital Improvements…………………………………………………………………………………………...+Total…………………………………………………………………………………………………………….++LB 142 amend the definition of TEEOSA for “Free lunch and free milk calculated students” as follows: (a) for+schools that did not provide free lunch to all students, students who individually qualify for free lunches or free+milk under federal lunch programs plus (b) for schools that provide free meals to all students, the greater of+students who individually qualified for free lunches or free milk for the most recent fiscal year when the school+did not provide free lunch to all students or the product of number of students who qualify for free lunches per+the community eligibility provisions at that school and identified student percent as determined by such federal+provision and that percentage cannot exceed 100% of students.++The operative date for LB 142 is three months after adjournment of the Legislature.++LB142 alters the state aid value of TEEOSA fund, which will have a corresponding impact on General Fund+expenditures.++It is estimated that there will be minimal costs to DOR to implement this bill
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