Bill Summary, LB 840 (1995)


LB 840 provides a financial incentive for school districts to reorganize.  Prior to the enactment of LB 840, the formulas for distributing state aid to reorganized school districts were disincentives to reorganization.  Generally, reorganized school districts receive less state aid than individual districts receive prior to reorganization.  (This is due in part to the lower cost per student which exists after reorganization.)


LB 840 provides a “hold harmless” provision for reorganized school districts which reorganize on or before June 30, 2005.  The hold harmless provision provides that in the base year (which is the first year in which a reorganized district is viewed as a single district for the calculation of state aid), the district will receive the greater of (1) 100 percent of the state aid (or portion thereof) calculated for the individual districts involved in the reorganization in the year prior to the base year or (2) the amount the reorganized district would receive under standard state aid calculations.  The hold harmless provision is then gradually phased out over the next three years following the base year.


LB 840 passed with the emergency clause 47-1 and was approved by the Governor on June 13, 1995.