LB 1114 (1996) - Property Tax Levy Limitations

LB 1114 established various maximum property tax levy limits for units of local government in Nebraska. Except as otherwise provided in sections 1 through 3 of LB 1114, the following levy limits apply:

(1) School Districts: Beginning with FY1998-99 and ending after FY2000-01, $1.10 per $100 of taxable valuation. Beginning FY2001-02, this maximum levy limit decreases to $1.00 per $100 of taxable valuation. However, "[e]xcluded from this limitation are amounts levied to pay for sums agreed to be paid by a school district to certified employees in exchange for a voluntary termination of employment and amounts levied to pay for special building funds and sinking funds established for projects commenced prior to April 1, 1996, for construction, expansion, or alteration of school district buildings." Additionally, LB 1114 permits "federal aid school districts" (i.e., "any school district which receives ten percent or more of the revenue for its general fund budget from federal government sources pursuant to Title VIII of Public Law 103-382") to exceed the maximum levy limitation "to the extent necessary to qualify to receive federal aid ......

(2) Community Colleges: Beginning with FY1998-99 and ending after FY2000-01, $0.08 per $100 of taxable valuation. Beginning FY2001-02, this maximum levy limit decreases to $0.04 per $100 of taxable valuation.

(3) Natural Resources Districts: Beginning FY1998-99, $0.045 per $100 of taxable valuation.

(4) Educational Service Units: Beginning with FY1998-99, $0.015 per $100 of taxable valuation.

(5) Incorporated Cities and Villages: Beginning with FY1998-99, $0.45 per $100 of taxable valuation-plus an additional $0.05 per $100 of taxable valuation to provide financing for the municipality's share of revenue required under an Interlocal Cooperation Act agreement.

(6) Sanitary and Improvement Districts (SIDs): Beginning FY1998-99, $0.40 per $100 of taxable valuation for SIDs which have been in existence for more than five years. (The bill specifically provides that there is no maximum levy limit for SIDs which have been in existence for five years or less. This provision becomes operative July 1, 1998.)

(7) Counties: Beginning with FY 1998-99, $0.50 per $100 of taxable valuation. Of that amount, up to $0.05 per $100 of taxable valuation may be levied to provide financing for the county's share of revenue required under an Interlocal Cooperation Act agreement. LB 1114 also provides that a county may allocate up to $0.15 of its property tax levy authority to political subdivisions other than those listed above (eg., airport authorities and rural fire districts) "to levy taxes as authorized by law" which do not collectively exceed $0.15 per $100 of taxable valuation "on any parcel or item of taxable property."

(8) Other Political Subdivisions (e.g., Airport Authorities, Cemetery Districts, Weather Control Districts, Etc.): "All political subdivisions other than school districts, community colleges, natural resources districts, educational service units, cities, villages, counties, and sanitary and improvement districts and all county agricultural societies may levy taxes as authorized by law which are authorized by the county board and are counted in the county levy limit . . . and which do not collectively total more than $0.15 per $100 of taxable valuation on any parcel or item of taxable property, except that such limitation shall not apply to property tax levies for preexisting lease-purchase contracts approved prior to July 1, 1998, and for bonded indebtedness approved according to law and secured by a levy on property."

LB 1114 also provided that the maximum property tax levy limits "are to include all other general or special levies provided by law" and makes numerous coordinating changes throughout the statutes to reflect the new levy limit provisions.

Four general exceptions to the maximum property tax levy limits were prescribed in the bill. Three of the four exceptions were for (1) property taxes levied in connection with certain judgments, (2) bonded indebtedness, and (3) preexisting lease-purchase contracts approved before July 1, 1998.

With respect to the fourth exception, LB 1114 permitted political subdivisions to exceed the maximum levy limits "by an amount approved by a majority of registered voters voting in a primary, general, or special election at which the issue is placed before the registered voters." (A vote to exceed the levy limits "must be approved prior to September 30 of the fiscal year which is to be the first to exceed the limits.") LB 1114 also provided that, in lieu of such election procedures, any political subdivision that is not a school district, community college, natural resources district, educational service unit, city, village, county, sanitary and improvement district, or county agricultural society, "may approve a levy in excess of the limits" or "the allocation provided by a county board ... for a period of one year at a meeting of the residents of the political subdivision or village" following proper published notification of such meeting. (Ten percent or more of the registered voters residing in the political subdivision or village constitutes a quorum for purposes of taking action to exceed the limits, and a majority vote in favor of exceeding the limits will require the county board to authorize the levy as approved by the residents for the year, provided that a copy of the record vote of that action is forwarded to the county board before September 30.)

Finally, LB 1114 provided that no new weather control districts may be organized under the Weather Control Act of Nebraska on or after January 1, 1997.

LB 1114 passed 3 6-12 and was approved by the Governor on April 16,1996.