PREPARED BY: John Wiemer
LB 242 DATE PREPARED: March 04, 2025
PHONE: 402-471-0051
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.
LB 242 amends the definition of allowable growth under section 13-518.
The bill amends the Property Tax Growth Limitation Act.
Under the bill, the preli minary property tax request authority for each p olitical subdivision shall be the amount of property taxes levied by
the county board of equalization pursuant to section 77- 1601 for such political subdivision in the prior fiscal year, less the sum of
exceptions utilized in the prior year pursuant to subdivisions (1) to (9) of section 13- 3404.
In addition to the preliminary property tax request authority, the political subdivision ’s property tax request authority may be increased
by:
• The product of the amount of property taxes levied in the prior year , less the sum of exceptions utilized in the prior year
pursuant to subdivisions (1) and (2) of section 13-3404 and the political subdivision’s growth percentage; and
• The product of the amount of property taxes levied in the prior yea r, less the sum of exceptions utilized in the prior year
pursuant to subdivisions (1) and (2) of section 13-3404 and the greater of zero or the inflation percentage.
The bill amends section 13-3404 to add subsections (8) through (10) to what a political subdiv ision may increase its property tax
request authority by over the amount determined under section 13- 3403.
Section 13-3405 is amended regarding elections for a political subdivision increasing its property tax request authority over the amount
determined under section 13- 3403. Under the bill, upon receipt of such recommendation or legal voter petition, the county clerk or
election commissioner shall place such issue on the ballot at the next regularly scheduled election or a special election called for suc h
purpose.
Section 13-3406 is amended to add that a political subdivision may choose to convert its accumulated amount of unused restricted
funds authority existing on June 30, 2025, as determined in accordance with section 13-521, into unused property tax request authority.
The amount converted may then be used by the political subdivision as unused property tax request authority for fiscal years beginning
on or after July 1, 2025. The amount converted shall not exceed 5% of the total property taxes levied for the political subdivision in
calendar year 2024.
The bill removes requirements for occupation taxes under section 18- 1208 for cities of the metropolitan class, primary class, first class,
second class, and villages. Section 18-1208 is also amended s o that no later than 90 days after the end of the fiscal year, each
municipality that imposes a new occupation tax or increase s the rate of an existing occupation tax on or after the effective date of the
bill shall provide an annual report on the collection and use of such occupation tax.
The bill amends section 77-1701 regarding what is to be included on county tax statements.
The bill amends the School District Property Tax Relief Act.
Under the bill, to determine the amount of the property tax credit for each parcel, the county treasurer shall multiply the amount
disbursed to the county under subsection (4) of this section by the ratio of the school district taxes levied in the current year on the
parcel to the school district taxes levied in the current year on all real property in the county. This is a change from prior year language
under current law. The amount so determined shall be the property tax credit for the parcel.
CONTINUED ON PAGE 2 LB 242
PAGE 2
The bill also amends the Act so that , after retaining 1% of the amount received by the county for costs, the county treasurer shall
disburse the remaining funds.
The bill contains the emergency clause.
The Auditor of Public Accounts estimates that it can handle changes under this bill within current resources. There is no basis to
disagree with this estimate.
The Department of Revenue estimates the bill will have no impact on General Fund revenues and no cost to it to implement the bill.
There is no basis to disagree with this estimate.
The Lancaster County T reasurer and the Nebraska Association of County Officials (NACO) estimate additional revenue to counties
from the 1% fee added under the bill regarding the pr operty tax credit connect ed to school districts. NACO also estimates a decrease i n
costs for counties connected to programming as a result of the bill.
ADMINISTRATIVE SERVICES STATE BUDGET DIVISION: REVIEW OF AGENCY & POLT. SUB. RESPONSE
LB: 242 AM: AGENCY/POLT. SUB: Depa rtment of Revenue
REVIEWED BY: Ryan Yang DATE: 3/4/2025 PHONE: (402) 471- 4178
COMMENTS: The Department of Revenue assessment of no fiscal impact from LB 242 appears reasonable.
ADMINISTRATIVE SERVICES STATE BUDGET DIVISION: REVIEW OF AGENCY & POLT. SUB. RESPONSE
LB: 242 AM: AGENCY/POLT. SUB: Lancaster County Treasurer
REVIEWED BY: Ryan Yang DATE: 1/23/2025 PHONE: (402) 471-4178
COMMENTS: No basis to disagree with the Lancaster County Treasurer assessment of a fiscal impact from LB 242.
ADMINISTRATIVE SERVICES STATE BUDGET DIVISION: REVIEW OF AGENCY & POLT. SUB. RESPONS E
LB: 242 AM: AGENCY/POLT. SUB: Nebraska Association of County Officials
REVIEWED BY: Ryan Yang DATE: 1/23/2025 PHONE: (402) 471-4178
COMMENTS: No basis to disagree with the Nebraska Association of County Officials assessment of a fiscal impact
from LB 242.
ADMINISTRATIVE SERVICES STATE BUDGET DIVISION: REVIEW OF AGENCY & POLT. SUB. RESPONSE
LB: 242 AM: AGENCY/POLT. SUB: Nebraska Auditor of Public Accounts
REVIEWED BY: Ryan Yang DATE: 1/16/2025 PHONE: (402) 471-4178
COMMENTS: No basis to disagree with the Nebraska Auditor of Public Accounts assessment of a manageable fiscal impact
from LB 242.
Please complete ALL (5) blanks in the first three lines. 2025
LB
(1) 242 FISCAL NOTE
State Agency OR Political Subdivision Name:
(2)
Lancaster County, Nebraska
Prepared by:
(3) Dennis Meyer Date Prepared:
(4)
1/21/2025 Phone:
(5)
402-441-6869
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:
LB34, recently passed during a special session, has yet to be fully implemented, and its effects have not been realized or
analyzed in practice. While LB34 introduces mechanisms for property tax growth limitations and adjustments tied to
growth and inflation percentages, the real-world financial impact on Lancaster County remains uncertain until it is
actualized and operational.
LB242 builds upon the property tax framework by broadening the allowable growth factors to include improvements to
real property, annexation, changes in property use, and increases in personal property valuation. It also introduces
additional flexibility by allowing adjustments for public safety agreements, behavioral health and substance abuse
prevention, and matching state and federal grants. However, similar to LB34, LB242 requires voter approval to exceed the
property tax lid, which could delay implementation of these provisions.
Feature LB34 (2024) LB242
Growth Factors
Growth percentage,
inflation.
Broad factors including
construction, annexation, and
personal property.
Public Safety Flexibility
General budgetary
flexibility.
Adjustments for public safety
threats and agreements.
Voter Approval for Exceeding Lid
Required for increases
beyond limit.
Required for increases beyond
limit.
Unused Authority Carryover
Allowed (5% cap).
Allowed (5% cap) with
restricted fund conversion.
Specific Adjustments for Grants
Not mentioned.
Includes matching state and
federal grants.
_____________________________________________________________________________________________________ _
BREAKDOWN BY MAJOR OBJECTS OF EXP ENDITURE
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……………………………… .....
Please complete ALL (5) blanks in the first three lines. 2025
LB
(1) 242 FISCAL NOTE
State Agency OR Political Subdivision Name:
(2)
Lancaster County Treasurer
Prepared by:
(3) Rachel Garver Date Prepared:
(4)
Jan. 22, 2025 Phone:
(5)
402-441-7425
ESTIMATE PROVIDED BY STATE AGENCY OR POLITICAL SUBDIVISION
FY 2025-26 FY 2026-27
EXPENDITURES REVENUE EXPENDITURES REVENUE
GENERAL FUNDS
$1,086,276 $1,125,270
CASH FUNDS
FEDERAL FUNDS
OTHER FUNDS
TOTAL FUNDS
$1,086,276 $1,125,270
Explanation of Estimate:
The revenue is the one percent fees retained by the county treasurer from the disbursement amount of the
school tax credits from the State.
It was calculated based on relief grant number s from 2024. Amount allocated to Lancaster County:
$107,781,084 less the amount calculated to date to be returned to the State : $3,331,475, netting in
$104,449,609. Which if Lancaster was allowed to retain a one percent fee it would be $1 ,044,496. The
calculation for 25 -26 uses a four percent growth in the amount of relief granted less the approximate three
percent returned to the State. The calculation for 26-27 was based a slightly less than a 3.6 percent growth in
the relief granted.
_____________________________________________________________________________________________________ _
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……………………………… .....
Please complete ALL (5) blanks in the first three lines. 2025
LB
(1) 242 FISCAL NOTE
State Agency OR Political Subdivision Name:
(2)
Nebraska Association of County Officials
Prepared by:
(3) Elaine Menzel Date Prepared:
(4)
1/21 /2025 Phone:
(5)
402.434.5660
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:
LB242 makes several technical changes to LB34 from last year’s special session. First, it harmonizes the
definition of growth in the Budget Act with the definitions of growth in the Property Tax Growth Limitation Act
and the Property Tax Request Act. It also makes a technical change to the calculation of any allowable
increase to the political subdivision’s preliminary property tax request authority. It further provides exceptions to
the property tax cap for: the amount of property taxes budgeted for substance abuse prevention and behavioral
health; property taxes budgeted for matching state and federal grants; and property taxes needed to replace
any revenue streams eliminated or reduced through legislative action. It also provides a transition for unused
budget authority under the former lid on restricted funds to unused authority under the property tax cap. It
clarifies how to calculate the amount of property taxes budgeted to fund public safety services, as that amount
appears on the property tax statement. As a final matter, it makes explicit that the county treasurer retains 1%
of the credits distributed under the School Property Tax Property Tax Relief Act and provides for application of
credits determined by the prior year’s school property tax levies to taxes levied on parcels in the current year.
The treasurer’s collection fee is 1% of a statewide distribution estimated to be $750 million in the 2025 property
tax year. This would represent $7.5 million in commissions for counties statewide that would go to the county
general fund. Changing the distribution of credits to taxes levied on parcels in the current year instead of the
prior year will result in not having to program and sort from the prior year’s tax cycle. In 2024, such
programming could have cost counties $18,000 statewide. _____________________________________________________________________________________________________ _
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 0242 Fiscal Note 2025
State Agency Estimate
State Agency Name: Department of Revenue Date Due LFO:
Approved by: James R. Kamm Date Prepared: 02/28/2025 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 242 amends the Property Tax Growth Limitation Act and changes how a political subdivision can increase its
property tax authority by:
1. The product of (a) the amount of property taxes levied in the prior year less the sum of exceptions used in
the prior year for the amount of property taxes budgeted for approved bonds and needed to respond to an
emergency in the prior year and (b) the growth percentage of the political subdivision; and
2. The product of (a) the amount of property taxes levied in the prior year less the sum of exceptions used in
the prior year for the amount of property taxes budgeted for approved bonds and needed to respond to an
emergency in the prior year and (b) the greater of zero or the inflation percentage.
LB 242 adds three additional exceptions allowing a political subdivision to increase its property tax request
authority over the limit designated above by the amount of property taxes:
1. Budgeted for substance abuse prevention, behavioral health, and opioid use prevention;
2. Budgeted for matching state and federal grants;
3. Needed to replace any revenue stream collected in the prior year that was eliminated or reduced through
legislative action.
LB 242 removes the requirement for a political subdivision to hold an election to increase its property tax request
authority on a certain date when it’s an odd numbered year. Additionally, the bill adds the ability for a political
subdivision to convert its unused restricted funds as of June 30, 2025, into unused property tax request authority
starting in fiscal years beginning July 1, 2025, with a limitation of converted authority not exceeding 5% of
property taxes levied by the political subdivision in calendar year 2024.
The bill removes requirements for imposing an occupation tax for metropolitan, primary class, first and second-
class cities.
On a property tax statement, LB 242 removes the requirement to include the levy rate for each political subdivision
to fund public safety services and now requires the property taxes due for each political subdivision to fund public
safety services no matter if the amount is an exception to the political subdivision’s property tax request authority.
The bill allows the county treasurer to now keep 1% of the distributed amount. LB 0242 page 2 Fiscal Note 2025
Finally, LB 242 makes changes to the credits received under the School, District Property Tax Relief Act by
changing how county treasurers determine the amount of property tax credits that are disbursed to each parcel.
Currently, the calculation is multiplying the credit amount distributed to the county by ratio of school district
taxes levied in the prior year on the parcel to the school district taxes levied in the prior year on all real property
in the county. LB 242 changes the ratio from being based on the school district taxes levied in the prior year to
the school district taxes levied in the current year.
This bill contains an emergency clause and becomes law upon enactment.
It is estimated that LB 242 will have no impact on General Fund revenues.
It is estimated that there will be no cost to the Department of Revenue to implement this bill.
Please complete ALL (5) blanks in the first three lines. 2025
LB
(1) 242 FISCAL NOTE
State Agency OR Political Subdivision Name:
(2)
Nebraska Auditor of Public Accounts
Prepared by:
(3) Craig Kubicek Date Prepared:
(4)
1/15/2025 Phone:
(5)
402-326-3063
ESTIMATE PROVIDED BY STATE AGENCY OR POLITICAL SUBDIVISION
FY 2025-26 FY 2026-27
EXPENDITURES REVENUE EXPENDITURES REVENUE
GENERAL FUNDS
$0 $0
CASH FUNDS
$0 $0
FEDERAL FUNDS
$0 $0
OTHER FUNDS
$0 $0
TOTAL FUNDS
$0 $0
Explanation of Estimate:
If passed, we will handle such changes within our current resources.
_____________________________________________________________________________________________________ _
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……………………………… .....