Bill
LB 249
Creates Military Impact Funding under TEOSTA, delivering per-pupil aid to districts with federally connected children; adds this funding to LSFR and sets 10 monthly payments.
LB249 Summary — Nebraska Legislature, 109th Legislature, 1st Session (Introduced Jan 14, 2025)
Overview
- Purpose: Create and integrate a new military impact funding mechanism into the Tax Equity and Educational Opportunities Support Act (TEOSTA), and adjust how local system formula resources are calculated and certified. The bill aims to compensate districts with federally connected students whose parents are on active duty, by providing targeted funding and harmonizing related formula resources and certification timing.
- Status: Notice of hearing set for January 28, 2025 (Education Committee, chaired by Senator Dave Murman). Emergency designation noted in the bill text.
- Principal Introducer: Senator Rita Sanders
Key Provisions
1) Establishment and calculation of Military Impact Funding (TEOSTA)
- Effective for school years beginning 2025-26 and each year thereafter.
- Eligibility: A school district qualifies for military impact funding if it received a basic support payment of federal impact aid under ESEA Section 7003 in the preceding school year for federally connected children (active-duty parents in the uniformed services) enrolled in the district as of the fall count.
- Per-pupil calculations:
- Federal Impact Aid per-pupil: Total federal impact aid received under ESEA Section 7003 in the prior year, divided by fall membership (excluding only federally connected children whose parents are on active duty).
- General Fund Tax Levy per-pupil: Total local property tax levy receipts for the district in the prior year, divided by fall membership (excluding federally connected children).
- Military impact funding amount: For each district, per-pupil GF levy minus per-pupil federal impact aid, multiplied by the number of federally connected children actually enrolled as of the fall count.
- Funding floor/ceiling: If the calculation yields a negative result, military impact funding for that district is zero.
2) Changes to Local System Formula Resources (LSFR) and integration with military funding
- For state aid calculations for 2025-26 onward, LSFR includes:
- Other actual receipts (per existing TEOSTA rules)
- Net option funding
- Allocated income tax funds
- Community achievement plan aid
- A specified percentage of foundation aid
- Military impact funding (new)
- Reduced by property tax refunds (per current practice)
- This expands the composition of LSFR to explicitly include military impact funding as a component of local system formula resources.
3) Certification, distribution timelines, and reporting
- Department duties (Sec. 4): By June 15, 2025 (and on that date in subsequent years) plus an earlier March deadline in each year thereafter, the department must determine the amounts to be distributed to each local system for the upcoming school year and certify these amounts to the Director of Administrative Services, the Auditor of Public Accounts, and each local system. The department must also report the certified state aid amounts to the Governor, the Appropriations Committee, and the Education Committee; reports are to be filed electronically.
- Payment schedule: Certified state aid amounts are distributed in ten roughly equal monthly payments on the last business day of each month, Sept–June, with a lump-sum payment adjustment if a monthly amount would be under $1,000.
4) Certification retroactivity and repeal
- Section 5 revises certification-related language (and references to prior-year certifications) to nullify certain pre-enactment certifications (prior to June 1, 2023) for school fiscal year 2025-26, aligning with the new funding framework.
Impacted Entities and Effects
- Affected stakeholders: Nebraska public school districts with federally connected students (active-duty military families) and districts receiving TEOSTA state aid.
- Impacts:
- Introduction of a targeted, per-pupil military impact payment that supplements or interacts with existing TEOSTA funding.
- Reconfiguration of LSFR to include military impact funding as a component, altering the calculation of overall state and local support.
- Revised certification and payment timelines to streamline and formalize funding distributions.
- Potential changes to budget planning and property tax requests at the local level due to revised LSFR composition and timing.
Timeline and Process
- Introduced: January 14, 2025
- Hearing: January 28, 2025
- Effective for fiscal year: 2025-26 and each subsequent year
- Certification/Distribution: Annually, with formal department determinations due by June 15 (and March 1 in certain years), and monthly payments thereafter.
Compiled from official sources — confirm details with the bill’s official record.
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