Nameplate capacity tax distribution to community colleges approved

Lawmakers passed a bill May 30 meant to address an unintended consequence of a recent change in the way community colleges are funded.

Owners of private renewable energy generation facilities pay a nameplate capacity tax in lieu of personal property taxes on equipment used to generate electricity. Counties where the infrastructure is located distribute the revenue to local political subdivisions based on the amount of property taxes they levy.

In 2023, lawmakers eliminated most of community colleges’ property tax levy authority and replaced the lost revenue with state funding. In doing so, however, they inadvertently reduced nameplate capacity tax revenue to community colleges.

LB50, sponsored by Niobrara Sen. Barry DeKay, requires counties to allocate 5% of nameplate capacity tax revenue to the community college area in which the renewable energy generation facility is located before distributing the rest to other political subdivisions.

The bill passed on a vote of 45-3.