79-3501.

State lottery funds for education; distribution; Nebraska Education Improvement Fund; created; use; investment; state lottery funds; reports; Auditor of Public Accounts; duties.

(1) For fiscal years through fiscal year 2023-24, the money available to be used for education pursuant to subdivision (3)(b) of section 9-812 shall be transferred to the Nebraska Education Improvement Fund.

(2) For fiscal years 2024-25 through 2028-29, the money available to be used for education pursuant to subdivision (3)(b) of section 9-812 shall be transferred as follows:

(a) Eight percent to the Behavioral Training Cash Fund;

(b) Two percent to the College Pathway Program Cash Fund;

(c) Seven percent to the Community College Gap Assistance Program Fund;

(d) Ten percent to the Department of Education Innovative Grant Fund;

(e) Three percent to fund distance education incentives pursuant to section 79-1337;

(f) One percent to the Door to College Scholarship Fund;

(g) Eight percent to the Excellence in Teaching Cash Fund;

(h) One and one-half percent to the Expanded Learning Opportunity Grant Fund;

(i) One and one-half percent to the Mental Health Training Cash Fund; and

(j) Fifty-eight percent to the Nebraska Opportunity Grant Fund.

(3) For fiscal year 2029-30 and each fiscal year thereafter, the money available to be used for education pursuant to subdivision (3)(b) of section 9-812 shall be transferred as the Legislature may direct.

(4)(a) The Nebraska Education Improvement Fund is created. The fund shall consist of money transferred pursuant to subsection (1) of this section and any other funds transferred by the Legislature. The fund shall be allocated, after actual and necessary administrative expenses, as provided in this subsection for fiscal years 2016-17 through 2023-24. A portion of each allocation for fiscal year 2023-24 may be retained by the agency to which the allocation is made or the agency administering the fund to which the allocation is made for actual and necessary expenses incurred by such agency for administration, evaluation, and technical assistance related to the purposes of the allocation, except that no amount of the allocation to the Nebraska Opportunity Grant Fund may be used for such purposes.

(b) For fiscal years 2017-18 through 2023-24, an amount equal to ten percent of the revenue received by the Nebraska Education Improvement Fund in the prior fiscal year shall be retained in the fund at all times plus any interest earned during the current fiscal year. The balance of the fund on July 26, 2024, less three percent of the money received for the fourth quarter of fiscal year 2023-24, shall be transferred to the Behavioral Training Cash Fund.

(c) For fiscal year 2023-24, the Nebraska Education Improvement Fund shall be allocated as follows:

(i) One percent of the allocated funds to the Expanded Learning Opportunity Grant Fund to carry out the Expanded Learning Opportunity Grant Program Act;

(ii) Seventeen percent of the allocated funds to the Department of Education Innovative Grant Fund to be used for competitive innovation grants pursuant to section 79-1054;

(iii) Nine percent of the allocated funds to the Community College Gap Assistance Program Fund to carry out the community college gap assistance program;

(iv) Eight percent of the allocated funds to the Excellence in Teaching Cash Fund to carry out the Excellence in Teaching Act;

(v) Sixty-two percent of the allocated funds to the Nebraska Opportunity Grant Fund to carry out the Nebraska Opportunity Grant Act in conjunction with appropriations from the General Fund; and

(vi) Three percent of the allocated funds to fund distance education incentives pursuant to section 79-1337.

(d) For fiscal year 2029-30 and each fiscal year thereafter, the Nebraska Education Improvement Fund shall be allocated as the Legislature may direct.

(e) Any money in the fund available for investment shall be invested by the state investment officer pursuant to the Nebraska Capital Expansion Act and the Nebraska State Funds Investment Act.

(5) A portion of each transfer pursuant to subdivisions (2)(c), (e), (f), (g), (h), and (i) of this section may be retained by the agency administering the fund to which such transfer is made for actual and necessary expenses incurred by such agency for administration, evaluation, and technical assistance related to the purposes of the transfer.

(6)(a) On or before September 20, 2022, and on or before each September 20 thereafter, (i) any department or agency receiving a transfer or acting as the administrator for a fund receiving a transfer pursuant to subsection (2) or (4) of this section, (ii) any recipient or subsequent recipient of money from any such fund, and (iii) any service contractor responsible for managing any portion of any such fund or any money disbursed from any such fund on behalf of any entity shall prepare and submit an annual report to the Auditor of Public Accounts in a manner prescribed by the auditor for the immediately preceding July 1 through June 30 fiscal year detailing information regarding the use of such fund or such money.

(b) The Auditor of Public Accounts shall annually compile a summary of the annual reports received pursuant to subdivision (6)(a) of this section, any audits related to transfers pursuant to subsection (2) or (4) of this section conducted by the Auditor of Public Accounts, and any findings or recommendations related to such transfers into a consolidated annual report and shall submit such consolidated annual report electronically to the Legislature on or before January 1, 2023, and on or before each January 1 thereafter.

(c) For purposes of this subsection, recipient, subsequent recipient, or service contractor means a nonprofit entity that expends funds transferred pursuant to subsection (2) or (4) of this section to carry out a state program or function, but does not include an individual who is a direct beneficiary of such a program or function.

(7) On or before December 31, 2027, the Education Committee of the Legislature shall electronically submit recommendations to the Clerk of the Legislature regarding how the money used for education from the State Lottery Operation Trust Fund should be allocated to best advance the educational priorities of the state for the five-year period beginning with fiscal year 2029-30.