Reactivation of enterprise zones advances

Senators gave first-round approval March 20 to a bill that would reactivate and modernize an economic development program in Nebraska.

LB800, introduced by Omaha Sen. Heath Mello, would reauthorize and update the Enterprise Zone Act. He said the original enterprise zones, implemented in 1993, were designed to expire after a decade and the act has gone unused since that time.

Mello said LB800 would be a positive step toward encouraging economic development in areas of the state with high poverty levels and high unemployment rates.

“[This bill] is an attempt to focus existing and somewhat limited resources where we think the need is the greatest,” Mello said.

Under the bill, the state Department of Economic Development would designate five areas as enterprise zones, with no more than one zone in a city of the metropolitan class and no more than one zone in a city of the primary class.

An enterprise zone would be required to meet two of the following criteria:
• the area’s population had decreased by 10 percent;
• the average unemployment is at least 200 percent of the state average; or
• the average poverty rate exceeds 20 percent for the total federal census tract.

Projects located within a designated enterprise zone would be given preference for various business incentive and grant programs. Enterprise zone designations would last for 10 years and projects within the zones would receive preference for funding from the following:
• Job Training Cash Fund;
• Business Innovation Act;
• Affordable Housing Trust Fund;
• Site and Building Development Fund; and
• Nebraska Advantage Microenterprise Tax Credit Act.

A Business and Labor Committee amendment, adopted 27-0, removed the Nebraska Advantage Microenterprise Tax Credit Act from the bill’s provisions.

Omaha Sen. Steve Lathrop, chairperson of the committee, said the state Department of Revenue expressed concerns about the ability to apply preferences under the act.

Sen. Tanya Cook of Omaha spoke in support of the bill, calling it an important economic development tool.

“The creation of enterprise zones across the state will encourage investment and economic growth in communities in need,” Cook said.

The bill advanced to select file on a 29-0 vote.