Additional economic development disclosure advanced

Businesses would be required to disclose additional information before applying for certain local economic development programs under a bill advanced by lawmakers Feb. 23.

The provisions of LB1059, introduced by Bellevue Sen. Sue Crawford, would apply to businesses seeking economic development incentives under the Local Municipal Economic Development Act or contracts using tax increment financing (TIF).

Crawford said the bill is designed to address the intersection between state incentives and local development incentives. She said state tax credits can include a refund of a municipality’s local option sales tax, which is not always evident to a municipality before awarding local incentives for the same project.

“In some cases, municipalities have gone months without local option sales tax revenue because of those refunds,” she said. “It is critical that municipalities facing a decision to award local development incentives know if state incentives for the same project would force them to lose [that revenue.]”

Before applying for special incentives, a business must certify:
• whether it has filed or intends to file an application to receive tax incentives under the Nebraska Advantage Act for the same project;
• whether such application includes or will include a refund of the municipality’s local option sales tax revenue;
• a good faith estimate of the total amount of tax incentives the business expects to receive under the Nebraska Advantage Act for any application; and
• whether such application has been approved.

An Urban Affairs Committee amendment, adopted 28-0, incorporated provisions of two related bills.

LB860, originally introduced by Venango Sen. Dan Hughes, would authorize a municipality to use funds from a Local Municipal Economic Development plan for workforce housing. Currently funds from such plans may be used only for low- and moderate-income housing.

Lincoln Sen. Colby Coash supported the bill and amendment, saying there already is precedent for making changes to existing Local Option Municipal Economic Development plans.

“These plans are one of the most effective tools we’ve given municipalities to encourage growth and development,” Coash said. “The Legislature has continually added things that become qualifying projects under the process which weren’t considered when the city initially went to the voters and asked for those funds.”

Originally introduced by Lincoln Sen. Matt Hansen, LB808 would allow a municipality to amend an existing Local Municipal Economic Development plan to add or remove a qualifying business if recommended by its citizen advisory review committee. The provisions would require a public hearing and a supermajority vote—two-thirds of members—by the municipality’s governing body.

Columbus Sen. Paul Schumacher said the provisions of LB808 were disingenuous to voters who approved only specific language and projects when approving a local option sales tax and were promised a popular vote to approve future changes. He introduced an amendment that would have required a unanimous vote by a municipality’s governing body, rather than a supermajority.

“We’re replacing a vote of the people here with a vote of a city council or a citizen advisory committee,” he said. “That’s not the deal that was originally made with the voters when they initially approved the language. I don’t think taking voters out of the loop is a good idea.”

The Schumacher amendment failed on a 12-18 vote.

Senators advanced the bill to select file on a 28-2 vote.