Bill seeks to expedite rail access projects

More funds would be available for projects outlined in a recently enacted state law under a bill considered Feb. 8 by the Appropriations Committee.

Lawmakers passed a bill in 2021, sponsored by North Platte Sen. Mike Groene, that appropriated $5 million to the Nebraska Rural Projects Act to provide matching funds from the state Department of Economic Development to cover the start-up costs of qualifying economic development projects in certain counties.

Grant funds could be used for site acquisition and preparation, utility extensions and rail spur construction for the development of a new industrial rail access business park, including expenses incurred to help an initial tenant in the manufacturing, processing, distribution or transloading trades.

LB788, introduced this year by Groene, would transfer $50 million in general funds to the Nebraska Rural Projects cash fund on May 1, 2022. The bill also would increase the limit any one project may receive from $30 million to 60 percent of the amount appropriated if that amount is more than $50 million.

The bill states legislative intent to increase the appropriation to the state Department of Economic Development from $5 million to $25 million in fiscal year 2021-22 and FY2022-23.

Groene said the changes would fully fund the act now, rather than parsing out the matching funds over a 10-year period, and allow future lawmakers to continue adding to the fund if the need arises.

“We did not expect the overwhelming interest that communities with railroad heritages would show in the Nebraska Rural Projects Act,” Groene said, adding that four communities applied for $73 million in funding on the day that DED began accepting applications.

He said LB788 would allow rural communities to diversify their economies and weather the ups and downs of the agricultural industry by branching out to attract small and medium manufacturing companies.

Representatives from several rural economic development organizations testified in support of the proposal, saying they have projects ready for development, but were edged out in the application process.

Megan Skiles, executive director of the Greater Fremont Development Council testified in support of the proposal. Speaking on behalf of the council and the Nebraska State Chamber of Commerce and Industry, she said the council’s grant application for a multi-tenant, rail-served industrial park was submitted “two minutes” after that of North Platte.

When fully built out in approximately 10 years, she said, the park is expected to have an $870 million impact on Dodge County’s economy. A grant under the Nebraska Rural Projects Act would allow the area to be more competitive and increase its odds of success, she said.

“Year after year, more companies and businesses have been looking at Fremont and Dodge County as an opportunity for growth and expansion,” Skiles said. “However, there have been a number of quality projects that we have lost to other communities who have the ability to deliver sites and the necessary infrastructure in a shorter timeline.”

Michael Rooks, executive director of Gateway Development Corporation in Washington County, also testified in favor of LB788. Speaking on behalf of the Greater Omaha Chamber of Commerce, he said Gateway is working to develop an industrial business park in Blair with rail access.

Companies that experienced supply chain issues during the pandemic are looking for ways to reach customers more quickly, Rooks said, and Nebraska needs the ability to deliver rail sites and infrastructure for those companies faster.

“It’s hard for small, rural communities and counties to build new rail parks with limited funding and resources,” Rooks said.

No one spoke in opposition to the proposal and the committee took no immediate action on it.