Turnback tax proposal amended, advanced

Parking facilities for convention centers and arenas would qualify for state turnback tax assistance under a bill advanced from general file March 31.

The Convention Center Facility Financing Assistance Act turns back 70 percent of the state sales tax collected by onsite retailers and nearby hotels to political subdivisions to help pay off bonds used to build convention and meeting center facilities.

Under LB927, introduced by Omaha Sen. Rich Pahls, political subdivisions also could use state turnback tax assistance to acquire, construct, improve and equip nearby parking facilities.

This would include any parking lot, garage or other parking structure that is not directly connected to a convention and meeting center facility but is located within 600 yards of such a facility.

Up to $150 million could be appropriated to a single approved project under LB927, an increase from $75 million under existing law.

Sen. Michael Flood of Norfolk supported the bill, saying Omaha will reach the current limit by the time it pays off debt used to finance the CHI Health Center.

“Increasing this cap allows Omaha to maintain and renovate the CHI [Health] Center, protecting Omaha’s valuable investment,” he said.

Under a Revenue Committee amendment, adopted 27-0, a municipality would be eligible for a grant under the Community and Civic Center Financing Act only if it partners with a certified creative district and is not otherwise prohibited from receiving a grant.

Grant applications would have to include a notification of approval from the Nebraska Arts Council. A grant could not be less than $100,000 or more than $250,000.

The provision would apply between July 1, 2023, and June 30, 2024.

The amendment also included the provisions of LB818, introduced by Elkhorn Sen. Lou Ann Linehan. That proposal would allow state assistance under the Sports Arena Facility Financing Assistance Act to be used for parking facilities within 700 yards of a sports arena facility.

Linehan said the Ralston Arena likely will lose a large number of parking spaces to a proposed casino and that the amendment would help the city pay for a new parking facility near the arena.

The amendment also would increase the total amount of state assistance for a sports arena facility from $50 million to $100 million and eliminate a current provision that prohibits state assistance from being paid out for more than 20 years after the issuance of the first bond for the facility.

Linehan said the changes would give Ralston “more breathing room.”

“Ralston is a landlocked city that cannot expand outward to increase economic development,” she said. “It must invest in the facilities it has, and this bill will go a long ways towards making that happen.”

Currently, state sales tax collected by hotels within 600 yards of an eligible convention and meeting center facility is included in the turnback provision. Sen. Terrell McKinney of Omaha introduced an amendment, adopted 28-0, that would extend the radius to 1,200 yards.

The Convention Center Facility Financing Assistance Act requires a portion of turnback revenue appropriated to a city of the metropolitan class to be distributed equally to areas with a high concentration of poverty for certain purposes.

McKinney’s amendment would not change those purposes but would specify that 55 percent of the funds be used to showcase important historical aspects of those areas and assist with the reduction of street and gang violence. The remaining 45 percent would be used to assist small business and entrepreneurship growth.

McKinney’s proposal also would require the county commissioner and city council member who serve on a committee that identifies potential projects in areas with a high concentration of poverty to share joint responsibility for committee operations and meetings.

Additionally, the amendment would require each funding recipient to submit an itemized report to the committee on the use of funds.

Recipients would not be eligible to receive funding for more than three consecutive years unless they are able to justify continued funding based on certain criteria, including the number of people served by the project and the economic impact on the area.

Blair Sen. Ben Hansen introduced an amendment, adopted 29-0, that included provisions of his LB1250.

That proposal would update a law passed last year that requires certain political subdivisions to participate in a joint public hearing before increasing their property tax request by more than a certain amount. Counties must notify affected taxpayers of the hearing by postcard.

Hansen said several clarifications in the amendment would make the law easier to administer.

Among other changes, it would require the county clerk or his or her designee to organize the hearing. It also would divide the cost of creating and mailing the postcards proportionately among participating political subdivisions based on the total number of parcels in each.

After adopting the amendments, senators voted 31-0 to advance LB927 to the second round of debate.