The Nebraska governor could use a new fund to attract and retain “high-impact” business projects or facilities if the money likely would be a determining factor under a bill advanced from general file April 7.
Omaha Sen. Brett Lindstrom, sponsor of LB729, said the proposal is modeled on an Oklahoma program that has attracted more than $3 billion in business investments to that state since 2011.
The bill would not require an initial appropriation to the program, he said, which means the governor would have to seek funds from the Legislature in the future.
“The quick action closing fund could be a deciding factor for a company looking to relocate to our state,” Lindstrom said. “And whatever Nebraska can do to gain an edge, I believe that we should do it.”
To qualify for the funds, the applying business would have to be engaged in a business activity that qualifies for incentives under the ImagiNE Nebraska Act, the state’s main business tax incentive program.
The governor could not approve payments from the fund, which would be administered by the state Department of Economic Development, unless the department has conducted an analysis of the applicant’s business activity that includes the number of jobs to be created or retained, the average salary of those jobs and the total capital investment to be made.
After evaluating selected projects, the director could recommend expenditures from the fund only if they are expected to result in a net economic benefit to the state.
Upon the governor’s approval, the department would enter into an agreement that sets the conditions for payment of money from the fund. Among other provisions, the agreement would include the total amount of funds awarded, the performance conditions that must be met to obtain the award and the methodology for validating performance.
A Revenue Committee amendment would have required the governor to consult with the speaker of the Legislature, the chairperson of the Executive Board of the Legislative Council and the chairpersons of the Appropriations and Revenue committees when determining whether to approve an expenditure from the fund.
Sen. Lou Ann Linehan of Elkhorn, the Revenue Committee’s chairperson, urged lawmakers to vote against the amendment, saying it could violate the state constitution’s separation of powers provisions.
The amendment failed on a vote of 3-33. Twenty-five votes were needed.
Linehan supported LB729, saying she would prefer the proposed fund, in conjunction with lower tax rates, to the state’s complex business tax incentive programs.
When lawmakers created the ImagiNE Nebraska Act in 2020, she said, they included a provision intended to retain a large company that might have left the state, along with thousands of jobs. She said Lindstrom’s proposal would allow the governor to act in a similar situation if the Legislature is not in session.
Henderson Sen. Curt Friesen opposed the bill. Without adequate oversight by lawmakers, he said, a future governor could use the fund to grant political favors.
Senators voted 27-10 to advance LB729 to select file.