Economic development bill amended, advanced

Senators gave second-round approval Feb. 28 to a bill that would give cities more revenue sources to fund economic development projects.

During the 2010 general election, Nebraska voters approved a constitutional amendment to permit cities to use a greater number of revenue sources for economic or industrial development projects approved by city voters. Previously, property taxes and local option sales taxes were the only revenue sources authorized. The amendment added to the list of suitable funding sources any general tax authorized by the municipality and revenue generated from municipal utilities, grants, donations, or state and federal funds.

LB471, introduced by Wilber Sen. Russ Karpisek, would incorporate the approved amendment into the Local Option Municipal Economic Development Act. The bill also would restrict uses for revenues generated from municipal utilities to utility-related projects or activities associated with a city council-approved economic development program, such as energy efficiency, load management and site development.

Omaha Sen. Heath Mello offered an amendment, approved 35-0, that would increase yearly funding caps in the bill by $2 million for each class of city in the state, resulting in the following annual maximums:

• $5 million for metropolitan and primary class cities;
• $4 million for first class cities; and
• $3 million for second class cities and villages.

Mello said increasing the caps would make economic development projects more attractive to Lincoln and Omaha. The amendment also would extend to primary and metropolitan class cities the ability to approve a retail entity as a qualifying business, he said.

After adopting the amendment, lawmakers advanced LB471 to final reading by voice vote.