Redevelopment bond repayment bill advanced

A bill intended to make the repayment time frame of a redevelopment bond more closely reflect the life of a project received first-round approval April 7.

Omaha Sen. Heath Mello, sponsor of LB54, said nearly all Tax Increment Financing (TIF) projects in Nebraska are paid for with bonds that must be repaid within 15 years. Currently, the repayment period begins on the date that a municipality’s redevelopment plan goes into effect.

Under the bill, the repayment period would not begin until the date that a municipality enters into a redevelopment contract. Mello said redevelopment plans often go into effect over a year before a redevelopment contract officially is entered into by a municipality and a developer, depriving cities of revenue with which to repay financing bonds.

Mello said the bill would allow lawmakers to “sharpen a tool already in the toolbox,” rather than creating a new economic development program.

Sen. Rich Pahls of Boys Town supported the bill, saying many cities in Nebraska utilize TIF financing.

“This does appear to be a very significant economic factor for the state,” Pahls said.

Senators advanced the bill to select file on a 36-0 vote.