Bill would implement constitutional changes regarding revenue bonds

The Urban Affairs Committee heard testimony Jan. 18 on a bill that would implement the provisions of a recently approved constitutional amendment regarding revenue bonds.

The 2010 Legislature passed a resolution placing a proposed constitutional amendment on the May primary election ballot authorizing any county, city or village to acquire, own, develop and lease real and personal property for use by charitable nonprofit enterprises, and to issue revenue bonds to defray the cost of acquiring, developing or financing such property.

Voters approved the measure, and Lincoln Sen. Amanda McGill introduced LB159 to amend the Nebraska Industrial Development Act to reflect the language of the constitutional change.

McGill said the bill would permit municipalities and counties to participate in financing and developing projects for nonprofit enterprises throughout Nebraska. Any revenue bonds issued would not be the obligation of the issuing county or municipality, she said, and no taxes could be levied to pay for the bonds.

LB159 also excludes any portion of a nonprofit enterprise project used for sectarian instruction or study, or for devotional activities or religious worship.

Robert Hallstrom of the Nebraska Bankers Association testified in support of the bill, saying it simply would extend current law that allows counties and municipalities to issue bonds for development projects related to certain private enterprises.

“The benefit under this bill is that the nonprofit community will have the opportunity to benefit from tax exempt financing,” he said.

Andy Bradley, executive vice president of Goodwill Industries in Omaha, also supported the measure.

He said Goodwill has opened nine new facilities in the Omaha area in the last seven years. Being eligible for tax exempt financing would mean nonprofits could receive lower interest rates, Bradley said, which would save his organization approximately $800,000 in interest payments per facility.

“With that savings, we could provide services to literally thousands of additional unemployed Nebraskans,” he said. “Opening this up to nonprofits makes sense.”

There was no opposition testimony and the committee took no immediate action on the bill.