State funding for rail access projects advanced

Lawmakers gave first-round approval March 23 to a bill that would require the state to provide matching funds for the development of industrial rail access business parks.

Sen. Mike Groene
Sen. Mike Groene

Under LB40, as introduced by North Platte Sen. Mike Groene, a nonprofit economic development corporation could apply to the director of the state Department of Economic Development for up to $10 million in matching funds to cover a project’s development costs.

Groene said the bill would help rural communities near rail lines attract manufacturers and transportation companies as they seek to expand their operations after the pandemic.

“Nebraska needs to be prepared to address the needs of the manufacturing and transportation industries, as we sit right in the middle of the country,” he said.

In particular, Groene said, LB40 would enable a proposed rail access business park near Union Pacific’s Bailey Yard in Lincoln County, bringing jobs and economic growth to the region.

State matching funds could be used for site acquisition and preparation, utility extensions and rail spur construction for the development of a new industrial rail access business park, including expenses incurred to help an initial tenant in the manufacturing, processing, distribution or transloading trades.

Qualifying projects would have to be located in a county with a population of fewer than 100,000 inhabitants.

Upon approval and legislative appropriation of funds, an applicant would receive a dollar-for-dollar match from the state for the total amount of their investment in the project over a five-year period.

A Revenue Committee amendment, adopted 40-0, would increase the total amount of matching funds that could be paid to $50 million. No more than $30 million could be paid for any one project.

Under the amendment, the state would provide $2 of matching funds for each dollar invested up to $2.5 million. For a larger investment, the state would provide $5 in matching funds for each dollar invested.

Elkhorn Sen. Lou Ann Linehan, committee chairperson, said the committee made the changes in order to attract substantial projects to greater Nebraska.

“We want to see significant investment and job creation in that part of the state,” she said.

Norfolk Sen. Michael Flood supported the bill, saying it represents “big thinking from rural Nebraska.” North Platte is well-positioned for the proposed project because of Bailey Yard’s large number of rail interconnections, he said, but Scottsbluff, Seward and other cities also could host such facilities.

“This is a state program that’s meaningful; it’s about job creation and it thinks big,” Flood said. “It takes advantage of something that we have that very few states have — our logistics.”

Sen. Curt Friesen of Henderson also supported LB40. He said it could diversify rural Nebraska’s economy, helping smaller communities through down cycles in the agriculture industry.

“We need to get rural Nebraska running again,” Friesen said, “and I think this might be just the thing that gets it started.”

LB40 advanced to select file on a vote of 42-0.

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