Executive branch closing fund pulled from agenda

A proposal to create a fund that Nebraska’s governor could use to attract and retain “high-impact” business projects or facilities stalled on select file April 11 after Speaker Mike Hilgers of Lincoln requested that lawmakers pass over it.

Under LB729, introduced by Omaha Sen. Brett Lindstrom, the governor could approve payments from the fund if the state Department of Economic Development conducts an analysis of the applicant’s business activity.

After evaluating selected projects, the director could recommend expenditures from the fund if they are expected to result in a net economic benefit to the state.

To qualify for the funds, an 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.

Sen. Steve Erdman of Bayard opposed the bill, calling it a “slick way to pay back political favors.” The Legislature would determine how much to appropriate to the fund, he said, but would have no control over how the governor spends the money.

Erdman filed a motion to bracket LB729 until April 20.

Norfolk Sen. Michael Flood supported the motion, saying LB729 “waters down” the separation of powers.

“In this case, we have a situation where we hand over the money before we know exactly where it’s going, and we give it to the executive branch,” he said. “That is not how it’s supposed to work.”

Sen. John Stinner of Gering also supported the motion, saying the governor’s use of discretionary funds to benefit certain businesses could “draw a lot of skepticism.”

He said the governor and the department can use existing tax incentive programs to assemble a package sufficient to attract or retain a business. If additional benefits are needed, he said, the Legislature can make that appropriation later.

Lindstrom opposed the motion, saying the proposal is intended to help the state act quickly to close a deal, especially when the Legislature is not in session.

“This is about closing business and having the flexibility to do so,” he said. “Nothing more, nothing less.”

Erdman’s bracket motion failed on a vote of 19-24. Twenty-five votes were needed.

After approximately one hour of second-round debate, lawmakers moved to the next item on the agenda without voting on LB729. The bill is unlikely to be scheduled for further debate this session.