Banking Commerce and Insurance

Large commercial site development bill advanced

Lawmakers gave first-round approval Feb. 14 to a measure intended to promote the development of “mega sites” in Nebraska, on assurance from its sponsor that the bill would be narrowed significantly during the next round of debate.

Sen. Mike McDonnell
Sen. Mike McDonnell

Omaha Sen. Mike McDonnell, sponsor of LB644, said the measure would enhance the state’s competitiveness in seeking such projects by bolstering the Site and Building Development Fund. The bill would create a sub-fund focused on identifying, evaluating and developing mega sites, which are large areas of land with infrastructure in place meant to draw commercial and industrial projects to the state.

As introduced last session, the measure would transfer $80 million per year from the state’s Cash Reserve Fund to the Site and Building Development Fund over the next two years, with $100 million targeted for developing mega sites, $50 million for developing sites pursuant to the underlying Site and Building Development Fund parameters and $10 million for planning, identifying and evaluating sites across Nebraska.

Sen. Julie Slama of Dunbar offered an amendment during general file debate Feb. 12, adopted 30-0, that replaced the bill. Under the amendment, the state Department of Economic Development would be required to use 15.5% of the funds for projects located west of the 100th meridian in Nebraska. The 100th meridian passes through the state at Cozad.

Slama said lawmakers ran out of time last session to take up her amendment, which she said would make funds more accessible for smaller Nebraska communities. The amendment also would lower the threshold to qualify for grants, which she said would ensure greater opportunity to use the funds outlined in LB644.

“As western Nebraska has fewer larger, urban municipalities that can apply for the funds, it would not need to be held to the same criteria as the eastern part of the state,” Slama said. “This is a great opportunity to think big.”

Sen. Mike Jacobson of North Platte supported the Slama amendment. National developers are interested in locating in Nebraska, he said, because of the state’s strong work ethic. The amended version of LB644 would ensure that western Nebraska has a chance to benefit from that interest, he said.

“You can go across the state, and we have opportunities, but particularly when you get west of the 100th meridian, what we’re really looking at is being able to make sure that that part of the state has an opportunity to utilize this funding as well,” Jacobson said.

Elmwood Sen. Robert Clements, chairperson of the Appropriations Committee, opposed the bill, saying the proposed $160 million transfer would deplete the cash reserve down to 13% of the state’s annual expenditures. The target for that balance traditionally has been 15%, he said.

In addition, Clements said, transfers from the cash reserve of roughly $900 million for the Perkins County Canal Project and a new state prison, which are slated for the current budget cycle, have yet to be made and will reduce the balance even further.

Sen. Lou Ann Linehan of Elkhorn also expressed concern about the size of the transfer, noting that senators appeared poised to advance LB644 with less consideration than it merited, given the size of the bill’s budgetary impact.

The Legislature adjourned for the day before taking further action on the bill.

When debate resumed Feb. 14, McDonnell said he would offer an amendment on select file to narrow the bill significantly and lower the fiscal impact to $500,000. He said the amendment would strike the existing bill and instead authorize a study of potential mega sites and how much funding would be needed to develop those areas.

Lawmakers then voted 41-1 to advance LB644 to the second round of debate.

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