Good life district updates advanced

Lawmakers gave first-round approval May 9 to a measure that would update a state initiative intended to encourage investment in large retail developments.

The Good Life Transformational Projects Act, passed by the Legislature in 2023, authorizes the state Department of Economic Development to create “good life districts” in which transactions are subject to a reduced state sales tax rate of 2.75%. A project is eligible for a designation if an applicant demonstrates that development costs will exceed certain thresholds, among other criteria.

Elkhorn Sen. R. Brad von Gillern, sponsor of LB707, introduced the measure as a shell bill. A Revenue Committee amendment, adopted 34-0, replaced the bill with a proposal he said is intended to add “guardrails” to the program and ensure that good life districts generate revenue for the state over the long term.

Among several other changes, the amendment would repeal the rate reduction on July 1, 2025, and instead require the state tax commissioner to allocate 50% of the state sales taxes collected within a good life district to the city in which it is located.

The measure would eliminate a city’s ability to adopt a local option sales tax to fund development in a district and instead allow it to impose a business occupation tax of no more than 3% as a local source of revenue.

Von Gillern said the amendment also would require a project applicant and a city to sign a memorandum of understanding detailing how funds would be expended within a good life district.

Additionally, the amendment would require applicants to demonstrate that a project would develop a certain minimum number of square feet of taxable retail space. At least 25% of the retail options would have to be from a business that was not located within the good life district or within 40 miles of the district during the year preceding its creation.

Beginning on the bill’s effective date, applicants also would be required to submit a report to the department and the city that includes the good life district. The report would provide:
• evidence that the applicant has sufficient financing for the project and that the project is financially viable;
• evidence that the applicant owns land within the proposed boundaries of the district; and
• information regarding any ownership interest held by the applicant in any existing retail business within the proposed district.

Von Gillern said LB707 likely would be amended further on the second round of debate to address concerns about how the proposed changes would affect good life districts in Bellevue and Grand Island.

The bill advanced to select file on a vote of 37-0.