Center for Rural Affairs April 25, 2005 NE Legislative Update

-- from the desk of Jon Bailey, Director Rural Research and Analysis Program
Center for Rural Affairs

Legislative Update
April 25, 2005

Budget Update

As expected, the budget to be officially released later this week by the Appropriations Committee will result in a political and financial tug-of-war that will dominate the remainder of the 2005 session.

Simple math shows the magnitude of the debate:

$22 million = apparently the amount of money available in the next two years for spending not in the Appropriations Committee budget

$91 million = the price tag for bills on the floor of the Legislature with at least a chance of becoming law

$32 million = the potential cost of the business tax incentive package being put together by the Revenue Committee

Obviously, the business tax incentive reform package could eat up all of the available funding slack left by the Appropriations Committee budget.

The budget process and debate is also complicated some by the meeting of the Economic Forecasting Board on April 29. At that meeting the Forecasting Board will provide their final revenue receipt numbers, which could be higher or lower than those used by the Appropriations Committee in fashioning their budget; if significantly different than the Appropriations Committee numbers, new revenue forecasts could change the tenor and intensity of the budget debate – more funds to accommodate more spending requests or even less money to compete for.

Governor Heineman has made it clear he wants an economic development bill that reforms the business tax incentive programs passed this year. The Revenue Committee also apparently wants something, but so far has been unable to advance a consensus bill out of committee. It seems the primary issue in the committee – besides the cost – is the support of the business community. Sen. Landis, chair of the Revenue Committee, has said he will not move forward with the tax incentive package unless the business community supports it.

Add to all of this opposition by some Senators to any increased spending for the business tax incentive package, particularly if funding for it comes at the expense of programs for vulnerable populations. In a debate on April 25 over a bill to increase the documentary stamp tax to fund housing for the mentally ill, Sen. Beutler, a member of the Appropriations Committee, warned that funding for the tax incentive package would come excessive cuts in the state budget (made up by increased local property tax), cutting state funding to higher education or higher state taxes.

In response, Sen. Chambers said any legislation that provides tax breaks for the wealthy while denying funding for programs for the poor would have to pass “not over my dead body, but over my live, determined opposition.”



Bills Update

Again, no action was taken last week on any of the bills listed below.

Any bill designated a Priority Bill will also have a “P” attached to its number (for example, LB 123P). The chief sponsor of the bill is listed in parentheses.

The words Support or Oppose after a bill description indicate where the Center for Rural Affairs has taken a position on the bill. If neither word is indicated, the Center has not taken a position at this time.

NOTE: Once a bill is Indefinitely Postponed (killed) or signed into law, we will remove it from the Legislative Update list.

Rural Development

LB 28 (Connealy) – The “Endow Nebraska Act.” The bill would provide a tax credit for a contribution to a qualified charitable organization. The bill sits on Select File. Support

LB 273P (Cunningham) – Would create the “Building Entrepreneurial Communities” program through a grant program for each of the next two years. The bill remains on General File, though it is bracketed until April 19 and cannot be brought up for consideration before that date. Support

Agriculture/Livestock

LB 71P (Stuhr) – Would re-authorize the Agricultural Opportunities and Value-Added Partnership Act (formerly the LB 1348 grant program). This program was terminated through budget cuts in 2001 and 2002. This bill would reauthorize the program through 2009. Sen. Stuhr has designated this as her Priority Bill. The bill awaits a vote on Final Reading. Support

LB 132 (Cunningham) – This bill modifies the Nebraska Pasteurized Milk Law by providing exemptions to small-scale dairies and processors to the often-expensive bottling and processing requirements, and by allowing dairies and farmers to advertise on-farm sales of non-pasteurized milk (currently, the sale of non-pasteurized milk cannot be advertised). The bill sits on General File. Support

LB 346P (Agriculture Committee) – Would modify several provisions of the Beginning Farmer Tax Credit Act all with the goal to increase utilization of the tax credit. The bill sits on General File. Support

Education/Schools

LB 126P (Raikes) – Would mandate the “assimilation” of Class I schools (elementary-only schools) into K-12 school districts for the 2006-07 school year. The bill awaits action on Select File. Oppose

LB 129P (Education Committee) – An overhaul of the formula for state aid to schools. The bill is pending in the Education Committee.

Taxes

LB 309 (Connealy) – Would establish the Small Business Rural Microenterprise Tax Credit. The bill would provide for $2 million worth of tax credits annually for small business (with five or fewer employees or beginning farmers/ranchers) in areas with declining population or low incomes or federal enterprise zones. The bill is pending in the Revenue Committee. Support

Other

LB 208 (Stuthman) – Provides for the appropriation of $1.75 million annually for the next two years to the state’s five federally qualified health clinics to provide services to the uninsured (the clinics are in Omaha, Lincoln and Scottsbluff). The bill is pending in the Appropriations Committee. The Appropriations Committee budget adds $875,000 to compensate the federally qualified health clinics for the increase in services provided uninsured patients. Support

LB 550 (Jensen) – Requires a plan to be submitted by December 1, 2005, for the financial support of community health centers and emergency medical services in the state. The bill awaits action by the Health and Human Services Committee.

May 19, 2005 – Congressional Briefing on Four Key USDA Grant Programs

-- from the desk of Marie Powell, Communications Associate
Center for Rural Affairs

April 26, 2005

YOU ARE INVITED to a Center for Rural Affairs briefing in Washington DC on May 19, 2005. The briefing will share the results of a study ranking four key agricultural research, marketing, and business enterprise development programs for how well they are serving family farms and rural communities.

Times and locations are listed below.

11:00 a.m. to Noon, IOWA House Briefing House Agriculture Committee Briefing Room, 1300 Longworth House office building

Noon to 1:00 p.m., GENERAL House Briefing House Agriculture Committee Briefing Room, 1300 Longworth House office building

2:00 to 3:00 p.m., IOWA Senate Briefing 328-A Russell Senate Office Building

3:00 to 4:00 p.m., GENERAL Senate Briefing 328-A Russell Senate Office Building

SPEAKERS INCLUDE: Kim Leval, Senior Policy Analyst, and Amanda Tuttle, Project Assistant, Center for Rural Affairs

For more information, contact Kim Leval at (402) 870-0658 or kimleval@qwest.net.

New Report Details Potential Federal Funding Losses in Great Plains States

-- from the desk of Russ Gifford, Director Communications and Development
Center for Rural Affairs

April 21, 2005


(LYONS, NE) Only 72 municipalities and seven counties in six Great Plains states might qualify for funding under the President's proposed “Strengthening America's Communities Initiative” – (SACI) – according to a new report released by the Center for Rural Affairs.

The Center’s report highlights how the SACI funds could be distributed. "There are no detailed proposal regulations at this point," says Jon Bailey, Director of the Center’s Research and Analysis Program, "but based on the wording of the initiative and statements by the administration, this report outlines a likely result."

While all qualifying municipalities and counties in the region are rural, only .3 percent of the region’s population resides in areas that may receive SACI funding.

SACI is a proposal contained in the President’s FY2006 budget, and would eliminate 18 economic and community development programs, roll them into one new program and provide one-third less funding.

Among the programs targeted for elimination are several that help modernize infrastructure, develop small businesses and create jobs in a significant number of rural communities – Community Development Block Grants (CDBG), the Rural Business Opportunity Grants, the Rural Business Enterprise Grants, and the Economic Development Administration.

The qualifying criteria according to the SACI wording – low-income, poverty, job loss and unemployment – will not apply to most rural municipalities and counties.

“SACI is the wrong idea for economic and community development in most of rural America,” according to Bailey. “Unemployment and job loss are not the real issues facing most rural communities – low incomes and low paying jobs and aging infrastructure are. Any federal investment in rural America must recognize the real issues facing rural people and rural places.”

Previous research by the Center shows that rural incomes in the region are only about 70 percent of those in metropolitan areas.

The four page report is part of the Center's Rural Action Brief series. It is available from the Center on their website, at http://www.cfra.org/.

The Center for Rural Affairs awarded grants from The Nebraska Environmental Trust

-- from the desk of Martin KIeinschmit, Sustainable Agriculture specialist
Center for Rural Affairs

April 19, 2005


(LYONS, NE) The Nebraska Environmental Trust will award the Center for Rural Affairs $81,000 to fund two important land stewardship projects.

“One of the first steps to meeting organic certification requirements is that the land be ‘chemical-free’ for a period of 36 months,” explains Martin KIeinschmit, Sustainable Agriculture specialist for the Center for Rural Affairs. “Many farmers find this transition period to be a huge psychological and physical hurdle.”

An organic incentive project, "A Management Alternative to Agriculture Chemicals," was developed by the Center to reduce the financial risk to farmers who are transitioning to organic growing methods.

The second project, "Building the Base: Carbon Sequestration in Nebraska" is based on a successful pilot program developed by the Center in 2001. The current project focuses on statewide education of the benefits that come with the adoption of farming and ranching practices that conserve or build soil carbon levels in Nebraska.

“Building the Base expands the carbon sequestration project activities to four more Natural Resource District’s” said Kleinschmit, “the Upper Niobrara White, Nemaha, Papio-Missouri River Omaha and Lower Elkhorn, while continuing to monitor farmers’ activities in the original project area, the Lewis and Clark NRD.”

The organic transition and carbon sequestration projects are partially funded through grants from The Nebraska Environmental Trust. The trust is funded by proceeds of the Nebraska Lottery and private donations and has awarded more than $89 million to conservation projects in Nebraska since 1994.

Kleinschmit was on hand in Lincoln on Tuesday, April 19, to accept the grant awards during a ceremony in the Warner Chamber of the state capitol.

For more information regarding the Center’s organic transition or carbon sequestration projects please contact Martin Kleinschmit at the Center for Rural Affairs, Hartington office, Phone: 402-254-6893 or by email: martink@cfra.org.

Center for Rural Affairs April 18, 2005 Nebraska Legislative Update

-- from the desk of Jon Bailey, Director Rural Research and Analysis Program
Center for Rural Affairs

Legislative Update
April 18, 2005

The easy lifting in the Legislature is done. As the Legislature passes the 2/3rds pole (April 19 will be the 63rd day of the 90-day session), the Senators have taken up most of the non-controversial items the Unicameral will take up in the 2005 session. What remains are bills and issues with significant controversy and differences of opinion – both those that have already received debate and those awaiting their opening arguments.

The April 19 agenda is a perfect example. On this one agenda are bills dealing with the following issues: motorcycle helmets, concealed handguns, who can provide telecommunication services, prairie dogs, the constitutional right to hunt/fish/trap, and criminalizing death or injuries to unborn children – all appealing for hours of debate. And every day between now and adjournment is likely to be similar.

Budget Update

The Appropriations Committee continues to hammer out details of their final budget recommendation to the full Legislature. By rule they must release their recommendation by April 28, the session’s 70th day.

News reports today indicated that Governor Heineman is confident that an economic development package including revamped tax incentives and other items (including, we hope, a tax credit for small businesses) is nearly finalized and will be ready to advance out of the Revenue Committee later this week. The agreed-upon proposals will be rolled into LB 312.

Bills Update

No action was taken last week on any of the bills listed below.

Any bill designated a Priority Bill will also have a “P” attached to its number (for example, LB 123P). The chief sponsor of the bill is listed in parentheses.

The words Support or Oppose after a bill description indicate where the Center for Rural Affairs has taken a position on the bill. If neither word is indicated, the Center has not taken a position at this time.

NOTE: Once a bill is Indefinitely Postponed (killed) or signed into law, we will remove it from the Legislative Update list.

Rural Development

LB 28 (Connealy) – The “Endow Nebraska Act.” The bill would provide a tax credit for a contribution to a qualified charitable organization. The bill sits on Select File. Support

LB 273P (Cunningham) – Would create the “Building Entrepreneurial Communities” program through a grant program for each of the next two years. The bill remains on General File, though it is bracketed until April 19 and cannot be brought up for consideration before that date. Support

Agriculture/Livestock

LB 71P (Stuhr) – Would re-authorize the Agricultural Opportunities and Value-Added Partnership Act (formerly the LB 1348 grant program). This program was terminated through budget cuts in 2001 and 2002. This bill would reauthorize the program through 2009. Sen. Stuhr has designated this as her Priority Bill. The bill awaits a vote on Final Reading. Support

LB 132 (Cunningham) – This bill modifies the Nebraska Pasteurized Milk Law by providing exemptions to small-scale dairies and processors to the often-expensive bottling and processing requirements, and by allowing dairies and farmers to advertise on-farm sales of non-pasteurized milk (currently, the sale of non-pasteurized milk cannot be advertised). The bill sits on General File. Support

LB 346P (Agriculture Committee) – Would modify several provisions of the Beginning Farmer Tax Credit Act all with the goal to increase utilization of the tax credit. The bill sits on General File. Support

Education/Schools

LB 126P (Raikes) – Would mandate the “assimilation” of Class I schools (elementary-only schools) into K-12 school districts for the 2006-07 school year. The bill awaits action on Select File. Oppose

LB 129P (Education Committee) – An overhaul of the formula for state aid to schools. The bill is pending in the Education Committee.

Taxes

LB 309 (Connealy) – Would establish the Small Business Rural Microenterprise Tax Credit. The bill would provide for $2 million worth of tax credits annually for small business (with five or fewer employees or beginning farmers/ranchers) in areas with declining population or low incomes or federal enterprise zones. The bill is pending in the Revenue Committee. Support

Business Tax Incentives

The Revenue Committee is still developing a bill to advance to the floor.

Other

LB 208 (Stuthman) – Provides for the appropriation of $1.75 million annually for the next two years to the state’s five federally qualified health clinics to provide services to the uninsured (the clinics are in Omaha, Lincoln and Scottsbluff). The bill is pending in the Appropriations Committee. Support

LB 550 (Jensen) – Requires a plan to be submitted by December 1, 2005, for the financial support of community health centers and emergency medical services in the state. The bill awaits action by the Health and Human Services Committee.

COMMUNITY DEVELOPMENT COALITION REBUTS BUSH ADMINISTRATION PROPOSAL TO GUT HUD PROGRAMS

Response to administration’s Strengthening America’s Communities Initiative advisory committee meeting in Fresno, Calif., on April 15

WASHINGTON, DC (April 14, 2005) Fifteen organizations representing local officials and community developers from around the nation have joined together to oppose the Bush administration’s proposed elimination of 18 existing federal community and economic development programs and the subsequent creation of a much smaller program housed in the Department of Commerce.

The administration’s so-called Strengthening America’s Communities Initiative, set to host the first meeting of its hand-picked presidential advisory committee in Fresno, Calif., on Friday, April 15, would cut federal assistance to low-income urban, suburban, and rural communities by $2 billion annually and indirectly reduce even more private sector investment in thousands of neighborhoods and communities across the country.

While the administration justifies eliminating the programs by claiming they fail to measure up to federal performance evaluations, only nine of the 18 programs slated for the chopping block have actually been evaluated. And two of them – the Economic Development Administration and the National Community Development Initiative – received the second highest ratings possible.

Following are quotes from coalition members, objecting to the proposed cuts:

“If the president’s goal is to provide states and communities with tools to achieve long-term economic growth and stability, he must fund and support programs that have effectively provided help and hope to low-income families and communities for years, if not decades, not destroy them,” said Bart Harvey, president of the Enterprise Foundation.

“President Bush’s Strengthen America’s Communities Initiative (SACI) is intended to divert the public’s attention from the huge funding cuts that he wants to make to housing and community development programs that help low-income people,” said Sheila Crowley, president of the National Low Income Housing Coalition. “Fortunately, most people, including members of Congress, are not that easily fooled. SACI has landed with a resounding thud.”

“There are no data to justify the radical, sweeping scope of President Bush’s budget proposal to scrap the existing federal community economic development system and replace it with an unfunded shell of an effort,” said Mark Pinsky, president and CEO of National Community Capital Association. “This seems to be part of a deliberate ‘war of crumbs’ strategy under which a variety of interests and groups would be set at each other’s throats to battle over an increasingly small amount of funds. And this battle will take place in the dark, since none of the groups that will be affected are even invited to the table to discuss how the new initiative will be formed.”

“The National Association of Counties (NACo) remains opposed to any proposal to eliminate the Community Development Block Grant (CDBG) program,” said Angelo D. Kyle, NAC0’s president. “CDBG is a long-running, successful federal program that assists local governments in providing critical public services to communities at the local level. NACo will continue to urge Congress to preserve CDBG at HUD and reject SACI.”

“SACI is the wrong idea for economic and community development in most of rural America,” said Jon Bailey, director, research and analysis program, Center for Rural Affairs. “Unemployment and job loss are not the real issues in most rural communities – low incomes, low paying jobs and aging infrastructure are. There is a role for federal investment in our rural communities, but any federal investment must recognize the real issues facing rural people in rural places.”

Following are the coalition members, who all are available to comment on this issue.

Center for Rural Affairs
Jon Bailey
jonb@cfra.org
402-687-2100

Council of State Community Development Agencies
Diane Taylor
diane@coscda.org
202-293-5830

National Community Capital Association (NCCA)
Mark Pinsky
markp@communitycapital.org
215-320-4304

Local Initiatives Support Corporation
Buzz Roberts
broberts@lisc.org
202-739-9264

National Low Income Housing Coalition
Katie Fischer
Katie@nlihc.org
202-662-1530 ext. 222

National Association of Regional Councils (NARC)
Beverly Nykwest
nykwest@narc.org
202-986-1032 ext. 220

Housing Assistance Council (HAC)
Leslie Strauss
leslie@ruralhome.org
202-842-8600

The Enterprise Foundation
Sandi Baer
sbaer@enterprisefoundation.org
410-772-5285

National Association of Counties (NACo)
Jeremy Ratner
jratner@naco.org
202-942-4220

National Association of Development Associations (NADO)
Matthew Chase
mchase@nado.org
202-624-7806

National Association of Local Housing Finance Agencies (NALFA)
John Murphy
John_murphy@nalfa.org
202-367-1197

Council of Development Finance Agencies
Toby Rittner
trittner@cdfa.net

National Conference of Black Mayors
Colin Wellenkamp
cwellenkamp@washingtonlinkagegroup.com
202-383-9143

Coalition of Community Development Financial Institutions
Jennifer Vasiloff
vasiloff@cdfi.org
703-294-6970

National Community Development Association
Chandra Western
Chandra@ncdaonline.org
202-887-5521

Center to President – 'Americans are watching' on Payment Limits

-- from the desk of Russ Gifford, Director Communications & Development
Center for Rural Affairs


(LYONS, NE) "Rural Americans are watching to see whether the President and Congress are more interested in subsidizing wealthy mega farmers or investing in rural people and their communities,” said Chuck Hassebrook, executive Director of the Center for Rural Affairs.

"Cuts will be made. Either they cut mega farms or they cut family size farms, small business and rural community development programs, nutrition programs for poor kids and conservation programs.”

The Center for Rural Affairs is a rural advocacy group based in Lyons, Nebraska. Hassebrook’s statement is in response to the news reports that the Bush administration "threw in the towel" on the president's proposal to slash farm payments.

The Center contends that giving large payments to mega farms subsidizes them to drive smaller operations out of business. “Capping payments to mega farms is a win-win solution,” said Hassebrook. “It saves money and it’s the single most effective thing Congress could do to strengthen family farms.”

Some farm-state lawmakers, such as Senator Chuck Grassley of Iowa, see the benefit of a tough cap on subsidy payments. It would help stretch the already limited federal resources to reach more farmers, and at the same time chop away at the federal government's ballooning deficit.

"We are urging the President and the Secretary of Agriculture to stick to their guns on capping payments to mega farms," adds Hassebrook. "Rural Americans are watching."

Center for Rural Affairs April 11, 2005 Nebraska Legislative Update

-- from the desk of Jon Bailey, Director Rural Research and Analysis Program
Center for Rural Affairs

Legislative Update
April 11, 2005

Budget Update: Medicaid

Medicaid – the federal/state health insurance program for low-income adults and children people with disabilities – took center stage in the Legislature last week. The Legislature undertook first round debate on LB 709, a bill that establishes an advisory committee to conduct public hearings and study the future of Medicaid in Nebraska. Sponsored by Sen. Erdman, the bill mandates a final report with policy recommendations for the Legislature to consider in 2006.

Medicaid is the second-largest portion of the state budget and the fast-growing. The Medicaid program is a federal-state partnership, with abut 60 percent of the program's funding coming from federal funds.

Supporters of LB 709 assert that unless something is done soon to control Medicaid costs, there will be little state funding left for other items in about 20 years at current spending patterns. Some Senators – notably Sen. Byars – stated that Medicaid should not be studied in a vacuum, that other aspects of health care finance should be studied and that ways to require employers to provide health care benefits to employees should be examined.

LB 709 was unanimously advanced to second round debate.

State Politics

The 2006 campaign began in earnest on April 11, 2005, when Governor Heineman took the first step in seeking election to the office by forming a campaign committee. In an interview with the Associated Press, Governor Heineman stated he would make his official campaign announcement later in 2005 or in early 2006. Heineman had received $5,000 in campaign contributions by April 5; once that figure is received, a campaign committee must be formed and filed with the Accountability and Disclosure Commission.

Third District Representative Tom Osborne has said he will make an announcement on his political future within the next couple of months.

Bills Update

Any bill designated a Priority Bill will also have a “P” attached to its number (for example, LB 123P). The chief sponsor of the bill is listed in parentheses.

The words Support or Oppose after a bill description indicate where the Center for Rural Affairs has taken a position on the bill. If neither word is indicated, the Center has not taken a position at this time.

NOTE: Once a bill is Indefinitely Postponed (killed) or signed into law, we will remove it from the Legislative Update list.

Rural Development

LB 28 (Connealy) – The “Endow Nebraska Act.” The bill would provide a tax credit for a contribution to a qualified charitable organization. The bill sits on Select File. Support

LB 273P (Cunningham) – Would create the “Building Entrepreneurial Communities” program through a grant program for each of the next two years. The bill remains on General File, though it is bracketed until April 19 and cannot be brought up for consideration before that date. Support

Agriculture/Livestock

LB 71P (Stuhr) – Would re-authorize the Agricultural Opportunities and Value-Added Partnership Act (formerly the LB 1348 grant program). This program was terminated through budget cuts in 2001 and 2002. This bill would reauthorize the program through 2009. Sen. Stuhr has designated this as her Priority Bill. The bill awaits a vote on Final Reading. Support

LB 132 (Cunningham) – This bill modifies the Nebraska Pasteurized Milk Law by providing exemptions to small-scale dairies and processors to the often-expensive bottling and processing requirements, and by allowing dairies and farmers to advertise on-farm sales of non-pasteurized milk (currently, the sale of non-pasteurized milk cannot be advertised). The bill sits on General File. Support

LB 346P (Agriculture Committee) – Would modify several provisions of the Beginning Farmer Tax Credit Act all with the goal to increase utilization of the tax credit. The bill sits on General File. Support

Education/Schools

LB 126P (Raikes) – Would mandate the “assimilation” of Class I schools (elementary-only schools) into K-12 school districts for the 2006-07 school year. The bill awaits action on Select File. Oppose.

LB 129P (Education Committee) – An overhaul of the formula for state aid to schools. The bill is pending in the Education Committee.

Taxes

LB 309 (Connealy) – Would establish the Small Business Rural Microenterprise Tax Credit. The bill would provide for $2 million worth of tax credits annually for small business (with five or fewer employees or beginning farmers/ranchers) in areas with declining population or low incomes or federal enterprise zones. The bill is pending in the Revenue Committee. Support

Business Tax Incentives

The Revenue Committee is still developing a bill to advance to the floor.

Other

LB 208 (Stuthman) – Provides for the appropriation of $1.75 million annually for the next two years to the state’s five federally qualified health clinics to provide services to the uninsured (the clinics are in Omaha, Lincoln and Scottsbluff). The bill is pending in the Appropriations Committee. Support

LB 550 (Jensen) – Requires a plan to be submitted by December 1, 2005, for the financial support of community health centers and emergency medical services in the state. The bill awaits action by the Health and Human Services Committee.

Center for Rural Affairs April 4, 2005 NE Legislative Update

--from the desk of Jon Bailey, Director Rural Research and Analysis Program
Center for Rural Affairs

Legislative Update
April 4, 2005

Budget Update

Last week revealed a new cost estimate for the tax incentive and economic development package being developed by the Revenue Committee. It is estimated that the new program would add $30 million annually to the current tax incentive program (which spends about $140 million annually).

The cost estimate released to members of the Revenue Committee, other key Senators and the Governor also anticipates the package under consideration will cost the state an additional $215 million over 10 years.

While Senators and the Governor appear optimistic that some plan will make its way out of the Revenue Committee, it remains unclear how the increased spending for such a plan fits with other spending proposals or how it will impact the rest of the Appropriations Committee budget. Some scenarios indicate that there may be as little as $35 million left for spending in the Appropriations Committee budget, leaving enough for the tax incentive plan and not much else. There are spending proposals worth about $400 million at various stages of legislative debate.

Bills Update

Any bill designated a Priority Bill will also have a “P” attached to its number (for example, LB 123P). The chief sponsor of the bill is listed in parentheses.

The words Support or Oppose after a bill description indicate where the Center for Rural Affairs has taken a position on the bill. If neither word is indicated, the Center has not taken a position at this time.

NOTE: Once a bill is Indefinitely Postponed (killed) or signed into law, we will remove it from the Legislative Update list.

Rural Development

LB 28 (Connealy) – The “Endow Nebraska Act.” The bill would provide a tax credit for a contribution to a qualified charitable organization. The bill sits on Select File. Support

LB 273P (Cunningham) – Would create the “Building Entrepreneurial Communities” program through a grant program for each of the next two years. During additional General File debate on March 30, the Legislature changed course and defeated the committee amendment that would have decreased the funding for this bill. As a result, the Legislature also struck an amendment offered by Sen. Synowiecki that would have applied the bill to federal enterprise areas in Omaha. The bill has now returned to its original form – rural and $1 million of funding. However, Sen. Cunningham still has a pending amendment to LB 273A (the companion appropriation bill) to reduce funding to $500,000. On April 4, the Legislature agreed to Bracket – or delay – further consideration of the bill until April 19 to allow for other bills to be taken up for debate . Support

Agriculture/Livestock

LB 71P (Stuhr) – Would re-authorize the Agricultural Opportunities and Value-Added Partnership Act (formerly the LB 1348 grant program). This program was terminated through budget cuts in 2001 and 2002. This bill would reauthorize the program through 2009. Sen. Stuhr has designated this as her Priority Bill. The bill awaits a vote on Final Reading. Support

LB 132 (Cunningham) – This bill modifies the Nebraska Pasteurized Milk Law by providing exemptions to small-scale dairies and processors to the often-expensive bottling and processing requirements, and by allowing dairies and farmers to advertise on-farm sales of non-pasteurized milk (currently, the sale of non-pasteurized milk cannot be advertised). The bill sits on General File. Support

LB 346P (Agriculture Committee) – Would modify several provisions of the Beginning Farmer Tax Credit Act all with the goal to increase utilization of the tax credit. The bill sits on General File. Support

Education/Schools

LB 126P (Raikes) – Would mandate the “assimilation” of Class I schools (elementary-only schools) into K-12 school districts for the 2006-07 school year. The bill awaits action on Select File. Sen. Smith has floated a compromise idea – to allow a new school structure called “contract schools”; these would be existing Class I schools that would operate outside state curriculum and accreditation requirements but have spending and testing requirements. This idea appears to have been coolly received, but may find its way as an alternative offered by Class I supporters. Oppose

LB 129P (Education Committee) – An overhaul of the formula for state aid to schools. The bill is pending in the Education Committee.

Taxes

LB 309 (Connealy) – Would establish the Small Business Rural Microenterprise Tax Credit. The bill would provide for $2 million worth of tax credits annually for small business (with five or fewer employees or beginning farmers/ranchers) in areas with declining population or low incomes or federal enterprise zones. The bill is pending in the Revenue Committee. Support

Business Tax Incentives

The Revenue Committee is still developing a bill to advance to the floor. See the “Budget Update” item above.

Other

LB 208 (Stuthman) – Provides for the appropriation of $1.75 million annually for the next two years to the state’s five federally qualified health clinics to provide services to the uninsured (the clinics are in Omaha, Lincoln and Scottsbluff). The bill is pending in the Appropriations Committee. Support

LB 550 (Jensen) – Requires a plan to be submitted by December 1, 2005, for the financial support of community health centers and emergency medical services in the state. The bill awaits action by the Health and Human Services Committee.

Building a New Rural Economy in Nebraska

-- from the desk Jon Bailey, Director Rural Research and Analysis Program
Center for Rural Affairs


The decisions the Legislature and the Governor make in the coming days may determine the fate and future of rural Nebraska.

The Legislature has before it a comprehensive, common-sense and cost-effective rural economic development package to help ensure a viable and sustainable future. They need only to act.

Four bills and provisions in the Governor’s proposed budget fit together to create this new rural policy model. They are not – as some Senators have stated – disparate measures with no common purpose. They are all pieces of a comprehensive rural revitalization package advanced by the Governor’s appointed Nebraska Rural Development Commission.

LB 273, the Building Entrepreneurial Communities Act, and LB 28, the Endow Nebraska Act, will mobilize communities and public and private resources to begin planning economic development within and between communities.

LB 71 would provide grants for farmer and rancher-owned cooperatives, and LB 309 would provide tax relief to small business owners and an incentive for those seeking to start and grow small businesses.

In rural Nebraska, opportunities come from entrepreneurship, specifically small businesses and value-added agriculture. During the 1990s, over 70 percent of job growth in rural Nebraska came from small, non-agricultural businesses. Currently nearly one-in-three private, non-farm jobs in rural Nebraska come from small businesses with five or fewer employees.

Together, these proposals and bills would cost the state about $6 million. This represents less than FOUR percent of what the state currently spends on tax incentives for big business expansion and recruitment.

The future of rural Nebraska is surely worth that.

Rural Nebraskans should not be fooled by the messages from the Legislature about a lack of funds and the need for a comprehensive rural economic development policy.

The time for study is past.

It is time to act.