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.