Blog for Rural America

The Center for Rural Affairs, a private, non-profit organization, is working to strengthen small businesses, family farms and ranches, and rural communities. Permission to reprint items from this web log is hereby granted, on the condition that clear credit is given to the original source of the material. If the blog provides information for a story, please let us know by sending an email to

Tuesday, May 24, 2005

Center for Rural Affairs May 23, 2005 Nebraska Legislative Update

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

Legislative Update

May 23, 2005

LB 90: Rural Economic Development Package

On May 17, LB 90 was advanced to Final Reading. Most of the debate on Select File concerned the provisions for funding the Ethanol Production Investment Credit program. Given the potential number of new ethanol plants being developed, debate centered on whether funds should be transferred from the state’s cash reserve fund or whether there should be a combination of cash funds and the grain checkoff fees. Ultimately, it was decided to leave the proposed LB 90 alone (a combination of state general funds and checkoff fees).

Sen. Chambers offered a significant amendment to LB 90A, the companion appropriations bill. Sen. Chambers proposed that the funding for the part of LB 90 that would provide grants to communities for entrepreneurial development be $1 million (rather than the proposed $250,000). This amendment was consistent with Sen. Chambers’ point on debate that rural development bills often request too little funding to make them effective. Unfortunately, the amendment lost on a 19-13 vote (25 needed for passage).

LB 312: Business Tax Incentive Reform

May 17 also saw LB 312 advance to Final Reading. On Select File the Legislature adopted an amendment introduced by Sen. Redfield that would reduce the level of tax credits in the investment only tier in proportion to any decrease in jobs at the company during the period credits were received. The intent is not to provide public subsiding of job loss as companies become more reliant on technology. Sen. Beutler offered an amendment to increase the minimum wage level for qualifying businesses in each tier to higher percentages of the state’s average weekly wage; the amendment failed on an 18-9 vote (25 votes needed).

Sen. Beutler also offered an amendment that would have required qualifying companies to provide healthcare plans or contribute to healthcare plans for their employees. Sen. Synowiecki offered a similar amendment – requiring employers in the larger tiers to pay at least 50 percent of healthcare benefits for employees. Both amendments failed (the Beutler amendment on a 14-12 vote and the Synowiecki amendment on a 20-2 vote; 25 votes needed for both).

Budget Update

On May 18, the budget bills (including LB 425, the main appropriations bill) received final approval and were sent to the Governor. LB 425 was adopted on a 34-10 vote. The Governor must sign or veto the budget bill by midnight May 24; the Governor may also line-item veto specific sections of the bill.

Class I Schools: LB 126 Returns

After nearly a three month hiatus, LB 126 retuned for second round debate week.

Since it’s been so long, a refresher on LB 126 is probably needed. Basically, the bill would require that all Class I (elementary-only) schools become “assimilated” into K-12 districts by the 2006-07 school year. Opponents believe this was the death knell for Class I schools; proponents believe this is a step toward a more effective and efficient school governance system.

If you remember, in February opponents and Sen. Raikes brokered a deal that allowed the bill to advance to Select File in return for discussions on a compromise bill. With time running out, a compromise amendment to the bill was finally offered last week. That compromise amendment was approved by a 35-6 vote; LB 126, as amended, was advanced to Final Reading by a 29-12 vote. Highlights of the compromise are:

Class I buildings could be kept open as “attendance centers” if they either meet criteria spelled out in LB 126 or at the discretion of the K-12 district. An attendance center building would be protected from closure if they have current kindergarten students – closure could not happen through the year in which current kindergartners complete the highest grade offered at that school (2013 for K-6 schools and 2015 for K-8 schools). Schools would also be protected if students are required to travel long distances to the nearest school. Any school not meeting those criteria is subject to closure by a vote of the K-12 board.

Elementary attendance centers could be designated as “community schools” through the formation of operating councils of three to six members. These councils would act in an advisory capacity to K-12 governing boards.

The “assimilation policy” will take effect for election purposes on January 1, 2006. This will allow citizens in Class I districts to vote and run for K-12 boards.

Grants of up to $100,000 would be distributed to school districts that adopt a school bond issue for at least $2 million before June 14, 2007, to remodel or build an elementary school. Qualifying school districts would have to meet other criteria, including enrolling at least 390 students during the 2005-06 school year.

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 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


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. See above. Oppose

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


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.


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