Center for Rural Affairs May 9, 2005 Nebraska Legislative Update
Center for Rural Affairs
May 9, 2005
Rural Economic Development Package
In response to LB 312 that primarily seeks to modify business tax incentives (see below), several rural Senators have developed a rural economic development package that contains portions of several bills.
Senators Wehrbein, Cunningham, Kremer, Schrock and Stuhr have introduced an amendment to LB 90 (originally a bill to increase the excise tax on corn and sorghum to help support ethanol production.) The bill as now amended and contains the following provisions:
Funding of the Ethanol Production Incentive Cash Fund to the tune of $2.5 million in each of fiscal years 2005-06 and 2006-07, $5.5 million in fiscal year 2007-08 and $2.5 million in each of fiscal years 2008-09 through 2011-12;
* $850,000 for value-added agricultural grants (from LB 71);
* $250,000 in grants to communities for entrepreneurial development (from LB 273);
* and an increase in the corn and sorghum excise tax (check-off) to 7/8ths cent per bushel of corn and per hundredweight of sorghum until 2010. The amount collected would be transferred to the Ethanol Production Incentive Cash Fund.
The Center supports the amendment (Amendment 1346) to LB 90. Debate on LB 90 is scheduled to begin on Monday, May 9.
LB 312: Business Tax Incentive Reform?
As reported last week, the Revenue Committee advanced LB 312, the long-awaited economic development/business tax incentive bill. LB 312 also borrows heavily from other bills. The major components of LB 312 are:
* Inclusion of a tax credit for microenterprises (from LB 309).
* Tax credit for increases in research and development spending (from LB 672).
* Sales tax exemption for manufacturing machinery and equipment (from LB 695).
* Allows tax credits in counties of less than 15,000 under the Employment and Expansion and Investment Incentive Act (also known as the LB 608 program) for creation of two jobs and investment of $125,000.
The most significant portion of LB 312 is the creation of a new business tax incentive program. The LB 775 program would be replaced by the new Nebraska Advantage Act. The new program would differ from LB 775 in the following ways:
* A required wage of at least 60 percent of the state’s average wage for all employees in order to qualify for benefits.
* Larger wage credits for higher-paying new jobs.
* Creation of a “jobs-only tier” that provides tax credits for the creation of jobs but does not require a minimum investment amount.
* Requiring disclosure of project-specific credits used and refunds received every other year.
* Modification of tiers – the required number of jobs to be created and investment made – to qualify for credits; in general, the requirements are larger.
The wage level is a significant reform from LB 775. The disclosure requirements appear to more than exist currently, but still less than full disclosure.
The main budget bill – LB 425 – was debated last week and was adopted on General File on May 5. The Appropriations Committee budget recommendation was adopted as LB 425 on first round debate with few amendments. The Legislature amended the committee budget to continue the Nebraska’s Women’s Commission ($200,000 for each of the next two years) and to implement a pilot program to continue pregnancies ($500,000). It is expected more amendments will be attempted next week during second round debate.
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.
Since LBs 71, 273 and 309 have been amended into the bills discussed above they have been deleted from the Bills Update section.
LB 28 (Connealy) – 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. 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.
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.