LINCOLN — A bill labeled as a “huge improvement” on Nebraska’s current economic incentive program, the 14-year-old Advantage Act, is ready for prime time.
On a 6-0 vote Thursday, the Legislature’s Revenue Committee advanced Legislative Bill 720, called the ImagiNE Nebraska Act, to debate by the full Legislature later this session.
State Sen. Mark Kolterman of Seward said the ImagiNE Nebraska Act is designed to be easier for businesses to navigate, more transparent and more financially predictable for the state than the Advantage Act, which has been criticized as too complicated and too expensive. It was initially projected to cost $60 million a year in foregone taxes but has ended up costing $120 million to $150 million a year.
Kolterman said the drafters of LB 720, which included state business groups and Gov. Pete Ricketts, heard those concerns and tried to craft a better program, with the goal of “growing Nebraska.”
“It’s a huge improvement,” he said.
Among the aspects of LB 720:
- It would target jobs that pay above the average wage in Nebraska — the Advantage Act required wages that were at least 60% of the “prevailing wage.” Jobs must pay more than $19.50 an hour under the bill.
- Additional incentives would be granted to companies that expand or locate in “extremely blighted” areas of high unemployment, including sections of inner-city Omaha.
- Businesses would be required to report annually their progress in meeting job-creation and investment requirements to qualify for the tax incentives, which Kolterman said should improve transparency on whether too much tax revenue is being lost. He said the goal is for the program to cost $150 million a year.
- A tax credit for companies that use ethanol byproducts to produce biochemicals, which was an initial proposal from Sen. Brett Lindstrom of Omaha. He said the credit would inspire the creation of spinoff companies near the state’s 24 ethanol plants, creating jobs in rural areas.
Two senators, Curt Friesen of Henderson and Mike Groene of North Platte, abstained from voting. Friesen said he cannot support such a bill until the Legislature addresses the state’s high property taxes.
Kolterman had intended to include workforce development and college scholarship components in LB 720, but questions arose within the Revenue Committee about whether it could add proposals that were subjects of public hearings in other committees.
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