107th Nebraska Legislature, First Session – Legislature Adjourns Sine Die
The First Session of the 107th Nebraska Legislature adjourned sine die on May 27, 2021. Because this was the first legislative session of the biennium, bills and resolutions from this session will carry-over to the next session. The Second Session of the 107th Legislature is scheduled to convene January 5, 2022.
Here is a chart that provides the status of all First Session bills related to economic development, energy and renewable energy, government and municipal law, healthcare, liquor, real estate and financial transactions, taxation, and telecommunications.
In our first update, available here, we addressed 21 bills from days one through five of bill introduction. In our second update, available here, we identified 20 additional bills of interest. Below are summaries of eight relevant bills the Legislature passed.
LB 9 (Blood) amends provisions relating to the annexation of land by cities and villages. As amended, the bill creates an exception allowing cities of the first class, in counties with at least three cities of the first class, to annex land that would be contiguous with the corporate limits but for a contiguity interruption by federal government land. Annexation under the bill would not result in any change to the service area of any electric utility without an express agreement from such electric utility. The bill also authorizes special valuation of agricultural or horticultural land in certain circumstances. On April 29, 2021, the Legislature passed the bill. On May 5, 2021, Governor Ricketts approved the bill with an emergency clause. Accordingly, the bill took effect immediately upon approval.
LB 25 (Wayne) amends the Community Development Law by increasing the period for dividing ad valorem taxes to 20 years for “extremely blighted areas.” The prior repayment period for Tax Increment Financing (“TIF”) was 15 years. On November 3, 2020, Nebraska voters approved LRCA 2 authorizing a TIF repayment period of 20 years for areas where more than 50 percent of properties are extremely blighted. LB 25 codifies the same. On March 11, 2021, the Legislature passed the bill. On March 17, 2021, Governor Ricketts approved the bill with an emergency clause. Accordingly, the bill took effect immediately upon approval.
LB 40 (Groene) adopts the Rural Development Projects Act. As amended, the bill provides an incentive to develop industrial rail access business parks in counties with populations of less than 100,000. Under the bill, an eligible nonprofit economic development corporation could apply to receive a dollar-for-dollar match of its total investment in an eligible project. The bill caps available funds at $10 million. Applicants must submit an application by December 31, 2022. On May 19, 2021, the Legislature passed the bill. On May 24, 2021, Governor Ricketts approved the bill. On August 27, 2021, the bill takes effect.
LB 81 (Hilkemann) authorizes sanitary and improvement districts to own, construct, and maintain public parking facilities to serve businesses. On April 29, 2021, the Legislature passed the bill. On May 5, 2021, Governor Ricketts approved the bill. On August 27, 2021, the bill takes effect.
LB 83 (Flood) amends the Nebraska Open Meetings Act (the “Act”) by authorizing and expanding the use of “virtual conferencing” during meetings of public bodies, including during declared emergencies. Additionally, public bodies must now require each speaker to provide their name and address and to disclose the name of any organization the speaker represents. In our prior updates, available here and here, we summarized LB 83 in detail. On April 21, 2021, Governor Ricketts approved the bill with an emergency clause. Accordingly, it took effect immediately upon approval.
LB 156 (Wayne) adopts the Municipal Inland Port Authority Act. The Act allows cities of the municipal, primary and first class to create inland port authorities in eligible areas within their jurisdiction. Eligible areas include navigable rivers or waterways, major rail lines, major interstates or highways and major airports. Port authorities will enable the development of shovel-ready commercial and industrial sites merging regional multi-modal transportation and supply chains. The Act allows up to five inland port districts throughout the state.
Port authorities under the Act may: (i) levy sales and use tax, issue and sell revenue bonds and borrow or receive money from both public and private sources, (ii) acquire, lease or sell real property, and (iii) charge fees to businesses and customers to maintain and operate the inland port districts. Port authorities are tax exempt but lack the power of eminent domain. On May 19, 2021, The Legislature passed the bill. On May 26, 2021, Governor Ricketts approved the bill. On August 27, 2021, the bill takes effect.
LB 265 (Blood) amends the Property Assessed Clean Energy Act. The bill exempts from the Act’s reporting requirements those municipalities with a clean energy assessment district but no active energy projects. On April 20, 2021, the legislature passed the bill. On April 23, 2021, Governor Ricketts approved the bill with an emergency clause. Accordingly, the bill took effect immediately upon approval.
LB 544 (Wayne) adopts the Urban Redevelopment Act. The Act, as amended, provides incentives for investment and job creation in “economic redevelopment areas” within cities of the metropolitan or primary class. Economic redevelopment area means an area where the average rate of unemployment is at least 150 percent of the state average, and the average poverty rate is 20 percent or more for the federal census tract in the area.
To qualify, an applicant must apply to the Director of Economic Development (the “Director”). The Director may accept applications until December 31, 2031 up to an $8,000,000 cumulative benefit limit. Political subdivisions and tax-exempt organizations may not apply.
There are two tiers of incentives under the Act. First, are applicants who: (i) commit to a cumulative investment in qualifying property of at least $150,000 and hire at least five new employees at the qualified location within two years of application; and (ii) pay a minimum qualifying wage of at least 70 percent of the statewide average to said employees. Such applicants may receive a tax credit of $3,000 for each qualifying employee and $4,000 for each qualifying employee who lives in an economic redevelopment area. Such applicants may also receive a tax credit of $2,750 for each $50,000 of qualifying investment.
Second, are applicants who commit to a cumulative investment in qualifying property of at least $50,000 within two years of application. Such applicants may receive a tax credit equal to five percent of the qualifying investment. Applicants may not qualify for both tiers and may not exceed a $50,000 credit.
Applicants must maintain their investment and employment levels for the duration of the term of their commitment. The Act sets forth a direct tax payment and refund procedure for any period in which an applicant fails to meet the required levels of investment and employment. On May 20, 2021, the Legislature passed the bill. On May 26, 2021, Governor Ricketts approved the bill. On January 1, 2022, the bill takes effect.
All bills are on the Legislature’s website at http://www.nebraskalegislature.gov/bills/. Please contact us if you have any questions about these bills or any others the Nebraska Legislature is currently considering. Thank you.
Tanner Whited, Summer Associate