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‘MicroTIF’ bill moves forward as Legislature enters final 3 days

‘MicroTIF’ bill moves forward as Legislature enters final 3 days

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The first day of the 2020 Legislature’s final three-day stretch Tuesday saw State Sen. Mike Groene’s “microTIF” bill advance to final reading on a voice vote.

The North Platte lawmaker, however, was effectively blocked in an 11th-hour effort to amend a massive “grand compromise” to open the door to $10 million in state help in developing an industrial “rail park” near Hershey.

No senators spoke during brief second-round consideration of Groene’s Legislative Bill 1021, which would enable property tax refunds for owners of aged homes and business buildings who fix them up or replace them.

LB 1021, now set for a final vote on Thursday’s closing day of the 106th Legislature, would resemble tax increment financing in pegging those refunds to a project’s estimated increase in taxable value and limiting projects to those in areas declared “substandard and blighted.”

The microTIF bill advanced several hours after lawmakers gave 41-4 second-round approval to LB 1107, rewritten last week to at least politically resolve two of the session’s most contentious issues.

The measure renews and rewrites Nebraska’s 33-year-old program of business tax incentives while offering a new income-tax credit, based on a property owner’s school property taxes, in addition to direct discounts on property-tax bills backed by the state’s Property Tax Credit Fund.

A Telegraph analysis last week showed the income-tax credit would have raised the state’s offset of North Platte property owners’ tax bills from 5% to 7.9% had it been in place last year.

Senators voted 42-4 to end debate on LB 1107 without taking up Groene’s rail-park amendment, which he put together in conjunction with the North Platte Area Chamber & Development Corp.

Groene joined the “yes” vote to end debate to fulfill a pledge to Seward Sen. Mark Kolterman, who sponsored the revised business incentives and had helped Groene on another proposal.

Had Groene’s amendment been adopted, nonprofit economic development corporations in counties of less than 100,000 people could have asked the state to match up to $10 million in local funds for rail-park development until the end of 2021.

Groene’s amendment could have enabled the North Platte chamber, which announced a proposed rail-park location in June after years of local efforts, to more quickly develop the site and recruit manufacturers needing access to the Union Pacific Railroad tracks.

Design work is under way on the rail park, which would cover two tracts totaling 118 acres on either side of the Greenbrier Rail Services train-car wheel manufacturing plant just east of Hershey’s city limits.

Chamber leaders secured five-year purchase options for the land after U.P. officials — which long were concerned a rail park might hamper their operations at nearby Bailey Yard — confirmed that site would work for them.

But Groene’s amendment was stymied mainly by Speaker Jim Scheer’s structuring of Tuesday’s Unicameral agenda, which scheduled an unrelated amendment ahead of his and enabled senators to cut off overall debate after 1½ hours.

Groene and State Sen. Steve Erdman of Bayard, who criticized their peers last week for giving up on substantial property tax relief, voted against cutting off debate and advancing LB 1107.

“I absolutely cannot support throwing money at a problem and calling it property tax relief,” Groene said, adding that the income-tax credit’s promised ultimate funding level likely won’t become reality.

Beyond that, he added, the rewritten business tax incentives — now to be called the ImagiNE Act — likely will be as tilted toward eastern Nebraska as their predecessors proved to be.

While projects in Omaha, Lincoln, Columbus and Blair already have been identified as likely beneficiaries, “you go west of Columbus (and) we get nothing,” Groene said. “Northeast Nebraska gets nothing. Southwest Nebraska gets nothing.”

He complained that his rail-park proposal was blockaded on the agenda because “the seven had agreed not to accept (it).” He referred to a group of legislative leaders led by Scheer that developed the omnibus “grand compromise.”

“It would be huge for western Nebraska to have a rail spur and an industrial yard off the largest classification rail yard in the world and next to an interstate that haulsmore tonnage than the other roads in the United States for freight,” Groene told lawmakers.

Chamber President and CEO Gary Person thanked Groene for reaching out to him with his rail-park proposal. The chamber worked with him on revising some of its details, he said.

“Though it won’t make it into law this year, at least he raised the awareness that rural Nebraska needs a boost as well to achieve something that could be a game-changer in our world of economic development,” Person said.

“If we don’t do creative economic development programs to help rural Nebraska, we will continue to see the population erode away in rural counties.”

Sens. Steve Halloran of Hastings and Megan Hunt of Omaha joined Groene and Erdman in voting against advancing LB 1107 to the final stage of floor consideration.

Erdman, who voted against ending second-round debate on the bill, again panned it as offering no more than “a decrease of the increase” in future property taxes.

Sens. Tom Brewer of Gordon, Dan Hughes of Venango and Matt Williams of Gothenburg voted both to end debate on the “grand compromise” and advance it to a final vote Thursday.

Special projects reporter for the Telegraph.

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