Amendments to Last Year’s “Good Life” District Incentive Bill in Nebraska
In Lincoln, state legislators made adjustments and then progressed with the refinement of last year’s “Good Life” District incentive legislation on Wednesday. The bill aimed to offer substantial state incentives for unique developments.
During the debate on Legislative Bill 1317 at the Capitol Rotunda, certain amendments were introduced, highlighting the frenzied last-minute efforts on the final day of the 2024 session to modify and push forward bills after the second-round debate.
Rod Yates, developer of Nebraska Crossing (Cindy Gonzalez/Nebraska Examiner)Z
The previous year saw the enactment of the Good Life Transformational Projects Act, which intended to provide state incentives for the establishment of large shopping, youth sports, and hotel complexes capable of attracting out-of-state investments, visitors, and renowned retailers like IKEA and Crate & Barrel.
Nebraska Crossing played a pivotal role in advocating for this act, outlining ambitious plans that developers believe could draw in over 20 million visitors annually and generate sales exceeding $2 billion.
The act permits half of the state’s sales taxes to be allocated towards development and financing expenses, potentially amounting to $55 million annually in incentives for Nebraska Crossing if their envisioned projects, inspired by those in Kansas City, come to fruition.
Attracting Youth Sports Tourism
Advocates of the Good Life initiative argue that the returns will manifest in a collective upsurge in new tax revenues and an enhanced quality of life by retaining local shoppers, promoting youth sports tourism within the state, and enticing visitors and shoppers from neighboring states.
They contend that a development situated between Omaha and Lincoln will offer the necessary population density to entice retailers who had not previously considered Nebraska as a viable market.
However, the implementation of last year’s act encountered challenges in terms of state financing, leading to disagreements among developers in the Nebraska Crossing vicinity.
State Sen. Eliot Bostar of Lincoln. (Zach Wendling/Nebraska News Service)
State Senator Eliot Bostar from Lincoln emphasized the necessity for new “guardrails” due to the broad eligibility criteria under last year’s act for receiving state Good Life incentives.
Bostar asserted, “Not everything should qualify as a Good Life District. We require controls, we need constraints before the situation spirals out of control.”
Currently, two Good Life Districts have received approval from the Nebraska Department of Economic Development to proceed, namely at Nebraska Crossing and the Avenue One development in Omaha. Four additional applications are under review, including those from Bellevue and Grand Island.
Adoption of Several Amendments
The amendments approved during the second-round review on Wednesday and earlier included:
- Empowering local voters to determine the imposition of additional sales or occupation taxes within a Good Life District to aid in covering development and financing expenses.
- Allowing multiple developers to participate, addressing concerns raised by some developers in the Nebraska Crossing region, and granting them a voice in the inclusion or exclusion of their land within a district.
- Granting the original applicant for a Good Life District the authority to establish standards for development and design aspects such as architecture, landscape design, construction materials, and sustainability.
- Authorizing a local municipality to allocate a portion of its local sales taxes generated within the Good Life District to support infrastructure development.
- Designating the State Department of Economic Development as a mediator in case of disputes between developers and municipalities, in addition to its existing role in reviewing and approving such districts.
- Setting a 30-year lifespan for the districts, with the Department of Economic Development conducting reviews after two and five years to assess if a Good Life District meets the specified criteria for incentives.
Limitation on Good Life Districts
Another legislative proposal in progress aims to cap the number of Good Life Districts in the state to a maximum of five.
LB 1317 amalgamated numerous revenue-related measures, forming a comprehensive “package” of bills often referred to as a “Christmas tree bill” due to its multifaceted nature.
The discussions on Wednesday primarily revolved around rectifying an alleged drafting error in a bill passed last year, which granted a state income tax exemption to Social Security recipients and federal retirees on federal annuity retirement plans.
Senator Lou Ann Linehan clarified that the intention of the previous law was to exclusively exempt federal retirees under an older federal retirement scheme predating 1984, not those under a more recent retirement plan combining Social Security and annuities.
Elimination of Tax Exemption for Recent Federal Retirees
The exclusion of these newer retirees was proposed as a cost-saving measure, estimated to save the state $12 million at a time when budget constraints necessitate reductions to accommodate new expenditures from bills passed in the current year.
However, the removal of this tax break sparked objections from Senator Carol Blood of Bellevue, who, along with federal retirees, championed the tax exemption through LB 38 last year.
Blood argued for parity, advocating that federal retirees should receive the same tax benefits as Social Security recipients, especially those ineligible for Social Security like pre-1984 federal employees.
She emphasized the importance of fairness, highlighting the legislative focus on retaining retirees in the state, a principle she believed should extend to federal retirees as well. Last year’s bill, according to Blood, encountered no opposition.
Nevertheless, an attempt to reinstate the tax exemption for recent federal retirees fell short, facing a 6-32 vote.