Nebraska
State Statutes (as of
6/7/07)
Local Option Municipal Economic Development Act
Contact: Tara Hosick
Nebraska Dept. of Economic
Development
(308) 367-8844
_______________________________________________________________
Section 18-2701
Act, how cited.
Sections
18-2701 to 18-2738 shall be known and may be cited as the Local Option
Municipal Economic Development Act.
Source:
Laws 1991, LB 840, � 1
Laws 1993, LB 732, � 16
Laws 1995, LB 207, � 1
Laws 2001, LB 827, � 9
~Revised Statutes Cumulative
Supplement, 2006
Section 18-2702
Legislative findings.
The
Legislature finds that:
(1) There
is a high degree of competition among states and municipalities in our nation
in their efforts to provide incentives for businesses to expand or to locate in
their respective jurisdictions;
(2)
Municipalities in Nebraska are hampered in their efforts to effectively compete
because of their inability under Nebraska law to respond quickly to
opportunities or to raise sufficient capital from local sources to provide
incentives for the provision of new services or business location or expansion
decisions which are tailored to meet the needs of the local community;
(3) The
ability of a municipality to encourage the provision of new services or
business location and expansion has a direct impact not only upon the economic
well-being of the community and its residents but upon the whole state as well;
and
(4) There
is a need to provide Nebraska municipalities with the opportunity of providing
assistance to business enterprises in their communities, whether for expansion
of existing operations, the creation of new businesses, or the provision of new
services, by the use of funds raised by local taxation when the voters in the
municipality determine that it is in the best interest of their community to do
so.
Source:
Laws 1991, LB 840, � 2
Laws 2001, LB 827, � 10
~Revised Statutes Cumulative
Supplement, 2006
Section 18-2703
Definitions, where found.
For
purposes of the Local Option Municipal Economic Development Act, the
definitions found in sections 18-2703.01 to 18-2709 shall be used.
Source:
Laws 1991, LB 840, � 4
Laws 2001, LB 827, � 11
~Revised Statutes Cumulative
Supplement, 2006
Section 18-2703.01
Advanced telecommunications capability, defined.
Advanced
telecommunications capability shall mean high-speed, broadband
telecommunications capability that enables users to originate and receive
high-quality voice, data, graphics, and video telecommunications using any
technology.
Source:
Laws 2001, LB 827, � 12
~Revised Statutes Cumulative
Supplement, 2006
Section 18-2704
City, defined.
City shall
mean any city of the metropolitan class, city of the primary class, city of the
first class, city of the second class, or village, including any city operated
under a home rule charter. City shall also include any group of two or more
cities acting in concert under the terms of the Interlocal
Cooperation Act or Joint Public Agency Act by means of a properly executed
agreement.
Source:
Laws 1991, LB 840, � 5
Laws 1999, LB 87, � 64
Cross References:
Interlocal
Cooperation Act,see section
13-801.
Joint Public Agency Act,see
section 13-2501.
~Revised Statutes Cumulative
Supplement, 2006
Section 18-2705
Economic development program, defined.
Economic
development program shall mean any project or program utilizing funds derived
from local sources of revenue for the purpose of providing direct or indirect
financial assistance to a qualifying business or the payment of related costs
and expenses or both, without regard to whether that business is identified at
the time the project or program is initiated or is to be determined by
specified means at some time in the future. An economic development program may
include, but shall not be limited to, the following activities: Direct loans or
grants to qualifying businesses for fixed assets or working capital or both;
loan guarantees for qualifying business; grants for public works improvements
which are essential to the location or expansion of, or the provision of new
services by, a qualifying business; grants or loans for job training; the
purchase of real estate, options for such purchases, and the renewal or
extension of such options; the issuance of bonds as provided for in the Local
Option Municipal Economic Development Act; and payments for salaries and
support of city staff to implement the economic development program or the
contracting of such to an outside entity. For cities of the first and second
class and villages, an economic development program may also include grants or
loans for the construction or rehabilitation for sale or lease of housing for
persons of low or moderate income. An economic development program may be
conducted jointly by two or more cities after the approval of the program by
the voters of each participating city.
Source:
Laws 1991, LB 840, � 6
Laws 1993, LB 732, � 17
Laws 1995, LB 207, � 3
Laws 2001, LB 827, � 13
~Revised Statutes Cumulative
Supplement, 2006
Section 18-2706
Election, defined.
Election
shall mean any general election, primary election, or special election called
by the city as provided by law.
Source:
Laws 1991, LB 840, � 7
~Reissue Revised Statutes of
Nebraska
Section 18-2707
Financial institution, defined.
Financial
institution shall mean a state or federally chartered bank, a capital stock
state building and loan association, a capital stock federal savings and loan
association, a capital stock federal savings bank, and a capital stock state
savings bank.
Source:
Laws 1991, LB 840, � 8
Laws 2003, LB 131, � 21
~Revised Statutes Cumulative
Supplement, 2006
Section 18-2708
Local sources of revenue, defined.
Local
sources of revenue shall mean the city's property tax or the city's local
option sales tax.
Source:
Laws 1991, LB 840, � 9
~Reissue Revised Statutes of
Nebraska
Section 18-2709
Qualifying business, defined.
Qualifying
business shall mean any corporation, partnership, limited liability company, or
sole proprietorship which derives its principal source of income from any of
the following: The manufacture of articles of commerce; the conduct of research
and development; the processing, storage, transport, or sale of goods or
commodities which are sold or traded in interstate commerce; the sale of
services in interstate commerce; headquarters facilities relating to eligible
activities as listed in this section; telecommunications activities, including
services providing advanced telecommunications capability; or tourism-related
activities. In cities of the first and second class and villages, a business
shall also be a qualifying business if it derives its principal source of
income from the construction or rehabilitation of housing. In cities with a
population of more than two thousand five hundred inhabitants and less than ten
thousand inhabitants, a business shall also be a qualifying business if it
derives its principal source of income from retail trade, except that no more
than forty percent of the total revenue generated pursuant to the Local Option
Municipal Economic Development Act for an economic development program in any
twelve-month period and no more than twenty percent of the total revenue
generated pursuant to the act for an economic development program in any
five-year period, commencing from the date of municipal approval of an economic
development program, shall be used by the city for or devoted to the use of
retail trade businesses. For purposes of this section, retail trade shall mean
a business which is principally engaged in the sale of goods or commodities to
ultimate consumers for their own use or consumption and not for resale. In
cities with a population of two thousand five hundred inhabitants or less, a
business shall be a qualifying business even though it derives its principal
source of income from activities other than those set out in this section.
If a
business which would otherwise be a qualifying business employs people and
carries on activities in more than one city in Nebraska or will do so at any
time during the first year following its application for participation in an
economic development program, it shall be a qualifying business only if, in
each such city, it maintains employment for the first two years following the
date on which such business begins operations in the city as a participant in its
economic development program at a level not less than its average employment in
such city over the twelve-month period preceding participation.
A
qualifying business need not be located within the territorial boundaries of
the city from which it is or will be receiving financial assistance.
Source:
Laws 1991, LB 840, � 10
Laws 1993, LB 121, � 145
Laws 1993, LB 732, � 18
Laws 1994, LB 1188, � 1
Laws 1995, LB 207, � 4
Laws 2001, LB 827, � 14
~Revised Statutes Cumulative
Supplement, 2006
Section 18-2710
Economic development program; proposed plan, contents.
The
governing body of any city proposing to adopt an economic development program
shall prepare a proposed plan for such economic development program. The proposed
plan shall include:
(1) A
description of the city's general community and economic development strategy;
(2) A
statement of purpose describing the city's general intent and proposed goals
for the establishment of the economic development program;
(3) A
description of the types of businesses and economic activities that will be
eligible under the program for the city's assistance;
(4) A
statement specifying the total amount of money that is proposed to be directly
collected from local sources of revenue by the city to finance the program,
whether the city desires the authority to issue bonds pursuant to the Local
Option Municipal Economic Development Act to provide funds to carry out the
economic development program, the time period within which the funds from local
sources of revenue are to be collected, the time period during which the
program will be in existence, and a basic preliminary proposed budget for the
program;
(5) A
description of the manner in which a qualifying business will be required to
submit an application for financial assistance, including the type of
information that will be required from the business, the process that will be
used to verify the information, and the steps that will be taken to insure the
privacy and confidentiality of business information provided to the city;
(6) A
description of the administrative system that will be established to administer
the economic development program, including a description of the personnel
structure that will be involved and the duties and responsibilities of those
persons involved; and
(7) A
description of how the city will assure that all applicable laws, regulations,
and requirements are met by the city and the qualifying businesses which
receive assistance.
Source:
Laws 1991, LB 840, � 11
Laws 1993, LB 732, � 19
~Reissue Revised Statutes of
Nebraska
Section 18-2710.01
Economic development program; housing for low-income or moderate-income
persons; proposed plan; contents; eligibility criteria.
(1) If the
proposed economic development program involves the making of grants or loans
for the construction or rehabilitation for sale or lease of housing for persons
of low or moderate income, the proposed plan shall specify (a) the income
levels which will qualify persons for participation in the housing program and
(b) the criteria for determining the adjustments to be made to the income of
persons to determine their qualification for participation. For purposes of the
Local Option Municipal Economic Development Act, the city shall determine
low-income and moderate-income standards for the economic development program
by basing such standards upon existing federal government guidelines or
standards for qualifying for any federal housing assistance program as such
levels may be modified by the consideration of existing local and regional
economic conditions and income levels.
(2) In
establishing the criteria to be applied in determining appropriate adjustments
to the income of persons seeking consideration for participation in the program
pursuant to subsection (1) of this section, the city shall consider the
following factors:
(a) The
amount of income of the person which is available for housing needs;
(b) The
size of the family to reside in each housing unit;
(c) The
cost and condition of housing available in the city;
(d)
Whether the person or any member of the person's family who will be residing in
the housing unit is elderly, infirm, or disabled;
(e) The
ability of the person to compete successfully in the private housing market and
to pay the amounts the private enterprise market requires for safe, sanitary,
and uncrowded housing; and
(f) Such
other factors as the city determines which are
particularly relevant to the conditions facing persons seeking new or
rehabilitated housing in the city.
Source:
Laws 1995, LB 207, � 2
~Reissue Revised Statutes of
Nebraska
Section 18-2711
Land purchase; creation of loan fund; additional requirements.
(1) If the
proposed economic development program involves the purchase of or option to
purchase land, the proposed plan shall also specify the manner in which tracts
of land will be identified for purchase or option to purchase and whether or
not the city proposes to use the proceeds from the future sale of such land for
additional land purchases.
(2) If the
proposed economic development program involves the creation of a loan fund, the
proposed plan shall also specify:
(a) The
types of financial assistance that will be available, stating the maximum
proportion of financial assistance that will be provided to any single
qualifying business and specifying the criteria that will be used to determine
the appropriate level of assistance;
(b) The
criteria and procedures that will be used to determine the necessity and
appropriateness of permitting a qualifying business to participate in the loan
fund program;
(c) The
criteria for determining the time within which a qualifying business must meet
the goals set for it under its participation agreement;
(d) What
personnel or other assistance beyond regular city employees will be needed to
assist in the administration of the loan fund program and the manner in which
they will be paid or reimbursed;
(e) The
investment strategies that the city will pursue to promote the growth of the
loan fund while assuring its security and liquidity; and
(f) The
methods of auditing and verification that will be used by the city to insure
that the assistance given is used in an appropriate
manner and that the city is protected against fraud or deceit in the conduct or
administration of the economic development program.
Source:
Laws 1991, LB 840, � 12
Laws 1993, LB 732, � 20
~Reissue Revised Statutes of Nebraska
Section 18-2712
Public hearing; governing body; adopt resolution; filing.
Upon
completion of the proposed plan, the governing body of the city shall schedule
a public hearing at which such plan shall be presented for public comment and
discussion. Following the public hearing, the governing body shall adopt the
proposed plan and any amendments by resolution. At the discretion of the
governing body, the resolution may include the full text of the proposed plan or
it may be incorporated by reference. The resolution shall include a statement
of the date at which the economic development program will be presented to the
voters of the city for approval pursuant to section 18-2713 and the language of
the ballot question as it will appear on the ballot. Following its adoption, a
copy of the resolution and the proposed plan shall be filed with the city clerk
who shall make it available for public review at city hall during regular
business hours.
Source:
Laws 1991, LB 840, � 13
Laws 1993, LB 732, � 21
~Reissue Revised Statutes of
Nebraska
Section 18-2713
Election; procedures.
Before
adopting an economic development program, a city shall submit the question of
its adoption to the registered voters at an election. The governing body of the
city shall order the submission of the question by filing a certified copy of
the resolution proposing the economic development program with the election
commissioner or county clerk not later than forty-one days prior to a special
election or not later than fifty days prior to a primary or general election.
The question on the ballot shall briefly set out the terms, conditions, and
goals of the proposed economic development program, including the length of
time during which the program will be in existence, the year or years within
which the funds from local sources of revenue are to be collected, the source
or sources from which the funds are to be collected, the total amount to be
collected for the program from local sources of revenue, and whether the city
proposes to issue bonds pursuant to the Local Option Municipal Economic
Development Act to provide funds to carry out the economic development program.
The ballot question shall also specify whether additional funds from other noncity sources will be sought beyond those derived from
local sources of revenue. In addition to all other information, if the funds
are to be derived from the city's property tax, the ballot question shall state
the present annual cost of the economic development program per ten thousand
dollars of assessed valuation based upon the most recent valuation of the city
certified to the Property Tax Administrator pursuant to section 77-1613.01. The
ballot question shall state: "Shall the city of (name of the city)
establish an economic development program as described here by appropriating
annually from local sources of revenue $...... for ....... years?". If the only city revenue source for the proposed
economic development program is a local option sales tax that has not yet been
approved at an election, the ballot question specifications in this section may
be repeated in the sales tax ballot question.
If a
majority of those voting on the issue vote in favor of the question, the
governing body may implement the proposed economic development program upon the
terms set out in the resolution. If a majority of those voting on the economic
development program vote in favor of the question when the only city revenue
source is a proposed sales tax and a majority of those voting on the local
option sales tax vote against the question, the governing body shall not
implement the economic development program, and it shall become null and void.
If a majority of those voting on the issue vote against the question, the
governing body shall not implement the economic development program.
Source:
Laws 1991, LB 840, � 14
Laws 1993, LB 732, � 22
Laws 1995, LB 490, � 23
~Reissue Revised Statutes of
Nebraska
Section 18-2714
Economic development program; established by ordinance; amendment; repeal;
procedures.
(1) After
approval by the voters of an economic development program, the governing body
of the city shall, within forty-five days after such approval, establish the
economic development program by ordinance in conformity with the terms of such
program as set out in the original enabling resolution.
(2) After
the adoption of the ordinance establishing the economic development program,
such ordinance shall only be amended (a) to conform to the provisions of any
existing or future state or federal law or (b) after notice, at least one
public hearing, and a two-thirds vote of the members of the governing body of
the city, when necessary to accomplish the purposes of the original enabling
resolution.
(3) The
governing body of a city shall not amend the economic development program so as
to fundamentally alter its basic structure or goals, either with regard to the
qualifying businesses that are eligible to participate, the uses of the funds
collected, or the basic terms set out in the original enabling resolution,
without submitting the proposed changes to a new vote of the registered voters
of the city in the manner provided for in section 18-2713.
(4) The
governing body of a city may, at any time after the adoption of the ordinance
establishing the economic development program, by a two-thirds vote of the
members of the governing body, repeal the ordinance in its entirety and end the
economic development program, subject only to the provisions of any existing
contracts relating to such program and the rights of any third parties arising
from those contracts. Prior to such vote by the governing body, it shall
publish notice of its intent to consider the repeal and hold a public hearing
on the issue. Any funds in the custody of the city for such economic
development program which are not spent or committed at the time of the repeal
and any funds to be received in the future from the prior operation of the
economic development program shall be placed into the general fund of the city.
Source:
Laws 1991, LB 840, � 15
~Reissue Revised Statutes of
Nebraska
Section 18-2715
Citizen advisory review committee; membership; meetings; powers;
unauthorized disclosure of information; penalty.
(1) The
ordinance establishing the economic development program shall provide for the
creation of a citizen advisory review committee. The committee shall consist of
not less than five or more than ten registered voters of the city who shall be
appointed to the committee by the mayor or chairperson subject to approval by
the governing body of the city. At least one member of the committee shall have
expertise or experience in the field of business finance or accounting. The
ordinance shall designate an appropriate city official or employee with
responsibility for the administration of the economic development program to
serve as an ex officio member of the committee with responsibility for
assisting the committee and providing it with necessary information and advice
on the economic development program.
(2) No
member of the citizen advisory review committee shall be an elected or
appointed city official, an employee of the city, a participant in a decisionmaking position regarding expenditures of program
funds, or an official or employee of any qualifying business receiving
financial assistance under the economic development program or of any financial
institution participating directly in the economic development program.
(3) The
ordinance shall provide for regular meetings of the citizen advisory review
committee to review the functioning and progress of the economic development
program and to advise the governing body of the city with regard to the
program. At least once in every six-month period after the effective date of
the ordinance, the committee shall report to the governing body on its findings
and suggestions at a public hearing called for that purpose.
(4)
Members of the citizen advisory review committee, in their capacity as members
and consistent with their responsibilities as members, may be permitted access
to business information received by the city in the course of its
administration of the economic development program, which information would
otherwise be confidential (a) under section 84-712.05, (b) by agreement with a
qualifying business participating in the economic development program, or (c)
under any ordinance of the city providing access to such records to members of
the committee and guaranteeing the confidentiality of business information
received by reason of its administration of the economic development program.
Such ordinance may provide that unauthorized disclosure of any business
information which is confidential under section 84-712.05 shall be a Class III
misdemeanor.
Source:
Laws 1991, LB 840, � 16
Laws 1993, LB 732, � 23
~Reissue Revised Statutes of
Nebraska
Section 18-2716
Expenditures; budget.
Following
the adoption of an ordinance establishing an economic development program, the
amount to be expended on the program for the ensuing year or biennial period
shall be fixed at the time of making the annual or biennial budget required by
law and shall be included in the budget.
Source:
Laws 1991, LB 840, � 17
Laws 2000, LB 1116, � 16
~Revised Statutes Cumulative
Supplement, 2006
Section 18-2717
Appropriations; restrictions.
(1) No
city shall appropriate from funds derived directly from local sources of
revenue for all approved economic development programs, in each year during
which such programs are in existence, an amount in excess of four-tenths of one
percent of the taxable valuation of the city in the year in which the funds are
collected.
(2)
Notwithstanding the provisions of subsections (1) and (3) of this section, no
city of the metropolitan or primary class shall appropriate from funds derived
directly from local sources of revenue more than three million dollars for all
approved economic development programs in any one year, no city of the first
class shall appropriate from funds derived directly from local sources of
revenue more than two million dollars for all approved economic development
programs in any one year, and no city of the second class or village shall
appropriate from funds derived directly from local sources of revenue more than
one million dollars for all approved economic development programs in any one
year.
(3)
Notwithstanding the provisions of subsections (1) and (2) of this section, no
city shall appropriate from funds derived directly from local sources of
revenue an amount for an economic development program in excess of the total
amount approved by the voters at the election or elections in which the
economic development program was submitted or amended.
(4) The
restrictions on the appropriation of funds from local sources of revenue as set
out in subsections (1) through (3) of this section shall apply only to the
appropriation of funds derived directly from local sources of revenue. Sales
tax collections in excess of the amount which may be appropriated as a result
of the restrictions set out in such subsections shall be deposited in the
city's economic development fund and invested as provided for in section
18-2718. Any funds in the city's economic development fund not otherwise
restricted from appropriation by reason of the city's ordinance governing the
economic development program or this section may be appropriated and spent for
the purposes of the economic development program in any amount and at any time
at the discretion of the governing body of the city subject only to section
18-2716.
(5) The
restrictions on the appropriation of funds from local sources of revenue shall
not apply to the reappropriation of funds which were
appropriated but not expended during previous fiscal years.
Source:
Laws 1991, LB 840, � 18
Laws 1992, LB 719A, � 79
Laws 1993, LB 732, � 24
Laws 2000, LB 1258, � 1
~Revised Statutes Cumulative
Supplement, 2006
Section 18-2718
Economic development fund; required; use; investment; termination of program;
effect; continuation of program; election.
(1) Any
city conducting an economic development program shall establish a separate
economic development fund. All funds derived from local sources of revenue for
the economic development program, any earnings from the investment of such
funds including, but not limited to, interest earnings, loan payments, and any
proceeds from the sale or rental by the city of assets purchased by the city
under its economic development program shall be deposited into the economic
development fund. Any proceeds from the issuance and sale of bonds pursuant to
the Local Option Municipal Economic Development Act to provide funds to carry
out the economic development program, except as provided in section 18-2732,
shall be deposited into the economic development fund. Except as provided in
this section, subsection (4) of section 18-2714, and subsection (7) of section
18-2722, no money in the economic development fund shall be deposited in the
general fund of the city. The city shall not transfer or remove funds from the
economic development fund other than for the purposes prescribed in the Local
Option Municipal Economic Development Act, and the money in the economic
development fund shall not be commingled with any other city funds.
(2) Any
money in the economic development fund not currently required or committed for
purposes of the economic development program shall be invested as provided for
in section 77-2341.
(3) In the
event that the city's economic development program is terminated as provided in
subsection (4) of section 18-2714 or subsection (7) of section 18-2722, the
balance of money in the economic development fund not otherwise committed by
contract under the program shall be deposited in the general fund of the city.
Any funds received by the city by reason of the economic development program
after the termination of such program shall be transferred from the economic
development fund to the general fund of the city as such funds are received.
The economic development fund shall not be terminated until such time as all
projects and contracts related to the program have been finally completed and
all funds related to them fully accounted for, with no further city action
required, and after the completion of a final audit pursuant to section
18-2721.
(4) When
the economic development program is terminated, the governing body of the city
shall by resolution certify the amount of money to be transferred from the
economic development fund to the general fund of the city and the amount that
is anticipated will be received by the city between such time and the final
audit of the economic development fund. The sum of those two amounts shall be
divided by the number of years in which funds for the economic development
program were collected from local sources of revenue. The resulting figure
shall constitute the amount to be applied against the budgeted expenditures of
the city during each succeeding year until all funds from the economic
development program have been expended. The installments shall be used to
reduce the property tax levy of the city by that amount in each year in which
they are expended.
(5) If,
after five full budget years following initiation of the approved economic
development program, less than fifty percent of the money collected from local
sources of revenue is spent or committed by contract for the economic
development program, the governing body of the city shall place the question of
the continuation of the city's economic development program on the ballot at
the next regular election.
Source:
Laws 1991, LB 840, � 19
Laws 1993, LB 732, � 25
~Reissue Revised Statutes of
Nebraska
Section 18-2719
Loan fund program; qualifying business; documentation required.
At the time
when a qualifying business makes application to a city to participate in a loan
fund program, the qualifying business shall provide to the city appropriate
documentation evidencing its negotiations with one or more primary lenders and
the terms upon which it has received or will receive the portion of the total
financing for its activities which will not be provided by the city.
Source:
Laws 1991, LB 840, � 20
~Reissue Revised Statutes of
Nebraska
Section 18-2720
Loan fund program; loan servicing requirements.
(1) If the economic development program involves the establishment of a loan fund, the governing body of the city shall designate an appropriate individual to assume primary responsib