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Last year, when I introduced, prioritized, and carried LB 720 to Select File, I did so because I firmly believe in the importance of growing our state. Whether your top issue is to reduce high property taxes for farmers and ranchers or to reform school funding, we must recognize that a thriving business sector is a critical part of the solution. Our businesses are listening and I hope this message is that we value their commitment to Nebraska, and we value the jobs that they bring to our communities, border to border.
After LB 720 was held on Select File, I used the interim to make a good bill even better. In order to meet the competitive needs of Nebraska’s businesses and communities, we’ve made changes to specifically address business activities in areas of opportunity for our state and we’ve made other competitive enhancements as well. We’ve worked to address concerns that we heard in the bill hearing with this committee last year, throughout the session, and into the interim: primarily that LB 720 didn’t go far enough in addressing the pressing needs of rural Nebraska.
Based upon concerns we heard from our rural senators and rural manufactures across the state, we have added two new tiers to the mainline program. Last Thursday, I presented these changes to the Revenue Committee.
We have added a new rural manufacturing tier. For counties with populations less than 100,000 thousand people, if a company hires 5 new FTE’s and invests $1,000,000 dollars, the company would qualify for a wage credit of 6% and an investment tax credit of either 4% or 7% if the investment is greater than $10 million dollars. Manufacturing is a growth industry for Nebraska and often starts employees out at entry level wages because of the large training investment these companies put in to their employees. These companies also often bolster these wage levels with strong benefit packages too. One of the concerns we heard last year were the wages were too high for rural areas so the proposal is to set the wage compensation at $31,387 annually, must offer an ACA compliant health insurance plan and a sufficient benefit package.
We have also added a new Manufacturing Growth and Expansion Tier. If a manufacturing company if a company hires 10 new FTE’s and invests $1,000,000 dollars, the company would qualify for a wage credit of 4% and an investment tax credit of either 4% or 7% if the investment is greater than $10 million dollars. To qualify under this category, a company must pay a new employee $33,618 annually, offer an ACA compliant health insurance plan, and a sufficient benefit package on top of that base wage.
Even by making these wage threshold adjustments, we are still increasing wages under this program from where we are today with Nebraska Advantage.
We are also creating a new program called the Key Employer and Jobs Retention Act. This will allow the state to be proactive when it comes to keeping key employers in the state and retaining our well-paid employees when there is a change in ownership and control of the key employer and the new owners are considering moving some or all of the jobs to another state.
We are trying to create a new program that is nimble and responsive to the conditions of a quickly changing economy. In an economy that will continue to see more acquisitions, mergers, and relocations, this Act is a step in the right direction.
In order to qualify for this new act, a key employer must employ over 1000 FTE’s. They must keep at least 90% of the base year employment at a wage threshold of 100% of the statewide average. There is a yearly cap of $4 million dollars and a 10 year cap of $40 million dollars. If the company fails to retain the required level of employment of the entire performance period, all or a portion of the retention credits will be recaptured or disallowed.
If this program had been in place a few years ago, our state would have been more competitively positioned to help retain Cabela’s in Sidney. We simply cannot afford to continue to be reactive to this reality of today’s economy. With an ever-evolving tech economy and fast-growing companies developing across our state, we need to look forward and contemplate what tools will be necessary in order to retain growing companies who are prime for buyouts by out-of-state corporations.
I will continue to work with my colleagues to ensure a timely passage of LB 720 this session because if we do not, the State of Nebraska will be at an extreme disadvantage at attracting new opportunities for our employees in an ever changing global economy.
As always, if we can be of assistance to you in any way, please do not hesitate to contact my office. My door is open and I have made it a goal to be accessible to the constituents of our district. Please stop by any time. My e-mail address is email@example.com, and the office phone number is 402-471-2756. Tyler and Katie are always available to assist you with your needs. If I am not immediately available, please do not hesitate to work with them to address any issues that you may need assistance. Please continue to follow me on Facebook at Kolterman for Legislature and on Twitter at @KoltermanforLegislature.