Lawmakers will take up second-round debate Wednesday on a bill that requires the state to help develop areas where industries can access railroad lines, such as a “rail park” envisioned near Hershey.
Under LB 40, introduced by North Platte Sen. Mike Groene, nonprofit economic development corporations could apply to the state Department of Economic Development for as much as $50 million in matching funds to cover development costs.
Groene said the bill will help rural communities that are located near rail lines attract manufacturers and companies that seek to expand their operations after the pandemic.
“Nebraska needs to be prepared to address the needs of the manufacturing and transportation industries, as we sit right in the middle of the country,” he said.
In particular, Groene said, LB 40 would enable a proposed rail access business park near Union Pacific’s Bailey Yard in Lincoln County, bringing jobs and economic growth to west central Nebraska.
State matching funds could be used for site acquisition and preparation, utility extensions and rail spur construction, including expenses to help an initial tenant in manufacturing, processing, distribution or transloading trades.
Qualifying projects would have to be located in a county with a population of less than 100,000, which has the effect of forcing the developments to occur in rural Nebraska.
Upon approval and legislative appropriation, an applicant would receive a match from the state for the total investment in the project during a five-year period. The state’s contribution would be capped at $30 million for any one project.
A Revenue Committee amendment, adopted 40-0, set the amount of matching funds that could be paid during the five years at $50 million.
For a large project, the state would provide as much as $5 in matching funds for each dollar invested, so, with a $7 million local investment, a $37 million rail park could theoretically be built.
The state money will be distributed on a “first come, first served” basis, Groene said.
Elkhorn Sen. Lou Ann Linehan, revenue committee chairwoman, said the goal is to attract substantial projects to greater Nebraska.
“We want to see significant investment and job creation in that part of the state,” Linehan said.
Norfolk Sen. Michael Flood supported the bill, saying it represents “big thinking from rural Nebraska.”
North Platte is well-positioned for the proposed project because of Bailey Yard’s large number of rail interconnections, Flood said, but Scottsbluff, Seward and other cities also could host such facilities.
“This is a state program that’s meaningful; it’s about job creation and it thinks big,” Flood said. “It takes advantage of something that we have that very few states have — our logistics.”
Sen. Curt Friesen of Henderson also supported LB 40. He said it could diversify rural Nebraska’s economy, helping smaller communities endure down cycles in the agriculture industry.
“We need to get rural Nebraska running again,” Friesen said, “and I think this might be just the thing that gets it started.”
LB 40 passed first-round debate on a unanimous vote of 42-0. Groene believes the bill will sail through the final rounds of debate and be signed by Gov. Pete Ricketts.
Tentative plans have been sketched to put the rail park near the former Greenbriar plant east of Hershey. Groene said North Platte Chamber and DevCo CEO Gary Person tells him that companies are reportedly already expressing interest in developing there.