LB 840



	& Regional
	LB 840
	Economic Development Plan

In 1991 the Nebraska Legislature passed into law the Local Option Municipal Economic Development Act, commonly known as LB 840. The law permits Nebraska cities to commit local sales tax proceeds for the benefit of private businesses.

The City of Scottsbluff, by voter referendum in 1995 and then in 2000, implemented a law which imposes 1.5% sales tax over the State of Nebraska’s 5% sales tax. One-half of $.01 goes directly to a fund earmarked for economic development projects for private businesses. The fund receives more than $600,000 annually.

In order to be eligible for an LB 840 grant, a business must derive its principal source of income from any of the following:

The manufacturing 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 service in interstate commerce
Telecommunication activities
Tourism related activities
Headquarters facilities relating to eligible activities as listed above

Success Stories			The LB 840 committee is comprised of elected officials, local business leaders, and bank representatives that review each application in strict confidence. Scottsbluff City Manager Rick Kuckkahn is the program administrator and is appointed by the City Council of the City of Scottsbluff. The administrator reviews each application with the LB 840 committee and makes recommendations to the City Council, who has final authority in the distribution of these funds.
Business	Amount	Employees
Western Pathology	$125,000	38
Center for Business & Industry	$244,000	training site
Western Plains Business Forms	$50,000	10
Thompson Glass	$50,000	10
HVS Partnership	$125,000	25
Sykes	$500,000	300
Progressive Rail, Morrill	$100,000	51

Most grants are based on the following:

$5,000 per full time employee with a ten-year employment level commitment (for example, a company would have to commit to 100 jobs for a ten-year period to be eligible for a $500,000 grant).
Jobs must be full time and carry benefits which must at least include employee health insurance
10% or $500 per year credit is earned for each full time equivalent employee. The company has the right to carry excess employees back and receive credit for deficiencies from prior years, but not forward.
Any credits not earned must be repaid to the LB 840 fund at the end of the ten-year job commitment period.
Security for potential repayment is usually required; business assets; personal guarantees; or both. Exceptions are made for applicants with a strong financial position.

Historically, the funds have been distributed both within the communities of Scottsbluff and Gering but have not been limited to any particular geographic location so long as the workforce for the businesses are largely derived from a commutable distance from Scottsbluff.

Regional Profile

The Cities of Scottsbluff and Gering are situated in the western portion of the Nebraska panhandle and have approximate populations of 15,000 and 9,000 respectively. Scottsbluff is also situated in Scotts Bluff County, which has an approximate population of 50,000 people, which represents the majority of the regional work force. The communities are the business and shopping center for a large region, which is reflected in the number of vehicles and pedestrians that may be found within the business district on heavy shopping days. In addition to desirable living conditions, Scotts Bluff County is the home of Western Nebraska Community College, a 2-year institution offering a variety of curriculums. A bachelor’s degree through Chadron State College is also available on the local Western Nebraska Community College campus. The Scottsbluff-Gering regional area continues to grow and expand its tax base making the communities one of the most affordable in the mid-western United States.