Wind Power vs. Health Care: A Lesson In Creative Lawmaking in Nebraska

Editor's Note: This was written by Center for Rural Affairs' Research Director Jon Bailey and included in our final state legislative update for the year. All Nebraskans on our list receive the regular update. Signup now for next year at http://www.cfra.org/singup.

Wind Power vs. Health Care: A Lesson In Creative Lawmaking

One of the more interesting developments over the last few days of the session involved a conflict between two major rural issues - wind power development and health care. In the end, however, it turned out to be a lesson in creative lawmaking.

In the waning days of the session the Legislature considered the Final Reading version of a bill to the jump start Nebraska's lagging wind power development, LB 561. On Select File the Legislature approved an amendment offered by Sen. Langemeier to modify the financing and purchasing agreement provisions of community-based energy projects (C-BED) if Nebraskans have at least a one-third ownership stake in the project. This amendment was apparently at the behest of the Tenaska, an Omaha-based power development corporation, to allow more private investment in wind projects by Tenaska investors. The original intent of C-BED was for rural Nebraskans to be the investors and owners of wind energy projects. While additional wind development is good, it will now apparently be mostly the result of corporate investors rather than through the efforts of public power entities or rural community partnerships.

This amendment also put the state budget in a last minute bind. The projection of more wind projects because of new investment opportunities and sales tax exemptions combined with the provisions of the C-BED law and LB 561 means less revenue for the state. The projected amount of lost state revenue as a result of the passage of LB 561 put the recently-passed state budget in the red by a small amount. As a result, the Legislature had to find revenue savings somewhere and quick. That's where the creative legislating came in. The Legislature turned to LB 420, a bill that would provide a sales tax exemption to non-profit hospitals and clinics, which was awaiting action by the Governor. The combination of lost revenue from both bills left the state budget about $1 million below the required reserve amount. To remedy the situation, the Legislature "unpassed" LB 420, withdrew it from the Governor's desk and left it on Select File for the 2010 session.

Of course, this brought objections by some Senators about why corporate tax breaks were favored over health care. But it may be that the hospitals and clinics were already tax exempt, as the Department of Revenue recently reinterpreted the law and is not currently collecting sales taxes from most of the facilities in question; LB 420 may simply be needed to clarify what the Department of Revenue is already doing.

Despite questions of why the Legislature couldn't take an extra $1 million from the cash reserve fund to do both, on May 27 LB 561was adopted on Final Reading by a 44-1 vote (Sen. Hansen voting "No") and the Governor signed the bill into law on May 29.

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