Small Business and the 2005 Legislature
Small businesses generally fared well in the 2005 Nebraska Legislature. The legislature adopted and the Governor signed into law several bills and initiatives that will help develop and expand small businesses, particularly in rural Nebraska.
More importantly, the small business initiatives and resources coming out of the 2005 legislature are a major recognition that entrepreneurship and small business development are core pieces of any rural economic development strategy. The actions of the 2005 legislature will help to begin creation of a new rural economy in Nebraska, one that places a greater emphasis on entrepreneurship and one that deposits more resources in the development of small businesses.
Highlights of the recently concluded 2005 session include:
○ An increase in funds to the Nebraska Microenterprise Partnership Fund through the state budget. Since 2000, the Microenterprise Partnership Fund lost over half its funding. The budget approved in the 2005 session for the two-year state budget biennium beginning July 1, 2005 restored nearly all that funding. That will allow organizations like REAP to provide more assistance to start-up and expanding businesses in rural communities.
○ A state income tax credit specifically for small
businesses. The “Small Business Microenterprise Tax Credit Program” was included in LB 312. The program allows up to $2 million annually in refundable individual income tax credits for businesses with five or fewer employees in certain areas of the state.
These include qualifying businesses in municipalities or counties that have lost population in the two most recent censuses, in designated federal enterprise zones, and in areas with less than 80 percent of the average statewide per capita income. The tax credit will begin in the 2006 tax year.
○ A grant program to encourage entrepreneurial
activity. The “Building Entrepreneurial Communities Act” was included in LB 90, the rural economic development package adopted by the Legislature.
This program will provide grants to community and regional partnerships to promote and support entrepreneurial activities. Recipients of these grants could do things such as develop business capital funds, business training programs, entrepreneurial education programs, and other local initiatives related to small business and entrepreneurial development.
○ Value-added agriculture grants were also part of LB 90. The legislature re-authorized and re-funded the Agricultural Opportunities and Value-Added Partnerships program. This program will provide grants to new and developing value-added agricultural initiatives, with a focus on small-scale businesses.
Rules, regulations, and forms to access these programs will be developed after July 1. Please watch Center for Rural Affairs publications and updates on how you and your community might use these programs.