Elgin does not currently have an LB840 economic development program, but we think that should change!

The Local Option Municipal Economic Development Act, commonly known as LB840, gives Nebraska communities a powerful, locally controlled tool to strengthen their economic future. Approved by Nebraska voters in 1990 and enacted in 1991, LB840 allows cities and villages—when approved by their local voters—to dedicate local revenue to an economic development program designed around the community’s own priorities and opportunities.

At its heart, LB840 is about local choice and local investment. Communities can use an approved program to provide loans or grants to qualifying businesses, support job training, make infrastructure improvements needed for business expansion, acquire property for development, and support other eligible economic development activities.

For Nebraska communities, the benefits can reach far beyond any individual project. An LB840 program can help attract new businesses, encourage existing businesses to expand, create and retain quality jobs, stimulate private investment, strengthen the local tax base, and address community needs such as workforce housing. Most importantly, it allows local residents to decide through the ballot box how local resources can best be invested in the future of their community.

LB840 is therefore more than an economic development funding mechanism—it is an opportunity for a community to take an active role in shaping its own future, turning local resources into investments that can create lasting economic opportunity and a stronger, more vibrant place to live and work.

Frequently Asked Questions

What is LB840?

LB840 is a Nebraska law that allows cities and villages to create a local economic development program using local sales tax revenue. The program can provide financial and other assistance to eligible businesses and economic development projects. You can read more about the Local Option Municipal Economic Development Act, LB840, on the Nebraska Dept. of Economic Development website found HERE.

Elgin's proposed economic development program is designed to support local businesses, encourage new business investment, create and retain quality jobs, and strengthen the local economy.

Why is Elgin proposing an LB840 economic development program?

Elgin's Economic Development Plan identifies the need for additional tools to compete for businesses, encourage investment, support existing businesses, and create and retain quality jobs.

LB840 would give Elgin a dedicated source of funding that could be used to provide financial and other assistance to eligible businesses and economic development projects.

The goal is to help create sustainable community economic development in Elgin to ensure the community will thrive for years to come.

What is Elgin's approved Economic Development Plan?

Elgin's approved Economic Development Plan can be viewed in full by clicking HERE.

What will the questions look like on the ballot?

PROPOSITION NO. 1

Shall the City Council of the City of Elgin increase the local option sales and use tax by 0.5%, to an aggregate amount of 1.5%, upon the same transactions within the City on which the State of Nebraska is authorized to impose a tax, subject to the terms and conditions of the Proposition as set out below?

O Yes (For the Sales and Use Tax Increase) O No (Against the Sales and Use Tax Increase)

Terms and Conditions: The terms and conditions of Proposition No. 1 are as follows:

· Economic Development Portion: If Proposition No. 2 passes, the additional 0.5% City Sales and Use Tax shall be appropriated to the Economic Development Program – also known as an LB840 program – as provided for in the Plan set out in Proposition No. 2. If Proposition No. 2 fails, the 0.5% sales tax increase shall not be implemented.

· Termination of Tax: The 0.5% City Sales and Use Tax increase shall automatically terminate on September 30, 2047, unless the tax is extended by a vote of the electorate prior to that date.

PROPOSITION NO. 2

Shall the city of Elgin establish an economic development program as described here by appropriating annually from local sources of revenue approximately $65,962.60 for 20 years?

O Yes (For the Program) O No (Against the Program)

Terms and Conditions: The Economic Development Program, as adopted by the City Council, is summarized as follows:

· Goals of the Program: The goal of the Program is to provide quality jobs for the citizens of the City and the local area. Funds will be used to encourage and assist existing and new Qualifying Businesses to create and retain jobs, through direct or indirect ﬁnancial assistance.

· Eligible Activities: Activities eligible for the Program include, but are not limited to, direct loans or grants for ﬁxed assets or working capital, loan guaranties, grants for public works improvements, grants or loans for job training, real estate purchases and options, issuing bonds, paying City staff or contracted administration expenses, providing technical assistance, location expenses, equity investments, and grants or loans for the construction or rehabilitation of housing pursuant to a Workforce Housing Plan or an affordable housing action plan.

· Qualifying Businesses: Eligible businesses include those deriving principal income from manufacturing, research and development,

processing/storing/transporting/selling goods in interstate commerce, selling services in interstate commerce, headquarters facilities, telecommunications, tourism, ﬁlm production, early childhood care, retail trade, and housing construction/rehabilitation pursuant to a Workforce Housing Plan or an affordable housing action plan.

Because the City has a population of 5,000 or less, any business may be considered a Qualifying Business.

· Duration of the Program: The Program shall be effective starting July 1, 2027, and shall continue in existence through September 30, 2047.

· Years of Collection: The sales tax collections to fund the Program will be collected from July 1, 2027, to September 30, 2047.

· Source of Funds: The Program will primarily be funded by an additional City Sales Tax of 0.5%.

· Total Amount to be Collected: The total amount proposed to be directly collected from local sources is estimated to be $1,330,245.77 for the ﬁrst twenty-one ﬁscal years.

· Bond Issuance: The City proposes to and may issue bonds pursuant to the Act to fund and carry out the Program.

· Additional Sources of Funds: Additional funds from noncity sources, including grants, state or federal funds, or donations, will be sought beyond those derived from local sources of revenue.

Why are there two questions on the ballot?

One question is for approving the economic development plan that has been approved by the Elgin city council. The other question is how the plan will be funded, which is a 0.5% increase in local sales tax.

Both have to pass in order for the economic development program to begin as it is currently prepared.

If voters approve the economic development program but reject the proposed sales tax, the City cannot implement the economic development program, and the program becomes null and void.

Is LB840 a new tax?

LB840 is the economic development program. The proposed funding mechanism for Elgin's program is an additional 0.5% local sales tax.

If approved, this would bring Elgin's total local option sales tax to 1.5%.

How much is the proposed sales tax?

The proposed additional sales tax is 0.5%.

That means the LB840 portion would be 50 cents on a $100 taxable purchase.

The additional 0.5% would be collected from July 1, 2027, through September 30, 2047.

How much money is expected to be generated?

Based on the estimates in Elgin's Economic Development Plan, the program is expected to collect approximately $1.33 million over its 20-year period.

Actual collections may vary depending on sales tax revenue.

Where will the money go?

The plan's preliminary budget allocates:

97% for grants for eligible economic development activities
3% for administration, oversight, and reporting activities for the fund

The majority of the funds are therefore intended to directly support eligible economic development activities.

What can Economic Development funds be used for?

Elgin's plan allows funds to be used for a variety of eligible economic development activities, including:

Direct loans or grants to qualifying businesses
Working capital or fixed assets
Loan guarantees
Public improvements necessary for a qualifying business
Job training
Purchase or options for real estate
Technical assistance, including marketing and management assistance
Business financial assistance
Expenses associated with locating a qualifying business
Equity investment in a qualifying business
Workforce housing
Construction or rehabilitation of eligible housing

The funds must be used for purposes allowed under Nebraska law and the approved Economic Development Plan.

What types of businesses can receive assistance?

Elgin's plan includes a broad range of eligible businesses and activities, including:

Manufacturing
Research and development
Processing, storing, transporting, or selling goods
Services sold in interstate commerce
Telecommunications
Tourism-related activities
Retail
Film production
Early childhood care and education
Workforce housing and eligible housing activities

Because Elgin has a population of fewer than 5,000 people, the plan also provides that any corporation, partnership, limited liability company, or sole proprietorship may qualify, even if its primary source of income does not fall within the specifically listed categories.

Can existing businesses apply, or is this only for new businesses?

Both.

The program is intended to support both existing businesses looking to expand and new businesses considering locating in the area.

The plan specifically states that the program is intended to promote and expand existing businesses while also helping Elgin compete for new businesses.

Can a small business apply?

Yes.

Elgin's plan is intentionally broad in who may qualify for assistance. Because Elgin has fewer than 5,000 residents, any corporation, partnership, LLC, or sole proprietorship may be considered a qualifying business, subject to the requirements of the plan and applicable law.

Does a business have to be located in Elgin?

No.

The plan states that a qualifying business does not have to be located within Elgin's city limits. For example, a business located just outside of Elgin city limits can qualify.

However, the project must meet the requirements of the Economic Development Plan and Nebraska law.

If approved, what happens to the program after 2047?

The current plan provides for the program to continue through September 30, 2047. After that date the plan will go back to a vote to be renewed.

Any changes to the plan must follow the amendment requirements outlined in the plan and Nebraska law.

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Where can I learn more?

Residents can review Elgin's complete Economic Development Plan and additional information about the proprosed program on this website.

Questions about the program can also be directed to:

City of Elgin, 402-843-5822, cityclerk@elginnebraska.org

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