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Legislative Bills Seek to Expand Renewable Energy Generation in Nebraska

on Friday, 13 March 2015 in Dirt Alert: David C. Levy, Editor

The Nebraska Legislature is considering four bills aimed at increasing renewable energy development in Nebraska and generating the significant property tax and economic development that comes with that. These four bills would create tax incentives and simplify the regulatory process for renewable energy projects, clarify the Rural Community Based Economic Development statute and extend the Nameplate Capacity Tax to solar, biomass and landfill gas projects.

LB 423, introduced by Senator Jeremy Nordquist of Omaha, proposes to increase the renewable energy tax credit available for owners of new renewable electric generation facilities. The bill proposes a credit for new renewable electric generation facilities calculated under one of two methods to be selected by the producer: (1) a credit of 1.5 cents for each kilowatt-hour of production or, (2) a one-time thirty percent credit of the total construction costs of the facility. The bill would also allow for the transfer of the credit to other parties and the ability to carry forward the credit for up to seven years after it is first earned. The Revenue Committee considered the bill at a hearing on February 25, 2015.

Senator Ken Haar of Malcom, Nebraska introduced LB 407, which proposes to broaden the class of facilities that would qualify as a certified renewable export facility (CREF) by eliminating several requirements, such as the power purchase agreement obligation. The bill would also repeal the public power districts’ right of first refusal of 10 percent of a CREF’s output and the ability of the Power Review Board to reject the project on a showing of a substantial risk of creating stranded assets. The Natural Resources Committee considered the bill at a hearing on March 4, 2015.

LB 412, introduced by Senator Heath Mello of Omaha, proposes to update the Rural Community-Based Economic Development Act (C-BED) by clarifying the counties that are required to pass a resolution before a C-BED project may proceed and by updating the notification requirements required for project developers. The Legislature advanced this bill to General File on March 4, 2015.

Senator Al Davis of Hyannis, Nebraska introduced LB 424, which proposes to replace the personal property tax with an excise tax called the Nameplate Capacity Tax for solar, landfill gas and biomass resources, to mirror the treatment that wind energy generation facilities currently receive. In addition to the Nameplate Capacity Tax, these facilities would also pay real property tax.

Baird Holm LLP helped prepare each bill and is actively representing clients on all of these bills.

Hannah Fischer, Summer Associate

David C. Levy

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