Midway through Nebraska’s Legislative Session, a County Zoning Bill Passes Final Reading and Other Bills Make Substantial Progress

The Second Regular Session of the 109th Nebraska Legislature convened on January 7, 2026.  After bill introduction concluded, we analyzed newly introduced bills of interest.  A chart summarizing those bills is available here.

The deadline for senator priority designations was February 19, 2026.  February 23 begins the second half of the 2026 session.  Below we summarize significant bills of interest that have passed or made substantial progress.

County Zoning

On February 20, 2026, the Legislature approved a significant zoning bill, LB 663, on Final Reading.  Unless Governor Pillen vetoes the bill by February 26, 2026, LB 663 will become law.  The bill will take effect three months after the Legislature adjourns.  That means LB 663 will likely take effect in July 2026.

LB 663 (Storer) would “streamline” the review process for county conditional use permits.  First, planning commissions and county boards would need to “presume” a conditional use permit applicant “will comply with all local, state and federal requirements.”  To overcome that presumption, “the party challenging” the conditional use permit would need to provide factual evidence “contrary to the application.” 

Absent “factual evidence” the application does not comply with the zoning regulations, the county “board shall approve the application.”  This means counties would need to approve conditional use permit applications that comply with the zoning regulations.

LB 663 would also confirm counties may not consider legal requirements outside of the zoning regulations.  “Granting a conditional use permit . . . shall be based solely on county zoning regulations.”  While applicants would still need to satisfy external legal requirements, the county may not consider that external compliance in its conditional use permit review.  “A commission or county boards shall not require an applicant for a conditional use permit to apply for or obtain any other permit from a federal, state or local agency as a condition for granting such conditional use permit.”

Second, LB 663 would set the following county deadlines for conditional use permit review:

• Completeness Review. After receiving a conditional use permit application, the zoning administrator or planning commission must determine within 30 days if the application “is complete.”  If the application is incomplete, the applicant must receive notice within 10 days of the deficiency and “what information is required to make the application complete.”
   
  The applicant may then supplement the application to make it complete.  That supplement restarts the zoning administrator or planning commission’s 30-day deadline to determine completeness.

• Planning Commission Recommendation. Once the county “receives a complete application,” the planning commission has 90 days to make a recommendation of approval or denial.  In limited cases, the planning commission must approve or deny the application itself. 
• County Board Determination. After receiving the planning commission’s recommendation, the county board has 30 days to determine completeness.  If it finds incompleteness, the above processes for supplementing the application apply.  Only if the county board receives “information which materially affects” the application may the county board force the applicant to restart the process with the planning commission.
   
  After the county board determines completeness, it must approve or deny the application within 90 days.  If the county board fails to issue a decision within 90 days, “the conditional use permit shall be deemed granted.”

Third, LB 663 modifies the burden of proof in a conditional use permit appeal.  Under the bill, “the appealing party shall have the burden of proving by clear and convincing evidence that such decision (i) was arbitrary, capricious or illegal or (ii) did not adhere to the county’s zoning regulations.”  This change increases the standard from preponderance of the evidence to “clear and convincing evidence.” 

Municipal Authority

While LB 663 is the most significant bill that has passed Final Reading this session, other important bills have made progress.  Several governmental and municipal law bills, for instance, have neared passage or received approval on Final Reading.

LB 384 (Storer) makes one major revision to the Property Tax Request Act.  When a political subdivision pursues an increased property tax request that is greater than the allowable growth percentage, this bill requires a majority of the elected members of the political subdivision and the county assessor to attend the hearing.

The Legislature unanimously approved this bill on Final Reading on February 5, 2026.  Governor then signed the bill on February 9, 2026.  This bill will take effect three months after the Legislature adjourns sine die.

LB 548 (Lippincott, Raybould and G. Meyer) would enable certain cities that own and operate natural gas systems to offer tax-exempt “prepay” transactions to industrial consumers.  Consumers must be within 100 miles of the city and require at least three billion British thermal units of gas per day.  Consumers are ineligible if they currently receive gas from a competitive natural gas provider or have received gas within the past five years from another gas system.  The prepay transaction must involve a competitive natural gas provider.

The Natural Resources Committee advanced this bill to General File in 2025.  The Legislature advanced the bill to Select File on January 29, 2026, and Final Reading on February 12, 2026.  Baird Holm attorneys drafted this bill, lobbied for its passage and negotiated the amendments that have allowed this bill to advance to Final Reading.

LB 935 (Bosn) proposes to allow political subdivisions to recover attorney’s fees and court costs any time they must defend against frivolous or harassing claims.  After a court rejects such a claim against a political subdivision, the court would need to hold a hearing to determine whether the claim was frivolous or harassing.  If the court determined the claim was frivolous or harassing, the party asserting such claim would have the opportunity to rebut that finding or show the claim was otherwise excused.  Unless the party who brought the claim rebuts the presumption, the court must award reasonable attorney’s fees and other expenses to the political subdivision. 

The Legislature referred this bill to the Judiciary Committee.  The bill had a hearing with significant support from Nebraska municipalities on February 18, 2026.  The next day, the Judiciary Committee designated this bill as part of its priority package.

Economic Development

Several economic development bills have also advanced this session.  While state cost remains a concern, some bills without a fiscal note have made progress.

LB 719 (Jacobson) would amend the Nebraska Rural Projects Act by expanding “project” to include “infrastructure development costs,” including natural gas infrastructure, not owned by the applicant.

The Banking, Commerce and Insurance Committee advanced the bill to General File in 2025.  The Legislature advanced the bill to Select File on January 27, 2026, and Final Reading on February 9, 2026.

LB 749 (Sorrentino) proposes to revise the calculation of tax levies for state aid to municipalities.  The Auditor of Public Accounts would no longer provide certain tax request amounts to the Department of Revenue.  Instead, the Property Tax Administrator would rely on the prior year’s certificate of taxes levied.

The Legislature referred this bill to the Revenue Committee.  After a hearing, the Committee advanced the bill to General File on January 30, 2026.

LB 778 (Dungan) would amend the Civic and Community Center Financing Act to eliminate the requirement that municipalities partner with a certified creative district to receive grants.  The change would apply from July 1, 2027, to June 30, 2028. 

The Legislature referred this bill to the Revenue Committee.  After a hearing, the Committee advanced the bill to General File on February 9, 2026.

LB 839 (Rountree) proposes to require cities’ biannual housing report to disclose the number of multifamily housing units constructed within the corporate limits since March 13, 1991, and how many have accessibility certifications under the federal Fair Housing Act. 

The Legislature referred the bill to the Urban Affairs Committee.  Senator Rountree designated this bill his priority bill for the session.  On February 17, 2026, the Committee advanced this bill to General File.

LB 954 (von Gillern) would amend the Nebraska Advantage Act by requiring the Department of Revenue to recalculate a Tier 6 taxpayer’s base‑year employees when part of the business is sold to an entity outside the same unitary group.  Employees from the sold operations would not count unless the sale results in a shutdown within 24 months or causes the site to close.

The Legislature referred this bill to the Revenue Committee.  After a hearing, the Committee advanced the bill to General File on February 6, 2026.

LB 988 (Meyer, DeKay, Hardin and Lippincott) proposes to amend the Community Development Law.  A blighted area would need to include at least one permanently uninhabitable or recently demolished structure.  The bill would also set maximum blighted areas per city or village.  No city or village could re-declare an area blighted within a 20-year period, absent an emergency declaration by the Governor.  Cities would need to report annually on redevelopment projects to the Property Tax Administrator, detailing plan approvals, tax-division dates and development types. 

The Legislature referred this bill to the Urban Affairs Committee on January 14, 2026.  The Committee held a hearing on February 17, 2026, that included significant opposition testimony.  Senator Glen Meyer designed this bill his priority bill for the session.  However, he noted the bill’s slim chances during the hearing.

Energy / Renewable Energy

All of the new energy bills have now had hearings.  None have yet advanced from committee.  The Natural Resources Committee may consider several for its priority package. 

LB 1261 (DeKay, at the request of Governor Pillen) would protect privately owned on‑site electric generation facilities from eminent domain.  The facilities would need to serve an onsite industrial consumer, provide an electrically equivalent point of grid interconnection to the industrial customer and receive approval from the Power Review Board.  “Consumer-owned electric supplier” includes any public power districts, public power and irrigation districts, electric cooperatives, and all other governmental entities or municipalities. 

The generation facility’s owner would also need to execute a “long-term” power purchase agreement, lease, joint venture or other commercial contract with the consumer-owned electric supplier.  The agreement would need to preserve the utility’s exclusive retail service rights, provide acceptable commercial benefits to the utility, prohibit resale of electricity by the industrial consumer and waive the utility’s right to condemn the generation facility.  Unless the utility allows, the generation facility could only serve the on-site industrial customer.  The bill has a sunset clause excluding contracts executed after December 31, 2031. 

The Legislature referred this bill to the Natural Resources Committee.  The bill had a hearing on February 5, 2026, with generally supportive testimony.  Senator Moser designated this bill his priority bill on February 17, 2026.  The Natural Resources Committee advanced this bill to General File on February 19, 2026.

LB 1010 (Brandt) proposes to add energy storage to the inherent powers of public power entities but restrict private suppliers from operating standalone energy storage resources without several local utility approvals.  This would effectively give public power veto authority.  Public power entities could also condemn privately developed storage projects.

The Legislature referred this bill to the Judiciary Committee, which re-referred the bill to the Natural Resources Committee.  The bill had a hearing with mixed testimony on February 11, 2026.  The Natural Resources Committee designated this bill for its priority package on February 19, 2026.

LB 1193 (Prokop) would subject energy storage resources to the nameplate capacity tax.  Like renewable energy generation facilities, energy storage resources would pay an excise tax of $3,518 per megawatt of nameplate capacity.

The bill would also clarify permitting for energy storage resources.  As the Power Review Board’s Guidance Document 14 currently provides, energy storage resources “associated” with a wind or solar farm would qualify under the wind or solar farm’s regulatory approval.  “Standalone” energy storage resources, by contrast, would need a certificate of public convenience and necessity from the Power Review Board. 

No consumer-owned Nebraska electric supplier could condemn an energy storage resources.  Energy storage resources would need to satisfy standard safety practices and avoid inputs from foreign adversaries. 

The Legislature referred this bill to the Revenue Committee.  The bill had a hearing with generally supportive testimony on February 11, 2026.

LB 1204 (Clouse) proposes to limit counties’ authority to dictate setbacks, height limits, decommissioning security, screening, shadow flicker and lighting.  Developers would still need local permits before construction and would need to submit certain reports and surveys to the political subdivision and pay landowners certain crop loss, drainage tile damage and other damages relating to construction. 

For any project smaller than 25 megawatts, the county board would need to approve or deny the permit within 45 days after submission.  For larger projects, the county board would need to approve or deny the permit within 90 days after submission.  Any applicant could appeal to the district court.  The district court would need to order the permit granted if the applicant could demonstrate the denial was arbitrary and capricious, based on a determination of fact the evidence of the record does not support or beyond the county board’s exercise of powers. 

The Legislature referred this bill to the Natural Resources Committee.  The bill had a long hearing with mixed testimony on February 12, 2026.

LB 1026 (Storm, Clouse, DeKay, Sorrentino and Strommen) would limit electric suppliers’ authority to retire electric generation facilities.  If any customer awaits electric service, electric suppliers could not retire or alter service at any electric generation facility unless another legal provision so requires, the facility is mechanically unsafe or beyond repair or the facility is uneconomical to operate.  Any retirement would need a formal resolution by the electric supplier. 

On January 15, 2026, the Legislature referred this bill to the Natural Resources Committee.  The bill had a hearing with largely negative testimony on February 5, 2026.

LB 1027 (Storm, Clouse, DeKay, Sorrentino and Strommen) proposes to subject privately developed renewable energy generation facilities to Power Review Board approval.  After a hearing, the Power Review Board could only approve if “[t]he application will serve the public convenience and necessity, and that the applicant can most economically and feasibly supply the electric service resulting from the proposed construction or acquisition without unnecessary duplication of facilities or operations.”  This would reverse the certification process wind and solar developers gained in 2016.

On January 15, 2026, the Legislature referred this bill to the Natural Resources Committee.  The bill bad a hearing on February 5, 2026.

LB 1172 (Holdcroft) would require all electric suppliers to maintain at least 75 percent “dispatchable” electricity capacity within its generation portfolio.  Dispatchable electricity means “a source of electricity that is readily available for on demand use that the supplier can dispatch upon request of the power grid operator or a source of electricity the supplier can adjust the power output of according to market demands.”  Electric suppliers would need to annually report their compliance to the Power Review Board. 

The Legislature referred this bill to the Natural Resources Committee.  The bill had a hearing on February 4, 2026.

LB 1186 (Cavanaugh, J., and Dungan) proposes the Affordable American Energy and Jobs Act to encourage county “best practices” for permitting “affordable American energy,” including wind, solar, biomass, geothermal, hydropower and battery energy storage projects.  The Department of Water, Energy and Environment would recommend best practices for setbacks, notices, wildlife protection and community benefit agreements. 

Counties that adopt those best practices would receive preference for nameplate capacity tax distribution.  Those counties would split their revenue between the county board and local electric supplier.  The Act would also address projects developed outside of those best practices.  All battery storage facilities would become subject to the nameplate capacity tax.

The Legislature referred this bill to the Revenue Committee.  The bill had a hearing on February 19, 2026.

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Attorneys at Baird Holm LLP have experience in government relations and lobbying, municipal law, and energy development.  Please reach out with any questions.

David C. Levy
Hannes D. Zetzsche
Spencer A. Hosch
Emily J. Hervert
Ellie Crawford
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