2026 Bulletin #7

LEGISLATIVE BULLETIN

LEAGUE OF NEBRASKA MUNICIPALITIES

109th Legislature, Second Session February 20, 2026 - Bulletin 7

ITEMS OF INTEREST TO MUNICIPALITIES

Stories inside:

• LB 1219: Revenue Committee advanced bill to General File to limit the total amount of property taxes that may be levied by any political subdivision to 2% plus the political subdivision’s “real growth percentage”; Sen. von Gillern, Chair of the Revenue Committee, told the League and NACO that LB 1219 is a “starting point” for negotiations to have a cap that is “firmer than LB 34” (passed in the 2024 Special Session and then amended by LB 647 in the 2025 session to make it workable).

• LB 988: Tax increment financing bill strongly opposed at public hearing

• LB 935: League bill to deter frivolous lawsuits gets priority designation

• LB 1171: Hearing held on bill to require municipalities to pay sewer back up claims within 90 days

• LB 797: League bidding bill advances to Select File

• LB 798: League bill advanced to Select File to amend laws governing planning commissions in cities of the second class and villages as well as the election of city council members in cities of the second class

• LR 312CA: Hearing held on proposed constitutional amendment to allow cities and villages to have more flexibility with tax increment financing projects

• Priority Bills: Senators, Committees, Speaker Arch designate “Priority Bills”

League of Nebraska Municipalities LEGISLATIVE BULLETIN

LB 1219: Revenue Committee advanced bill to General File to limit the total amount of property taxes that may be levied by any political subdivision to 2% plus the political subdivision’s ‘real growth percentage’

Plymouth Sen. Tom Brandt introduced LB 1219 to limit the total amount of property taxes that may be levied by any political subdivision to 2% plus the political subdivision’s “real growth percentage” as defined in the bill. Sen. Brandt also introduced LR 317CA, a proposed constitutional amendment with the same provisions similar to the Property Tax Request Act (also referred to as the “Pink Postcard Bill.”)

The Revenue Committee held a hearing on LB 1219 and LR 317CA on Feb. 5, as reported in League

Legislative Bulletin #5. During the hearing, the League and representatives of other political subdivisions strongly opposed LB 1219 and LR 317CA, outlining the devastating impact these proposals would have on local budgets, necessitating significant cuts in essential services. In addition to a number of other problems with the provisions in LB 1219 and LR 317CA, the definition of “real growth value” does NOT include the tax-increment financing language that is part of the Property Tax Request Act.

LB 1219 in its entirety states as follows: “(1)

Beginning January 1, 2027, and notwithstanding the Property Tax Growth Limitation Act and the School District Property Tax Limitation Act, the total amount of property taxes that may be levied by a political subdivision in any year shall not exceed the total amount levied in the prior year by more than the allowable growth percentage. (2) For purposes of this section: (a) Allowable growth percentage means a percentage equal to the sum of (i) two percent plus (ii) the political subdivision’s real growth percentage; (b) Real growth percentage means the percentage obtained by dividing (i) the political subdivision’s real growth value by (ii) the political subdivision’s total property valuation from the prior year; and (c) Real growth value means the increase in a political subdivision’s total property valuation from the prior year to the current year due to (i) improvements to real property as a result of new construction and additions to existing buildings, (ii) any other improvements to real property which increase the value of such property, (iii) annexation of real property by the political subdivision, (iv) a change in the use of

real property, and (v) any increase in personal property valuation over the prior year.”

On Feb. 18, the Revenue Committee voted to advance LB 1219 to General File, with the following Senators voting “yes”: Brad von Gillern, Mike Jacobson, Teresa Ibach, Kathleen Kauth, Dave Murman, and Tony Sorrentino. Only Lincoln Sen. Eliot Bostar voted “no” and Lincoln Sen. George Dungan was “present and not voting” due to his serious concerns about the bill.

On Feb. 19, the League hosted about 25 lobbyists representing political subdivisions who stand united in opposition to the bill as originally introduced and advanced to General File. On Feb. 20, Elkhorn Sen. von Gillern, Chair of the Revenue Committee, told the League and NACO that LB 1219 is a “starting point” for negotiations to have a cap that is “firmer than LB 34” (passed in the 2024 Special Session and then amended by LB 647 in the 2025 session to make it workable). He also stated that whatever amendments are negotiated would be incorporated into one of the Revenue Committee Priority Bills.

Municipalities and counties are the only political subdivisions subject to the “Property Tax Growth Limitation Act.” Schools have a different property tax cap while all other political subdivisions remain subject to the “lid on restricted funds” which has been in effect since passage of LB 299 in 1996.

How do I follow the Legislature while it's in session?

Nebraska Educational Telecommunications (NET) provides live coverage of legislative floor activity and public committee hearings held at the Capitol. These can be viewed as a videostream from NET's website.

For technical assistance with the videostream, contact NET at (800) 698-3426.

LB 988: Tax increment financing bill strongly opposed at public hearing

On Feb. 17, the Urban Affairs Committee heard testimony on LB 988, introduced by Pender Sen. Glen Meyer. In his opening statement, Sen. Meyer discussed the recent reports issued by the State Auditor regarding his concerns about the use of tax increment financing (TIF). LB 988 is intended to address those concerns.

There were no testifiers at the hearing to support the bill but 13 people testified in opposition including the League, the Nebraska Housing Developers Association, the Nebraska Chamber of Commerce, the Cities of Lincoln and Omaha, Habitat for Humanity Omaha, the Nebraska Realtors Association, the Nebraska Commission on African American Affairs, the Nebraska State Home Builders Association, in addition to developers and attorneys who work with TIF.

There are several issues of the bill that are problematic for municipalities, including the new definition of effective date, the elimination of the language “advances

of money” when that language appears in the Nebraska Constitution relating to TIF, the broad prohibition of TIF not being used for public transportation, and requiring there be an uninhabitable structure on an area being declared substandard or blighted. There is also language in the bill requiring an inspector designated by the city or village declare the structure “permanently uninhabitable.”

Several testifiers spoke of a bill passed last year, LB 288, that expanded the use of TIF for affordable housing and that this bill would reverse that progress.

A representative of the State Auditor’s office testified in a neutral capacity citing concerns about TIF projects, particularly dealing with the lack of supporting documentation.

Thanks to all the testifiers on this bill for bringing forward their compelling reasons why this bill should not be advanced from committee.

LB 935: League bill to deter frivolous lawsuits gets priority designation

The City of David City brought a legislative request to the League’s Legislative Committees to help deter frivolous lawsuits against political subdivisions. The goal was to protect the taxpayers who fund political subdivisions. David City has defended numerous frivolous and harassing lawsuits in the last couple years.

LB 935, introduced by Lincoln Sen. Carolyn Bosn, helps protect scarce public dollars by clarifying a political subdivision may request attorney’s fees and court costs when it must defend a frivolous or harassing claim. Current law allows attorney’s fees and costs for frivolous or bad-faith claims, but it is ambiguous about how those provisions apply to local government. This bill resolves that ambiguity.

LB 935 works as follows: A political subdivision may request attorney’s fees and court costs when it is forced to defend a claim that is “frivolous or intended primarily to harass the political subdivision or its public officials.”

If the court rejects the underlying claim against a political subdivision and the political subdivision requests attorney fees, the court must hold a hearing to determine whether the claim was frivolous or harassing.

If the court determines the claim was frivolous or harassing, the party asserting the claim has the burden to rebut that finding or show the claim was otherwise excused. If the party fails to carry that burden, the court must award reasonable attorney’s fees and other expenses to the political subdivision.

Along with a League representative, the city attorney for David City testified in favor of the bill. Other entities wrote letters of support including the City of Lincoln, the Nebraska Association of County Officials, and the Nebraska School Boards Association.

The Judiciary Committee named LB 935 as one of their Priority Bills, meaning it is likely to be debated by the full Legislature this session.

Thanks to Sen. Bosn for introducing this important legislation for municipalities and other political subdivisions.

League of Nebraska Municipalities LEGISLATIVE

LB 1171: Hearing held on bill to require municipalities to pay sewer back up claims within 90 days

On Feb. 19, the Legislature’s Judiciary Committee took testimony on LB 1171, introduced by Sen. Mike Moser of Columbus. LB 1171 would provide that if a private residence or other building is damaged due to a sewer system backup caused by the negligent act or omission of an employee of the political subdivision that operates the sewer system or a contractor hired by such political subdivision and the amount of damages are known and not in dispute, the owner of the private

LB 797: League bidding bill advances to Select File

On Feb. 19, on a 29-1 vote, the Legislature advanced to Select File LB 797, introduced by Omaha Sen. Terrell McKinney on behalf of the Urban Affairs Committee. LB 797 increases the minimum bidding amount requirements for cities of the first class, cities of the second class, and villages.

Under LB 797, advertisements for bids are required for any

contract costing over $90,000 for enlargement or general improvements, such as water extensions, sewers, public heating systems, bridges, work on streets, or any other work or improvement when the cost of such enlargement or improvement is assessed to the property.

The current bid threshold is $30,000. The bill also raises the minimum bid for municipal electric utilities entering into contracts for the enlargement or improvement of the electric system or for the purchase of equipment used for the enlargement or improvement without advertising for bids.

Under LB 797, the minimum bidding amount for municipal electric utilities would increase in tiered amounts depending on the amount of retail sales by the electric utility. The increased minimum bidding limits would range from $90,000 to $1 million.

residence or other building may file a claim under the Political Subdivisions Tort Claims Act and the governing body of the political subdivision shall pay the claim within 90 days after the date of filing.

LB 1171 was supported by two Columbus residents. LB 1171 was opposed by a representative from the League and the Nebraska Attorney General’s Office. There also were several letters submitted in opposition to the bill.

Priority Bills: Senators, Committees, Speaker Arch designate “Priority Bills”

The deadline for Senators and Committees to designate “priority bills” for the 2026 session was Feb. 19. When a bill is selected as a “Priority Bill,”it greatly enhances the chance of consideration and passage. Without

2026

LEGISLATIVE SESSION

this designation, a bill likely will not be debated this session unless the Speaker schedules non controversial bills for consideration on a “Consent Calendar.”

Each Senator is allowed to select one “Priority Bill”which does not have to be a bill he or she introduced. Click here for the Senator “Priority Bills.” Each Committee is allowed to designate two “Priority Bills.” Click here for the Committee “Priority Bills.”

The Speaker can designate 25 “Priority Bills.” Click here for the Speaker “Priority Bills” announced by Speaker Arch Feb. 20.

League of Nebraska Municipalities LEGISLATIVE

LB 798: League bill advanced to Select File to amend laws governing planning

commissions

in cities of the second class and villages as well as the election of city council members in cities of the second class

Thanks to the Urban Affairs Committee for introducing LB 798 on behalf of the League. On Feb. 19, the Legislature voted to advance LB 798 to Select File, with 33 voting in favor; zero “no” votes; 10 present and not voting; and 6 excused and not voting.

LB 798 amends section 32-554 to allow a city of the second class the option to elect council members by ward or at large. Currently, cities of the first class have the option to elect some of the members of their governing body by ward and some at large. LB 798 would authorize cities of the second class to do so, too.

LR

The City of Yutan brought this request to the League Larger and Smaller Cities Legislative Committees for consideration since Yutan experienced some difficulties with the election of city council members just by ward. LB 798 also amends section 19-926 to allow villages and cities of the second class to have the option for a three-member planning commission. Currently, villages and cities of the second class can have five, seven, or nine members on the planning commission. It is increasingly difficult for smaller municipalities to fill positions on their planning commissions.

312CA: Hearing held on proposed constitutional

amendment to allow cities and villages to have more flexibility with tax

increment financing projects

On Feb. 17, the Urban Affairs Committee held a hearing on LR 312CA, introduced by Kearney Sen. Stan Clouse, to submit to the voters in November 2026, an amendment to Article VIII, Section 12, of the Nebraska Constitution governing tax increment financing (TIF).

In his opening remarks, Sen. Clouse said LR 312CA would allow municipalities to have more flexibility with TIF projects by allowing local decisions on development needs without arbitrary barriers, emphasizing that TIF is one of the few tools municipalities have available.

Sen. Clouse stated LR 312CA would modernize Nebraska’s TIF provisions in the constitution by removing an outdated requirement that the property be “substandard and blighted,” noting that many other neighboring states no longer impose this requirement as a condition of using TIF.

LR 312CA also would allow up to 30 years for repayment of TIF projects involving a “residential development project area or redevelopment project area.” Proponents told the Committee that commercial

and industrial projects have a higher rate of return and can be financed in 15 years; in contrast, affordable housing projects have a much lower rate of return which is why 30 years is necessary. Sen. Clouse and other proponents stated that Nebraska is in need of 120,000 housing units for the 80,000 plus new job openings. LR 312CA would help address this housing crisis. Proponents included Trevor Lee of the Buffalo County Development Council and Craig Bennett of Miller & Associates based in Kearney.

A representative of the Nebraska Association of School Boards signed in opposition to the LR 312CA; there also were nine online opponents.

A League representative testified in a neutral capacity, emphasizing that language allowing for site acquisition costs and certain other provisions need to be reinstated in the proposed constitutional amendment. Notwithstanding, the League representative thanked Sen. Clouse for introducing the measure, agreeing that Nebraska’s TIF provisions need to be modernized; Nebraska has the most restrictive TIF laws of any of our surrounding states. Click here for LR 312CA.

SCHEDULE OF COMMITTEE HEARINGS

The order of the bills listed may not be the order in which they are heard that day in committee.

Monday, February 23, 2026

Banking, Commerce and Insurance Room 1507 - 1:30 p.m.

LB987 Lonowski

LB793 Spivey

LB1042 Rountree

LB1035 Cavanaugh, M.

LB1157 Hansen

LB728 Kauth

LB1198 Prokop

LB1056 Conrad

LB1009 Dungan

LB1011 Dungan

LB1077 Brandt

LB1133 Kauth

LB1170 Wordekemper

Adopt the Vision Benefit Plan Act

Change liability insurance and financial responsibility requirements relating to motor vehicles

Change provisions of the Uninsured and Underinsured Motorist Insurance Coverage Act relating to stacking of coverage

Change and provide limitations on the rating system an insurer can file under the Property Casualty Insurance Rate and Form Act

Provide payment method requirements for health insurers, health insurer vendors, and care management organizations

Require proxy advisors for companies to disclose whether a financial analysis was used for proxy services

Require paper tickets for certain large public events

Business and Labor Room 1200 - 1:30 p.m.

Change provisions of the Nebraska Workers' Compensation Act

Change provisions relating to the date when compensation begins under the Nebraska Workers' Compensation Act

Note: This will be a combined hearing with LB 1011

Change provisions relating to compensation for temporary disability under the Nebraska Workers' Compensation Act

Note: This will be a combined hearing with LB 1009

Change provisions relating to workers' compensation insurance policies and deductibles

Provide for payment of claims against the state Note: This will be a combined hearing with LB 1170

Change provisions relating to filing and appealing claims against the state Note: This will be a combined hearing with LB 1133

General Affairs Room 1023 - 1:30 p.m.

Appointment

Appointment

Appointment

Appointment

Appointment

Appointment

Appointment

Appointment

Pedersen, Boyd L - State Electrical Board

Ritz, Tyler C - State Electrical Board

Conroy, Randall - State Racing and Gaming Commission

Davis, Brenda - Nebraska Arts Council

Dunning, Crystal - Nebraska Arts Council

Hofschire, Shari - Nebraska Arts Council

Jeffrey, Timothy - Nebraska Arts Council

Williams, Lori - Nebraska Arts Council

LB725 Quick Change provisions of the State Electrical Act

LB1120 Hansen

Authorize a progressive jackpot form of lottery and raffle under the Nebraska Lottery and Raffle Act and the Nebraska Small Lottery and Raffle Act

Tuesday, February 24, 2026

Banking, Commerce and Insurance Room 1507 - 1:30 p.m.

LB805 Lonowski Require insurance coverage for infant cranial helmets

LB1142 Hardin Change provisions relating to the Nebraska Visitors Development Act

LB780 Dungan Require insurance coverage of eating disorders

LB971 Guereca Require insurance coverage for rescue and maintenance asthma inhalers

LB1069 Dover Require emergency care providers to submit claims to third-party payors

LB1222 Prokop

Require insurance coverage of acquired brain injury services and require insurance and medicaid coverage of certain testing and treatments for Alzheimer's disease and related dementia

LB939 Murman Adopt the Saving Human Connection Act

Education Room 1525 - 1:30 p.m.

Appointment

Abegglen, Jon - Board of Educational Lands and Funds

LB1262 Andersen Adopt the Foreign Adversaries Out of Postsecondary Education Act

LB1051 Education Change a definition relating to the University of Nebraska

LB1052 Education Change terminology relating to the Student Discipline Act

Urban Affairs Room 1200 - 1:30 p.m.

LB1134 Kauth

Change and provide limitations on updates to state and local building codes, electrical codes, and energy codes

LB1227 Andersen Change provisions relating to local energy codes and local electrical codes

LB1168 Wordekemper Authorize the issuance of conduit revenue bonds under the Community Development Law

LB1250 Guereca Authorize certain cities and villages to sell waterworks, sewer systems, and water systems

LB1129 Dover Change provisions of the Community Development Law

Wednesday, February 25, 2026

Government, Military and Veterans Affairs Room 1507 - 1:30 p.m.

LB1159 Lonowski Require the naming of a person to the Nebraska Hall of Fame

LB1019 Dorn Provide immunity from prosecution for trespass for county assessors

LB1203 Clouse Provide for the treatment of uncashed checks issued by counties

Health and Human Services Room 1510 - 1:30 p.m.

Appointment

Appointment

Appointment

Appointment

Hesser, Kate - Nebraska Rural Health Advisory Commission

Kusek, Katherine - Nebraska Rural Health Advisory Commission

Stoney, Myra - Nebraska Rural Health Advisory Commission

Dexter, April - Nebraska Rural Health Advisory Commission

LB777 Cavanaugh, M. Provide for eligibility and reporting requirements under the medical assistance program

LB949 Ballard

Wednesday, February 25, 2026 (cont.)

Change provisions relating to the prescription drug monitoring program, the statewide health information exchange, and the Health Information Technology Board

LR296 Hallstrom Urge the President of the United States and members of Congress to make permanent changes to the Child and Adult Food Programs

Judiciary Room 1525 - 1:30 p.m.

LB1084 Storer

LB1040 Kauth

Change provisions relating to persons taken into emergency protective custody

Change provisions of the Nebraska Mental Health Commitment Act relating to grounds for civil commitment and inpatient treatment and allow for interested parties to file petitions

LB1055 DeBoer Provide training requirements for an adult protective services official under the Adult Protective Services Act

LB1060 Murman Adopt the Child Placement Services Preservation Act

LR316CA Cavanaugh, M. Constitutional amendment to provide for certain rights of persons with disabilities

Natural Resources Room 1023 - 1:30 p.m.

Appointment

Appointment

Appointment

LB1165 von Gillern

Mayhew, Lynn - Environmental Quality Council

Staples, Amy - Environmental Quality Council

Juelfs, Dallen R - Nebraska Oil and Gas Conservation Commission

Revenue Room 1524 - 1:30 p.m.

Change provisions relating to the Key Employer and Jobs Retention Act, the ImagiNE Nebraska Act, and the Site and Building Development Act and create a grant program to help employers retain or attract employees

LB974 Conrad Provide for an excise tax on individual incomes and create the Tax Equity Cash Fund

LB1150 Hunt

LB1037 Raybould

Prohibit the approval of certain applications under the ImagiNE Nebraska Act

Change provisions relating to negotiations and agreements between the Governor and federally recognized Indian Tribes relating to the collection and dissemination of any cigarette tax or certain other tobacco products tax collected on sales of such products made or sold on a federal recognized Indian tribe’s Indian country

LB931 Cavanaugh, J. Provide an income tax credit related to premium payments for a qualified health plan

LB802 Revenue Change individual income tax rates

LB803 Revenue Change provisions relating to the listing of taxable tangible personal property

LB901 Revenue Change the sales and use tax rate and provisions relating to fund distributions

Thursday, February 26, 2026

Government, Military and Veterans Affairs Room 1507 - 1:30 p.m.

LB1081 Meyer, G. Require state agencies and political subdivisions to purchase flags made in the United States

LB1215 McKinney Adopt the Political Subdivision Contracting Transparency Act

LB1256 Cavanaugh, J. Redefine a term under the Emergency Management Act

Health and Human Services Room 1510 - 12:30 p.m.

Appointment

Owens, David - Stem Cell Research Advisory Committee

Appointment Ulrich, Jim - Nebraska Rural Health Advisory Commission

Appointment

LB746 Hardin

Zamora , Tracy - Nebraska Rural Health Advisory Commission

Eliminate obsolete provisions of the Population Health Information Act

LB796 DeKay Change provisions relating to the practice of pharmacy

LB958 Cavanaugh, M.

LB734 Hunt

LB1200 Guereca

LB943 Dorn

LB952 Dorn

LB909 Hardin

LB910 Hardin

LB1254 Bostar

LB1255 Bostar

Provide a requirement for the Department of Health and Human Services relating to 1915(c) waivers and define nursing facility level of care under the Medical Assistance Act

Change waiver of work requirements under the Supplemental Nutrition Assistance Program

Require industrial integrators to submit an annual disaster mitigation plan to the Department of Health and Human Services

Judiciary Room 1525 - 1:30 p.m.

Provide immunity from claims of public or private nuisance for motor vehicle racing facilities

Create the Supreme Court Operations Cash Fund and terminate the Supreme Court Reports Cash Fund and the Court Appointed Special Advocate Fund

Prohibit sexual abuse by a law enforcement officer

Require defendants convicted of sexual offenses against children to pay a fee for electronic devices seized during prosecution

Prohibit sale of electronic smoking devices without a child safety feature

Prohibit public power suppliers from exercising the power of eminent domain

Friday, February 27, 2026

Education Room 1524 - 1:30 p.m.

LB1216 McKinney Provide for educational services for prisoners

Friday, February 27, 2026

Government, Military and Veterans Affairs Room 1507 - 1:30 p.m.

LB1002 Cavanaugh, M.

LB1017 Raybould

LB1018 Raybould

Change provisions relating to filings under the Nebraska Political Accountability and Disclosure Act

Provide a limit on contributions made to a candidate committee under the Nebraska Political Accountability and Disclosure Act

Change provisions relating to prohibited expenditures by committees under the Nebraska Political Accountability and Disclosure Act

Health and Human Services Room 1510 - 1:30 p.m.

1115 Waiver on Retro Eligibility Period (as required by Neb. Rev. Stat. § 81-604)

Judiciary Room 1525 - 1:30 p.m.

*LB854 & LB906 will be a combined hearing

*LB881 & LB963 will be a combined hearing

This hearing will operate under annotated committee guidelines

*LB854 Hunt

*LB906 Juarez

*LB881 Guereca

*LB963 McKinney

LB907 Juarez

LB1095 Andersen

LB885 Andersen

Prohibit law enforcement officers from wearing facial coverings or disguises and require them to wear appropriate identification

Note: This will be a combined hearing with LB906

Prohibit law enforcement officers from wearing facial coverings or disguises and require officers to wear appropriate identification

This item will operate under annotated committee guidelines

Note: This will be a combined hearing with LB854

Require law enforcement agencies, jails, and the Nebraska State Patrol to receive approval prior to entering into agreements to enforce immigration law

Note: This will be a combined hearing with LB963

Prohibit agreements by state agencies relating to immigration enforcement without legislative approval and change provisions relating to the use of state prisons

Note: This will be a combined hearing with LB881

Prohibit law enforcement officers from entering community safe spaces to enforce immigration law

Nebraska Retirement Systems Room 1525 - 12:00 p.m.

Change provisions relating to the duties of the Nebraska Investment Council, the state investment officer, and the State Treasurer

Allow the Governor to remove the state investment officer from office and eliminate the need for cause for removal of the state investment officer

Rules

Room 1200 - 12:00 p.m.

*Rule Changes #1 & #2 will be a combined hearing

*Rule Change #1 (found on page 610 of the legislative journal)

Note: This will be a combined hearing with Rule Change #2

*Rule Change #2 (found on page 611 of the legislative journal)

Note: This will be a combined hearing with Rule Change #1

Rule Change #3 (found on page 777 of the legislative journal)