LB 1186

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                        LEGISLATURE OF NEBRASKA
                     ONE HUNDRED NINTH LEGISLATURE
                            SECOND SESSION
              LEGISLATIVE BILL 1186
Introduced by Cavanaugh, J., 9.
Read first time January 21, 2026
Committee: Revenue
1 A BILL FOR AN ACT relating to electricity; to amend section 77-6202,
2     Revised Statutes Cumulative Supplement, 2024, and section 77-6204,
3     Revised Statutes Supplement, 2025; to adopt the Affordable American
4     Energy and Jobs Act; to redefine a term and change distribution
5     provisions relating to the nameplate capacity tax; and to repeal the
6     original sections.
7 Be it enacted by the people of the State of Nebraska,
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1Section 1.      Sections 1 to 7 of this act shall be known and may be
2  cited as the Affordable American Energy and Jobs Act.
3Sec. 2.     The Legislature finds and declares the following:
4(1) Electric rates are rising rapidly across the United States due
5    to unprecedented demand for electricity;
6(2) There is a need for energy generation resources which can be
7 quickly developed and can create jobs and economic benefits in local
8    communities;
9(3) Affordable American energy can be quickly developed and can
10    provide jobs, tax revenues, and economic benefits across the state;
11(4) Affordable American energy can provide the lowest cost energy
12  generation resources to the people of the state;
13(5) Affordable American energy enhances our national security by
14  reducing reliance on foreign fossil fuels;
15(6) Affordable American energy does not emit carbon dioxide or other
16 harmful substances that can contaminate our lifegiving and sustaining
17    natural resources; and
18(7) Use of best practices which provide guidance to local governing
19  bodies on issues related to protecting wildlife habitat, bird migration
20  corridors,        native   prairies,   cultural    heritage     sites,    and   prime
21  agricultural areas as well as dealing with economic and social impacts
22  can address challenges related to the development of affordable American
23  energy.
24Sec. 3.      For purposes of the Affordable American Energy and Jobs
25  Act:
26(1) Affordable American energy means electric energy generated using
27 wind, solar, biomass, geothermal, hydropower, or battery energy storage
28     systems or other storage devices for later transmission, distribution, or
29  use;
30(2)   Battery   energy   storage   system   means   a   resource   capable   of
31 receiving electric energy from the electrical grid or from a generation
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1    resource with which the system is associated and storing such electric
2    energy for injection into the electrical grid;
3(3)    Department        means     the     Department  of   Water,       Energy,      and
4  Environment; and
5(4) Private electric supplier has the same meaning as in section
6    70-1001.01.
7Sec. 4.       Before any affordable American energy project and facility
8 is constructed by any private electric supplier, such supplier shall
9    enter into a power purchase agreement or similar contractual agreement
10    with    a    Nebraska    public    power       district,       public     power    and       irrigation
11    district,  municipality,    registered  group    of    municipalities,  electric
12     cooperative,  electric    membership  association,      any    other     governmental
13  entity, or any combination thereof, for purchase of all electric energy
14 and electric capacity of such project or facility and shall maintain a
15     contractual  relationship    for       purchase     of     such    energy       and     capacity
16     throughout the operational life of the project or facility. Privately
17  developed affordable American energy projects or facilities shall not be
18 subject  to    eminent    domain     by    any     Nebraska      public   power      district   or
19     similar entity that supplies electricity to the public in the state of
20     Nebraska.
21Sec. 5.        (1) The department shall develop a list of affordable
22     American energy best practices based on factual information and data for
23     siting affordable American energy projects, including, but not limited
24  to, standards or matrices that can be used by county boards and planning
25  and zoning officials.
26(2) In developing the affordable American energy best practices, the
27    department shall seek assistance from the Game and Parks Commission, the
28    Department of Economic Development, representatives of Nebraska public
29     power       districts,       counties,        health     departments,  energy     developers,
30  agricultural producers, representatives of conservation organizations,
31 and others who have expertise in this area.
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1(3) The department shall also consider siting criteria developed in
2     other   states    to   the    extent      such    criteria       provide   examples    of    best
3 practices.
4(4) Affordable American energy best practices shall include, but not
5     be limited to, the following:
6(a) Appropriate setbacks for different types of affordable American
7 energy facilities which support the development of such facilities;
8(b)       Appropriate     notices     to     neighboring       residents     and   property
9 owners;
10(c) Criteria for protecting wildlife habitat areas, bird migration
11 corridors, native prairies, or other environmentally sensitive areas;
12(d) Criteria for protecting culturally sensitive areas;
13(e) Criteria for protecting prime agricultural lands;
14(f) Guidelines for community benefit agreements or other guidelines
15 which       maximize      job    creation,     with    an    emphasis    on    job   creation     for
16 Nebraska      residents  and   union   members,       and   economic     benefit    to    local
17 communities and the state;
18(g) Consideration of benefits to public power districts and their
19 customers;
20(h) Other criteria which enable local officials to respond to valid
21 issues and concerns; and
22(i) Expedited review processes for facilities which fail to meet
23 affordable American energy best practices.
24(5) On or before October 15, 2026, the department shall publish a
25 preliminary list of affordable American energy best practices on the
26 department's website which shall be open to public comment for thirty
27 days.       The    department     may   hold    one    or    more     public    hearings   on     such
28 preliminary list.
29(6) On or before December 15, 2026, the department shall publish a
30     final   list     of    affordable       American        energy    best     practices    on    the
31  department's website.
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1(7) The list of affordable American energy best practices shall not
2     be binding on any county board or local zoning authority.
3(8) Any county which adopts the list of affordable American energy
4    best practices in its planning and zoning process shall be eligible to
5    receive additional revenue under the nameplate capacity tax.
6(9) The department shall use existing staff and other resources of
7    the department to develop the list of affordable American energy best
8    practices.
9Sec. 6.       There is hereby created the Affordable American Energy Best
10     Practices Cash Fund. The fund shall be administered by the department.
11     The fund may receive gifts, bequests, grants, or other contributions or
12    donations from public or private entities. No General Funds shall be
13    transferred to the Affordable American Energy Best Practices Cash Fund.
14     The fund shall be used for educational purposes related to the Affordable
15  American Energy and Jobs Act and not as incentive payments related to any
16 application or project. Any money in the fund available for investment
17     shall   be   invested     by   the   state   investment    officer   pursuant   to   the
18     Nebraska Capital Expansion Act and the Nebraska State Funds Investment
19  Act.
20Sec.     7.     The    department    may    adopt     and   promulgate   rules   and
21    regulations to carry out the Affordable American Energy and Jobs Act.
22Sec. 8. Section 77-6202, Revised Statutes Cumulative Supplement,
23  2024, is amended to read:
2477-6202 For purposes of sections 77-6201 to 77-6204:
25(1) Commissioned means the renewable energy generation facility has
26    been in commercial operation for at least twenty-four hours. A renewable
27     energy generation facility is not in commercial operation unless the
28     renewable energy generation facility is connected to the electrical grid
29    or to the end user if the renewable energy generation facility is a
30    customer-generator as defined in section 70-2002;
31(2) Nameplate capacity means the capacity of a renewable energy
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1    generation facility to generate electricity as measured in megawatts,
2    including fractions of a megawatt. Nameplate capacity shall be determined
3    based on the facility's alternating current capacity; and
4(3) Renewable energy generation facility means (a) a facility that
5    generates electricity using wind as the fuel source, or (b) a facility
6    that generates electricity using solar, biomass, or landfill gas as the
7    fuel source if such facility was installed on or after January 1, 2016,
8    and has a nameplate capacity of one hundred kilowatts or more, or (c) a
9    battery energy storage system as defined in section 3 of this act.
10Sec.    9.    Section      77-6204,      Revised    Statutes    Supplement,      2025,    is
11    amended to read:
1277-6204       (1)    The   county     treasurer     shall     distribute   all    revenue
13    received from the Department of Revenue pursuant to section 77-6203 as
14    follows:
15(a)    Five    percent      of    such   revenue     shall    be   distributed    to     the
16     community college area in which the renewable energy generation facility
17     is located; and
18(b) The remainder of such revenue shall be distributed to local
19    taxing entities which, but for such personal property tax exemption,
20    would have received distribution of personal property tax revenue from
21     depreciable       personal      property      used    directly     in   the   generation       of
22    electricity using wind, solar, biomass, or landfill gas as the fuel
23    source.
24(2) A local taxing entity's status as eligible for distribution
25    under subdivision (1)(b) of this section shall not be affected when and
26    if   the    net    book    value      of   personal     property    used   directly    in     the
27    generation of electricity using wind, solar, biomass, or landfill gas as
28    the fuel source becomes zero. A local taxing entity's status as eligible
29     for distribution under such subdivision shall be affected by the disposal
30    of all of the exempt depreciable personal property used directly in the
31    generation of electricity using wind, solar, biomass, or landfill gas as
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1    the fuel source.
2(3)(a) (3) The distribution to each eligible local taxing entity
3    under   subdivision      (1)(b)    of    this    section     shall        be   calculated      by
4    determining the amount of taxes that the eligible local taxing entity
5    levied during the taxable year and dividing this amount by the total tax
6    levied by all of the eligible local taxing entities during the year.
7(b)(i) After the resulting fraction has been determined for each
8    eligible local taxing entity, the revenue shall first be distributed to
9    all   counties   that    are   eligible    local    taxing    entities  and    that   have
10    adopted the list of affordable American energy best practices published
11     pursuant to subsection (6) of section 5 of this act by multiplying the
12     resulting fraction of each such county by one hundred fifty percent and
13  then multiplying the resulting amount by the amount of revenue available
14    for   distribution      pursuant   to    subdivision   (1)(b)        of    this      section   to
15    determine the portion of such revenue due each such county.
16(ii) The revenue distributed to a county under subdivision (3)(b)(i)
17     of this section may be used as follows:
18(A) Fifty percent of the revenue shall be retained by the county and
19    used for property tax relief for taxpayers of the county; and
20(B) Fifty percent of the revenue shall be distributed by the county
21    to all electric utilities that provide electric service in the county to
22    be used to reduce the electric bills of the customers of such utilities
23     through energy efficiency, demand side programs or projects, or other
24 similar programs as determined by each utility. The distribution under
25    this subdivision shall be allocated among the utilities on a pro rata
26    basis based on the number of residential customers served in the county
27    by each utility.
28(c) After such distribution, the resulting fraction of each eligible
29    local taxing entity that is not a county that has adopted the list of
30     affordable   American       energy      best    practices    Each  eligible     entity's
31    resulting fraction shall then be multiplied by the remaining amount of
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1 revenue available for distribution pursuant to subdivision (1)(b) of this
2 section to determine the portion of such revenue due each such local
3 taxing entity.
4(4) The Department of Revenue shall not retain any revenue collected
5 pursuant to sections 77-6201 to 77-6204 for distribution, use, transfer,
6 pledge, or allocation to or from the General Fund.
7Sec.   10.   Original   section   77-6202,   Revised   Statutes   Cumulative
8     Supplement, 2024, and section 77-6204, Revised Statutes Supplement, 2025,
9 are repealed.
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