Read the full stored bill text
LEGISLATURE OF NEBRASKA
ONE HUNDRED NINTH LEGISLATURE
SECOND SESSION
LEGISLATIVE BILL 850
Introduced by Cavanaugh, J., 9.
Read first time January 08, 2026
Committee: Urban Affairs
A BILL FOR AN ACT relating to the Local Option Municipal Economic1
Development Act; to amend section 18-2705, Reissue Revised Statutes2
of Nebraska, and section 18-2709, Revised Statutes Supplement, 2025;3
to redefine terms; to authorize the use of economic development4
programs for certain construction or rehabilitation of housing in5
cities of the metropolitan class and primary class; to harmonize6
provisions; and to repeal the original sections.7
Be it enacted by the people of the State of Nebraska,8
LB850
2026
LB850
2026
-1-
Section 1. Section 18-2705, Reissue Revised Statutes of Nebraska, is1
amended to read: 2
18-2705 (1) Economic development program means any project or3
program utilizing funds derived from local sources of revenue for the4
purpose of providing direct or indirect financial assistance to a5
qualifying business or the payment of related costs and expenses or both,6
without regard to whether that business is identified at the time the7
project or program is initiated or is to be determined by specified means8
at some time in the future. 9
(2) An economic development program may include, but shall not be10
limited to: (a) Direct loans or grants to qualifying businesses for fixed11
assets or working capital or both, (b) loan guarantees for qualifying12
businesses, (c) grants for public works improvements which are essential13
to the location or expansion of, or the provision of new services by, a14
qualifying business, (d) grants or loans to qualifying businesses for job15
training, (e) the purchase of real estate, options for such purchases,16
and the renewal or extension of such options, (f) grants or loans to17
qualifying businesses to provide relocation incentives for new residents,18
(g) the issuance of bonds as provided for in the Local Option Municipal19
Economic Development Act, and (h) payments for salaries and support of20
city staff to implement the economic development program or develop an21
affordable housing action plan, including any such plan required under22
section 19-5505, or payments for the contracting of such program23
implementation or plan development to an outside entity.24
(3) An For cities of the first class, cities of the second class,25
and villages, an economic development program may also include grants,26
loans, or funds for construction or rehabilitation for sale or lease of27
housing (a) for persons of low or moderate income, (b) as part of a28
workforce housing plan, or (c) as part of an affordable housing action29
plan, including any such plan required under section 19-5505. :30
(a) Construction or rehabilitation for sale or lease of housing (i)31
LB850
2026
LB850
2026
-2-
for persons of low or moderate income, (ii) as part of a workforce1
housing plan, or (iii) as part of an affordable housing action plan,2
including any such plan required under section 19-5505;3
(4) For cities of the first class, cities of the second class, and4
villages, an economic development program may also include grants, loans,5
or funds for: 6
(a) (b) Rural infrastructure development as defined in section7
66-2102; or 8
(b) (c) Early childhood infrastructure development.9
(5) (4) An economic development program may be conducted jointly by10
two or more cities after the approval of the program by the voters of11
each participating city. 12
Sec. 2. Section 18-2709, Revised Statutes Supplement, 2025, is13
amended to read: 14
18-2709 (1) Qualifying business means any corporation, partnership,15
limited liability company, or sole proprietorship which derives its16
principal source of income from any of the following: The manufacture of17
articles of commerce; the conduct of research and development; the18
processing, storage, transport, or sale of goods or commodities which are19
sold or traded in interstate commerce; the sale of services in interstate20
commerce; headquarters facilities relating to eligible activities as21
listed in this section; telecommunications activities, including services22
providing advanced telecommunications capability; tourism-related23
activities; or the production of films, including feature, independent,24
and documentary films, commercials, and television programs.25
(2) Qualifying business also means: 26
(a) A In cities of the first class, cities of the second class, and27
villages, a business that derives its principal source of income from the28
construction or rehabilitation of housing; 29
(b) In cities of the first class, cities of the second class, and30
villages, a business that derives its principal source of income from31
LB850
2026
LB850
2026
-3-
early childhood care and education programs; 1
(c) A business that derives its principal source of income from2
retail trade. For purposes of this subdivision, retail trade means a3
business which is principally engaged in the sale of goods or commodities4
to ultimate consumers for their own use or consumption and not for5
resale; and 6
(d) In cities with a population of five thousand inhabitants or less7
as determined by the most recent federal decennial census or the most8
recent revised certified count by the United States Bureau of the Census,9
a business shall be a qualifying business even though it derives its10
principal source of income from activities other than those set out in11
this section. 12
(3) If a business which would otherwise be a qualifying business13
employs people and carries on activities in more than one city in14
Nebraska or will do so at any time during the first year following its15
application for participation in an economic development program, it16
shall be a qualifying business only if, in each such city, it maintains17
employment for the first two years following the date on which such18
business begins operations in the city as a participant in its economic19
development program at a level not less than its average employment in20
such city over the twelve-month period preceding participation.21
(4) A qualifying business need not be located within the territorial22
boundaries of the city from which it is or will be receiving financial23
assistance. 24
(5) Qualifying business does not include a political subdivision, a25
state agency, or any other governmental entity, except as allowed for26
cities of the first class, cities of the second class, and villages for27
rural infrastructure development as provided for in subdivision (4)(a)28
(3)(b) of section 18-2705. 29
Sec. 3. Original section 18-2705, Reissue Revised Statutes of30
Nebraska, and section 18-2709, Revised Statutes Supplement, 2025, are31
LB850
2026
LB850
2026
-4-
repealed. 1
LB850
2026
LB850
2026
-5-