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LB 291

Adopt the Aid to Municipalities Act

109th Legislature (2025-2026)

LB291 creates the Aid to Municipalities Fund to grant up to $5 million per municipality annually for eligible Nebraska infrastructure projects, funded to about $15 million yearly.

Title printed. Carryover bill
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Bill Summary · LB 291

Summary of Legislative Bill LB291 — Aid to Municipalities Act

Status and Timeline
- Bill: LB291
- Title: Adopt the Aid to Municipalities Act
- Introduced: January 15, 2025
- Committee: Urban Affairs
- Hearing: February 4, 2025 (Notice of hearing issued January 27, 2025)
- Current status: Notice of hearing; bill components include creating a new state aid program and amending existing statutes

Purpose and Intent
- LB291 creates the Aid to Municipalities Act to provide state financial assistance to Nebraska municipalities (cities and villages) for infrastructure projects, services, and local development.
- The Legislature states an intent to appropriate $15 million annually to fund the Act.

Key Provisions
1. Establishment of the Aid to Municipalities Fund
- A new fund, the Aid to Municipalities Fund, is created.
- The Department of Economic Development administers the program and uses the fund to award grants and cover administrative costs.
- Money in the fund may be invested consistent with Nebraska law (Nebraska Capital Expansion Act and Nebraska State Funds Investment Act).

  1. Eligible Recipients

    • Municipality means any city or village in Nebraska.
    • Grants are awarded to municipalities, not to counties or other entities, under the Act’s framework.

  2. Eligible Projects and Uses of Grant Funds

    • Infrastructure projects funded must be owned or operated by the municipality and include:
      • Solid waste management facilities
      • Wastewater, storm water, and water treatment works and systems
      • Water distribution facilities
      • Water resources projects (e.g., pumping stations, transmission lines)
      • Resource recovery systems
      • Airports
      • Port facilities
      • Buildings and capital equipment for municipal operations and resident services
      • Convention and tourism facilities
      • Redevelopment projects (as defined by statute)
      • Parking facilities
    • Excluded from eligibility: public highways and bridges, and municipal roads, streets, and bridges
    • Grant funds may be used for:
      • Construction, acquisition, or equipping of infrastructure projects
      • Paying the principal, interest, premium, and issuance costs on bonds issued to finance such projects
    • Funds must be used exclusively for these purposes and placed in a separate municipal fund.

  3. Application and Award Process

    • Municipalities may apply by submitting a department-prescribed form detailing:
      • Amount of grant funds requested
      • Description of the funded infrastructure projects
    • Applications are reviewed in the order received and may be approved as appropriations permit.
    • Each grant shall not exceed $5 million.

  4. Administration and Rules

    • The department may adopt and promulgate rules and regulations to implement the Act.
    • The Act provides a framework for grant administration, including fund management and compliance.

  5. Amendments to Existing Statutes

    • LB291 also amends section 13-518, Revised Statutes, to redefine and adjust several terms (e.g., allowable growth, capital improvements, governmental unit, restricted funds, state aid) to align with the new Aid to Municipalities Act framework.
    • Revisions include changes effective for fiscal years beginning on or after July 1, 2025, related to governing bodies and classifications of governmental units.

Funding and Fiscal Impact
- The Legislature expresses an intent to appropriate $15 million annually to carry out the Aid to Municipalities Act (state-level funding).
- Each grant is capped at $5 million, with total annual funding allocated based on available appropriations.

Impact and Stakeholders
- Affected: Nebraska municipalities (cities and villages), and the Department of Economic Development as administrator.
- Potential beneficiaries: municipalities undertaking eligible infrastructure projects that align with the Act’s definitions and funding priorities.
- Administrative impact: establishment of a dedicated fund and revised statutory definitions to support grant administration and compliance.

Compiled from official sources — confirm details with the bill’s official record.

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