Nebraska Grow the Good Life Act: $50 Million HQ Credit

On April 16, 2026, Nebraska Governor Jim Pillen signed Legislative Bill 1165, the Grow the Good Life Act, into law after the Unicameral passed it 42-7 on Final Reading with the emergency clause attached. The act offers up to $50 million in tax credits over 10 years to a large employer that keeps its headquarters, and at least 90% of its base-year Nebraska workforce, in the state through a merger with an out-of-state company.

The statute was written with one merger in mind. Sen. R. Brad von Gillern of Elkhorn, who introduced LB 1165 on the governor's behalf, told the Revenue Committee on February 25, 2026, that the bill targets employers like Union Pacific, which has roughly 3,000 employees at its Omaha headquarters and more than 5,500 across Nebraska, and whose proposed combination with Atlanta-based Norfolk Southern is before the Surface Transportation Board, according to the Unicameral Update and the Nebraska Examiner. The STB rejected the railroads' original application as incomplete on January 16, 2026. Josh Perkes, a Union Pacific senior vice president, testified that the railroad intends for Omaha to remain its headquarters if the merger is approved. No one testified in opposition.

Nearly every state incentive toolkit is built to attract new projects. LB 1165, building on Nebraska's earlier Key Employer and Jobs Retention Act, is built to hold what the state already has when an anchor employer changes hands, the moment when headquarters functions historically migrate to the acquirer's home state.

Key Provisions

LB 1165 combines five performance-based tools for an anchor employer going through a change of control. Sections 1 through 12 of the slip law constitute the Grow the Good Life Act itself. The remaining sections amend the ImagiNE Nebraska Act, the Nebraska Advantage Act, the Convention Center Facility Financing Assistance Act, and the Site and Building Development Act to add the supporting pieces. Exhibit 1 lists each tool and its maximum value.

The credit formula is simple and the caps are hard. A qualified employer earns 5% of the total compensation it pays in a year to retained employees who earn at least 100% of the Nebraska statewide average hourly wage. The slip law states that "the wage retention credit earned for all qualified employers shall not exceed five million dollars in any year" and that total credits under the act "shall not exceed fifty million dollars." Credits are earned over a 10-year performance period, with a separate claims period that begins in 2031, so the state's cash exposure is spread across two decades.

The trigger is narrowly drawn. The merger or combination must be with an out-of-state company that has an actual or implied enterprise value above $50 billion, the employer's shareholders must receive 20% or more of the combined entity's ownership value, and the transaction must occur between January 1, 2026, and December 31, 2028. The employer must also have kept its headquarters in Nebraska for at least 10 years before the deal. Eligibility keys off base-year employment before the merger closes.

The act also reaches into four existing statutes. It amends the Convention Center Facility Financing Assistance Act to extend eligibility to primary-class cities with facilities of more than 16,000 seats, gives Nebraska Advantage Act Tier 6 projects approved after December 1, 2020, three more years (nine instead of six) to meet their targets in exchange for a $90,000 one-time fee, and amends the Site and Building Development Act to fund grants or zero-interest loans of $2.5 million a year to cities of the first class hit by a "sudden and significant" private-sector closure or downsizing, per the Unicameral Update's account of the committee amendment.

Eligibility and Limitations

The 3,000-employee floor limits the wage-retention credit to a handful of anchor employers. Companies on the scale of Union Pacific qualify. Mid-market firms do not. The $50 billion enterprise-value test on the acquiring or merging company narrows the field further to transactions of the Union Pacific-Norfolk Southern class.

The recapture terms are strict. If the employer falls below the 90% retention threshold, the slip law provides that "one-tenth of the credits shall be recaptured from the employer for each year the required level of employment was not maintained," and recaptured amounts are treated as an underpayment of tax, immediately due and payable, and a lien on the employer's assets. Von Gillern described that structure as a strong taxpayer protection.

Both caps are statewide. No more than $5 million in any year and $50 million in total may be earned under the act, and the statutory language applies those caps to all qualified employers combined. In practice the act is sized for one transaction.

The supporting grants are modest and time-limited. The Department of Economic Development's capital-improvement grants run for two fiscal years at $2.5 million a year, and the Department of Labor's grants to economic development organizations helping companies retain and relocate employees are capped at $300,000. Together they add roughly $5 million to the package, small next to the wage-retention credit, but they drew criticism on the floor. Sen. Danielle Conrad of Lincoln called the relocation and capital-improvement provisions a "white glove concierge service" paid for by taxpayers and offered two amendments to strip them, which failed.

What It Means for Other Headquarters States

As merger activity consolidates Fortune 500 headquarters, states are finding that their toolkits were built to attract new employers, with few tools for keeping the ones they have. LB 1165 passed 42-7 on Final Reading and drew zero opposition testimony at its hearing. Union Pacific told the committee it has invested $1.5 billion in Nebraska infrastructure over five years and pays more than $800 million in annual Nebraska payroll.

Other states have reason to follow. The Greater Omaha Chamber called the act "one of the most significant economic development wins Nebraska has advanced in recent years" in its April 17, 2026, legislative update. We expect the structure, a capped, clawback-backed wage-retention credit triggered by change of control, to surface in other states' 2027 sessions wherever a hometown anchor becomes a merger target. Sen. Mike Jacobson of North Platte described the program on the floor as a "model" and suggested it could draw Norfolk Southern employees from Georgia to Nebraska.

Retention incentives now figure on both sides of a merger. State retention money is now a quantifiable input in merger integration planning, alongside the incentives an acquirer's home state may offer to relocate. Von Gillern told the committee that Georgia's governor was likely already courting Union Pacific with competing offers. Norfolk Southern has more than 3,000 workers at its Atlanta headquarters.

Fiscal Cost and Timing

The state's estimated cost is front-loaded and small relative to the payroll at stake. The Nebraska Examiner reported an estimated state revenue loss of $8.7 million in fiscal year 2026-27 and $4.58 million in 2027-28, driven mainly by the grant transfers and ImagiNE changes, against a Union Pacific Nebraska payroll above $800 million a year. The wage-retention credit itself begins to be claimed in 2031.

The act took effect immediately. Because LB 1165 carried the emergency clause and passed Final Reading 42-7 on April 10, 2026, it took effect on the governor's signature on April 16, 2026, one day before the Legislature adjourns sine die on April 17, 2026. Employers do not need to wait for a July operative date, and the Department of Economic Development can begin building application guidance now.

How the act applies to existing ImagiNE Nebraska agreements is unsettled. The enhanced credit percentages and the child-care use of credits sit inside the ImagiNE Nebraska Act, so how the amendments apply to agreements already in place will depend on guidance from the Department of Economic Development and the Department of Revenue. Exhibit 2 lists each date.

What to Do Now

If your company is a large Nebraska employer that is in, or could be drawn into, a merger, this act is worth a look. The credit is limited to anchor employers and pays out only on retained wages, and the qualifying window closes December 31, 2028. If you want a read on eligibility before a deal moves forward, reach out to our team.

References

1. Nebraska Legislature, LB 1165 slip law, approved by the Governor April 16, 2026.
2. Nebraska Legislature, LB 1165 bill page and history.
3. Nebraska Legislature, LB 1165 Final Reading vote record, April 10, 2026 (42-7).
4. Nebraska Legislature, LB 1165 General File vote record, March 24, 2026 (38-3).
5. Nebraska Legislature, Revenue Committee, Committee Statement on LB 1165.
6. Unicameral Update, Retention incentives proposed for 'anchor' companies, February 26, 2026.
7. Unicameral Update, Retention, attraction incentives for large companies advanced, March 24, 2026.
8. Greater Omaha Chamber, Legislative Update, April 17, 2026.
9. Nebraska Examiner, Union Pacific-centric tax incentives measure sees no opposition during hearing, February 25, 2026.
10. Surface Transportation Board, Latest News, Docket No. FD 36873, Union Pacific Corporation and Norfolk Southern Corporation merger proceeding.

© Copyright 2026 TC Policy Group, LLC (d/b/a Crawford Partners). The views expressed herein are those of the author(s) and not necessarily the views of Crawford Partners, its management, its subsidiaries, its affiliates, or its other professionals. Crawford Partners is not a law firm and cannot provide legal advice.