Senators pitch business incentives to keep Union Pacific in Nebraska during merger

Several state senators are again eyeing business tax incentives to try to keep big businesses, such as Union Pacific, in the state.

Sen. Brad von Gillern introduced LB1165 Wednesday on behalf of Gov. Jim Pillen. The legislation specifically tailors existing laws, such as the Key Employer and Jobs Retention Act, the ImagiNE Nebraska Act and the Site and Building Development Act. The measure also creates a new grant program that aims to help employers retain and attract employees.

Von Gillern pitched the big business bill as a benefit to the entire state and its workforce. It would only provide incentives to corporations that employ at least 3,000 employees, retain 90% of employees during business changes, offer competitive benefits and health insurance and hire a minimum of 500 new employees.

“LB1165 has been referred to by name as the ‘Union Pacific merger bill’ by some. I suppose, that’s not entirely incorrect, although you’ll not find their name anywhere in the bill. The Grow the Good Life Act is not about corporate welfare, as some will try to say. It’s not about a headquarters building. It’s not about a quarterly earnings report. It’s not about a stock price. It’s not about a merger. It’s about people,” von Gillern said.

The Omaha-area senator said Nebraska is at great risk of losing Omaha-based Union Pacific to Georgia, where Norfolk Southern is based. Union Pacific announced last summer its intention to acquire Norfolk Southern.

In late July, the company reached an agreement with Norfolk Southern to purchase the Atlanta-based railroad for $85 billion. If the merger is approved, Union Pacific would become the first transcontinental railroad. But the business deal has several more hoops to clear before it can take effect.

“If you don't think that Gov. Kemp of Georgia has made a trip to Omaha, with regards to this issue, I'm betting you're wrong, and I'll take that bet with pretty good odds. And if you don't think he had a checkbook in his pocket when he came there, I'll take that bet, too,” von Gillern said.

The senator said it was “too late” to save companies like Cabela’s in Sidney, Tyson in Lexington and ConAgra in Omaha, and this is a preventative measure in this case for Union Pacific. But in that same meeting, a representative from the rail company said it plans to keep its headquarters in Omaha.

“We intend for Omaha to remain the company’s headquarters, retaining and growing our strong workforce to complement this. LB1165 serves as a competitive model to support economic growth through business retention and attraction – all important for our state’s future,” Union Pacific’s Chief HR Officer Josh Perkes said.

A handful of business groups, including the Nebraska Chamber of Commerce, the Greater Omaha Chamber of Commerce and the Lincoln Chamber of Commerce all testified in support of the bill.

But this measure comes as the state faces a sharp budget shortfall and large gaps to fill. Some, including State Auditor Mike Foley and Democratic lawmakers have warned that steep business tax credits are widening Nebraska’s tax shortfall.

In 2025, Foley released a 20-page letter that said recent tax credit measures passed by the Legislature would let Nebraska companies over the next four years rake in more than $1.5 billion in corporate tax incentives – an amount that would reverse the state’s economic hole. Foley has also recently called into question certain tax incentives that are still benefiting companies that started in Nebraska but have since relocated outside of the state.

Von Gillern said this is, specifically, a “pay for performance” plan, so if the business in question does not hit certain standards in the legislation, it would not receive the incentives. In addition to tax credits, the business that meets the specific requirements would also receive up to $5 million in state money to support “capital improvements” to site and building development. State money could also be used for large businesses undergoing a merger to implement a plan that would retain or attract workforce in the state.

The Revenue Committee took no immediate action on the bill, but since it has the backing of the governor, it’s expected to be voted to the floor for full debate.

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