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LEGISLATURE OF NEBRASKA
ONE HUNDRED NINTH LEGISLATURE
SECOND SESSION
LEGISLATIVE BILL 1156
Introduced by Spivey, 13.
Read first time January 20, 2026
Committee: Revenue
A BILL FOR AN ACT relating to revenue and taxation; to adopt the1
Disinvested Community Development Incentive Tax Credit Act; and to2
provide an operative date. 3
Be it enacted by the people of the State of Nebraska,4
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Section 1. Sections 1 to 9 of this act shall be known and may be1
cited as the Disinvested Community Development Incentive Tax Credit Act.2
Sec. 2. (1) The Legislature finds and declares that (a) many3
communities across the State of Nebraska, including urban neighborhoods,4
rural downtowns, and historically disinvested areas, experience5
persistent underinvestment in neighborhood-scale commercial, mixed-use,6
industrial, and community-serving development, (b) small and emerging7
developers and locally based developers face structural barriers to8
accessing private capital due to limited balance sheets, limited9
development history, and lack of early-stage financing, and (c) existing10
economic development incentives frequently favor large-scale projects and11
established developers and do not adequately address predevelopment,12
workforce development, and community engagement needs.13
(2) The Legislature further finds that (a) tax credits are an14
effective mechanism to mobilize private capital at scale, encourage15
sustained private participation in economic development, and reduce16
reliance on direct public appropriations and (b) limited and targeted17
grant assistance remains necessary to address market gaps where private18
capital is unavailable or insufficient. 19
(3) It is the intent of the Legislature to establish a tax-credit-20
driven urban development incentive program, supplemented by limited grant21
assistance, to incentivize private investment in economically distressed22
areas, support small and emerging developers and underrepresented23
businesses, expand access to affordable commercial or mixed-use space,24
promote local job creation and workforce development, encourage25
sustainability and resilience, and maximize public benefit while26
maintaining predictable fiscal exposure. 27
Sec. 3. For purposes of the Disinvested Community Development28
Incentive Tax Credit Act: 29
(1) Affordable commercial or mixed-use space means commercial or30
mixed-use space that is leased or otherwise made available at rates at31
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least thirty percent below prevailing market rates or designated by the1
department as serving small businesses, nonprofit organizations, or2
community-based enterprises; 3
(2) Department means the Department of Economic Development;4
(3) Economically distressed area means (a) a qualified census tract5
as defined in 26 U.S.C. 42(d)(5)(B)(ii)(I), as such section existed on6
January 1, 2026, or (b) an area in the State of Nebraska in which the7
average unemployment rate is at least one hundred fifty percent of the8
statewide average and the poverty rate is at least twenty percent;9
(4) Eligible developer means a small developer or emerging developer10
that is engaged in the development or rehabilitation of real property,11
that has fewer than fifty full-time-equivalent employees, that had annual12
gross revenue not exceeding five million dollars in any of the three most13
recently completed fiscal years, that is independently owned and operated14
and not a subsidiary of a larger business entity, and that has limited15
access to traditional financing due to size, operational history, or16
limited prior project experience; 17
(5) Qualified project means the development, redevelopment, or18
rehabilitation of affordable commercial or mixed-use space, industrial19
facilities, or community-serving facilities located in an economically20
distressed area, as approved by the department; and21
(6) Qualifying organization means an organization certified by the22
department to receive tax-credit-supported contributions, including (a) a23
community development financial institution certified by the United24
States Department of the Treasury or (b) an innovation hub designated25
under the Nebraska Innovation Hub Act. 26
Sec. 4. (1) A taxpayer who makes a cash contribution to a27
qualifying organization for the purpose of funding one or more qualified28
projects or eligible activities under the Disinvested Community29
Development Incentive Tax Credit Act shall be allowed a nonrefundable30
income tax credit equal to fifty percent of the contribution. The credit31
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may be applied against income tax liability imposed under the Nebraska1
Revenue Act of 1967. Any unused credit may be carried forward and applied2
against tax liability for up to five taxable years.3
(2) The total amount of tax credits allowed under this section shall4
not exceed twenty-six million five hundred thousand dollars per calendar5
year. Credits shall be reserved and allocated by the department on a6
first-come, first-served basis subject to availability and compliance7
with the rules and regulations adopted and promulgated by the department.8
Sec. 5. Tax-credit-supported contributions may be used by9
qualifying organizations, subject to approval by the department, for the10
following eligible activities: 11
(1) Development or rehabilitation of affordable commercial or mixed-12
use space, including neighborhood-scale retail, office, light industrial,13
cultural, nonprofit, and community-serving facilities;14
(2) Site readiness and site preparation activities, including15
environmental remediation, demolition, utility installation, grading, and16
related infrastructure improvements; 17
(3) Gap financing, credit enhancement, or other financial support18
necessary to complete qualified projects; 19
(4) Development, expansion, or modernization of industrial,20
manufacturing, logistics, and intermodal facilities, including supporting21
infrastructure; 22
(5) Creation, expansion, or operation of accelerator programs,23
incubators, and innovation programs for early-stage companies;24
(6) Provision of business support services and access-to-capital25
programming for underrepresented companies; 26
(7) Workforce development, job training, apprenticeships,27
credentialing, and placement programs tied to supported projects or28
businesses; 29
(8) Sustainability, resilience, energy efficiency, renewable energy30
systems, and green building certification; 31
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(9) Community engagement, public consultation, and capacity-building1
activities for eligible developers; and 2
(10) Sports, cultural, and placemaking facilities located in3
economically distressed areas when sponsored by or developed in4
partnership with a designated innovation hub. 5
Sec. 6. (1) The department may award limited grants to eligible6
developers for qualified projects when such assistance is necessary to7
advance project feasibility or public benefit. A grant awarded under this8
section shall not exceed ten percent of total project costs or five9
hundred thousand dollars per project. The total amount of grants awarded10
statewide shall not exceed twenty million dollars per fiscal year.11
(2) Grant funds may be used only for predevelopment and feasibility12
costs, downpayment assistance or credit enhancement, workforce13
development and job training, and community engagement and public14
consultation activities. Grant funds shall supplement but not replace15
private capital mobilized through the tax credit. 16
Sec. 7. Any tax-credit-supported contribution under the Disinvested17
Community Development Incentive Tax Credit Act shall be made to a18
qualifying organization. A qualifying organization that receives such a19
contribution shall maintain such funds in segregated accounts dedicated20
to purposes authorized under the Disinvested Community Development21
Incentive Tax Credit Act, shall deploy the funds only for department-22
approved projects or activities, and shall comply with the reporting,23
audit, and compliance requirements established by the department.24
Sec. 8. The department shall electronically submit an annual report25
to the Clerk of the Legislature detailing the total amount of tax credits26
issued, the total private capital mobilized, the total grant funds27
awarded, the number and location of projects supported, the number of28
eligible developers assisted, and the number of jobs created or retained.29
The department shall also forward the annual report to the Commission on30
African American Affairs, the Commission on Asian American Affairs, the31
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Commission on Indian Affairs, or the Commission on Latino-Americans, as1
appropriate. 2
Sec. 9. The department may adopt and promulgate rules and3
regulations necessary to carry out the purposes of the Disinvested4
Community Development Incentive Tax Credit Act. 5
Sec. 10. This act becomes operative for taxable years beginning or6
deemed to begin on or after January 1, 2026, under the Internal Revenue7
Code of 1986, as amended. 8
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