Read the full stored bill text
LEGISLATURE OF NEBRASKA
ONE HUNDRED NINTH LEGISLATURE
SECOND SESSION
LEGISLATIVE BILL 1168
Introduced by Wordekemper, 15.
Read first time January 21, 2026
Committee: Urban Affairs
A BILL FOR AN ACT relating to the Community Development Law; to amend1
sections 18-2124, 18-2125, and 18-2136, Reissue Revised Statutes of2
Nebraska, section 18-2117.01, Revised Statutes Cumulative3
Supplement, 2024, and sections 18-2101.02 and 18-2147, Revised4
Statutes Supplement, 2025; to authorize the issuance of conduit5
revenue bonds as prescribed; to authorize certain taxpayer6
agreements; to harmonize provisions; and to repeal the original7
sections. 8
Be it enacted by the people of the State of Nebraska,9
LB1168
2026
LB1168
2026
-1-
Section 1. Section 18-2101.02, Revised Statutes Supplement, 2025, is1
amended to read: 2
18-2101.02 (1) For any city that (a) intends to prepare a3
redevelopment plan that will divide ad valorem taxes for a period of more4
than fifteen years but not more than twenty years as provided in5
subdivision (5)(a) (4)(a) of section 18-2147, (b) intends to declare an6
area as an extremely blighted area for purposes of funding decisions7
under subdivision (1)(b) of section 58-708, or (c) intends to declare an8
area as an extremely blighted area in order for individuals purchasing9
residences in such area to qualify for the income tax credit authorized10
in subsection (7) of section 77-2715.07, the governing body of such city11
shall first declare, by resolution adopted after the public hearings12
required under this section, such area to be an extremely blighted area.13
(2) Prior to making such declaration, the governing body of the city14
shall conduct or cause to be conducted a study or an analysis on whether15
the area is extremely blighted and shall submit the question of whether16
such area is extremely blighted to the planning commission or board of17
the city for its review and recommendation. The planning commission or18
board shall hold a public hearing on the question after giving notice of19
the hearing as provided in section 18-2115.01. The planning commission or20
board shall submit its written recommendations to the governing body of21
the city within thirty days after the public hearing.22
(3) Upon receipt of the recommendations of the planning commission23
or board, or if no recommendations are received within thirty days after24
the public hearing required under subsection (2) of this section, the25
governing body shall hold a public hearing on the question of whether the26
area is extremely blighted after giving notice of the hearing as provided27
in section 18-2115.01. At the public hearing, all interested parties28
shall be afforded a reasonable opportunity to express their views29
respecting the proposed declaration. After such hearing, the governing30
body of the city may make its declaration. 31
LB1168
2026
LB1168
2026
-2-
(4) Copies of each study or analysis conducted pursuant to1
subsection (2) of this section shall be posted on the city's public2
website or made available for public inspection at a location designated3
by the city. 4
(5) The study or analysis required under subsection (2) of this5
section may be conducted in conjunction with the study or analysis6
required under section 18-2109. The hearings required under this section7
may be held in conjunction with the hearings required under section8
18-2109. 9
(6) Notwithstanding any other provisions of the Community10
Development Law, the designation of an area as an extremely blighted area11
pursuant to this section shall be valid for a period of no less than12
twenty-five years from the effective date of the resolution declaring13
such area to be an extremely blighted area, except that such designation14
may be removed prior to the end of such period pursuant to section15
18-2156. 16
Sec. 2. Section 18-2117.01, Revised Statutes Cumulative Supplement,17
2024, is amended to read: 18
18-2117.01 (1)(a) On or before December 1 each year, each city which19
has approved one or more redevelopment plans which are financed in whole20
or in part through the division of taxes as provided in section 18-214721
shall provide a report to the Property Tax Administrator on each such22
redevelopment plan which includes the following information:23
(i) A copy of the redevelopment plan and any amendments thereto,24
including the date upon which the redevelopment plan was approved, the25
effective date for dividing the ad valorem tax as provided to the county26
assessor pursuant to subsection (7) (6) of section 18-2147, and the27
location and boundaries of the property in the redevelopment project; and28
(ii) A short narrative description of the type of development29
undertaken by the city or village with the financing and the type of30
business or commercial activity locating within the redevelopment project31
LB1168
2026
LB1168
2026
-3-
area as a result of the redevelopment project. 1
(b) If a city has approved one or more redevelopment plans using an2
expedited review under section 18-2155, the city may file a single report3
under this subsection for all such redevelopment plans.4
(2) The report required under subsection (1) of this section must be5
filed each year, regardless of whether the information in the report has6
changed, except that a city is not required to refile a copy of the7
redevelopment plan or an amendment thereto if such copy or amendment has8
previously been filed. 9
(3) The Property Tax Administrator shall compile a report for each10
active redevelopment project, based upon information provided by the11
cities pursuant to subsection (1) of this section and information12
reported by the county assessor or county clerk on the certificate of13
taxes levied pursuant to section 77-1613.01. Each report shall be14
electronically transmitted to the Clerk of the Legislature not later than15
March 1 each year. The report may include any recommendations of the16
Property Tax Administrator as to what other information should be17
included in the report from the cities so as to facilitate analysis of18
the uses, purposes, and effectiveness of tax-increment financing and the19
process for its implementation or to streamline the reporting process20
provided for in this section to eliminate unnecessary paperwork.21
Sec. 3. Section 18-2124, Reissue Revised Statutes of Nebraska, is22
amended to read: 23
18-2124 An authority may issue bonds , including conduit revenue24
bonds subject to a taxpayer agreement entered into pursuant to subsection25
(3) of section 18-2147, from time to time in its discretion for any of26
its corporate purposes, including the payment of principal and interest27
upon any advances for surveys and plans for redevelopment projects. An28
authority may also issue refunding bonds for the purpose of paying,29
retiring, or otherwise refinancing or in exchange for any or all of the30
principal or interest upon bonds previously issued by the authority. An31
LB1168
2026
LB1168
2026
-4-
authority may issue such types of bonds as it may determine, including,1
without limiting the generality of the foregoing, bonds on which the2
principal and interest are payable: (1) Exclusively from the income,3
proceeds, and revenue of the redevelopment project financed with proceeds4
of such bonds; (2) exclusively from the income, proceeds, and revenue of5
any of its redevelopment projects whether or not they are financed in6
whole or in part with the proceeds of such bonds; (3) exclusively from7
its revenue and income, including any special assessment levied pursuant8
to section 18-1722 and such tax revenue or receipts as may be authorized9
under the Community Development Law, including those which may be pledged10
under section 18-2150, and from such grants and loans as may be received;11
or (4) from all or part of the income, proceeds, and revenue enumerated12
in subdivisions (1), (2), and (3) of this section. Any such bonds may be13
additionally secured by a pledge of any loan, grant, or contributions, or14
parts thereof, from the federal government or other source or a mortgage15
of any redevelopment project or projects of the authority. The authority16
shall not pledge the credit or taxing power of the state or any political17
subdivision thereof, except such tax receipts as may be authorized under18
this section or pledged under section 18-2150, or place any lien or19
encumbrance on any property owned by the state, county, or city used by20
the authority. 21
Sec. 4. Section 18-2125, Reissue Revised Statutes of Nebraska, is22
amended to read: 23
18-2125 Neither the members of an authority nor any person executing24
the bonds shall be liable personally on the bonds by reason of the25
issuance thereof. The bonds and other obligations of the authority, and26
such bonds and obligations shall so state on their face, shall not be a27
debt of the city and the city shall not be liable on such bonds, except28
to the extent authorized by sections 18-2147 to 18-2150, nor in any event29
shall such bonds or obligations be payable out of any funds or properties30
other than those of said authority acquired for the purposes of the31
LB1168
2026
LB1168
2026
-5-
Community Development Law, except to the extent authorized by sections1
18-2147 to 18-2150. Except to the extent otherwise authorized, the bonds2
shall not constitute an indebtedness within the meaning of any3
constitutional or statutory debt limitation or restriction. Bonds of an4
authority are declared to be issued for an essential public and5
governmental purpose and to be public instrumentalities and, together6
with interest thereon and income therefrom, shall be exempt from all7
Nebraska taxes. All bonds , except conduit revenue bonds issued pursuant8
to subsection (3) of section 18-2147, shall be general obligations of the9
authority issuing same and shall be payable out of any revenue, income,10
receipts, proceeds, or other money of the authority, except as may be11
otherwise provided in the instruments themselves. 12
An authority shall have power from time to time to issue bond13
anticipation notes, referred to as notes herein, and from time to time to14
issue renewal notes, such notes in any case to mature not later than15
thirty months from the date of incurring the indebtedness represented16
thereby in an amount not exceeding in the aggregate at any time17
outstanding the amount of bonds then or theretofore authorized. Payment18
of such notes shall be made from any money or revenue which the authority19
may have available for such purpose or from the proceeds of the sale of20
bonds of the authority, or such notes may be exchanged for a like amount21
of such bonds. The authority may pledge such money or revenue of the22
authority, subject to prior pledges thereof, if any, for the payment of23
such notes, and may in addition secure the notes in the same manner as24
herein provided for bonds. All notes shall be issued and sold in the same25
manner as bonds, and any authority shall have power to make contracts for26
the future sale from time to time of notes on terms and conditions stated27
in such contracts, and the authority shall have power to pay such28
consideration as it shall deem proper for any commitments to purchase29
notes and bonds in the future. Such notes shall also be collaterally30
secured by pledges and deposits with a bank or trust company, in trust31
LB1168
2026
LB1168
2026
-6-
for the payment of such notes, of bonds in an aggregate amount at least1
equal to the amount of such notes and, in any event, in an amount deemed2
by the issuing authority sufficient to provide for the payment of the3
notes in full at the maturity thereof. The authority may provide in the4
collateral agreement that the notes may be exchanged for bonds held as5
collateral security for the notes, or that the trustee may sell the bonds6
if the notes are not otherwise paid at maturity, and apply the proceeds7
of such sale to the payment of the notes. Such notes shall bear interest8
at a rate set by the authority, and shall be sold at such price as shall9
cause an interest cost thereon not to exceed such rate.10
It is the intention hereof that any pledge of revenue, income,11
receipts, proceeds, or other money made by an authority for the payment12
of bonds or notes shall be valid and binding from the time such pledge is13
made; that the revenue, income, receipts, proceeds, and other money so14
pledged and thereafter received by the authority shall immediately be15
subject to the lien of such pledge without the physical delivery thereof16
or further act, and that the lien of any such pledge shall be valid and17
binding as against all parties having claims of any kind in tort,18
contract, or otherwise against the authority irrespective of whether such19
parties have notice thereof. Neither the resolution nor any other20
instrument by which a pledge is created need be recorded.21
Sec. 5. Section 18-2136, Reissue Revised Statutes of Nebraska, is22
amended to read: 23
18-2136 All property including funds of an authority shall be exempt24
from levy and sale by virtue of an execution, and no execution or other25
judicial process shall issue against such property nor shall judgment26
against an authority be a charge or lien upon its property. The27
provisions of this section shall not apply to or limit the right of28
obligees to foreclose or otherwise enforce any taxpayer agreement entered29
into pursuant to subsection (3) of section 18-2147 or any mortgage of an30
authority or the right of obligees to pursue any remedies for the31
LB1168
2026
LB1168
2026
-7-
enforcement of any pledge or lien given by an authority on its rents,1
fees, grants, or revenue. 2
Sec. 6. Section 18-2147, Revised Statutes Supplement, 2025, is3
amended to read: 4
18-2147 (1) Any redevelopment plan as originally approved or as5
later modified pursuant to section 18-2117 may contain a provision that6
any ad valorem tax levied upon real property, or any portion thereof, in7
a redevelopment project for the benefit of any public body shall be8
divided, for the applicable period described in subsection (5) (4) of9
this section, as follows: 10
(a) That portion of the ad valorem tax which is produced by the levy11
at the rate fixed each year by or for each such public body upon the12
redevelopment project valuation shall be paid into the funds of each such13
public body in the same proportion as are all other taxes collected by or14
for the body. When there is not a redevelopment project valuation on a15
parcel or parcels, the county assessor shall determine the redevelopment16
project valuation based upon the fair market valuation of the parcel or17
parcels as of January 1 of the year prior to the year that the ad valorem18
taxes are to be divided. The county assessor shall provide written notice19
of the redevelopment project valuation to the authority as defined in20
section 18-2103 and the owner. The authority or owner may protest the21
valuation to the county board of equalization within thirty days after22
the date of the valuation notice. All provisions of section 77-150223
except dates for filing of a protest, the period for hearing protests,24
and the date for mailing notice of the county board of equalization's25
decision are applicable to any protest filed pursuant to this section.26
The county board of equalization shall decide any protest filed pursuant27
to this section within thirty days after the filing of the protest. The28
county clerk shall mail a copy of the decision made by the county board29
of equalization on protests pursuant to this section to the authority or30
owner within seven days after the board's decision. Any decision of the31
LB1168
2026
LB1168
2026
-8-
county board of equalization may be appealed to the Tax Equalization and1
Review Commission, in accordance with section 77-5013, within thirty days2
after the date of the decision; 3
(b) That portion of the ad valorem tax on real property, as provided4
in the redevelopment contract, bond resolution, or redevelopment plan, as5
applicable, in the redevelopment project in excess of such amount, if6
any, shall be allocated to and, when collected, paid into a special fund7
of the authority to be used solely to pay the principal of, the interest8
on, and any premiums due in connection with the bonds of, loans, notes,9
or advances of money to, or indebtedness incurred by, whether funded,10
refunded, assumed, or otherwise, such authority for financing or11
refinancing, in whole or in part, the redevelopment project. When such12
bonds, loans, notes, advances of money, or indebtedness, including13
interest and premiums due, have been paid, the authority shall so notify14
the county assessor and county treasurer and all ad valorem taxes upon15
taxable real property in such a redevelopment project shall be paid into16
the funds of the respective public bodies. An authority may use a single17
fund for purposes of this subdivision for all redevelopment projects or18
may use a separate fund for each redevelopment project; and19
(c) Any interest and penalties due for delinquent taxes shall be20
paid into the funds of each public body in the same proportion as are all21
other taxes collected by or for the public body. 22
(2) To the extent that a redevelopment plan authorizes the division23
of ad valorem taxes levied upon only a portion of the real property24
included in such redevelopment plan, any improvements funded by such25
division of taxes shall be related to the redevelopment plan that26
authorized such division of taxes. 27
(3)(a) An authority may enter into a redevelopment contract or adopt28
a bond resolution or redevelopment plan pursuant to which it issues29
conduit revenue bonds and under which the authority may pledge a30
percentage, up to and including one hundred percent, of the annual excess31
LB1168
2026
LB1168
2026
-9-
tax revenues described in subdivision (1)(b) of this section, if any,1
toward the authority's obligations under the contract, resolution, or2
plan. The ad valorem taxes to be pledged under this subsection shall be3
placed into a special fund of the authority to be used solely to pay the4
principal of, the interest on, and any premiums due in connection with5
the bonds of the redevelopment project. When an authority has pledged6
less than one hundred percent of the excess tax revenues under the7
contract, resolution, or plan, the unpledged portion of ad valorem taxes8
collected on the real property shall be paid into the funds of the9
respective public bodies as provided in subdivision (1)(b) of this10
section. 11
(b) An authority that issues one or more conduit revenue bonds12
pursuant to subdivision (3)(a) of this section may enter into an13
agreement with a taxpayer that limits the taxpayer's rights to challenge14
the assessment of real property taxes on real property within a15
redevelopment project or that guarantees, enhances, or otherwise further16
secures bonds issued by the authority, such as by guaranteeing any17
shortfall in real property taxes pledged to payment of the conduit18
revenue bonds issued to support a redevelopment project, if (i) the19
taxpayer's real property is within such redevelopment project and (ii)20
the real property taxes levied upon such real property are subject to21
division in accordance with subdivision (3)(a) of this section. The22
obligation to make payments under a taxpayer agreement that guarantee,23
enhance, or otherwise further secure conduit revenue bonds issued24
pursuant to subdivision (3)(a) of this section shall be treated in the25
same manner as property taxes for purposes of section 77-203 if, and to26
the extent that, the taxpayer agreement provides for a property tax lien.27
(c) A lien resulting from a taxpayer agreement described in28
subdivision (3)(b) of this section takes priority over any existing or29
subsequent mortgage, other lien, or other encumbrance on the property,30
shall have parity with a property tax lien described in section 77-203,31
LB1168
2026
LB1168
2026
-10-
and may be enforced and collected in all respects as real property taxes.1
(4)(a) (3)(a) For any redevelopment plan located in a city of the2
metropolitan class that includes a division of taxes, as provided in this3
section, that produces, in whole or in part, funds to be used directly or4
indirectly for (i) new construction, rehabilitation, or acquisition of5
housing for households with annual incomes below the area median income6
for households and located within six hundred yards of a public passenger7
streetcar or (ii) new construction, rehabilitation, or acquisition of8
single-family housing or condominium housing used as primary residences9
for individuals with annual incomes below the area median income for10
individuals, such housing shall be deemed related to the redevelopment11
plan that authorized such division of taxes regardless of whether such12
housing is or will be located on real property within such redevelopment13
plan, as long as such housing supports activities occurring on or14
identified in such redevelopment plan. 15
(b) During each fiscal year in which the funds described in16
subdivision (a) of this subsection are available, the authority and city17
shall make best efforts to allocate not less than thirty percent of such18
funds to single-family housing deemed related to the redevelopment plan19
described under such subdivision. 20
(c) In selecting projects to receive funding, the authority and city21
shall develop a qualified allocation plan and give first priority to22
financially viable projects that serve the lowest income occupants for23
the longest period of time. 24
(5)(a) (4)(a) For any redevelopment plan for which more than fifty25
percent of the property in the redevelopment project area has been26
declared an extremely blighted area in accordance with section27
18-2101.02, ad valorem taxes shall be divided for a period not to exceed28
twenty years after the effective date as identified in the project29
redevelopment contract or in the resolution of the authority authorizing30
the issuance of bonds pursuant to section 18-2124.31
LB1168
2026
LB1168
2026
-11-
(b) For all other redevelopment plans, ad valorem taxes shall be1
divided for a period not to exceed fifteen years after the effective date2
as identified in the project redevelopment contract, in the resolution of3
the authority authorizing the issuance of bonds pursuant to section4
18-2124, or in the redevelopment plan, whichever is applicable.5
(6) (5) The effective date of a provision dividing ad valorem taxes6
as provided in subsection (5) (4) of this section shall not occur until7
such time as the real property in the redevelopment project is within the8
corporate boundaries of the city. This subsection shall not apply to a9
redevelopment project involving a formerly used defense site as10
authorized in section 18-2123.01. 11
(7) (6) All notices of the provision for dividing ad valorem taxes12
shall be sent by the authority to the county assessor on forms prescribed13
by the Property Tax Administrator. The notice shall be sent to the county14
assessor on or before July 1 of the year of the effective date of the15
provision. Failure to satisfy the notice requirement of this section16
shall result in the taxes, for all taxable years affected by the failure17
to give notice of the effective date of the provision, remaining18
undivided and being paid into the funds for each public body receiving19
property taxes generated by the property in the redevelopment project.20
However, the redevelopment project valuation for the remaining division21
of ad valorem taxes in accordance with subdivisions (1)(a) and (b) of22
this section shall be the last certified valuation for the taxable year23
prior to the effective date of the provision to divide the taxes for the24
remaining portion of the twenty-year or fifteen-year period pursuant to25
subsection (5) (4) of this section. 26
Sec. 7. Original sections 18-2124, 18-2125, and 18-2136, Reissue27
Revised Statutes of Nebraska, section 18-2117.01, Revised Statutes28
Cumulative Supplement, 2024, and sections 18-2101.02 and 18-2147, Revised29
Statutes Supplement, 2025, are repealed. 30
LB1168
2026
LB1168
2026
-12-