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LEGISLATIVE BILL 768
Approved by the Governor April 14, 2026
Introduced by Dover, 19.
A BILL FOR AN ACT relating to grants and other financial assistance; to amend
sections 58-709, 81-1228, 81-1229, 81-1230, 81-1231, 81-1232, and 81-1241,
Reissue Revised Statutes of Nebraska, sections 58-201 and 58-703, Revised
Statutes Cumulative Supplement, 2024, and sections 58-701, 58-708, 72-804,
72-805, 81-1237, 81-1238, 81-1239, and 81-1240, Revised Statutes
Supplement, 2025; to provide powers for the Nebraska Investment Finance
Authority; to change and eliminate provisions of the Nebraska Affordable
Housing Act; to change provisions relating to new state buildings and
buildings constructed with state funds; to authorize certain contracts
under the Nebraska Affordable Housing Act, the Rural Workforce Housing
Investment Act, and the Middle Income Workforce Housing Investment Act; to
eliminate a housing advisory committee; to harmonize provisions; to repeal
the original sections; and to outright repeal section 58-704, Reissue
Revised Statutes of Nebraska, and section 58-712, Revised Statutes
Supplement, 2025.
Be it enacted by the people of the State of Nebraska,
Section 1. Section 58-201, Revised Statutes Cumulative Supplement, 2024,
is amended to read:
58-201 Sections 58-201 to 58-273 and sections 2 and 3 of this act shall be
known and may be cited as the Nebraska Investment Finance Authority Act.
Sec. 2. (1) In addition to the powers granted under section 58-239, the
authority may:
(a) Support, establish, operate, manage, invest in, participate in, and
own nonprofit entities, nonprofit subsidiaries, or other nonprofit consortia,
in each case to further carry out the purposes of the Nebraska Investment
Finance Authority Act, including with respect to projects for which financing
or other resources are provided pursuant to the act; and
(b) Transfer assets of the authority to an entity created pursuant to this
section.
(2) Unless otherwise provided by the authority, the debts, liabilities,
and obligations of any such entity, subsidiary, or other consortium shall not
be debts, liabilities, or obligations of the authority.
Sec. 3. (1) For purposes of this section, public funds has the same
meaning as in section 81-11,106.
(2) If the authority administers any grant or loan program involving
public funds pursuant to an agreement with a state agency, the following
requirements shall apply:
(a) The authority shall provide information regarding such grant or loan
program and the public funds involved in such program to such state agency,
upon such agency's request, in order to allow the state agency to comply with
its responsibilities under section 81-1113;
(b) The authority shall record information regarding such grant or loan
program and the public funds involved in such program in an accounting system.
The information to be recorded in the accounting system shall include:
(i) All revenue and fund balances relating to such public funds;
(ii) All expenditures of such public funds, including the amount of all
grant and loan awards; and
(iii) All schedules of uses of funds, including all invoices and other
supporting documentation, that are submitted by grant or loan recipients under
such grant or loan program, except that the requirement to include such
schedules and documentation shall apply only to the extent such information is
in the possession of the authority; and
(c) The authority shall allow such state agency, the Legislative Fiscal
Analyst, and the budget administrator of the budget division of the Department
of Administrative Services to have access to the accounting system described in
subdivision (2)(b) of this section, upon request.
Sec. 4. Section 58-701, Revised Statutes Supplement, 2025, is amended to
read:
58-701 Sections 58-701 to 58-711 and section 8 of this act 58-712 shall be
known and may be cited as the Nebraska Affordable Housing Act.
Sec. 5. Section 58-703, Revised Statutes Cumulative Supplement, 2024, is
amended to read:
58-703 The Affordable Housing Trust Fund is created. The fund shall
receive money pursuant to section 76-903 and may include revenue from sources
recommended by the housing advisory committee established in section 58-704,
appropriations from the Legislature, transfers authorized by the Legislature,
grants, private contributions, repayment of loans, and funds from all other
sources. The Department of Economic Development as part of its comprehensive
housing affordability strategy shall administer the Affordable Housing Trust
Fund.
Transfers may be made from the Affordable Housing Trust Fund to the
General Fund, the Behavioral Health Services Fund, the Lead-Based Paint Hazard
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Control Cash Fund, the Middle Income Workforce Housing Investment Fund, the
Rural Workforce Housing Investment Fund, and the Site and Building Development
Fund at the direction of the Legislature.
Sec. 6. Section 58-708, Revised Statutes Supplement, 2025, is amended to
read:
58-708 (1) During each calendar year in which funds are available from the
Affordable Housing Trust Fund for use by the Department of Economic
Development, the department shall make its best efforts to allocate not less
than thirty percent of such funds to each congressional district. The
department shall announce a grant and loan application period of at least sixty
ninety days duration for all projects. Before an a grant application for any
new construction project can be submitted to the department, the land for the
project shall be identified. In selecting projects to receive trust fund
assistance, the department shall develop a qualified allocation plan and give
first priority to financially viable projects that serve the lowest income
occupants for the longest period of time. The qualified allocation plan shall:
(a) Set forth selection criteria to be used to determine housing
priorities of the housing trust fund which are appropriate to local conditions,
including the community's immediate need for affordable housing, proposed
increases in home ownership, private dollars leveraged, level of local
government support and participation, and repayment, in part or in whole, of
financial assistance awarded by the fund; and
(b) Give first priority in allocating trust fund assistance among selected
projects to those projects which are located in whole or in part within an
enterprise zone designated pursuant to the Enterprise Zone Act or an
opportunity zone designated pursuant to the federal Tax Cuts and Jobs Act,
Public Law 115-97, serve the lowest income occupant, are located in an area
that has been declared an extremely blighted area under section 18-2101.02, and
are obligated to serve qualified occupants for the longest period of time.
(2) Beginning on July 1, 2026:
(2) (a) The Department of Economic Development shall disburse grant funds
to a qualified recipient equal to eighty percent of the amount awarded to a
qualified recipient housing development costs of such recipient, excluding
general administration costs, housing management fees, lead-based paint test
costs, and technical assistance costs, once the department approves such
recipient for funding and shall disburse the remaining twenty percent of such
amount, excluding general administration costs, housing management fees, lead-
based paint test costs, and technical assistance costs, upon the completion of
the project. The funds shall be held in an interest-bearing construction
disbursement escrow account and shall be disbursed for qualified expenses upon
sufficient presentation of partial lien releases and supporting invoices or
receipts, as determined by the escrow company in the exercise of its duties.
The escrow company shall be a licensed title insurance company, financial
institution, or third-party law firm. Interest received from the funds while in
escrow may be used to pay for the escrow company fees. The use of any
additional interest shall be determined by the department. Any funds remaining
in the escrow account after qualified expenses are paid shall be returned to
the department. grant funds; and
(b) The department shall disburse grant funds to a qualified recipient
equal to twenty percent of the housing development costs of such recipient,
excluding general administration costs, housing management fees, lead-based
paint test costs, and technical assistance costs, upon the completion of the
project.
(3)(a) Beginning on October 1, 2025, a qualified recipient shall submit to
the Department of Economic Development a schedule of uses of funds for eligible
activities on a quarterly basis, no later than thirty days after the end of
each calendar quarter, during the time of performance under the award
agreement.
(b) The schedule of uses of funds for eligible activities shall include an
itemization of costs for eligible activities. If reasonable, the department may
require source documentation and proof of payment, including, but not limited
to, a paid invoice, completed payment, or cleared check, to be submitted with
the schedule as evidence of appropriate use of funds. Qualified recipients
shall ensure proper use of funds. The department is not responsible for the
audit or approval of each of the qualified recipient's transactions involving
funds.
(c) The department may initiate any of the following actions if a
qualified recipient does not submit a schedule of uses of funds for eligible
activities:
(i) Disqualification of the qualified recipient in pending applications
for the Affordable Housing Trust Fund;
(ii) Disqualification of the qualified recipient in pending applications
for other department programs;
(iii) Disqualification of the qualified recipient as an eligible applicant
for Affordable Housing Trust Fund applications for up to twenty-four months
from the date of the department action; or
(iv) Other actions deemed necessary by the department to meet the
department's responsibility to ensure proper use of funds . so long as such
actions do not unduly harm a qualified recipient's reputation and ability to
successfully operate in Nebraska. This subdivision does not prohibit the
department from taking appropriate actions against qualified recipients that
have committed illegal actions, such as fraud and theft.
(4) Beginning July 1, 2027, the Department of Economic Development shall
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prescribe annual reporting requirements to collect sufficient information from
qualified recipients to determine the amount of funds obligated to projects,
the repayment terms of such funds, and the current balance of funds unspent or
repaid. The reporting requirements shall also require qualified recipients to
provide an accounting of awards granted for the purpose described in
subdivision (10) of section 58-706, including the award amount and estimates
related to equity earned on homes purchased with such awards. If a qualified
recipient fails to meet the reporting requirements of this subsection, such
qualified recipient may be required to return all awarded funds and transfer
equity positions of recoverable housing assistance funds to the satisfaction of
the department.
(5) (4) The Department of Economic Development shall fund in order of
priority as many applications as will utilize available funds less actual
administrative costs of the department in administering the program. In
administering the program, the department may contract for services or directly
provide funds to other governmental entities or instrumentalities.
(6)(a) (5)(a) The Department of Economic Development may recapture any
funds, including interest accrued in any escrow account, which were allocated
to a qualified recipient for an eligible project through an award agreement if
such funds were not utilized for eligible costs within the time of performance
under the agreement and are therefore therefor no longer obligated to the
project.
(b) Upon completion of a project, the department shall recapture a
percentage of the funds which were allocated to a qualified recipient for an
eligible project through an award agreement equal to the percentage of the
housing development the qualified recipient agreed to construct under the award
agreement but failed to complete, along with any interest accrued on the funds.
Any funds recaptured under this subdivision shall be credited to the Affordable
Housing Trust Fund.
(c) A qualified recipient shall recapture any funds allocated to such
recipient from the Affordable Housing Trust Fund that are provided to a
homebuyer by the recipient as financial assistance for the purchase of a home
upon sale of such home from the net proceeds of such sale, if any.
Sec. 7. Section 58-709, Reissue Revised Statutes of Nebraska, is amended
to read:
58-709 The Department of Economic Development, in consultation with the
Nebraska Investment Finance Authority and the housing advisory committee
established in section 58-704, shall adopt and promulgate rules and regulations
to carry out the Nebraska Affordable Housing Act. The department shall monitor
programs to see that only qualified individuals and families are occupying
projects funded by the Affordable Housing Trust Fund.
Sec. 8. (1) The Department of Economic Development may contract with a
statewide public or private nonprofit organization or a state instrumentality
which shall serve as agent for the department to help carry out the purposes
and requirements of the Nebraska Affordable Housing Act.
(2) If the department utilizes an agent pursuant to this section, then any
reference to the department in relationship to duties under the Nebraska
Affordable Housing Act shall include such agent to the extent that the
agreement between the department and the agent so specifies.
Sec. 9. Section 72-804, Revised Statutes Supplement, 2025, is amended to
read:
72-804 (1) Any new state building shall meet or exceed the requirements of
the 2018 International Energy Conservation Code published by the International
Code Council. For purposes of this subsection, new state building does not
include any building that (a) is constructed or repaired using state funds
received in the form of a grant or loan from the state and (b) will not be
owned or managed by the state upon the completion of such construction or
repair.
(2) Any new lighting, heating, cooling, ventilating, or water heating
equipment or controls in a state-owned building and any new building envelope
components installed in a state-owned building shall meet or exceed the
requirements of the 2018 International Energy Conservation Code.
(3) The State Building Administrator of the Department of Administrative
Services, in consultation with the Department of Water, Energy, and
Environment, may specify:
(a) A more recent edition of the International Energy Conservation Code;
(b) Additional energy efficiency or renewable energy requirements for
buildings; and
(c) Waivers of specific requirements which are demonstrated through life-
cycle cost analysis to not be in the state's best interest. The agency
receiving the funding shall be required to provide a life-cycle cost analysis
to the State Building Administrator.
Sec. 10. Section 72-805, Revised Statutes Supplement, 2025, is amended to
read:
72-805 (1) Except as provided in subsection (2) of this section 58-712 for
certain projects funded by the Affordable Housing Trust Fund, the 2018
International Energy Conservation Code, published by the International Code
Council, applies to all new buildings constructed in whole or in part with
state funds after July 1, 2020. The Department of Water, Energy, and
Environment shall review building plans and specifications necessary to
determine whether a building will meet the requirements of this subsection
section, except that the department shall not be required to review building
plans and specifications upon evidence that the building plans and
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specifications have previously been reviewed by a county, city, or village
enforcing a local building or construction code adopted pursuant to section
71-6406 if such local building or construction code includes the requirements
of the 2018 International Energy Conservation Code. The department shall
provide a copy of any review to the agency receiving funding. The agency
receiving the funding shall verify that the building as constructed meets or
exceeds the code. The verification shall be provided to the department.
(2) This section does not apply to any building that (a) is constructed or
repaired using state funds received in the form of a grant or loan from the
state and (b) will not be owned or managed by the state upon the completion of
such construction or repair.
(3) The Director of Water, Energy, and Environment may, in consultation
with the State Building Administrator of the Department of Administrative
Services, adopt and promulgate rules and regulations to carry out this section.
Sec. 11. Section 81-1228, Reissue Revised Statutes of Nebraska, is amended
to read:
81-1228 For purposes of the Rural Workforce Housing Investment Act:
(1) Department means the Department of Economic Development;
(2) Director means the Director of Economic Development;
(3) Eligible activities of a nonprofit development organization means:
(a) New construction of owner-occupied or rental housing in a community
with demonstrated workforce housing needs;
(b) Substantial repair or rehabilitation of dilapidated housing stock;
(c) Upper-story housing development; or
(d) Extension of sewer or water service in support of workforce housing;
(4) HOME funds means funds awarded as formula grants under the HOME
Investment Partnerships Program administered by the United States Department of
Housing and Urban Development;
(5) Matching funds means dollars contributed by individuals, businesses,
foundations, local, regional, and statewide political subdivisions, or other
nonprofit organizations to a workforce housing investment fund administered by
a nonprofit development organization;
(6) Nonprofit development organization means a local, regional, or
statewide nonprofit development organization approved by the director;
(7) Qualified activities include, but are not limited to, purchase and
rental guarantees, loan guarantees, loan participations, and other credit
enhancements or any other form of assistance designed to reduce the cost of
workforce housing related to eligible activities of the nonprofit development
organization;
(8) Qualified investment means a cash investment in a workforce housing
investment fund administered by a nonprofit development organization;
(9) Rural community means any municipality in a county with a population
of fewer than one hundred thousand inhabitants as determined by the most recent
federal decennial census;
(10) Workforce housing means:
(a) Housing that meets the needs of today's working families;
(b) Housing that is attractive to new residents considering relocation to
a rural community;
(c) Owner-occupied housing units that cost not more than three hundred
seventy-five twenty-five thousand dollars to construct or rental housing units
that cost not more than three two hundred fifty thousand dollars per unit to
construct. For purposes of this subdivision (c), housing unit costs shall be
updated annually by the department based upon the most recent increase or
decrease in the Producer Price Index for all commodities, published by the
United States Department of Labor, Bureau of Labor Statistics;
(d) Owner-occupied and rental housing units for which the cost to
substantially rehabilitate exceeds fifty percent of a unit's assessed value;
(e) Upper-story housing; and
(f) Housing units that do not receive federal or state low-income housing
tax credits, community development block grants, HOME funds, or funds from the
National Housing Trust Fund, which would impose individual or household income
limitations or restrictions on such housing units, or funding from the
Affordable Housing Trust Fund restricting the level of individual or household
income to anything less than one hundred percent of area median income as
calculated by the United States Department of Housing and Urban Development;
and
(11) Workforce housing investment fund means a fund that has been created
by a nonprofit development organization and certified by the director to
encourage development of workforce housing in rural communities.
Sec. 12. Section 81-1229, Reissue Revised Statutes of Nebraska, is amended
to read:
81-1229 (1) The director shall establish a workforce housing grant program
to foster and support the development of workforce housing in rural
communities.
(2) A nonprofit development organization may apply to the director for
approval of a workforce housing grant for a workforce housing investment fund.
The application shall be in a form and manner prescribed by the director.
Through fiscal year 2031-32 2026-27, grants shall be awarded by the director on
a competitive basis until grant funds are no longer available. A nonprofit
development organization may apply for more than one grant, subject to the
following limits:
(a) The maximum amount of grant funds awarded to any one nonprofit
development organization over a two-year period shall not exceed five million
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dollars; and
(b) The maximum amount of grant funds awarded to any one nonprofit
development organization for all program years shall not exceed an aggregate
limit determined by the department at the discretion of the director.
(3) An applicant shall provide matching funds of at least one-quarter of
the amount of workforce housing grant funds awarded. Unallocated workforce
housing grant funds held by the department shall be rolled to the next program
year.
(4) Grants shall be awarded based upon:
(a) A demonstrated and ongoing housing need as identified by a recent
housing study;
(b) A community or region that has a low unemployment rate and is having
difficulty attracting workers and filling employment positions;
(c) A community or region that exhibits a demonstrated commitment to
growing its housing stock;
(d) Projects that can reasonably be ready for occupancy in a period of
twenty-four months; and
(e) A demonstrated ability to grow and manage a workforce housing
investment fund.
(5) A nonprofit development organization shall:
(a) Invest or intend to invest in workforce housing eligible activities;
(b) Use any fees, interest, loan repayments, or other funds it received as
a result of the administration of the grant to support qualified activities;
and
(c) Have an active board of directors with expertise in development,
construction, and finance that meets at least quarterly to approve all
qualified investments made by the nonprofit development organization. A
nonprofit development organization shall have a formal plan and proven
expertise to invest unused workforce housing investment fund balances and shall
have an annual review of all financial records conducted by an independent
certified public accountant.
Sec. 13. Section 81-1230, Reissue Revised Statutes of Nebraska, is amended
to read:
81-1230 (1) The Rural Workforce Housing Investment Fund is created.
Funding for the grant program described in section 81-1229 shall come from the
Rural Workforce Housing Investment Fund. The Rural Workforce Housing Investment
Fund may include revenue from appropriations from the Legislature, grants,
private contributions, and other sources. In addition, the State Treasurer
shall make a one-time transfer of seven million three hundred thousand dollars
on or before October 1, 2017, from the Affordable Housing Trust Fund to the
Rural Workforce Housing Investment Fund. Any money in the Rural Workforce
Housing Investment Fund available for investment shall be invested by the state
investment officer pursuant to the Nebraska Capital Expansion Act and the
Nebraska State Funds Investment Act.
(2) The department shall administer the Rural Workforce Housing Investment
Fund and may seek additional private or nonstate funds to use in the grant
program, including, but not limited to, contributions from the Nebraska
Investment Finance Authority and other interested parties.
(3) Interest earned by the department on grant funds shall be applied to
the grant program.
(4) If a nonprofit development organization fails to engage in the initial
qualified activity within twenty-four months after receiving initial grant
funding, the nonprofit development organization shall return the grant funds to
the department for credit to the General Fund.
(5) If a nonprofit development organization fails to allocate any
remaining initial grant funding on a qualified activity within twenty-four
months after engaging in the initial qualified activity, the nonprofit
development organization shall return such unallocated grant funds to the
department for credit to the Rural Workforce Housing Investment Fund.
(6) Beginning July 1, 2032 2027, any funds held by the department in the
Rural Workforce Housing Investment Fund shall be transferred to the General
Fund.
Sec. 14. Section 81-1231, Reissue Revised Statutes of Nebraska, is amended
to read:
81-1231 (1) Each nonprofit development organization shall submit an annual
report to the director to be included as a part of the department's annual
status report required under section 81-1201.11. The report shall certify that
the nonprofit development organization meets the requirements of the Rural
Workforce Housing Investment Act and shall include a breakdown of program
activities.
(2) The annual report shall include, but not necessarily be limited to:
(a) The name and geographical location of the reporting nonprofit
development organization;
(b) The number, amount, and type of workforce housing investment funds
invested in qualified activities;
(c) The number, geographical location, type, and amount of investments
made;
(d) A summary of matching funds and where such matching funds were
generated; and
(e) The results of the annual review of all financial records required
under subsection (5) of section 81-1229.
(3) If a nonprofit development organization ceases administration of a
workforce housing investment fund, it shall file a final report with the
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director in a form and manner required by the director. Before July 1, 2032
2027, any unallocated grant funds shall be returned to the department for
credit to the Rural Workforce Housing Investment Fund. On and after July 1,
2032 2027, any unallocated grant funds shall be returned to the department for
transfer to the General Fund.
(4) If a nonprofit development organization fails to file a complete
annual report by February 15, the director may, in his or her discretion,
impose a civil penalty of not more than five thousand dollars for such
violation. All money collected by the department pursuant to this subsection
shall be remitted to the State Treasurer for distribution in accordance with
Article VII, section 5, of the Constitution of Nebraska.
Sec. 15. Section 81-1232, Reissue Revised Statutes of Nebraska, is amended
to read:
81-1232 (1) The department shall use its best efforts to assure that grant
funds awarded to nonprofit development organizations are targeted to the
geographic communities or regions with the most pressing economic and
employment needs.
(2) The department shall use its best efforts to assure that the
allocation of grant funds provides equitable access to the benefits provided by
the Rural Workforce Housing Investment Act to all eligible geographical areas.
(3) The department may contract with a statewide public or private
nonprofit organization or a state instrumentality which shall serve as agent
for the department to help carry out the purposes and requirements of the Rural
Workforce Housing Investment Act. The department or its agent may only use for
expenses that portion of the funds available for the workforce housing grant
program through the Rural Workforce Housing Investment Fund necessary to cover
the actual costs of administering the program, including, but not limited to,
the hiring of staff.
Sec. 16. Section 81-1237, Revised Statutes Supplement, 2025, is amended to
read:
81-1237 For purposes of the Middle Income Workforce Housing Investment
Act:
(1) Department means the Department of Economic Development;
(2) Director means the Director of Economic Development;
(3) Eligible activities of a workforce housing investment fund means:
(a) New construction of owner-occupied or rent-to-own housing in a
neighborhood and community with a demonstrated need for housing that is
affordable and attractive to first-time homebuyers, middle-income families, and
the emerging workforce;
(b) Substantial repair or rehabilitation of dilapidated housing stock; or
(c) Upper-story housing development for occupation by a homeowner or rent-
to-own tenant;
(4) HOME funds means funds awarded as formula grants under the HOME
Investment Partnerships Program administered by the United States Department of
Housing and Urban Development;
(5) Homeownership incentive reserve account means an interest-bearing,
deposit-insured account maintained by the owner of a housing unit for future
use by the unit's tenant to purchase a home;
(6) Matching funds means dollars contributed by individuals, businesses,
foundations, local and regional political subdivisions, or other nonprofit
organizations to a workforce housing investment fund administered by a
nonprofit development organization;
(7) Nonprofit development organization means a regional or statewide
nonprofit development organization approved by the director;
(8) Owner means one or more persons, jointly or severally, in whom is
vested all or part of the legal title to, or beneficial ownership of, the
subject housing unit;
(9) Project reserve account means an interest-bearing, deposit-insured
account maintained by the owner of a housing unit for unexpected expenses,
routine maintenance, and other operational costs associated with managing
rental properties;
(10) Qualified activities include purchase guarantees, loan guarantees,
loan participations, and other credit enhancements related to eligible
activities of the workforce housing investment fund;
(11) Qualified investment means a cash investment in a workforce housing
investment fund administered by a nonprofit development organization;
(12) Rent-to-own housing means housing units that:
(a) Are located within a development of single-family housing, duplexes,
townhouses, or multifamily housing in which there are no more than ten units on
a parcel of land; and
(b) Meet the following requirements until the housing unit is owner
occupied:
(i) The housing unit is occupied by a tenant as the tenant's primary
residence;
(ii) The tenant does not own a home or other residential real estate;
(iii) The lease for the housing unit provides that:
(A) Not less than fifty dollars of the tenant's monthly rent shall be set
aside in a homeownership incentive reserve account prior to any cash flow
distributions to the owner. Such homeownership incentive reserve account shall
be maintained by the owner in an interest-bearing account as long as the tenant
resides in the unit. When the lease ends, the owner shall liquidate the
homeownership incentive reserve account and distribute the money to the tenant
for downpayment and closing costs on the purchase of a home that will be the
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tenant's new primary residence. If the tenant does not purchase a home at the
end of the lease, the money in the homeownership incentive reserve account
shall be transferred to a project reserve account; and
(B) The tenant may end the lease without penalty if the tenant provides
the owner with thirty days' written notice and purchases a home that will be
the tenant's new primary residence; and
(iv) The housing unit is the subject of a legally binding agreement
granting the tenant the option to purchase the unit from the owner at fair
market value not less than one year after the lease begins. Such agreement
shall give the tenant the ability to apply homeownership incentive reserve
account funds to downpayment and closing costs;
(13) Urban community means any area that is:
(a)(i) In a county with a population greater than one hundred thousand
inhabitants as determined by the most recent federal decennial census; and
(ii) Within or adjacent to a qualified census tract as described in 26
U.S.C. 42(d)(5)(B), as such section existed on January 1, 2022;
(b) Within a city of the primary class or within a county in which a city
of the primary class is located; or
(c) In a county with a population greater than one hundred thousand
inhabitants, as determined by the most recent federal decennial census, that
does not contain a city of the metropolitan class or a city of the primary
class;
(14) Workforce housing means:
(a) Owner-occupied or rent-to-own housing units that have an after-
construction appraised value or construction cost of at least one hundred
twenty-five thousand dollars but not more than three hundred seventy-five
thirty thousand dollars. For purposes of this subdivision, housing unit after-
construction appraised value and construction cost shall be updated annually by
the department based upon the most recent increase or decrease in the Producer
Price Index for all commodities, published by the United States Department of
Labor, Bureau of Labor Statistics;
(b) Owner-occupied or rent-to-own housing that meets the following
requirements:
(i) The cost to substantially rehabilitate such housing exceeds twenty-
five fifty percent of its before-construction assessed value; and
(ii) The after-construction appraised value of the building alone is at
least one hundred twenty-five thousand dollars but not more than three two
hundred seventy-five thousand dollars. For purposes of this subdivision,
housing unit after-construction appraised value shall be updated annually by
the department based upon the most recent increase or decrease in the Producer
Price Index for all commodities, published by the United States Department of
Labor, Bureau of Labor Statistics;
(c) Upper-story housing for occupation by a homeowner or rent-to-own
tenant; and
(d) Housing units that do not receive federal or state low-income housing
tax credits, community development block grants, HOME funds, or funds from the
Affordable Housing Trust Fund. Notwithstanding the foregoing, the department
shall not restrict the construction of housing units on land parcels prepared
using funds from the sources described in this subdivision and shall not
restrict the sale of housing units to homebuyers that receive homebuyer
assistance funds from the sources described in this subdivision; and
(15) Workforce housing investment fund means a fund that has been created
by a nonprofit development organization and certified by the director to
encourage development of workforce housing in urban communities.
Sec. 17. Section 81-1238, Revised Statutes Supplement, 2025, is amended to
read:
81-1238 (1) The director shall establish a workforce housing investment
grant program to foster and support the development of workforce housing in
urban communities.
(2) A nonprofit development organization may apply to the director for
approval of a workforce housing grant for a workforce housing investment fund.
The application shall be in a form and manner prescribed by the director.
Through fiscal year 2031-32 2026-27, grants shall be awarded by the director on
a competitive basis until grant funds are no longer available. Grant maximums
shall not exceed ten million dollars to any one nonprofit development
organization over a two-year period, with the cumulative amount for any single
grantee to be determined by the department at the discretion of the director.
An applicant shall provide matching funds for workforce housing grant funds
awarded. For grant funds awarded prior to July 19, 2024, an applicant shall
provide matching funds of at least fifty percent of the amount of such grant
funds awarded. For grant funds awarded on or after July 19, 2024, an applicant
shall provide matching funds of at least twenty-five percent of the amount of
such grant funds awarded. Unallocated funds held by the department shall be
rolled to the next program year.
(3) Grants shall be awarded based upon:
(a) A demonstrated need for additional housing. Need can be demonstrated
with a recent housing study or a letter from the planning department of the
city in which the fund is intending to operate stating that the proposal is in
line with the city's most recent consolidated plan submitted under 24 C.F.R.
part 91, subpart D, as such subpart existed on January 1, 2020;
(b) A neighborhood or community that has a higher-than-state-average
unemployment rate;
(c) A neighborhood or community that exhibits a demonstrated commitment to
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growing its housing stock;
(d) Reducing barriers to the development and purchase of owner-occupied
housing with flexible forms of assistance, including grants, forgivable loans,
homeownership incentive reserve accounts, purchase option agreements, and other
forms of long-term, patient financing;
(e) Projects that can reasonably be ready for occupancy in a period of
twenty-four months; and
(f) A demonstrated ability to grow and manage a workforce housing
investment fund.
(4) A workforce housing investment fund shall:
(a) Be required to receive annual certification from the department;
(b) Invest or intend to invest in eligible activities for a workforce
housing investment fund;
(c) Use any fees, interest, loan repayments, or other funds received by
the nonprofit development organization as a result of the administration of the
grant to support qualified activities; and
(d) Have an active board of directors with expertise in development,
construction, and finance that meets at least quarterly to approve all
qualified investments made by the nonprofit development organization. A
nonprofit development organization shall have a formal plan and proven
expertise to invest unused workforce housing investment fund balances and shall
conduct an annual audit of all financial records by an independent certified
public accountant.
(5) A nonprofit development organization that has previously received a
grant or grants under the Middle Income Workforce Housing Investment Act shall
not be eligible for an additional grant under this section unless the
organization has expended at least fifty percent of the funds from such
previous grant or grants.
Sec. 18. Section 81-1239, Revised Statutes Supplement, 2025, is amended to
read:
81-1239 (1) The Middle Income Workforce Housing Investment Fund is
created. Funding for the grant program described in section 81-1238 shall come
from the Middle Income Workforce Housing Investment Fund. The Middle Income
Workforce Housing Investment Fund may include revenue transferred at the
direction of the Legislature, grants, private contributions, and other sources.
Any money in the Middle Income Workforce Housing Investment Fund available for
investment shall be invested by the state investment officer pursuant to the
Nebraska Capital Expansion Act and the Nebraska State Funds Investment Act.
(2) The department shall establish a subaccount within the Middle Income
Workforce Housing Investment Fund that shall be used to fund affordable housing
and related land parcel preparation activities under the Economic Recovery Act
as described in subdivisions (4)(d) and (e) of section 81-12,241.
(3) The department shall administer the Middle Income Workforce Housing
Investment Fund and may seek additional private or nonstate funds to use in the
grant program under the Middle Income Workforce Housing Investment Act,
including, but not limited to, contributions from the Nebraska Investment
Finance Authority and other interested parties.
(4) Interest earned by the department on grant funds shall be applied to
the grant program.
(5) If a nonprofit development organization, or a recipient of subaccount
funds described in subsection (2) of this section, fails to engage in a
qualified activity within twenty-four months after receiving initial grant
funding, the nonprofit development organization or recipient of subaccount
funds shall return the grant proceeds to the department for credit to the
General Fund.
(6) Beginning July 1, 2032 2029, any funds held by the department in the
Middle Income Workforce Housing Investment Fund shall be transferred to the
General Fund.
Sec. 19. Section 81-1240, Revised Statutes Supplement, 2025, is amended to
read:
81-1240 (1) Each nonprofit development organization shall submit an annual
report to the director to be included as a part of the department's annual
status report required under section 81-1201.11. The report shall certify that
the workforce housing investment fund meets the requirements of the Middle
Income Workforce Housing Investment Act and shall include a breakdown of
program activities.
(2) The annual report shall include, but not be limited to:
(a) The name and geographical location of the nonprofit development
organization;
(b) The number, amount, and type of workforce housing investment funds
invested in qualified activities;
(c) The number, geographical location, type, and amount of investments
made;
(d) A summary of matching funds and where such matching funds were
generated;
(e) The results of the annual audit required under subdivision (4)(d) of
section 81-1238; and
(f) The number of tenants assisted into homeownership, if applicable.
(3) If a nonprofit development organization ceases administration of a
workforce housing investment fund, it shall file a final report with the
director in a form and manner required by the director. Before July 1, 2032
2029, any unallocated workforce housing investment fund grant funds shall be
returned for credit to the Middle Income Workforce Housing Investment Fund. On
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and after July 1, 2032 2029, any unallocated workforce housing investment fund
grant funds shall be returned to the department for transfer to the General
Fund.
(4) If a workforce housing investment fund fails to file a complete annual
report by February 15, the director may, in his or her discretion, impose a
civil penalty of not more than five thousand dollars for such violation. All
money collected by the department pursuant to this subsection shall be remitted
to the State Treasurer for distribution in accordance with Article VII, section
5, of the Constitution of Nebraska.
(5) This section does not apply to the subaccount of the Middle Income
Workforce Housing Investment Fund described in subsection (2) of section
81-1239.
Sec. 20. Section 81-1241, Reissue Revised Statutes of Nebraska, is amended
to read:
81-1241 (1) The department shall use its best efforts to assure that any
grant funds awarded to a nonprofit development organization are targeted to the
geographic communities or regions with the most pressing housing, economic, and
employment needs.
(2) The department shall use its best efforts to assure that the
allocation of grant funds provides equitable access to the benefits provided by
the Middle Income Workforce Housing Investment Act to all eligible
neighborhoods and communities.
(3) The director may contract with a statewide public or private nonprofit
organization or a state instrumentality which shall serve as agent for the
department to help carry out the purposes and requirements of the Middle Income
Workforce Housing Investment Act. The department or its agent may only use for
expenses that portion of the funds available for the workforce housing
investment grant program through the Middle Income Workforce Housing Investment
Fund necessary to cover the actual costs of administering the program.
Sec. 21. Original sections 58-709, 81-1228, 81-1229, 81-1230, 81-1231,
81-1232, and 81-1241, Reissue Revised Statutes of Nebraska, sections 58-201 and
58-703, Revised Statutes Cumulative Supplement, 2024, and sections 58-701,
58-708, 72-804, 72-805, 81-1237, 81-1238, 81-1239, and 81-1240, Revised
Statutes Supplement, 2025, are repealed.
Sec. 22. The following sections are outright repealed: Section 58-704,
Reissue Revised Statutes of Nebraska, and section 58-712, Revised Statutes
Supplement, 2025.
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