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LEGISLATURE OF NEBRASKA
ONE HUNDRED NINTH LEGISLATURE
SECOND SESSION
LEGISLATIVE BILL 819
Introduced by Hallstrom, 1; McKinney, 11.
Read first time January 07, 2026
Committee: Business and Labor
A BILL FOR AN ACT relating to housing; to amend sections 81-1228,1
81-1229, 81-1230, and 81-1231, Reissue Revised Statutes of Nebraska,2
and sections 81-1238, 81-1239, and 81-1240, Revised Statutes3
Supplement, 2025; to change provisions relating to the Rural4
Workforce Housing Investment Act and the Middle Income Workforce5
Housing Investment Act; and to repeal the original sections.6
Be it enacted by the people of the State of Nebraska,7
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Section 1. Section 81-1228, Reissue Revised Statutes of Nebraska, is1
amended to read: 2
81-1228 For purposes of the Rural Workforce Housing Investment Act:3
(1) Department means the Department of Economic Development;4
(2) Director means the Director of Economic Development;5
(3) Eligible activities of a nonprofit development organization6
means: 7
(a) New construction of owner-occupied or rental housing in a8
community with demonstrated workforce housing needs;9
(b) Substantial repair or rehabilitation of dilapidated housing10
stock; 11
(c) Upper-story housing development; or 12
(d) Extension of sewer or water service in support of workforce13
housing; 14
(4) HOME funds means funds awarded as formula grants under the HOME15
Investment Partnerships Program administered by the United States16
Department of Housing and Urban Development; 17
(5) Matching funds means dollars contributed by individuals,18
businesses, foundations, local, regional, and statewide political19
subdivisions, or other nonprofit organizations to a workforce housing20
investment fund administered by a nonprofit development organization;21
(6) Nonprofit development organization means a local, regional, or22
statewide nonprofit development organization approved by the director;23
(7) Qualified activities include, but are not limited to, purchase24
and rental guarantees, loan guarantees, loan participations, and other25
credit enhancements or any other form of assistance designed to reduce26
the cost of workforce housing related to eligible activities of the27
nonprofit development organization; 28
(8) Qualified investment means a cash investment in a workforce29
housing investment fund administered by a nonprofit development30
organization; 31
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(9) Rural community means any municipality in a county with a1
population of fewer than one hundred thousand inhabitants as determined2
by the most recent federal decennial census; 3
(10) Workforce housing means: 4
(a) Housing that meets the needs of today's working families;5
(b) Housing that is attractive to new residents considering6
relocation to a rural community; 7
(c) Owner-occupied housing units that cost not more than three8
hundred seventy-five twenty-five thousand dollars to construct or rental9
housing units that cost not more than three two hundred fifty thousand10
dollars per unit to construct. For purposes of this subdivision (c),11
housing unit costs shall be updated annually by the department based upon12
the most recent increase or decrease in the Producer Price Index for all13
commodities, published by the United States Department of Labor, Bureau14
of Labor Statistics; 15
(d) Owner-occupied and rental housing units for which the cost to16
substantially rehabilitate exceeds fifty percent of a unit's assessed17
value; 18
(e) Upper-story housing; and 19
(f) Housing units that do not receive federal or state low-income20
housing tax credits, community development block grants, HOME funds, or21
funds from the National Housing Trust Fund, which would impose individual22
or household income limitations or restrictions on such housing units, or23
funding from the Affordable Housing Trust Fund restricting the level of24
individual or household income to anything less than one hundred percent25
of area median income as calculated by the United States Department of26
Housing and Urban Development; and 27
(11) Workforce housing investment fund means a fund that has been28
created by a nonprofit development organization and certified by the29
director to encourage development of workforce housing in rural30
communities. 31
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Sec. 2. Section 81-1229, Reissue Revised Statutes of Nebraska, is1
amended to read: 2
81-1229 (1) The director shall establish a workforce housing grant3
program to foster and support the development of workforce housing in4
rural communities. 5
(2) A nonprofit development organization may apply to the director6
for approval of a workforce housing grant for a workforce housing7
investment fund. The application shall be in a form and manner prescribed8
by the director. Through fiscal year 2036-37 2026-27, grants shall be9
awarded by the director on a competitive basis until grant funds are no10
longer available. A nonprofit development organization may apply for more11
than one grant, subject to the following limits: 12
(a) The maximum amount of grant funds awarded to any one nonprofit13
development organization over a two-year period shall not exceed five14
million dollars; and 15
(b) The maximum amount of grant funds awarded to any one nonprofit16
development organization for all program years shall not exceed an17
aggregate limit determined by the department at the discretion of the18
director. 19
(3) An applicant shall provide matching funds of at least one-20
quarter of the amount of workforce housing grant funds awarded.21
Unallocated workforce housing grant funds held by the department shall be22
rolled to the next program year. 23
(4) Grants shall be awarded based upon: 24
(a) A demonstrated and ongoing housing need as identified by a25
recent housing study; 26
(b) A community or region that has a low unemployment rate and is27
having difficulty attracting workers and filling employment positions;28
(c) A community or region that exhibits a demonstrated commitment to29
growing its housing stock; 30
(d) Projects that can reasonably be ready for occupancy in a period31
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of twenty-four months; and 1
(e) A demonstrated ability to grow and manage a workforce housing2
investment fund. 3
(5) A nonprofit development organization shall:4
(a) Invest or intend to invest in workforce housing eligible5
activities; 6
(b) Use any fees, interest, loan repayments, or other funds it7
received as a result of the administration of the grant to support8
qualified activities; and 9
(c) Have an active board of directors with expertise in development,10
construction, and finance that meets at least quarterly to approve all11
qualified investments made by the nonprofit development organization. A12
nonprofit development organization shall have a formal plan and proven13
expertise to invest unused workforce housing investment fund balances and14
shall have an annual review of all financial records conducted by an15
independent certified public accountant. 16
Sec. 3. Section 81-1230, Reissue Revised Statutes of Nebraska, is17
amended to read: 18
81-1230 (1) The Rural Workforce Housing Investment Fund is created.19
Funding for the grant program described in section 81-1229 shall come20
from the Rural Workforce Housing Investment Fund. The Rural Workforce21
Housing Investment Fund may include revenue from appropriations from the22
Legislature, grants, private contributions, and other sources. In23
addition, the State Treasurer shall make a one-time transfer of seven24
million three hundred thousand dollars on or before October 1, 2017, from25
the Affordable Housing Trust Fund to the Rural Workforce Housing26
Investment Fund. Any money in the Rural Workforce Housing Investment Fund27
available for investment shall be invested by the state investment28
officer pursuant to the Nebraska Capital Expansion Act and the Nebraska29
State Funds Investment Act. 30
(2) The department shall administer the Rural Workforce Housing31
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Investment Fund and may seek additional private or nonstate funds to use1
in the grant program, including, but not limited to, contributions from2
the Nebraska Investment Finance Authority and other interested parties.3
(3) Interest earned by the department on grant funds shall be4
applied to the grant program. 5
(4) If a nonprofit development organization fails to engage in the6
initial qualified activity within twenty-four months after receiving7
initial grant funding, the nonprofit development organization shall8
return the grant funds to the department for credit to the General Fund.9
(5) If a nonprofit development organization fails to allocate any10
remaining initial grant funding on a qualified activity within twenty-11
four months after engaging in the initial qualified activity, the12
nonprofit development organization shall return such unallocated grant13
funds to the department for credit to the Rural Workforce Housing14
Investment Fund. 15
(6) Beginning July 1, 2037 2027, any funds held by the department in16
the Rural Workforce Housing Investment Fund shall be transferred to the17
General Fund. 18
Sec. 4. Section 81-1231, Reissue Revised Statutes of Nebraska, is19
amended to read: 20
81-1231 (1) Each nonprofit development organization shall submit an21
annual report to the director to be included as a part of the22
department's annual status report required under section 81-1201.11. The23
report shall certify that the nonprofit development organization meets24
the requirements of the Rural Workforce Housing Investment Act and shall25
include a breakdown of program activities. 26
(2) The annual report shall include, but not necessarily be limited27
to: 28
(a) The name and geographical location of the reporting nonprofit29
development organization; 30
(b) The number, amount, and type of workforce housing investment31
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funds invested in qualified activities; 1
(c) The number, geographical location, type, and amount of2
investments made; 3
(d) A summary of matching funds and where such matching funds were4
generated; and 5
(e) The results of the annual review of all financial records6
required under subsection (5) of section 81-1229. 7
(3) If a nonprofit development organization ceases administration of8
a workforce housing investment fund, it shall file a final report with9
the director in a form and manner required by the director. Before July10
1, 2037 2027, any unallocated grant funds shall be returned to the11
department for credit to the Rural Workforce Housing Investment Fund. On12
and after July 1, 2037 2027, any unallocated grant funds shall be13
returned to the department for transfer to the General Fund.14
(4) If a nonprofit development organization fails to file a complete15
annual report by February 15, the director may, in his or her discretion,16
impose a civil penalty of not more than five thousand dollars for such17
violation. All money collected by the department pursuant to this18
subsection shall be remitted to the State Treasurer for distribution in19
accordance with Article VII, section 5, of the Constitution of Nebraska.20
Sec. 5. Section 81-1238, Revised Statutes Supplement, 2025, is21
amended to read: 22
81-1238 (1) The director shall establish a workforce housing23
investment grant program to foster and support the development of24
workforce housing in urban communities. 25
(2) A nonprofit development organization may apply to the director26
for approval of a workforce housing grant for a workforce housing27
investment fund. The application shall be in a form and manner prescribed28
by the director. Through fiscal year 2036-37 2026-27, grants shall be29
awarded by the director on a competitive basis until grant funds are no30
longer available. Grant maximums shall not exceed ten million dollars to31
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any one nonprofit development organization over a two-year period, with1
the cumulative amount for any single grantee to be determined by the2
department at the discretion of the director. An applicant shall provide3
matching funds for workforce housing grant funds awarded. For grant funds4
awarded prior to July 19, 2024, an applicant shall provide matching funds5
of at least fifty percent of the amount of such grant funds awarded. For6
grant funds awarded on or after July 19, 2024, an applicant shall provide7
matching funds of at least twenty-five percent of the amount of such8
grant funds awarded. Unallocated funds held by the department shall be9
rolled to the next program year. 10
(3) Grants shall be awarded based upon: 11
(a) A demonstrated need for additional housing. Need can be12
demonstrated with a recent housing study or a letter from the planning13
department of the city in which the fund is intending to operate stating14
that the proposal is in line with the city's most recent consolidated15
plan submitted under 24 C.F.R. part 91, subpart D, as such subpart16
existed on January 1, 2020; 17
(b) A neighborhood or community that has a higher-than-state-average18
unemployment rate; 19
(c) A neighborhood or community that exhibits a demonstrated20
commitment to growing its housing stock; 21
(d) Reducing barriers to the development and purchase of owner-22
occupied housing with flexible forms of assistance, including grants,23
forgivable loans, homeownership incentive reserve accounts, purchase24
option agreements, and other forms of long-term, patient financing;25
(e) Projects that can reasonably be ready for occupancy in a period26
of twenty-four months; and 27
(f) A demonstrated ability to grow and manage a workforce housing28
investment fund. 29
(4) A workforce housing investment fund shall:30
(a) Be required to receive annual certification from the department;31
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(b) Invest or intend to invest in eligible activities for a1
workforce housing investment fund; 2
(c) Use any fees, interest, loan repayments, or other funds received3
by the nonprofit development organization as a result of the4
administration of the grant to support qualified activities; and5
(d) Have an active board of directors with expertise in development,6
construction, and finance that meets at least quarterly to approve all7
qualified investments made by the nonprofit development organization. A8
nonprofit development organization shall have a formal plan and proven9
expertise to invest unused workforce housing investment fund balances and10
shall conduct an annual audit of all financial records by an independent11
certified public accountant. 12
(5) A nonprofit development organization that has previously13
received a grant or grants under the Middle Income Workforce Housing14
Investment Act shall not be eligible for an additional grant under this15
section unless the organization has expended at least fifty percent of16
the funds from such previous grant or grants. 17
Sec. 6. Section 81-1239, Revised Statutes Supplement, 2025, is18
amended to read: 19
81-1239 (1) The Middle Income Workforce Housing Investment Fund is20
created. Funding for the grant program described in section 81-1238 shall21
come from the Middle Income Workforce Housing Investment Fund. The Middle22
Income Workforce Housing Investment Fund may include revenue transferred23
at the direction of the Legislature, grants, private contributions, and24
other sources. Any money in the Middle Income Workforce Housing25
Investment Fund available for investment shall be invested by the state26
investment officer pursuant to the Nebraska Capital Expansion Act and the27
Nebraska State Funds Investment Act. 28
(2) The department shall establish a subaccount within the Middle29
Income Workforce Housing Investment Fund that shall be used to fund30
affordable housing and related land parcel preparation activities under31
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the Economic Recovery Act as described in subdivisions (4)(d) and (e) of1
section 81-12,241. 2
(3) The department shall administer the Middle Income Workforce3
Housing Investment Fund and may seek additional private or nonstate funds4
to use in the grant program under the Middle Income Workforce Housing5
Investment Act, including, but not limited to, contributions from the6
Nebraska Investment Finance Authority and other interested parties.7
(4) Interest earned by the department on grant funds shall be8
applied to the grant program. 9
(5) If a nonprofit development organization, or a recipient of10
subaccount funds described in subsection (2) of this section, fails to11
engage in a qualified activity within twenty-four months after receiving12
initial grant funding, the nonprofit development organization or13
recipient of subaccount funds shall return the grant proceeds to the14
department for credit to the General Fund. 15
(6) Beginning July 1, 2037 2029, any funds held by the department in16
the Middle Income Workforce Housing Investment Fund shall be transferred17
to the General Fund. 18
Sec. 7. Section 81-1240, Revised Statutes Supplement, 2025, is19
amended to read: 20
81-1240 (1) Each nonprofit development organization shall submit an21
annual report to the director to be included as a part of the22
department's annual status report required under section 81-1201.11. The23
report shall certify that the workforce housing investment fund meets the24
requirements of the Middle Income Workforce Housing Investment Act and25
shall include a breakdown of program activities. 26
(2) The annual report shall include, but not be limited to:27
(a) The name and geographical location of the nonprofit development28
organization; 29
(b) The number, amount, and type of workforce housing investment30
funds invested in qualified activities; 31
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(c) The number, geographical location, type, and amount of1
investments made; 2
(d) A summary of matching funds and where such matching funds were3
generated; 4
(e) The results of the annual audit required under subdivision (4)5
(d) of section 81-1238; and 6
(f) The number of tenants assisted into homeownership, if7
applicable. 8
(3) If a nonprofit development organization ceases administration of9
a workforce housing investment fund, it shall file a final report with10
the director in a form and manner required by the director. Before July11
1, 2037 2029, any unallocated workforce housing investment fund grant12
funds shall be returned for credit to the Middle Income Workforce Housing13
Investment Fund. On and after July 1, 2037 2029, any unallocated14
workforce housing investment fund grant funds shall be returned to the15
department for transfer to the General Fund. 16
(4) If a workforce housing investment fund fails to file a complete17
annual report by February 15, the director may, in his or her discretion,18
impose a civil penalty of not more than five thousand dollars for such19
violation. All money collected by the department pursuant to this20
subsection shall be remitted to the State Treasurer for distribution in21
accordance with Article VII, section 5, of the Constitution of Nebraska.22
(5) This section does not apply to the subaccount of the Middle23
Income Workforce Housing Investment Fund described in subsection (2) of24
section 81-1239. 25
Sec. 8. Original sections 81-1228, 81-1229, 81-1230, and 81-1231,26
Reissue Revised Statutes of Nebraska, and sections 81-1238, 81-1239, and27
81-1240, Revised Statutes Supplement, 2025, are repealed.28
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