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LEGISLATURE OF NEBRASKA
ONE HUNDRED NINTH LEGISLATURE
SECOND SESSION
LEGISLATIVE BILL 856
Introduced by McKinney, 11.
Read first time January 08, 2026
Committee: Revenue
A BILL FOR AN ACT relating to taxation; to adopt the Community1
Reinvestment and Equity Act; to establish an excise tax on certain2
businesses operating in a qualified census tract; and to create a3
fund and a grant program. 4
Be it enacted by the people of the State of Nebraska,5
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Section 1. Sections 1 to 9 of this act shall be known and may be1
cited as the Community Reinvestment and Equity Act.2
Sec. 2. (1) The Legislature finds that: 3
(a) Qualified census tracts experience disproportionate health4
burdens and neighborhood disinvestment alongside high concentrations of5
alcohol, tobacco, and fuel retail; 6
(b) Residents of qualified census tracts face higher barriers to7
primary care, re-entry housing and services, access to healthy foods,8
affordable childcare, and community-stabilizing initiatives;9
(c) To meet the needs of low-income and moderate-income10
neighborhoods, a community reinvestment framework should apply to covered11
businesses operating in qualified census tracts; and12
(d) A geographically targeted excise tax supports health and safety,13
is rationally related to legitimate public purposes, and is distinct from14
a uniform property tax. 15
(2) It is the intent of the Legislature to: 16
(a) Impose a five percent community reinvestment excise tax on17
covered businesses operating in qualified census tracts;18
(b) Establish a public rating of community reinvestment performance;19
and 20
(c) Direct proceeds to federally qualified health centers, homeless21
services, re-entry housing, healthy food access, childcare, and community22
development initiatives. 23
Sec. 3. For purposes of the Community Reinvestment and Equity Act:24
(1) Covered business means any gas station, convenience store, or25
package liquor store that sells alcoholic liquor, tobacco products as26
defined in section 77-4007, or cigarettes as defined in section 77-2601,27
for off-premises consumption and has a fixed place of business located28
within a qualified census tract; 29
(2) Department means the Department of Economic Development;30
(3) Gross receipts has the same meaning as in section 77-2701.16;31
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and 1
(4) Qualified census tract means a census tract designated by the2
United States Department of Housing and Urban Development under section3
26 U.S.C. 42(d)(5)(B)(ii)(I), as such section existed on January 1, 2026.4
Sec. 4. (1) Beginning January 1, 2027, a five percent excise tax is5
imposed on the gross receipts of each covered business located within a6
qualified census tract. 7
(2) The excise tax shall be collected, reported, and remitted in the8
same manner as the sales tax under the Nebraska Revenue Act of 1967, on9
forms prescribed by the Tax Commissioner. 10
(3) All taxes collected under this section shall be remitted to the11
State Treasurer for credit to the Community Reinvestment Fund.12
(4) The Tax Commissioner shall provide information to the13
department, upon request, regarding the amount of excise tax collected in14
a given qualified census tract. 15
(5) The provisions of sections 77-2703 to 77-2713 relating to16
deficiencies, penalties, interest, the collection of delinquent amounts,17
confidentiality, refunds, and appeal procedures for the tax imposed by18
section 77-2703 shall also apply to the tax imposed by this section.19
(6) The Tax Commissioner may adopt and promulgate rules and20
regulations necessary to carry out his or her duties under the Community21
Reinvestment and Equity Act. 22
Sec. 5. (1) No covered business may advertise the excise tax as a23
surcharge on any specific product, however nothing prohibits making price24
adjustments in the ordinary course of business. 25
(2)(a) A violation of this section is a deceptive trade practice for26
purposes of the Consumer Protection Act and the Uniform Deceptive Trade27
Practices Act. 28
(b) The Attorney General shall have authority to enforce violations29
of this section pursuant to the Consumer Protection Act and the Uniform30
Deceptive Trade Practices Act. 31
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Sec. 6. (1) On or before April 1, 2028, and on or before April 1 of1
each year thereafter, each covered business shall file an annual2
community reinvestment report with the department detailing:3
(a) Investments or in-kind contributions to federally qualified4
health centers, homeless and re-entry services, healthy food access,5
childcare, or community development initiatives in the qualified census6
tract where the covered business operates; 7
(b) Local hiring, apprenticeships, or workforce partnerships;8
(c) Participation in a healthy corner store program, Supplemental9
Nutrition Assistance Program and WIC program enrollment support, or10
similar programs; and 11
(d) Community engagement activities. 12
(2) The department shall publish an annual rating for each covered13
business on its website based on weighted criteria that include, but are14
not limited to, impact, equity reach, transparency, and collaboration,15
using the following ratings: 16
(a) Outstanding or Satisfactory. Any covered business that receives17
an outstanding or satisfactory rating will receive (i) recognition on the18
department's website, (ii) eligibility preference in applicable state19
façade improvement grants administered by the department, and (iii)20
consideration in local licensing where lawful; 21
(b) Needs to Improve. The department shall development a technical22
assistance plan for any covered business that receives a rating of needs23
to improve to assist in improving the rating of the covered business; and24
(c) Noncompliance. Failure to file an annual community reinvestment25
report with the department or any material misstatement made in any such26
report will result in a rating of noncompliance. The penalty for27
receiving a rating of noncompliance is a fine of up to ten thousand28
dollars per location. For any subsequent ratings of noncompliance, the29
penalty shall be a fine of up to fifty thousand dollars per location.30
(3)(a) Any covered business aggrieved by the imposition of a fine31
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under this section may request a hearing on any such fine imposed by the1
department. 2
(b) A request for hearing shall be made within thirty days after the3
receipt of the notice of the imposition of a fine. Such hearing shall be4
conducted in accordance with the Administrative Procedure Act and the5
rules and regulations of the department. 6
(c) A covered business may appeal any decision of the department7
under this section and the appeal shall be in accordance with the8
Administrative Procedure Act. 9
Sec. 7. (1)(a) The Community Reinvestment Fund is hereby created.10
The fund shall be administered by the department to be used for grants11
for the following purposes: Childcare, early childhood development,12
community development initiatives, healthcare, healthy food access,13
homeless services, and re-entry housing. 14
(b) The fund shall consist of money transferred pursuant to15
subsection (3) of section 4 of this act, bequests, donations, gifts, and16
grants. 17
(c) Any money in the Community Reinvestment Fund available for18
investment shall be invested by the state investment officer pursuant to19
the Nebraska Capital Expansion Act and the Nebraska State Funds20
Investment Act. 21
(2)(a) Beginning January 1, 2028, the department, in consultation22
with the Department of Health and Human Services, shall administer a23
grant program and make awards annually based on the following criteria:24
(i) Childcare and early childhood services serving low-income25
families: Fifteen percent of the total number of grants awarded;26
(ii) Community development initiatives, including, but not limited27
to, violence prevention, neighborhood revitalization, and workforce28
pipelines: Fifteen percent of the total number of grants awarded;29
(iii) Federally qualified health centers: Thirty percent of the30
total number of grants awarded; 31
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(iv) Healthy food access: Fifteen percent of the total number of1
grants awarded; and 2
(v) Homelessness prevention, re-entry housing, and services: Twenty-3
five percent of the total number of grants awarded.4
(b) In awarding grants (i) at least seventy percent of the excise5
tax collected from a given qualified census tract shall be awarded within6
that same qualified census tract and (ii) up to thirty percent of the7
excise tax collected in adjacent qualified census tracts may be pooled8
regionally across such qualified census tracts for efficiency and impact.9
(3) The department in making awards shall prioritize measurable10
outcomes in access to care, housing stability, healthy food availability,11
childcare slots, community development, recidivism reduction, and12
projects led by and serving the residents of a qualified census tract.13
(4) Grants awarded under this section shall supplement, not14
supplant, existing state or local funding. 15
(5) The combined administrative costs for the department and the16
Department of Health and Human Services to administer the fund and the17
grant program shall not exceed five percent of annual deposits in the18
Community Reinvestment Fund. 19
(6) The department may audit grantees for performance and compliance20
at any time during the term of the grant and within twelve months after21
the conclusion of the term of the grant. 22
(7) A grantee may appeal any decision of the department and the23
appeal shall be in accordance with the Administrative Procedure Act.24
Sec. 8. (1) The department shall maintain a searchable database on25
its website showing (a) covered business filings, investments, and26
ratings, and (b) grants awarded by qualified census tract.27
(2) The department may adopt and promulgate rules and regulations28
necessary to carry out its duties under the Community Reinvestment and29
Equity Act. 30
Sec. 9. The Community Reinvestment and Equity Act shall be31
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construed as a geographically targeted excise tax rationally related to1
the legislative purpose of mitigating documented health and safety harms2
and promoting reinvestment in qualified census tracts.3
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