Industrial and economic development; powers of counties and municipalities.
Notwithstanding any other provision in the Constitution, the Legislature may authorize any county or incorporated city or village, including cities operating under home rule charters, to acquire, own, develop, and lease real and personal property suitable for use by manufacturing or industrial enterprises and to issue revenue bonds for the purpose of defraying the cost of acquiring and developing such property by construction, purchase, or otherwise. The Legislature may also authorize such county, city, or village to acquire, own, develop, and lease real and personal property suitable for use by enterprises as determined by law if such property is located in blighted areas as determined by law and to issue revenue bonds for the purpose of defraying the cost of acquiring and developing or financing such property by construction, purchase, or otherwise. Such bonds shall not become general obligation bonds of the governmental subdivision by which such bonds are issued. Any real or personal property acquired, owned, developed, or used by any such county, city, or village pursuant to this section shall be subject to taxation to the same extent as private property during the time it is leased to or held by private interests, notwithstanding the provisions of Article VIII, section 2, of the Constitution. The acquiring, owning, developing, and leasing of such property shall be deemed for a public purpose, but the governmental subdivision shall not have the right to acquire such property by condemnation. The principal of and interest on any bonds issued may be secured by a pledge of the lease and the revenue therefrom and by mortgage upon such property. No such governmental subdivision shall have the power to operate any such property as a business or in any manner except as the lessor thereof.
Notwithstanding any other provision in the Constitution, the Legislature may also authorize any incorporated city or village, including cities operating under home rule charters, to appropriate such funds as may be deemed necessary for an economic or industrial development project or program subject to approval by a vote of a majority of the registered voters of such city or village voting upon the question. Subject to such vote, funds may be derived from property tax, local option sales tax, or any other general tax levied by the city or village or generated from municipally owned utilities or grants, donations, or state and federal funds received by the city or village subject to any restrictions of the grantor, donor, or state or federal law.
Source:Neb. Const. art. XII, sec. 2 (1875); Transferred by Constitutional Convention, 1919-1920, art. XIII, sec. 2; Amended 1972, Laws 1971, LB 688, sec. 1; Amended 1982, Laws 1982, LB 634, sec. 1; Amended 1990, Laws 1990, LR 11, sec. 1; Amended 2010, Laws 2010, LR 297CA, sec. 1.
2. Prior law
Provisions of section 18-1401 for expenditure of tax money and income from proprietary functions for purchase by a municipality or a county of property for industrial development violate the Constitution, but the provisions for expenditures for other purposes by a municipality or county itself or through private organizations are constitutional. Chase v. County of Douglas, 195 Neb. 838, 241 N.W.2d 334 (1976).
2. Prior law
The public buildings authorized by L.B. 1003, Eighty-second Legislature, First Session (sections 23-2601 to 23-2612), to be used exclusively for public purposes are not works of internal improvement within the meaning of this section. Dwyer v. Omaha-Douglas Public Building Commission, 188 Neb. 30, 195 N.W.2d 236 (1972).
Airport Authority Act did not violate this section. Obitz v. Airport Authority of City of Red Cloud, 181 Neb. 410, 149 N.W.2d 105 (1967).
Industrial Development Act of 1961 was sustained as constitutional under constitutional amendment notwithstanding this section. State ex rel. Meyer v. County of Lancaster, 173 Neb. 195, 113 N.W.2d 63 (1962).
Paving by city of second class is not work of internal improvement requiring submission to electors. Wookey v. City of Alma, 118 Neb. 158, 223 N.W. 953 (1929).
State roads are not works of internal improvement requiring election before donations thereto. State v. Bone Creek Township, 109 Neb. 202, 190 N.W. 586 (1922), rehearing denied 109 Neb. 208, 193 N.W. 767 (1923).
Donations can be made only to aid in works of internal improvement, and a system of waterworks is not a work of internal improvement. Village of Grant v. Sherrill, 71 Neb. 219, 98 N.W. 681 (1904).
Bridges built by county and wholly within it are not works of internal improvement. DeClerq v. Hager, 12 Neb. 185, 10 N.W. 697 (1881).
A request for injunction is a proper form in which to present the question of unlawful or improper exercise of the power of eminent domain, because the attempt to deprive a private citizen of an estate in his property, if successful, makes the resulting damage irreparable and legal remedies inadequate. Monarch Chemical Works, Inc. v. City of Omaha, 203 Neb. 33, 277 N.W.2d 423 (1979).
The taking of substandard or blighted areas by a city for redevelopment and resale, in accordance with an approved redevelopment plan which is in conformity with a general plan for the municipality as a whole as provided for in these sections, is a proper public use for a municipality. Monarch Chemical Works, Inc. v. City of Omaha, 203 Neb. 33, 277 N.W.2d 423 (1979).
This section does not prohibit a city from using the power of eminent domain to acquire and develop land for manufacturing and industrial sites. Monarch Chemical Works, Inc. v. City of Omaha, 203 Neb. 33, 277 N.W.2d 423 (1979).
This section does not prohibit Legislature from authorizing the electors of a county to vote bonds for poor relief. In re House Roll 284, 31 Neb. 505, 48 N.W. 275 (1891).