Sections 58-701 to 58-712 shall be known and may be cited as the Nebraska Affordable Housing Act.

The Legislature finds that current economic conditions, lack of available affordable housing, federal housing policies that have placed an increasing burden on the state, and declining resources at all levels of government adversely affect the ability of Nebraska's citizens to obtain safe, decent, and affordable housing. Lack of affordable housing also affects the ability of communities to maintain and develop viable and stable economies.

Furthermore, the Legislature finds that impediments exist to the construction and rehabilitation of affordable housing. Local codes and state statutes have an important effect on housing's affordability by placing increased costs on developers. Financing affordable housing, especially in rural areas and smaller communities, is becoming increasingly difficult. In addition, existing dilapidated housing stock and industrial buildings are detrimental to new affordable housing development and the general health and safety of people living and working in or around such places. An affordable housing trust fund would assist all Nebraska communities in financing affordable housing projects and other projects which make the community safer for residents.

To enhance the economic development of the state and to provide for the general prosperity of all of Nebraska's citizens, it is in the public interest to assist in the provision of safe, decent, and affordable housing in all areas of the state. The establishment of the Nebraska Affordable Housing Act will assist in creating conditions favorable to meeting the affordable housing needs of the state.

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 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 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.

(1) The Legislature finds that the development of operational rules and regulations and an appropriate source of funding is critical to the success of the Affordable Housing Trust Fund. A housing advisory committee is created to address issues related to the operation of the fund and to recommend a plan to coordinate low-income housing efforts throughout the state. On or before December 15, 1996, the committee shall recommend to the Legislature and the Governor the most viable revenue source or sources for the funding of the fund. The committee shall also recommend for public review proposals for rules and regulations to carry out the fund, including time limitations for the use of financial assistance and limitations on the administrative costs of proposed projects. For administrative purposes, the committee shall be located in the Department of Economic Development.

(2) The committee shall consist of fifteen members who represent a wide range of interests associated with the development and sales of housing. The Governor shall appoint the members and a chairperson and vice-chairperson from the members. The committee may be a committee or council previously created by statute or executive order of the Governor. The Governor shall attempt to have the nonprofit and for-profit communities equally represented on the advisory committee.

(3) The committee shall meet at the call of the chairperson or a majority of the members. The chairperson shall call such meetings as he or she determines necessary to fulfill the duties of the committee. A quorum shall be one-half of the members.

The Department of Economic Development shall use the Affordable Housing Trust Fund to finance loans, grants, subsidies, credit enhancements, and other financial assistance for community affordable housing projects and for expenses of the department as appropriated by the Legislature for administering the fund.

The following activities are eligible for assistance from the Affordable Housing Trust Fund:

(1) New construction, rehabilitation, or acquisition of housing to assist low-income and very low-income families;

(2) Matching funds for new construction, rehabilitation, or acquisition of housing units to assist low-income and very low-income families;

(3) Technical assistance, design and finance services, and consultation for eligible nonprofit community or neighborhood-based organizations involved in the creation of affordable housing;

(4) Matching funds for operating costs for housing assistance groups or organizations when such grant or loan will substantially increase the recipient's ability to produce affordable housing;

(5) Mortgage insurance guarantees for eligible projects;

(6) Acquisition of housing units for the purpose of preservation of housing to assist low-income or very low-income families;

(7) Projects making affordable housing more accessible to families with elderly members or members who have disabilities;

(8) Projects providing housing in areas determined by the Department of Economic Development to be of critical importance for the continued economic development and economic well-being of the community and where, as determined by the department, a shortage of affordable housing exists;

(9) Infrastructure projects necessary for the development of affordable housing;

(10) Downpayment and closing cost assistance;

(11) Demolition of existing vacant, condemned, or obsolete housing or industrial buildings or infrastructure;

(12) Housing education programs developed in conjunction with affordable housing projects. The education programs must be directed toward:

(a) Preparing potential home buyers to purchase affordable housing and postpurchase education;

(b) Target audiences eligible to utilize the services of housing assistance groups or organizations; and

(c) Developers interested in the rehabilitation, acquisition, or construction of affordable housing;

(13) Support for efforts to improve programs benefiting homeless youth;

(14) Vocational training in the housing and construction trades industries by nonprofit groups; and

(15) Weatherization and solar or other energy improvements to make utilities for housing more affordable.

Organizations which may receive assistance under the Nebraska Affordable Housing Act are governmental subdivisions, local housing authorities, community action agencies, community-based or neighborhood-based or reservation-based nonprofit organizations, and for-profit entities working in conjunction with one of the other eligible organizations. For-profit entities that are eligible under this section shall be required to provide, or cause to be provided, matching funds for the eligible activity in an amount determined by the Department of Economic Development, which amount shall be at least equal to ten percent of the amount of assistance provided by the Affordable Housing Trust Fund. Political subdivisions, local housing authorities, community action agencies, and community-based, neighborhood-based, and reservation-based nonprofit organizations shall not be required to provide, or cause to be provided, such matching funds. Nothing in the act shall be construed to allow individuals to receive direct loans from the Affordable Housing Trust Fund.

(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 ninety days duration for all projects. Before 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:

(a) The Department of Economic Development shall disburse grant funds to a qualified recipient equal to eighty 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, once the department approves such recipient for 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) 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.

(5)(a) The Department of Economic Development may recapture any funds 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 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. 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.

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.

(1) The Department of Economic Development shall submit, as part of the department's annual status report under section 81-1201.11, the following information regarding the Affordable Housing Trust Fund: (a) The applications funded during the previous calendar year; (b) the applications funded in previous years; (c) the identity of the organizations receiving funds; (d) the location of each project; (e) the amount of funding provided to each project; (f) the amount of funding leveraged as a result of each project; (g) the number of units of housing created by each project and the occupancy rate; (h) the expected cost of rent or monthly payment of those units; (i) the projected number of new employees and community investment as a result of each project; (j) the amount of revenue deposited into the Affordable Housing Trust Fund pursuant to section 76-903; (k) the total amount of funds for which applications were received during the previous calendar year, the year-end fund balance, and, if all available funds have not been committed, an explanation of the reasons why all such funds have not been so committed; (l) the amount of appropriated funds actually expended by the department for the previous calendar year; (m) the department's current budget for administration of the Nebraska Affordable Housing Act and the department's planned use and distribution of funds; and (n) project summaries, including the applicant, project description, and grant amount requested for every application seeking funds during the previous calendar year.

(2) The status report shall contain no information that is protected by state or federal confidentiality laws.