81-12,248.

Development of underutilized tax-exempt property; covered nonprofit organization; requirements; sale restrictions; violations; penalty.

(1) For purposes of this section:

(a) Community development corporation means a private, nonprofit corporation whose board of directors is comprised of business, civic, and community leaders, and whose principal purpose includes the provision of low-income housing or community economic development projects that primarily benefit low-income individuals and communities;

(b) Community development organization means a private, nonprofit organization that works to improve the social, economic, and environmental well-being of a specific geographic area or community. Community development organizations focus on grassroots efforts and community engagement to address local needs and promote sustainable development. Community development organizations may engage in a wide range of activities, including, but not limited to, affordable housing, economic development, education and training, community engagement, health and social services, environmental sustainability, civic engagement, infrastructure development, and cultural and recreational activities;

(c) Covered nonprofit organization means any community development corporation, community development organization, or economic development corporation. The term does not include any political subdivision of the state;

(d) Department means the Department of Economic Development;

(e) Director means the Director of Economic Development;

(f) Economic development corporation means a private, nonprofit corporation whose primary goal is the promotion of economic growth, job creation, and overall economic prosperity within a specific geographic area. Economic development corporations may engage in a wide range of activities, including, but not limited to, promoting business growth, supporting entrepreneurship, attracting investment, workforce development, infrastructure development, industry cluster development, and industry collaboration and advocacy;

(g) High-poverty area means an area consisting of one or more contiguous census tracts, as determined by the most recent federal decennial census, which contain a percentage of persons with incomes below the poverty line of greater than thirty percent, and all census tracts contiguous to such tract or tracts, as determined by the most recent federal decennial census;

(h) Market value means the fair market value of real property as determined by an independent appraisal; and

(i) Underutilized tax-exempt property means any real property in this state that (i) is exempt from property taxes and (ii) is completely undeveloped or contains deteriorating structures.

(2)(a) A covered nonprofit organization that owns or acquires underutilized tax-exempt property located within a high-poverty area shall develop such property within three years after July 19, 2024, or the date of acquiring such property, whichever is later. Such development must:

(i) Increase the market value of the property by at least twenty-five percent; and

(ii) Result in the creation of new jobs or the starting of a new business on such property.

(b) The covered nonprofit organization shall electronically submit a development plan for the underutilized tax-exempt property to the department, the Clerk of the Legislature, and the chairperson of the Urban Affairs Committee of the Legislature within ninety days after July 19, 2024, or the date of acquiring the property, whichever is later. The development plan shall include a description of the proposed development and an estimated timeline for such development.

(c)(i) If a covered nonprofit organization fails to develop the property within the three-year period described in subdivision (a) of this subsection, the director shall, following notice and opportunity for hearing in accordance with the Administrative Procedure Act, impose a fine equal to the amount of property taxes that would be owed for such property if the property had not been tax-exempt or ten thousand dollars, whichever is greater.

(ii) If the failure to develop the property persists for twelve months after the end of the three-year period described in subdivision (a) of this subsection, the director shall, following notice and opportunity for hearing in accordance with the Administrative Procedure Act, impose a fine equal to the amount of property taxes that would be owed for such property if the property had not been tax-exempt or twenty thousand dollars, whichever is greater.

(iii) If the failure to develop the property persists for twenty-four months after the end of the three-year period described in subdivision (a) of this subsection, the director shall, following notice and opportunity for hearing in accordance with the Administrative Procedure Act, make a written recommendation to the county board of equalization in the county where the property is located that the property tax exemption be revoked for the underutilized tax-exempt property.

(d) If any covered nonprofit organization transfers ownership of underutilized tax-exempt property located within a high-poverty area to another covered nonprofit organization, the time periods prescribed in this subsection shall not be restarted. Such periods shall be determined as if no transfer occurred.

(3)(a) A covered nonprofit organization that owns or acquires underutilized tax-exempt property located within a high-poverty area shall not attempt to sell such property at a price that is more than fifty percent above the market value for such property.

(b) If a covered nonprofit organization violates subdivision (a) of this subsection, the director shall, following notice and opportunity for hearing in accordance with the Administrative Procedure Act, revoke the property tax exemption for the underutilized tax-exempt property.

(4) All money collected as a fine under this section shall be remitted to the State Treasurer for distribution in accordance with Article VII, section 5, of the Constitution of Nebraska.

(5) The department may adopt and promulgate rules and regulations to carry out this section.