106th Nebraska Legislature, Second Session, Adjourns Sine Die

The Second Session of the 106th Nebraska Legislature reconvened on July 20, 2020 following a suspension due to the COVID-19 pandemic.  The Legislature adjourned sine die on August 13, 2020.

Below are summaries of five particularly relevant bills the Legislature passed:

HIGHLIGHTED BILLS

LB 424 expands the Nebraska Municipal Land Bank Act to allow any municipality in Nebraska to join an existing land bank.  Land banks are tax-exempt political subdivisions that acquire and develop vacant, abandoned and tax delinquent properties prior to eliminating their liabilities and transferring them to new owners for community development.  Prior to LB 424, only municipalities in Douglas and Sarpy counties could create land banks due to population requirements.  An amendment to the bill, AM 509, authorized primary class cities to create land banks.  Lincoln currently is the state’s only primary class city.  Smaller municipalities may now join a land bank by entering into an agreement with an authorized municipality.  The bill also regulates land bank activities and implements procedural safeguards to protect against conflicts of interest and remove land bank board members.  On August 11, the Legislature passed the bill.  On August 15, the Governor approved the bill.  Here is the bill in its entirety. 

LB 808 is an omnibus bill that incorporates the provisions of six other bills.  LB 808 incorporates LB 767, which incentivizes developers to build condominiums.  LB 808 amends the Nebraska Condominium Act to preserve the rights of individual unit owners and to limit litigation risk for condominium developers, which can be a significant barrier to condominium development.

To limit such risk, the bill does the following:

• Requires a preventative maintenance plan for a condominium project of 15 units or larger;
• Allows the developer to retain control of the project until it conveys 50 percent of the units to unit owners;
• Gives individual unit owners greater control over the actions of the owners association by limiting the association’s ability to engage in litigation absent a vote of 80 percent of unit owners;
• Requires a seller of a unit to disclose any threatened or pending litigation;
• Imposes a notice and cure period of three months to allow developers and builders to cure defects before litigation commences; and
• Reduces the statute of limitations for actions under the Condominium Act from four years to two years generally, or one year from discovery for defects that are not reasonably discoverable.

Condominium development increases housing and residential density providing Nebraska communities additional property tax revenue.  On August 11, the Legislature passed the bill.  On August 15, the Governor approved the bill.  Here is the bill in its entirety.

LB 866, which incorporates provisions of LB794 and LB1155, adopts the Municipal Density and Missing Middle Housing Act, which seeks to promote affordable housing by deregulating private sector development of “middle housing” (defined as duplexes, triplexes, quadplexes, cottage clusters and townhouses) and increasing residential density.  Beginning July 1, 2021, cities with populations greater than 20,000 must submit a report to the Urban Affairs Committee every two years detailing efforts to address the availability of and incentives for affordable housing through zoning codes, ordinances, and regulations.  Beginning January 1, 2023, cities with populations greater than 50,000 must develop an “affordable housing action plan” meeting minimum standards designed to encourage middle and workforce housing development.  Cities with populations less than 50,000 must develop a plan by January 1, 2024.  Any city that fails to meet its requirements must allow development of middle housing in all areas zoned for detached single-family dwellings.

LB 866 also creates the Middle Income Workforce Housing Investment Fund within the Department of Economic Development and funds it with a one-time transfer of ten million dollars ($10,000,000.00) from the state’s General Fund.  Its purpose is to provide grant funding for qualifying projects by nonprofit development organizations able to match all funds dollar-for-dollar.  The bill allocates funding to development projects in “urban communities” with populations greater than 100,000 based upon housing, economic and employment needs.  On behalf of our clients, we testified in support of the bill.  On August 13, the Legislature passed the bill.  On August 17, the Governor approved the bill.  Here is the bill in its entirety. 

LB 1021, as introduced, created an expedited review process for qualifying projects under the Community Development Law that utilize tax-increment financing (“TIF”) in counties with a population less than 100,000 or in areas that have been declared “extremely blighted.”  On behalf of our clients, we opposed the bill in its original form due to its creation of a broad parallel avenue to TIF that had the potential to muddy the current Community Development Law and create administrative burdens for some municipalities, namely larger municipalities likely to have a high volume of small-scale projects.  We collaborated on an amendment, which passed with 40 votes.  The amendment, AM 2988, gave municipalities discretion by making the expedited review process elective, limited expedited review eligibility to redevelopment projects in those counties with populations of less than 100,000, and streamlined administrative procedures for approval, financing, and reporting for qualifying projects.  On August 13, the Legislature passed the amended bill.  On August 17, the Governor approved the bill.  Here is the bill in its entirety.

LB 1107 is an omnibus bill that incorporates parts of LB 720.  LB 720 replaces the Nebraska Advantage Act, which provides a sales tax refund for tangible depreciable wind turbine and solar panel property, amongst other businesses.  LB 1107 will continue the sales tax refund for wind turbine and solar panel property subject to the developer complying with certain requirements.  On August 13, the Legislature passed the bill.  On August 17, the Governor approved the bill.  Here is the bill in its entirety.

Here is the final version of the chart we have published throughout the legislative session on bills related to economic development, municipal law, real estate, renewable energy, telecommunications and taxation.

Copies of the bills and interim studies are available on the Nebraska Legislature’s website at http://www.nebraskalegislature.gov.  As always, please do not hesitate to contact us if you have questions about these bills or any others.  Thank you.