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LB 288

Change provisions of the Property Assessed Clean Energy Act, the Community Development Law, the Nebraska Affordable Housing Act, and the Middle Income Workforce Housing Investment Act

109th Legislature (2025-2026)

Expands clean energy projects to include grid resiliency, broadens affordable/middle‑income housing tools (including rent‑to‑own), and tightens funding, reporting, and eligibility

Provisions/portions of LB450 amended into LB288 by AM733
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Bill Summary · LB 288

Summary — LB 288 (2025)

Status: Enacted — Approved by Governor May 30, 2025
Introduced: Jan 15, 2025 (Urban Affairs Committee)
Primary focus: Amend multiple statutes to (1) expand eligible energy projects under the Property Assessed Clean Energy Act, (2) revise Community Development/TIF definitions and findings relating to affordable housing, (3) change grant/program rules under the Nebraska Affordable Housing Act, and (4) amend the Middle Income Workforce Housing Investment Act to allow and regulate rent‑to‑own and refine grant/reporting rules. Several other bills (LB450, LB626, LB292, LB531/LB622 provisions) were incorporated by committee amendment AM733 (and later amendments ER55, AM968, AM1181).

Main purposes / intent

  • Add “grid resiliency improvements” (e.g., backup generators, solar + battery, smart‑grid tech) as eligible energy projects under the Property Assessed Clean Energy Act.
  • Expand and clarify definitions and funding priorities for redevelopment/TIF and affordable housing under the Community Development Law and Nebraska Affordable Housing Act.
  • Modify the Middle Income Workforce Housing Investment Act to permit rent‑to‑own projects, set construction cost limits, and adjust grant/ reporting/administration rules to promote owner‑occupied and rent‑to‑own middle‑income housing.

Key provisions (high level)

Property Assessed Clean Energy Act (PA‑CEA)
- Adds a statutory definition of “grid resiliency improvement” and includes such improvements as eligible energy projects for clean energy assessment districts.

Community Development Law / TIF (from LB626)
- Adds “lack of affordable housing” as a condition supporting designation of substandard/blighted areas.
- Defines “affordable housing” and requires that, where an area was declared blighted because less than 20% of housing is affordable, a redevelopment project with tax‑division may be approved only if it will result in at least 30% of residential units being affordable upon completion.

Nebraska Affordable Housing Act (AM968 / AM1181)
- Changes allocation and disbursement priorities for the Affordable Housing Trust Fund (e.g., district allocation guidance; first priority for enterprise/opportunity/extremely blighted zones serving lowest income households).
- New disbursement structure (beginning July 1, 2026 in AM968): up to 80% of housing development costs up front when approved and remaining ~20% upon completion (subject to specified exclusions).
- Reporting and monitoring enhancements; authorizes recapture of unspent or uncompleted funds.
- AM1181 exempts certain Affordable Housing Trust Fund projects from Department of Environment and Energy review of compliance with the International Energy Conservation Code (operative date deferred three months after adjournment for those added sections).

Middle Income Workforce Housing Investment Act (core LB288 + AM509/AM733)
- Redefines “workforce housing” to include owner‑occupied or rent‑to‑own units costing no more than $350,000 to construct.
- Explicitly makes rent‑to‑own housing eligible for grants; limits rent‑to‑own projects to 10 units or fewer.
- Removes requirement tying rehabilitation eligibility to an after‑construction appraised value; clarifies unit cost considerations and program parameters (e.g., homeownership incentive reserve accounts, purchase option/purchase agreements).
- Adds reporting requirement to track number of tenants assisted into homeownership; clarifies grant selection criteria (e.g., demonstrated local need, readiness within 24 months, matching funds requirements).

Other
- Legislative intent/appropriation: $250,000 from the Middle Income Workforce Housing Investment Fund for a prefabricated housing study; report due to department electronically by April 1, 2026 (from LB292 as amended).

Who is affected

  • Municipalities — expanded authority/eligible projects under PA‑CEA; altered TIF/redevelopment criteria.
  • Nonprofit developers, housing developers, local governments — changes to grant priorities, disbursement timing, recapture rules, and eligibility (including rent‑to‑own).
  • Prospective middle‑income homebuyers/renters — greater access to rent‑to‑own and owner‑occupied programs; targeted projects in zones with affordability gaps.
  • Department of Economic Development and Department of Environment & Energy — new reporting, certification, monitoring, and in some cases modified review responsibilities.

Procedural/timeline notes

  • Committee hearing: Urban Affairs (Feb 4, 2025); major committee amendment AM733 incorporated multiple bills (LB450, LB626, LB292, etc.).
  • Final actions: Passed Legislature on Final Reading May 28, 2025 (43–6–0); presented to Governor May 28; approved May 30, 2025.
  • Operative dates: Several sections and certain amendment additions carry specific operative timing (see AM1181 and ER55 language — some provisions operative three months after adjournment). The prefabricated housing study report due April 1, 2026.
  • Fiscal notes were prepared (dates: Feb 3 and May 5, 2025) reflecting funding/disbursement and program cost implications.

This bill is a multi‑component package intended to promote energy resiliency, expand and prioritize affordable/middle‑income housing production (including rent‑to‑own), and adjust state program administration and reporting to reflect those policy goals.

Compiled from official sources — confirm details with the bill’s official record.

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