58-708.

Department of Economic Development; selection of projects to receive assistance; disbursements; duties; schedule of uses of funds; recapture funds; when.

(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.