The proposed bill introduces the Disinvested Community Development Incentive Tax Credit Act, aimed at addressing persistent underinvestment in economically distressed areas across Nebraska. The legislation recognizes the challenges faced by small and emerging developers in accessing private capital and aims to create a tax-credit-driven urban development incentive program. This program will support private investment in these areas, promote local job creation, and enhance community engagement while ensuring fiscal responsibility. The act outlines definitions for key terms such as "affordable commercial or mixed-use space," "economically distressed area," and "eligible developer," establishing a framework for the program's implementation.

Under the act, taxpayers who contribute to qualifying organizations for funding qualified projects will receive a nonrefundable income tax credit equal to 50% of their contribution, with a cap of $26.5 million in tax credits available per calendar year. Additionally, the Department of Economic Development may award limited grants to eligible developers to support project feasibility and public benefit, with a total grant limit of $20 million per fiscal year. The bill mandates that qualifying organizations maintain segregated accounts for tax-credit-supported contributions and requires the department to submit an annual report detailing the program's impact. The act is set to become operative for taxable years beginning on or after January 1, 2026.