April 15, 2022

2022 SESSION, 107TH LEGISLATURE

After completing day 59 of the 2022 Legislative Session, the Legislature recessed for an extended five-day period to allow for the return on day 60 to override any vetoes that may be issued by Governor Ricketts. The Governor has five days from the date of passage to veto legislation; had the Legislature conducted the final day of the session without the extended recess, the Governor could have waited until the body adjourned Sine Die and issued "pocket vetoes" after the legislature had adjourned.

The final day for bills to advance from the Select File and still have a chance for passage featured a filibuster of Senator Tom Brewer's (Gordon) "constitutional carry" gun rights bill (LB 773), which would have allowed Nebraskans to carry concealed weapons without a permit or current required gun safety training.

Omnibus Banking Bill Sent to Governor

The Legislature has given final approval LB 707. The bill, introduced by Senator Matt Williams (Gothenburg), was designated as a Committee Priority bill and, as originally introduced, would authorize the Department of Banking to examine bank subsidiaries and recognize that bank subsidiaries may be formed as a limited liability company. The bill would also adopt the annual state-chartered bank and savings and loan “wildcard.”
 
As adopted, the bill contains the following provisions, all of which are supported by the NBA:​
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LB 706 - REAL PROPERTY APPRAISER ACT: Introduced by Senator Williams, LB 706 will make “technical corrections” to the existing Real Property Appraiser Act to remain in compliance with the Appraiser Qualification Board’s Real Property Appraiser Qualification Criteria and to maintain compliance with Title XI of the federal Financial Institutions Reform, Recovery, and Enforcement Act of 1989.

LB 738 - LIBOR TRANSITION: Introduced by Senator Eliot Bostar (Lincoln), LB 738 addresses the legal effects of the discontinuance of LIBOR on contracts, securities or instruments and provides for the replacement, by operation of law, of the United States Dollar Libor as the benchmark index for any contract, security or instrument, with a recommended benchmark replacement that is based off a Secured Overnight Financing Rate (SOFR).

The bill specifies that the benchmark replacement applies with respect to a contract, security or instrument that either: 1) contains no fallback provisions setting forth a methodology or procedure for determining a benchmark replacement; or 2) contains fallback provisions that result in a benchmark replacement that: a) is not a recommended benchmark replacement; and b) is based in any way on any LIBOR value.

The measure provides that the selection or use of a recommended benchmark replacement as a benchmark replacement for a contract, security or instrument: 1) constitutes a reasonable replacement for and a commercially substantial equivalent LIBOR and 2) does not: a) impair or affect certain rights and performance obligations under; b) constitute a breach of; or c) void or nullify; the contract, security or instrument. The bill further provides that a person is not liable for damages and is not subject to any claim for equitable relief, in connection with: 1) the selection or use of a recommended benchmark replacement; or 2) the determination, implementation or performance of benchmark replacement performing changes; with respect to any contract, security or instrument.

LB 826 - PUBLIC FUNDS DEPOSIT SECURITY ACT: Senator Brett Lindstrom (Omaha) was the sponsor of LB 826, which will authorize the use of bonds or obligations of another state, or a political subdivision of another state, which are rated within the two highest classifications by at least one of the standard credit rating services to be used as collateral for public funds, with such classifications to include the underlying credit rating or enhanced credit rating, whichever is higher, with respect to bonds or obligations of a political subdivision of another state.
 
LB 846 - BANK DIRECTORS ANNUAL AUDIT: Introduced by Senator Julie Slama (Sterling), LB 846 will allow a bank’s board of directors to submit its annual audit to the Department of Banking within 120 days after the completion of the audit or, for a periodic audit, within 120 days after the end of the calendar year.

LB 993 - NEBRASKA FINANCIAL INNOVATION ACT: Senator Bostar was also the sponsor of legislation (LB 993) which will prohibit a digital asset depository from providing digital asset and cryptocurrency custody services unless the digital asset or cryptocurrency was 1) initially offered for public trade more than six months prior to the date of the custody services or 2) was created or issued by any bank, savings bank, savings and loan association, or building and loan association organized under the laws of this state or organized under the laws of the United States to do business in this State.
 
The bill also contains provisions clarifying the reserve requirements applicable to digital asset depositories which take custody of digital assets. The bill clarifies that the 100% reserve requirement for digital asset depositories only applies to the value of any outstanding stablecoin issued by the digital asset depository. Without this amendment, the 100% reserve requirement would apply to all digital assets in the custody of the digital asset depository.

Rural Workforce Housing Bill Given Final Approval

The Legislature has given final approval to LB 1069, a bill introduced and prioritized by Senator Williams, on behalf of the NBA, which will: a) extend the definition of workforce housing to include owner-occupied housing units that cost not more than $325,000 (currently $275,000) and rental housing units that cost not more than $250,000 (currently $200,000); b) replace the $2 million cumulative grant limitation with provisions allowing for the Department, in its discretion, to determine the cumulative amount of grants for any single grantee; c) reduce the matching requirement for grants from 100% to 50%; and d) extend the sunset date for provisions of the Act from July 1, 2022, to July 1, 2027.

Other Bills of Interest

Other bills supported by the NBA and adopted by the Legislature during the past week include the following:
 
LB 902 - NEBRASKA CAREER SCHOLARSHIP ACT: LB 902, introduced by Senator Ray Aguilar (Grand Island) and designated as a Speaker Priority bill, will authorize the Board of Trustees of the Nebraska State Colleges to award a Nebraska Career Scholarship not exceeding a maximum of $15,000 per year to any eligible state college student who achieved a composite score on a standard college admission test equivalent to a score of at least 18 out of a maximum score of 36 and who is enrolled in an eligible program of study (rangeland management, industrial technology, criminal justice, business administration, education, communication, or computer information systems). Under the measure each scholarship recipient will be required to register to obtain a Nebraska-based internship, apprenticeship, clinical position or employment in a major-related field prior to completion of the student’s eligible program of study. The bill also provides similar scholarship and internship opportunities for University of Nebraska eligible students.

LB 1024 - ARPA FUNDING-NORTH OMAHA RECOVERY ACT: Introduced by Senator Justin Wayne (Omaha), LB 1024 will promote recovery effort in North and South Omaha and other underserved areas of Nebraska. The legislation will allocate $335 million in federal funds under the American Rescue Plan Act of 2021 (ARPA) to support affordable housing, infrastructure improvements, crime prevention projects and other recovery initiatives.