The Legislature continues to endure filibusters on every bill debated on the floor of the Legislature. Under current rules, this requires eight hours of debate on bills during General File and four hours of debate for bills on Select File before a motion to invoke cloture, cease debate and vote on advancement of the bill can be entertained. On Thursday and Friday, over 650 amendments and procedural motions were filed to bills that have advanced from Committee with priority bill status, as well as other priority bills that remain in Committee. Speaker of the Legislature John Arch (La Vista) announced that, given the number of hours for debate remaining in the session and in the absence of a change in circumstances, the Legislature will only be able to process approximately 20 of the 100+ priority bills, including the package of budget bills which must be approved this session.

The Legislature adopted revisions to its rules, effectively limiting the number of motions that can be introduced at each stage of debate. Introduced in response to a tactic employed last week during debate on LB 574 (transgender surgery) in which opponents filed various procedural motions, talked for 10 minutes, and then withdrew the motions, the rules change will limit motions to postpone debate, recommit a bill to Committee, or indefinitely postpone to one-per-day on each of the three rounds of debate. While the rules change will not inhibit filibusters, it will require more time to be spent debating amendments to measures, rather than discussing procedural motions and enhance the ability to adopt substantive amendments.

Following eight hours of debate on Wednesday and Thursday, the Legislature approved a motion to invoke cloture and advanced LB 754 to select file on a vote of 41-0. Introduced on behalf of Governor Pillen and designated as a priority bill by Senator Lou Ann Linehan (Elkhorn), LB 754 would reduce the maximum individual income tax rate from 6.84% to 3.99% and also reduce the maximum corporate income tax rate from 7.25% to 3.99% over the next five years.
 
Prior to advancing the bill, amendments incorporating the provisions of LB 38 (exclude federal retirement income from state income tax to the extent included in federal adjusted gross income); LB 206 (allow partnerships to pay taxes owed on an amended return on behalf of the partners rather than requiring each partner to file an amended return and allow pass-through entities (LLCs and S-Corps) to pay state and local taxes on behalf of members/shareholders); LB 318 ($35 million in tax credits for childcare expenses); LB 497 (would allow individual taxpayers to deduct all itemized deductions on the state income tax return); and LB 641 (accelerate phase-out of income taxes on social security benefits), were added to the bill.

The Legislature commenced debate on LB 243 late Friday morning prior to adjourning for the weekend. Introduced by Senator Tom Briese (Albion), LB 243 would provide for the minimum amount of relief under the Property Tax Credit Act for 2024 and each year thereafter, in the amount of $700 million, plus a percentage increase equal to the percentage increase, if any, in the total assessed value of all real property in the state from the prior year to the current year.

With proposed committee amendments, the bill would increase annual property tax credits provided to taxpayers from the current level of $315 million in 2023 to $388 million in 2024 and, ultimately, rising to $560 million by 2029.
 
Other property tax relief measures to be incorporated into LB 243 include:

​LB 589 - School District Property Tax Limitation Act
Introduced by Senator Briese, LB 589 would prohibit a school district from making a property tax request for any year in excess of 3% more than its property tax request in the prior year, or the percentage increase in the Consumer Price Index, except with approval of the majority of its school board or by a 60% majority of the registered voters in a Primary, General or Special Election. (NBA Position: Support)

LB 242 - Nebraska Property Tax Incentive Act
Also introduced by Senator Briese, LB 242 would eliminate the 5% cap on the amount of income tax credits provided for property taxes paid and replace it with limitations based on the total increase in statewide property tax valuation. (NBA Position: Support)

LB 783 - Eliminate the Levy Authority of Community College Areas
Introduced by Senator Dave Murman (Glenvil), LB 783 would remove property taxes as a source of funding for the state community colleges, shifting approximately $200 million in property taxes annually to state sales and income taxes. (NBA Position: Watch)

With 50 days in the books, Friday marked the final day of Committee hearings. When lawmakers return to action next Tuesday, they will conduct the initial day of all-day floor debate and will hold the first of 27 evening sessions scheduled in the final 40 days of the session.

The Legislature debated the "Let Them Grow Act" (LB 574) for three full morning sessions prior to approving a motion to invoke cloture and advance the bill to Select File late Thursday morning. Some opponents of LB 574 have indicated their intention, with advancement of the bill, to filibuster every measure considered for the remainder of the session. Only time will tell!

The NBA testified during the final Banking, Commerce and Insurance Committee hearing on Tuesday in opposition to the following bill:

LB 710 - Credit Union Act
Introduced by Senator George Dungan (Lincoln), LB 710 would: a) eliminate requirements for the Director of the Nebraska Department of Banking and Finance (NDBF) to provide notices of an application for establishment of a branch of a credit union and remove discretion from the Director to hold a public hearing on amendments to a credit union association’s bylaws which are brought before the Department; b) allow a credit union with a main chartered office or approved branch in the state, upon notification to the Department, to establish savings account programs in any elementary or secondary school, whether public or private, that has students who reside in the same city or village as the main chartered office or branch of the credit union; c) expand the field of membership of a credit union to include persons or organizations within a geographically defined community, neighborhood, or rural district; d) authorize a credit union to conduct annual or special meetings by virtual conferencing platform; e) authorize credit unions to invest in shares, stocks, or member units of financial technology companies in a total amount not exceeding 5% of the net worth of the credit union; and f) repeal the 18% usury rate on credit union loans. (NBA Position: Oppose)

Having recently advanced a package of income tax cut bills, providing approximately $3 billion in relief over the next five years, the Revenue Committee has followed suit by moving a group of property tax relief proposals to the floor of the Legislature. The property tax relief measures are estimated to provide more than $3 billion in relief over the next six years.

LB 243, introduced and designated as a Priority Bil by Senator Tom Briese (Albion), has advanced from the Revenue Committee on a 7-0 vote. With proposed committee amendments, the bill would increase annual property tax credits provided to taxpayers from the current level of $315 million in 2023 to $388 million in 2024 and, ultimately, rising to $560 million by 2029.

Other property tax relief measures incorporated into LB 243 include:

LB 589 - School District Property Tax Limitation Act
Introduced by Senator Briese, LB 589 would prohibit a school district from making a property tax request for any year in excess of 3% more than its property tax request in the prior year, or the percentage increase in the Consumer Price Index, except with approval of the majority of its school board or by a 60% majority of registered voters in a Primary, General or Special Election. (NBA Position: Support)

LB 242 - Nebraska Property Tax Incentive Act
Also introduced by Senator Briese, LB 242 would eliminate the 5% cap on the amount of income tax credits provided for property taxes paid and replace it with limitations based on the total increase in statewide property tax valuations. (NBA Position: Support)

LB 783 - Eliminate the Levy Authority of Community College Areas
Introduced by Senator Dave Murman (Glenvil), LB 783 would remove property taxes as a source of funding for the states' community colleges, shifting approximately $200 million in property taxes annually to state sales and income taxes. (NBA Position: Watch)

Lawmakers adjourned on Thursday for a long, four–day weekend. After confronting filibusters on virtually every bill for the past three weeks, lawmakers ended the week with a flurry of activity by advancing three Committee Priority bills from General File. When the Legislature reconvenes on Tuesday, they will take up a contentious bill (LB 574), which would prohibit the performance of gender altering procedures for individuals under the age of 19.
 
With passage of the deadline for designating priority bills, the agenda for the rest of the session has been established. Any bills that have not been prioritized, amended into a priority bill, or are eligible to be considered on “consent calendar” (bills advancing from Committee with no dissenting votes and no opposition) are not likely to receive further consideration this session.

While not officially reported to the floor of the Legislature, media reports indicate that the Revenue Committee has advanced Governor Pillen's income tax relief package to General File. Introduced by Senator Lou Ann Linehan (Elkhorn), LB 754 would reduce the maximum individual income tax rate from 6.84% to 3.99% and also reduce the maximum corporate income tax rate from 7.25% to 3.99% over the next five years.

Prior to advancing the bill, the provisions of LB 318 ($35 million in tax credits for childcare expenses); LB 641 (accelerate phase-out of income taxes on social security benefits); and LB 38 (exclude federal retirement income from state income tax to the extent included in federal adjusted gross income) were added to the bill.

The NBA will present testimony before the Banking, Commerce and Insurance Committee next week in opposition to the following bill:

LB 710 - Credit Union Act
Introduced by Senator George Dungan (Lincoln), LB 710 would eliminate requirements for the Director of Banking to provide notices of an application for establishment of a branch of a credit union and remove discretion from the Director to hold a public hearing on amendments to the Credit Union Association's bylaws which are brought before the Department. The bill would also allow a credit union with a main chartered office approved branch in the state, upon notification to the Department, to establish savings account programs in any elementary or secondary school, whether public or private, that has students who reside in the same city or village as the main chartered office or branch of the credit union or, if the main office of the credit union is located in an unincorporated area of the county, at any school that has students who reside in the same unincorporated area. The legislation would: expand the field of membership of a credit union to include persons or organizations within a geographically defined community, neighborhood, or rural district; authorize a credit union to conduct annual or special meetings by virtual conferencing platform; and authorize credit unions to invest in shares, stocks or member units of financial technology companies in a total amount not exceeding 5% of the net worth of the credit union. (NBA Position: Oppose)

The NBA presented testimony before various Committees this week on the following bills:

Business and Labor Committee:
LB 367 - Fair Chance Hiring Act
​Introduced by Senator Danielle Conrad (Lincoln), LB 367 would prohibit an employer from asking an applicant to disclose information concerning the applicant's criminal record or history until after the applicant has received a conditional offer of employment from the employer. The bill would allow an employer to request information concerning the applicant's criminal record or history only after making a conditional offer of employment if the applicant is applying for a position for which a) a criminal history record information check is required by federal or state law; or b) federal or state law specifically disqualifies an applicant with a criminal background even if the law allows for a waiver that would allow the applicant to be employed. (NBA Position: Oppose)

Banking, Commerce and Insurance Committee:
LB 446 - Peer-to-Peer Vehicle Sharing Program Act
Introduced by Senator Eliot Bostar (Lincoln), LB 446 would require a Peer-to-Peer Vehicle Sharing Program. The NBA proposed an amendment to protect vehicles that serve as collateral for a bank loan which would require if a vehicle has a lien against it, that during each sharing period the vehicle owner's risk of loss due to physical damage to the vehicle is covered through at least one of the following: a) a physical damage protection package; b) a financial protection package; or c) any policy of insurance providing comprehensive and collision coverage that recognizes that the vehicle insured under the policy is made available and used through a Peer-to-Peer vehicle sharing program.

The following bills of interest to the banking industry have been designated as priority bills, which will enhance their likelihood of being considered as the session progresses.

Senator Priority Bills
LB 77 - Concealed Weapons
Introduced by Senator Tom Brewer (Gordon), LB 77 would authorize a county to allow the carrying of concealed weapons for all persons not otherwise prohibited from possessing or carrying such weapons under state or federal law. (Retains provisions of existing law prohibiting a person not prohibited from possession or carrying a concealed handgun to carry a concealed handgun in specified business locations, including a financial institution.) (NBA Position - Watch) SEN. BREWER PRIORITY BILL

LB 79 - Taxation - Consumption Tax Act
Introduced by Senator Steve Erdman (Bayard), LB 79 would eliminate all property, income and corporate taxes and replace them with a tax on the use or consumption in the state of Nebraska of taxable property or services (excludes intangible property and services) at a rate of 7.5%. The legislation would impose the consumption tax on financial intermediation services, including explicitly and implicitly charged fees for financial intermediation services to be collected with the same frequency that statements are rendered by the financial institution, but not less frequently than quarterly. NBA Position: Oppose) SEN. ERDMAN PRIORITY BILL

LB 249 - Rural Workforce Housing Investment Act
Introduced by Senator Tom Briese (Albion), LB LB 249 would have expanded the definition of workforce housing to include housing that receives federal or state low-income housing tax credits, community development block grants, home funds, funds from the National Housing Trust Fund, or funds from the Affordable Housing Trust Fund, thereby allowing for the use of such funds, together with Rural Workforce Housing Investment Funds. The bill would allow a nonprofit development organization to apply for more than one grant subject to a limitation on the maximum amount of grant funds awarded to such nonprofit development organization over a two-year period to no more than $5 million. The bill would also provide $20 million in additional funding for the Rural Workforce Housing Investment Act.

The NBA had initially opposed LB 249 based upon the proposed removal of “anti-stacking” provisions, which prohibited the mixing of certain low-income housing funds with rural workforce housing funds. Prior to advancing the bill, the Committee removed the objectionable provisions, and the NBA supports the bill as amended. (NBA Position: Support) SEN. IBACH PRIORITY BILL

Committee Priority Bills
LB 116 - Beginning Farmer Tax Credit Act
Introduced by Senator Tom Brandt (Plymouth), LB 116 would increase the net worth requirements for individuals to be qualified as a beginning farmer or livestock producer under the Beginning Farmer Tax Credit Act from $200,000 to $1 million (pension, retirement, or other types of deferred benefit accounts owned by the beginning farmer or livestock producer, including such accounts owned by a spouse or dependent would be excluded from the determination of a qualified beginning farmer’s or livestock producer’s net worth). (NBA Position: Support) AGRICULTURE COMMITTEE PRIORITY BILL
 
LB 214 - Omnibus Department of Banking Bill
Introduced by Senator Julie Slama (Dunbar), LB 214 would adopt changes to federal law regarding banking and finance and change provisions relating to digital asset depositories, loan brokers, mortgage loan originators, and installment loans. The bill would also renew the annual bank and savings and loan “wild-card” provisions. Amendments to incorporate the provisions of LB 669 (Department of Banking Conditional Orders) and LB 674 (Nebraska Financial Innovation Act) into the bill, both of which are supported by the NBA, have been adopted by the Committee. (NBA Position: Support) BANKING, COMMERCE AND INSURANCE COMMITTEE PRIORITY BILL​

LB 531 – Economic Recovery Act
LB 531, introduced by Senator Terrell McKinney (Omaha), would address the distribution of ARPA funds to North and South Omaha under the Economic Recovery Act of 2022. (NBA Position: Support) URBAN AFFIARS COMMITTEE PRIORITY BILL
LB 754 - Taxation - Individual and Corporate Income Tax Reductions
Senator Linehan has introduced legislation that would reduce the maximum individual income tax rate from 6.84% to 3.99% and also reduce the maximum corporate income tax rate from 7.25% to 3.99% over the next five years. (NBA Position: Support) REVENUE COMMITTEE PRIORITY BILL

Speaker Priority Bills
LB 206 – TAXATION – PARTNERSHIP RETURNS: LB 206, introduced by Senator Brad von Gillern (Omaha), would allow a partnership, at the partnership’s election, to file an amended Nebraska income tax return and pay all Nebraska income tax associated with the amended return after taking into consideration offsetting positive and negative adjustments of partnership items, at the top individual tax rate as if the partnership were an individual. The bill would avoid the need for partners of the electing partnership to file an amended Nebraska income tax return or pay Nebraska income tax resulting from the amended return in the year of the election, with the basis, and other tax items in the hands of the partner, arising from the partner’s interest in the partnership to be determined as if the election had not been made. (NBA Position: Support)

After breaking a filibuster late last week to advance LB 77 (constitutional concealed carry handguns) to Select File, lawmakers dove headlong into another filibuster on LB 753, the Opportunity Scholarships Act, which would provide tax credits for money donated to organizations providing scholarships to students attending private and parochial schools. LB 753 was advanced to Select File after a motion for cloture received the minimum 33 votes required for adoption.

Thursday marked the deadline for submitting requests for the Speaker to designate bills as Priority bills. Individual Senator and Committee Priority bills must be designated by March 14, with the 25 Speaker Priority bills, 49 Individual Senator Priority bills and 30 Committee Priority bills expected to dominate the balance of the legislative session.

It is anticipated that one of the bills (LB 214) designated as a priority by the Banking, Commerce and Insurance Committee will be debated on the floor of the legislature next week. Introduced by Senator Julie Slama (Dunbar), LB 214 would adopt changes to federal law regarding banking and finance and change provisions relating to digital asset depositories, loan brokers, mortgage loan originators and installment loans. The bill would also renew the annual bank and savings and loan “wild card” provisions. (NBA Position: Support)

Amendments adopted by the Committee incorporate provisions of the following bills, both of which are supported by the NBA:

LB 669 – Department of Banking Conditional Orders
Introduced by Senator Beau Ballard (Lincoln), LB 669 would authorize the Director of the Department of Banking to prescribe conditions for banks, trust companies, credit unions, building and loan associations, savings and loan associations, digital asset depositories, and their holding companies, if any, as part of any written order, decision or determination required to be made pursuant to the Nebraska Banking Act, Chapter 8, Article 3, the Credit Union Act, and the Nebraska Financial Innovation Act.

LB 674 – Nebraska Financial Innovation Act
Introduced by Senator Mike Jacobson (North Platte), LB 674 would make technical corrections to the Nebraska Financial Innovation Act regarding digital asset depositories.

As introduced by Senator Tom Briese (Albion), LB 249 would have expanded the definition of workforce housing to include housing that receives federal or state low-income housing tax credits, community development block grants, home funds, funds from the National Housing Trust Fund, or funds from the Affordable Housing Trust Fund, thereby allowing for the use of such funds, together with Rural Workforce Housing Investment Funds. The bill would allow a nonprofit development organization to apply for more than one grant subject to a limitation on the maximum amount of grant funds awarded to such nonprofit development organization over a two-year period to no more than $5 million. The bill would also provide $20 million in additional funding for the Rural Workforce Housing Investment Act.

The NBA had initially opposed LB 249 based upon the proposed removal of “anti-stacking” provisions, which prohibited the mixing of certain low-income housing funds with rural workforce housing funds. Prior to advancing the bill, the Committee removed the objectionable provisions, and the NBA supports the bill as amended. Senator Teresa Ibach (Sumner) has designated LB 249 as her individual Senator Priority bill.

The Banking, Commerce and Insurance Committee has advanced LB 67 to General File on a vote of 5 to 3. Introduced by Senator Slama, the bill would require the State Treasurer to ensure that money deposited by the State Treasurer's office is not used by financial institutions for social or political causes or objectives.

The NBA has worked diligently with Senator Slama and State Treasurer Murante to craft language to address the NBA’s concerns with this legislation. No further action on the legislation is anticipated this session unless amendments are agreed upon by the NBA and the State Treasurer.

The NBA presented testimony before various Committees this week in support of the following bills:

LB 69 - Life Insurance Assignment - Notice of Lapse/Termination
Senator Jacobson introduced LB 69 on behalf of the NBA, which would prohibit a policy of life insurance subject to an assignment from being terminated or lapsed by reason of default in payment of any premium unless a notice of pending lapse and termination of the policy has been provided by the insurer to any known assignee at least 30 days prior to the effective date of the lapse and termination. The bill also authorizes senior citizens to designate a third party to receive notices of cancellation, nonrenewal and conditional renewal of a life insurance policy. Many thanks to NBA member Kevin Postier (Henderson State Bank) for testifying in support of LB 69. ​(NBA Position: Support)

LB 483 - Public Funds/Credit Unions
Introduced by Senator Jane Raybould (Omaha) LB 483 would authorize a state or federal credit union to hold public deposits of the state or any political subdivision of the state. A big thank you to the many NBA members who reached out to members of the Banking, Commerce and Insurance Committee to express opposition to LB 483. (NBA Position: Oppose)​

LB 504 - Rural Workforce Housing Investment Fund Appropriations
Introduced by Senator Ray Aguilar (Grand Island), LB 504 would transfer $25 million in fiscal year 2023-24 and fiscal year 2024-25 to the Rural Workforce Housing Investment Fund. (NBA Position: Support)

LB 741 - Rural Workforce Housing
Senator Tony Vargas (Omaha) is the sponsor of the LB 741, which would appropriate $25 million in fiscal years 2023-24 and 2024-25 to the Rural Workforce Housing Investment Fund. (NBA Position: Support)

LB 367 - Fair Chance Hiring Act
Introduced by Senator Danielle Conrad (Lincoln), LB 367 would prohibit an employer from asking an applicant to disclose information concerning the applicant's criminal record or history until after the applicant has received a conditional offer of employment from the employer. The bill would only allow an employer to request information concerning the applicant's criminal record or history after making a conditional offer of employment if the applicant is applying for a position for which a) a criminal history record information check is required by federal or state law; or b) federal or state law specifically disqualifies an applicant with a criminal background even if the law allows for a waiver that would allow the applicant to be employed. (NBA Position: Oppose)

The pace at the Legislature has moved from a “slow walk” to a “crawl” during the past week as extended debate continues on every bill that surfaces on the Agenda, whether controversial or not. The initial highly controversial bill of the session (LB 77-concealed carry handguns) has been debated for the past two days and may carry over into next week. The deadline for designating individual Senator, Committee and Speaker priority bills is rapidly approaching, and it appears that the bills selected may be the only issues considered during the balance of the session.

The Banking, Commerce and Insurance Committee has advanced LB 214 to General File and designated the bill as one of the Committee priority bills. Introduced by Senator Julie Slama (Sterling), LB 214 would adopt changes to federal law regarding banking and finance and change provisions relating to digital asset depositories, loan brokers, mortgage loan originators and installment loans. The bill would also renew the annual bank and savings and loan “wild card” provisions. (NBA Position: Support)
 
Prior to advancing the bill, Committee amendments were adopted to incorporate provisions of the following bills, both of which are supported by the NBA:
 
LB 669 – Department of Banking Conditional Orders
Introduced by Senator Beau Ballard (Lincoln), LB 669 would authorize the Director of the Department of Banking to prescribe conditions for banks, trust companies, credit unions, building and loan associations, savings and loan associations, digital asset depositories, and their holding companies, if any, as part of any written order, decision or determination required to be made pursuant to the Nebraska Banking Act, Chapter 8, Article 3, the Credit Union Act, and the Nebraska Financial Innovation Act.
 
LB 674 – Nebraska Financial Innovation Act
Introduced by Senator Mike Jacobson (North Platte), LB 674 would make technical corrections to the Nebraska Financial Innovation Act regarding digital asset depositories.

The NBA presented testimony in opposition to the following bills and proposed constitutional amendments of interest to the banking industry during the past week.​

Revenue Committee – March 3

LR 6CA – Proposed Constitutional Amendment/Consumption Tax
Introduced by Senator Steve Erdman (Bayard), LR 6CA would prohibit governmental entities from imposing any taxes other than retail consumption taxes and excise taxes.
 
LR 7CA – Proposed Constitutional Amendment/Consumption Tax
Also introduced by Senator Erdman, LR 7CA would require the state to impose a consumption tax or an excise tax on all new goods and services and to provide a tax exemption for grocery items.
 
LB 79 - Taxation Consumption Tax Act
Senator Erdman also introduced LB 79, which would eliminate all property, income and corporate taxes and replace it with a tax on the use or consumption in the state of Nebraska of taxable property or services (excludes intangible property and services) at a rate of 7.5%.  The legislation would impose the consumption tax on financial intermediation services, including explicitly and implicitly charged fees for financial intermediation services to be collected with the same frequency that statements are rendered by the financial institution, but not less frequently than quarterly.

The NBA will be presenting testimony before various Committees next week in support of the following bills:
 
LB 69 - Life Insurance Assignment - Notice of Lapse/Termination
Senator Mike Jacobson also introduced LB 69 on behalf of the NBA, which would prohibit a policy of life insurance subject to an assignment from being terminated or lapsed by reason of default in payment of any premium unless a notice of pending lapse and termination of the policy has been provided by the insurer to any known assignee at least 30 days prior to the effective date of the lapse and termination. The bill also authorizes senior citizens to designate a third party to receive notices of cancellation, nonrenewal and conditional renewal of a life insurance policy.
 
LB 504 - Rural Workforce Housing Investment Fund Appropriations
Introduced by Senator Ray Aguilar (Grand Island), LB 504 would transfer $25 million in fiscal year 2023-24 and fiscal year 2024-25 to the Rural Workforce Housing Investment Fund.
 
LB 741 - Rural Workforce Housing
Senator Tony Vargas (Omaha) is the sponsor of LB 741, which would appropriate $25 million in fiscal year 2023-24 and 2024-25 to the Rural Workforce Housing Investment Fund.