​108th Legislature, 2nd Session

Nebraska lawmakers ended a contentious week on a positive note, advancing 22 bills on final reading. Time is winding down as Thursday marked Day 52 of the 60-day session. Senators will return from the long weekend on Tuesday to take back up LB 388, described below. The Legislature adjourned Thursday afternoon with debate on LB 1073, introduced by Senator Julie Slama (Dunbar). LB 1073 is one of the Banking, Commerce and Insurance Committee priority bills and contains provisions supported by the NBA.

The Revenue Committee advanced LB 388 to the floor of the Legislature to begin the week on a 7-1 vote. The bill was promptly taken up for debate on Wednesday, March 27. However, debate was cut short after it appeared the supporters did not have the 33 votes necessary to invoke cloture to end debate and get to a vote on the bill. Senator Lou Ann Linehan (Elkhorn), LB 388's sponsor, ended the evening debate by letting colleagues know she planned to work on the bill over the weekend to work on drafting errors.

LB 388 contains a package of bills that were heard in committee and represents Governor Jim Pillen’s revenue package. Included in LB 388 is an increase in the state sales tax rate from 5.5% to 6.5%. However, there is a mechanism for the rate to be lowered in quarter-percent increments dependent on state revenue collected. Additionally, a series of sales tax exemptions are eliminated, and new taxes are added on other products and services. The elimination of exemptions includes animal grooming, veterinary services, drycleaning, soft drinks and candy. Also, taxes on hemp products, cigarettes and vaping would face sharp increases.
 
LB 388 would also add a tax on revenues from advertising for large advertisers, such as Google and Meta. Opponents argue that this will be passed along to businesses using these services. Also contained in the package are caps on spending for counties, cities and villages, with exceptions for first responders, and methods for exceeding the caps.

The Legislature advanced LB 1412 and LB 1413 on Tuesday of this week. LB 1412 was the biennial budget adjustment bill to make updates to the biennial budget passed last year. LB 1413, which proposed a series of sweeps of the State’s various cash funds, included an amendment to compromise with opponents who took issue with the proposed sweep of $70 million from the State Unemployment Insurance Trust Fund. Initially, the bill would have directed $10 million to the Workforce Development Program, and $60 million to the general fund. Under the compromise, only $30 million will go to the General Fund, with $40 million to the Workforce Development Program. Additionally, an amendment brought by Senator Ben Hansen (Blair) would lower the minimum amount the Department of Labor can collect each year from businesses paying the tax. The NBA supports the compromise and amendment from Senator Hansen. LB 1413 also directs $12.5 million each to the Rural Workforce Housing and Middle-Income Housing Funds. 

​108th Legislature, 2nd Session

The Legislature has given first-round approval to LB 1074, one of the two Banking, Commerce and Insurance Committee Priority Bills which, as advanced, now contains the following provisions:

LB 1074 - Omnibus Department of Banking Bill
Introduced by Senator Julie Slama (Dunbar), LB 1074 would, among other things, renew the annual bank and savings and loan “wild-card” provisions. Prior to advancing the bill, the Committee adopted amendments incorporating the provisions of LB 710 (Credit Union Act), LB 872 (Central-Bank Digital Currency) and LB 1122 (Misleading Advertisements/ Solicitations). (NBA Position: Support)

LB 710 - Credit Union Act
Introduced by Senator George Dungan (Lincoln), LB 710 would: a) authorize a credit union to provide written notice of any change in its principal place of business within the state to be delivered to the Department in person or sent by regular or electronic mail; b) authorize a credit union to conduct annual or special meetings by virtual conferencing platform; c) authorize the board of directors of a credit union to conduct regular meetings not less frequently than six meetings annually, with at least one meeting in each calendar quarter; d) authorize a credit union board of directors to appoint one or more associate directors to serve in an advisory capacity; and e) authorize a credit union to invest in insurance policies and other investment products to fund employee benefit plans for its employees not to exceed 15% of the net worth of a credit union from a single issuer or 25% of the net worth of a credit union in aggregate.

Provisions of the original bill – which were opposed by the NBA and which have been removed in the Committee amendment to LB 1074 – would have: a) eliminated requirements for the Director of the Nebraska Department of Banking and Finance (Department) 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) allowed 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) expanded the field of membership of a credit union to include persons or organizations within a geographically defined community, neighborhood or rural district; d) authorized 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 e) repealed the 18% usury rate on credit union loans.

LB 872 - Central-Bank Digital Currency
Introduced by Senator Rob Clements (Elmwood), LB 872 would prohibit political subdivisions or state agencies from accepting a central-bank digital currency as a method of cash payment of any tax, levy, excise, duty, custom, toll, interest, penalty, fine, license, fee or assessment of whatever kind or nature.

LB 1122 - Misleading Advertisements/Solicitations
Senator Beau Ballard (Lincoln) is the sponsor of LB 1122, which would increase the maximum fine that the Department of Banking can impose for violations involving misleading advertisements or solicitation of bank customers from $1,000 to $5,000. Current law places restrictions on the ability of any person to include the name, trade name, logo or symbol of a financial institution in a written solicitation for financial products or services directed to a consumer who has obtained a loan from the financial institution without the consent of the financial institution, unless the solicitation clearly and conspicuously states that the person is not sponsored or affiliated with a financial institution and that the solicitation is not authorized by the financial institution.

Another pending amendment to LB 1074 would incorporate the following provisions of LB 1176, a bill on the NBA Affirmative Legislative agenda:

LB 1176 - Public Entities Pooled Investment Act
Introduced by Senator Dungan, LB 1176 would establish investment priorities, customer disclosures and restrictions on investments for political subdivision investment pools. As amended by the Committee prior to advancing, the bill would specifically limit investments by a political subdivision investment pool in commercial paper to commercial paper a) issued by a United States corporation; b) with a stated maturity of 270 days or fewer from its date of issuance; and c) which is rated in the highest quality category by at least two nationally recognized rating agencies at the time of purchase. In addition, the bill would limit investments in commercial paper by a political subdivision investment pool to no more than 50% of the total funds eligible for investment at the time of purchase and to no more than 5% of the total funds available for investment in commercial paper of a single issuer. 

Lawmakers gave second-round approval to two bills (LB 1412 and LB 1413) comprising the state's mid-biennium adjustment package.

Housing Funding Adjusted

An amendment proposed by Senator Terrell McKinney (Omaha) revised the amount of funding to be allocated for rural workforce housing and middle-income workforce housing. Prior to adopting the amendment, LB 1413 would have transferred $20 million from the Affordable Housing Trust Fund to the Rural Workforce Housing Investment Fund and $5 million to the Middle-Income Workforce Housing Fund. Under the amendment the combined $25 million in transfers would instead be split evenly between the two funds in the amount of $12.5 million each.

The amendment initially failed on a vote of 23-22 with 25 votes needed for the adoption. A motion to reconsider the vote was ultimately successful and the amendment was adopted on the following vote of 25-23.

Yes: Arch, Ballard, Blood, Bostar, J. Cavanaugh, M. Cavanaugh, Conrad, Day, DeBoer, Dungan, Fredrickson, Hansen, Holdcroft, Hunt, Linehan, McDonnell, McKinney, Raybould, Riepe, Sanders, Vargas, von Gillern, Walz, Wayne and Wishart
 
No: Aguilar, Albrecht, Armendariz, Bostelman, Brandt, Brewer, Clements, DeKay, Dorn, Dover, Erdman, Halloran, Hardin, Huges, Ibach, Jacobson, Kauth, Lippincott, Lowe, Meyer, Moser, Murman and Slama

Excused and Not Voting: Bosn

The following bill, supported by the NBA, has advanced to Select File:

LB 1023 - Taxation - Individual Income Taxes
LB 1023, introduced by Senator Brad von Gillern (Elkhorn), would allow deductions from federal adjusted gross income for business assets covered under Section 168 of the Internal Revenue Code.

Another bill supported by the NBA that has been incorporated into LB 1023 is the following:

LB 1400 - Relocation Incentive Act
Introduced by Senator Ballard, LB 1135 would authorize a refundable income tax credit equal to 50% of the relocation expenses paid by an employer for a qualifying employee (individual moving to Nebraska to accept a position of employment) not to exceed a maximum credit of $5,000 per qualifying employee. The bill would require a qualifying employee to receive an annual salary of at least $70,000 and not more than $250,000 per year and would subject the tax credit to recapture if the employee moves out-of-state within two years after the credit is claimed. The tax credits for this program will be capped at $5 million.

The two priority bills designated by the Banking, Commerce and Insurance Committee (LB 1073 and LB 1074) are expected to surface on the agenda sometime next week. The bills, as amended and advanced from Committee - along with other pending amendments - contain the following:

LB 1073 - Third-Party Administrators of Insurers On-Site Audits
Introduced by Senator Julie Slama (Dunbar), LB 1073 was amended to include the following bills which are supported by the NBA. (NBA Position: Support)

LB 873 - Real Estate Closing/Good Funds
LB 873, introduced by Senator Beau Ballard (Lincoln), would authorize use of real-time or instant payments through the FedNow service of the United States Federal Reserve system, or through the RTP network of the Clearinghouse Payments Company LLC for purposes of the good funds requirement associated with real estate closings and would increase from $500 to $1,500 of the amount of funds that need not be available for disbursement from good funds.

LB 1135 - Right-to-List Home Sale Agreements
Introduced by Senator Robert Dover (Norfolk), LB 1135 would make void and unenforceable any right-to-list home sale agreement (an agreement by the owner of residential real estate providing another person with the exclusive right to list real estate for sale at a future date in exchange for monetary consideration which purports to be a lien, encumbrance or other real property security interest) or lien or encumbrance resulting from such an agreement which is presented for recording, or recorded in the office of the register of deeds or county clerk.

LB 1409 - Condominium Association Declaration Amendment
Introduced by Senator Eliot Bostar (Lincoln), LB 1409 would limit the requirement to obtain lienholder approval of amendments to a condominium association declaration to a) time-share arrangements; b) unit subdivisions; and c) issues affecting lien priorities and lienholder foreclosure rights. The bill would deem a lienholder which fails to respond to a request for approval of amendment to declarations within 60 days of the request to have given approval. Prior to advancing, amendments proposed by the NBA providing greater protection to lienholders were adopted by the Committee.

LB 1074 - Omnibus Department of Banking Bill
Also introduced by Senator Slama, LB 1074 would, among other things, renew the annual bank and savings and loan "wild-card" provisions. Prior to advancing the bill, the Committee adopted amendments incorporating the provisions of LB 710 (Credit Union Act), LB 872 (Central-Bank Digital Currency) and LB 1122 (Misleading Advertisements/Solicitations.) (NBA Position: Support)

The bills to be incorporated into LB 1074 are as follows:

LB 710 - Credit Union Act
Introduced by Senator George Dungan (Lincoln), LB 710 would: a) authorize a credit union to provide written notice of any change in its principal place of business within the state to be delivered to the Department in person or sent by regular or electronic mail; b) authorize a credit union to conduct annual or special meetings by virtual conferencing platform; c) authorize the board of directors of a credit union to conduct regular meetings not less frequently than six meetings annually, with at least one meeting in each calendar quarter; d) authorize a credit union board of directors to appoint one or more associate directors to serve in an advisory capacity; and e) authorize a credit union to invest in insurance policies and other investment products to fund employee benefit plans for its employees not to exceed 15% of the net worth of a credit union from a single issuer or 25% of the net worth of a credit union in aggregate.

Provisions of the original bill - which were opposed by the NBA and which have been removed in the Committee amendment to LB 1074 - would have: a) eliminate requirements for the Director of the Nebraska Department of Banking and Finance (Department) 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) allowed a credit union with a main chartered office of 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) expanded the field of membership of a credit union to include persons or organizations within a geographically defined community, neighborhood or rural district; d) authorized 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 e) repealed the 18% usury rate on credit union loans.

LB 872 - Central-Bank Digital Currency
Introduced by Senator Rob Clements (Elmwood), LB 872 would prohibit political subdivisions or state agencies from accepting a central-bank digital currency as a method of cash payment of any tax, levy excise, duty, custom, toll, interest, penalty, fine, license, fee or assessment of whatever kind or nature.

LB 1122 - Misleading Advertisements/Solicitations
Senator Ballard is the sponsor of LB 1122, which would increase the maximum fine that the Department of Banking can impose for violations involving misleading advertisements or solicitation of bank customers from $1,000 to $5,000. Current law places restrictions on the ability of any person to include the name, trade name, logo or symbol of a financial institution in a written solicitation for financial products or services directed to a consumer who has obtained a loan from the financial institution without the consent of the financial institution, unless the solicitation clearly and conspicuously states that the person is not sponsored or affiliated with a financial institution and that the solicitation is not authorized by the financial institution.

Another pending amendment to LB 1074 would incorporate the following provisions of LB 1176, a bill on the NBA Affirmative Legislative agenda:

LB 1176 - Public Entities Pooled Investment Act
Introduced by Senator Dungan, LB 1176 would establish investment priorities, customer disclosures and restrictions on investments for political subdivision investment pools. As amended by the Committee prior to advancing, the bill would specifically limit investments by a political subdivision investment pool in commercial paper to commercial paper a) issued by a United States corporation; b) with a stated maturity of 270 days or fewer from its date of issuance; and c) which is rated in the highest quality category by at least two nationally recognized rating agencies at the time of purchase. In addition, the bill would limit investments in commercial paper by a political subdivision investment pool to no more than 50% of the total funds eligible for investment at the time of purchase and to no more than 5% of the total funds available for investment in commercial paper of a single issuer.

​108th Legislature, 2nd Session

With just over 20 legislative days remaining in the 2024 session, full-day floor debate commenced upon lawmakers' return to the Capitol on Monday morning. The Appropriations Committee has advanced its biennium budget adjustments and the bill to provide for transfers of various Agency Cash Funds to the General Fund, as described in greater detail below. 
 
The week started with a bang with lawmakers advancing six bills on the “consent calendar” Agenda. Another 15 priority bills were advanced to the next stage of debate in rapid-fire fashion on Monday. The pace of action slowed considerably as the week ended with a filibuster on LB 175, a bill that would have adopted the Residential Tenant Clean Slate Act. A motion for cloture on LB 175 early Thursday afternoon failed on a vote of 30-16.
 
Governor Pillen issued his initial veto of the session regarding a bill (LB 307) that would create a statewide needle exchange. A motion to override the veto has been filed and will be considered next Tuesday.

​The deadline for filing to run for election to the Nebraska Legislature expired last Friday with NBA General Counsel Bob Hallstrom throwing his hat into the ring to succeed Senator Julie Slama (Dunbar) in the 1st Legislative District. If elected, Mr. Hallstrom will discontinue his lobbying services with the NBA. In addition, former State Senator Ernie Chambers has filed to run for election in his North Omaha legislative district after having been term-limited (for the second time) four years ago. 

On the heels of the Nebraska Economic Forecasting Advisory Board raising projected revenues for the current fiscal year by $50 million, the Appropriations Committee, chaired by Senator Rob Clements (Elmwood) has advanced LB 1412 and LB 1413 to General File. The budget package being recommended by the Appropriations Committee would hold spending to a 3.1% increase over the two-year budget period, leaving a record balance of $574.9 million in the state’s General Fund by the end of the budget period (June 30, 2025) and another $904 million in the separate Cash Reserve Fund. Chairman Clements has indicated that the General Fund cushion is needed to make the tax cut and school aid package adopted last session sustainable into the future.
 
Lawmakers will have the long, four-day weekend to review the Appropriations Committee budget proposal and will be briefed on the proposal next Tuesday by Chairman Clements. The body will begin debate on LB 1412 on Tuesday afternoon.
​
The Governor’s proposed budget would have provided for a series of transfers from various State Agency Cash Funds to the General Fund, including $2 million in fiscal years 2024 and 2025 from the Financial Institution Assessment Cash Fund to the General Fund. The Appropriations Committee rejected this proposed cash transfer, instead transferring an additional $2 million in each of the two fiscal years from the Securities Cash Fund to the General Fund.
 
In addition, the budget now provides additional funding to the Department of Banking and Finance in the amount of $791,289 in fiscal year 2024-25 for financial examiner salaries. These additional funds should allow the Department examiner salaries to be more competitive and minimize the potential for state banking examiners to be lured away from work by other bank regulators.
 
The budget proposal also provides for the transfer of $20 million from the Affordable Housing Trust Fund to the Rural Workforce Housing Investment Fund and a transfer of $5 million to the Middle-Income Workforce Housing Investment Fund in fiscal year 2024-25.

LB 989 - Appraisal Management Company Registration Act/Real Property Appraiser Act
Introduced by Senator George Dungan (Lincoln), LB 989 would make a series of technical changes to the Real Property Appraiser Act and Nebraska Appraisal Management Company Registration Act and provide civil and criminal immunity for members of the Real Property Appraiser Board. (NBA Position: Support)

LB 992 - Real Property Appraiser Act
Senator Dungan also introduced LB 992, which would 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. (NBA Position: Support)

​108th Legislature, 2nd Session

The Banking, Commerce and Insurance Committe has advanced its final Committee priority bill (LB 1074 - Omnibus Department of Banking Bill) to General File. LB 1074, introduced by Senator Julie Slama (Dunbar) would, among other things, renew the annual bank and savings and loan "wild-card" provisions. Prior to advancing the bill, the Committee adopted amendments incorporating the provisions of LB 710 (Credit Union Act), LB 872 (Central Bank Digital Currency) and LB 1122 (Misleading Advertisements/Solicitations). (NBA Position: Support)

The bills to be incorporated into LB 1074 are as follows:

LB 710 - Credit Union Act
Introduced by Senator George Dungan (Lincoln), LB 710 would: a) authorize a credit union to provide written notice of any change in its principal place of business within the state to be delivered to the Department in person or sent by regular or electronic mail; b) authorize a credit union to conduct regular meetings by virtual or conferencing platform; c) authorize the board of directors of a credit union to conduct regular meetings not less frequently than six meetings annually, with at least one meeting in each calendar quarter; d) authorize a credit union board of directors to appoint one or more associate directors to serve in an advisory capacity; and e) authorize a credit union to invest in insurance policies and other investment products to fund employee benefit plans for its employees not to exceed 15% of the net worth of a credit union from a single issuer or 25% of the net worth of a credit union in aggregate.

Provisions of the original bill - which were opposed by the NBA and which have been removed in the Committee amendment to LB 1074 - would have: a) eliminated requirements for the Director of the Nebraska Department of Banking and Finance (Department) 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) allowed 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) expanded the field of membership of a credit union to include persons or organizations within a geographically defined community, neighborhood, or rural district; d) authorized 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 e) repealed the 18% usery rate on credit union loans.

LB 872 - Central-Bank Digital Currency
Introduced by Senator Rob Clements (Elmwood), LB 872 would prohibit political subdivisions or state agencies from accepting a central-bank digital currency as a method of cash payment of any tax, levy, excise, duty, custom, toll, interest, penalty, fine, license, fee, or assessment of whatever kind or nature.

LB 1122 - Misleading Advertisements/Solicitations
Senator Beau Ballard (Lincoln) is the sponsor of LB 1122, which would increase the maximum fine that the Department of Banking can impose for violations involving misleading advertisements or solicitation of bank customers from $1,000 to $5,000. Current law places restrictions on the ability of any person to include the name, trade name, logo or symbol of a financial institution in a written solicitation for financial products or services directed to a consumer who has obtained a loan from the financial institution without the consent of the financial institution, unless the solicitation clearly and conspicuously states that the person is not sponsored or affiliated with a financial institution and that the solicitation is not authorized by the financial institution.

The NBA presented testimony on the following bills that were heard before various committees this week:

February 27
Banking, Commerce and Insurance Committee

LB 954 - Biometric Autonomy Liberty Law
Senator Kathleen Kauth (Omaha) has introduced LB 954, which would provide for regulation of the collection, use, safeguarding, handling, storage, retention and destruction of biometric data. Senator Kauth submitted amendments supported by the NBA at the Committee hearing to exclude financial institutions, affiliates of financial institutions and data subject to Title V of the Gram-Leach-Bliley Act from the provisions of the bill. (NBA Position: Watch and Seek Amendments)

February 28
Revenue Committee
LB 1379 - Affordable Housing Down-Payment Assistance
Introduced by Senator Robert Dover (Norfolk), LB 1379 would increase the documentary stamp tax from $2.25 to $2.50 and use the additional funds for affordable housing down-payment assistance. NBA Associate General Counsel Ryan McIntosh proposed amendments at the Committee hearing to provide protections to existing lienholders and require notice of liens to be filed by the state in connection with down-payment assistance loans. (NBA Position: Watch and Seek Amendments)