The 109th Nebraska Legislature has concluded, with the Second Session adjourning on April 17, the final day of the 60‑day “short session.” As predicted by Speaker John Arch (La Vista), the defining issue of the session was the state budget shortfall. Traditionally, budget work is concentrated in the first session of each biennium, with only limited adjustments during the second year. This session, however, opened with lawmakers confronting an estimated $471 million deficit in the current biennial budget, a gap that grew to $646 million midway through after the Nebraska Economic Forecasting Advisory Board changed projected tax revenues.

We have summarized only the major bills of direct interest to the banking industry, according to subject within the wrap-up. Other non-banking legislative measures were disposed of early in the session and were previously covered in the weekly NBA Legislative Update narratives or Bill Summary emails.
 
Members of the NBA Government Relations Committee spent numerous hours reviewing potential legislation for introduction on behalf of the NBA and analyzed other legislation introduced throughout the session. The committee makes recommendations regarding legislation and the positions to be established by the NBA on legislation of interest. These recommendations are forwarded to the NBA Board of Directors for final action.
 
Special thanks to Todd Rischling (Security First Bank, Lincoln), who served as the 2025-2026 NBA Government Relations Committee Chair, along with all of the other members of the committee for their efforts on behalf of Nebraska's banking industry. A list of the committee members is included in the full Wrap-Up linked below.

If you have any questions regarding any of the bills highlighted, please feel free to contact the NBA. This NBA Legislative Update Wrap-Up Edition has been prepared as a summary, and it does not necessarily constitute a complete or definitive analysis of each bill discussed. The NBA staff is prepared to provide you with further information or to send you copies of bills in which you are interested.

​109th Legislature, 2nd Session

The 109th Legislature ended the week with a marathon agenda of 65 bills on Final Reading. Friday marked day 59 of the 60-day session with nearly all business now complete. Throughout Friday's debate, senators gave tributes to the outgoing senators who are either term limited or, for three senators, choosing not to run for reelection. The Legislature will convene for its final day on Friday, April 17, which will include a farewell message from Speaker John Arch (La Vista) and an address from Governor Jim Pillen.

The week was marked with successes and some controversy as more than 100 bills were passed and sent to Governor Pillen. Lawmakers cleared a major hurdle when Governor Pillen signed the mid-biennium budget bills without issuing any line-item vetoes, an uncommon outcome that allowed the Legislature to finalize its two-year budget after weeks of negotiation. The budget package, which initially failed to pass, allowed the Legislature to close a projected $646 million deficit and survived earlier stalemates tied to opportunity scholarship funding and childcare subsidy provisions. Separately, senators advanced a revamped overhaul of the Nebraska Brand Committee, expanding its membership and updating inspection rules in what rural lawmakers described as a workable compromise after years of disagreement over modernizing the state's brand laws. LB 1187, introduced by Senator Barry DeKay (Niobrara) represented a significant compromise between the various factions of the cattle industry.

At the same time, several high-profile policy objectives stalled. Late-session attempts by Senator Kathleen Kauth (Omaha) regarding transgender medical procedures and to require public bathrooms to align with biological sex failed after senators ruled the amendments nongermane or pulled underlying bills from the agenda. A major, K-3 reading bill, LB 1050, introduced by Senator Dave Murman (Glenvil) on behalf of Governor Pillen, also fell short of the 33 votes needed to overcome a filibuster. Opponents cited unfunded mandates and concerns about retention policies. The setbacks underscored the limited floor time in the final stretch of the session and the difficulty of advancing contentious proposals amid procedural fights and coalition splits. Whether or not there will be ripple effects remains to be seen.

On Friday, senators advanced a series of NBA affirmative legislation. First, the Legislature advanced LB 838, introduced by Senator Mike Jacobson (North Platte), on a vote of 46-3. LB 838 amends existing elder and vulnerable adult statutes to allow financial institutions to designate an "authorized contact" in the event of an emergency, a loss of contact with the customer, or suspected financial exploitation. LB 838 also includes LB 1118. Senator Carolyn Bosn (Lincoln) introduced LB 1118 on behalf of the NBA to combat the rising use of fraudulent social media advertisements to perpetrate fraud. The bill, as included in the amendment, amends the Nebraska Uniform Deceptive Trade Practices Act to require social media platforms that accept paid advertising to establish programs to verify the identity of their customers, and a process for detecting, investigating and removing fraudulent advertising. LB 838 was designated as the Banking, Commerce and Insurance Committee's banking priority bill and includes LB 837, introduced by Senator Jacobson on behalf of the NBA, which allows banks and merchants to round cash transactions to the nearest nickel.

Additional fraud legislation was included in LB 965, introduced by Senator Elliot Bostar (Lincoln). LB 965 was designated as the Judiciary Committee's priority bill and was amended to include several important criminal justice reforms. Among the provisions included was LB 785, introduced by Senator Bob Hallstrom (Syracuse). LB 785 amends the existing statutes for possession of burglary tools to include the unauthorized possession or use of keys or locks for mail receptacles, including those used by the U.S. Postal Service and commercial carriers. Such possession would be a Class IV felony. The legislation directly targets organized mail theft rings that have fueled identity theft and financial fraud across the state.

The Legislature also took up three important bills related to housing. First, senators advanced LB 768, introduced by Senator Rob Dover (Norfolk). LB 786, as introduced, allows the Nebraska Department of Economic Development to enter into a contract to allow an outside entity to administer housing programs. The underlying goal is to allow the Nebraska Investment Finance Authority (NIFA) to administer all housing programs for the state. LB 786 includes LB 819, introduced by Senator Hallstrom on behalf of the NBA to extend the sunset of the Nebraska Rural Workforce Housing and Middle-Income Workforce Housing programs. The Legislature also passed LB 803, which includes the First-Time Home Buyer Savings Account Act, originally introduced by Senator Hallstrom. Third, the Legislature passed LB 1067, also introduced by Senator Hallstrom. LB 1067 creates a dedicated, ongoing funding stream for Nebraska's Rural Workforce Housing and Middle-Income Workforce Housing programs by adding a $1-per-$1,000 increase to the documentary stamp tax, with all new revenue split evenly between the two funds. As initially introduced, the increase would have been $1.50 per $1,000.

Legislature Approves Biennial Budget Bills
 
Nebraska lawmakers have approved the final adjustments to the state’s two-year budget, passing LB 1071 and LB 1072 after weeks of negotiation and procedural delays, well beyond the Day 50 requirement. The budget package relies on a mix of spending cuts, cash reserve transfers, and other adjustments to shrink what had grown into a projected $646 million deficit. Major components include a $50 million reduction from the Tobacco Settlement Fund and a cumulative $304 million draw from the Cash Reserve Fund over the biennium. While earlier debates were contentious, especially around proposed scholarship opportunity funding and childcare subsidy eligibility, lawmakers ultimately advanced the budget without those provisions after multiple failed attempts to reach consensus.
 
Even with the mainline budget bills passed, approximately $38 million remained to be addressed, prompting lawmakers to advance several revenue generating and cost saving measures. These include new or reinstated taxes and fees on kratom products, data centers, nonprofit sales, skill-based gaming devices, and water well registrations, along with changes to apprenticeship programs, insurance producer licensing fees, and judicial retirement provisions. Collectively, these bills are projected to generate roughly $44 million, potentially turning the remaining deficit into a modest surplus. Governor Jim Pillen praised the Legislature’s progress while signaling that additional work—including potential line item vetoes—may still be needed to fully stabilize the state’s fiscal outlook.
 
Judiciary Committee Package Advances
 
Last Tuesday the Legislature advanced LB 965, one of two priority bills for the Judiciary Committee. The bill finally advanced after a filibuster of more than five hours. LB 965, introduced by Senator Eliot Bostar (Lincoln), became the vehicle for a series of criminal justice bills for the Judiciary Committee. Contained within the committee amendment was LB 785, introduced by Senator Bob Hallstrom (Syracuse), on behalf of the NBA. LB 785 creates a new Class IV felony for the unauthorized possession, duplication, or use of keys or locks for mail receptacles, including those used by the U.S. Postal Service and commercial carriers, when done with intent to defraud. This legislation directly targets organized mail theft rings that have fueled identity theft and financial fraud across the state. The bill is expected to be scheduled for Final Reading this week.
 
Revamped Brand Bill Passes After Compromise
 
The Legislature also advanced to Select File a revised version of the “Nebraska Brand” bill last week after reaching a compromise intended to ease concerns from ranchers and agricultural groups. LB 1187, introduced by Senator Barry DeKay (Niobrara) initially dealt with modest fee increases for brand inspections. However, following a second hearing, it became the primary bill for reform to the current brand inspection practices in Nebraska. The updated proposal narrows earlier provisions contained in LB 1258 and focuses on modernizing the livestock brand inspection system while preserving key elements important to producers. Supporters say the compromise maintains necessary protections against cattle theft and ensures continuity for the state’s brand program, while also allowing for operational updates sought by policymakers. The bill’s movement signals continued legislative momentum on an issue closely watched by the NBA, and which has proved to be one of the most contentious issues of the entire biennium. 
 
Legislature Ready for Final Week
 
Lawmakers will return on Tuesday for the final week of the 109th Legislature, Second Session. Tuesday marks Day 56 of the 60-day Session. The agenda on Tuesday is filled primarily with Select File bills, as last week was the deadline for any bills to be advanced on General File. Tuesday is also the deadline for Governor Jim Pillen to return any budget bill line-item vetoes. Wednesday is the last day for Select File debate, with the remainder of the week focused on Final Reading. This week is also the last opportunity for any debate over rules changes ahead of the 2027 Session. As it stands, it is expected that Senators will only return for day 60 if Governor Pillen vetoes any bills passed this week. If not, the Legislature will have completed its work and return home, with just fewer than half the Senators shifting their focus to upcoming elections. 

Nebraska lawmakers broke a weeks-long budget stalemate by advancing the state's two main budget bills, LB 1071 and LB 1072, to final-round debate after earlier attempts were blocked by filibusters. Prior to Thursday's vote, LB 1071 had failed twice after Senators rejected two separate Motions to Invoke Cloture to end debate. The breakthrough came after senators agreed to strip out two contentious policy provisions: proposed $3.5 million funding for an opportunity scholarship "bridge" program and a permanent expansion of childcare subsidy eligibility. Their removal eased tensions that had previously split the Legislature, allowing LB 1071 to advance 34-7 without the need for a cloture vote, something that had not been possible in earlier debates. The shift in tone was notable, with lawmakers offering standing ovations to Appropriations Committee Chair Senator Rob Clements (Elmwood) for navigating the gridlock.​

Even with the budget bills now poised for final passage, Nebraska still faces a projected $38 million deficit, meaning additional revenue measures will be needed before the session ends. Legislative Fiscal Analyst Keisha Patent noted that closing the gap will likely depend on a series of revenue-generating bills still awaiting debate, including proposals to raise taxes or roll back exemptions. Governor Jim Pillen expressed disappointment that the voucher program was removed but praised the bipartisan cooperation that allowed the budget to move forward. Lawmakers now have a narrow window – just nine days left in the 60‑day session – to finalize both the budget and any accompanying revenue measures needed to balance it.

The balance of the NBA’s affirmative legislation – designated as the Banking, Commerce, and Insurance Committee’s priority bill – has moved on from Select File and is expected to be among the next items scheduled for Final Reading. LB 838, introduced by Senator Mike Jacobson (North Platte), updates protections for elder and vulnerable adults. This bill was amended into a package with two other pieces of legislation introduced on behalf of the NBA: LB 1118 and LB 837. Senator Carolyn Bosn (Lincoln) introduced LB 1118 to help mitigate fraudulent social media advertising by requiring platforms to verify advertisers and remove deceptive content. LB 837, also introduced by Senator Jacobson, allows banks and merchants to round cash transactions to the nearest nickel.​

The Legislature also advanced two key NBA-supported housing measures. LB 768, introduced by Senator Rob Dover, would allow the Department of Economic Development to contract with an outside entity, anticipated to be the Nebraska Investment Finance Authority (NIFA) to administer the state's housing programs. The bill includes LB 819, brought by Senator Bob Hallstrom (Syracuse) on behalf of the NBA, extending the sunset for the Rural Workforce Housing and Middle-Income Workforce Housing programs. With both bills clearing this stage of debate, they are likely to return to the floor soon for final votes as the Legislature works to complete its remaining agenda.

Nebraska lawmakers hit an unexpected roadblock when the main mid-biennium budget bill, LB 1071, failed to advance after several Republican senators pushed back over the removal of $3.5 million in private school opportunity scholarship funding. Appropriations Committee Chair Senator Rob Clements (Elmwood) stripped the funding ahead of debate in order to avoid a filibuster. However, the move backfired, with 19 senators refusing to support the Motion to Invoke Cloture, which would end debate on the bill. The standoff highlighted deep divisions within the Republican caucus and between policy and budget priorities, as Governor Jim Pillen publicly urged lawmakers to "stop playing political games" and pass a balanced budget. The failed cloture vote marked the first time since 2019 that a Nebraska budget bill stalled on the floor.​

The impasse also raised concerns about the broader budget timeline and the risk of a special session if lawmakers cannot reconcile disagreements. Senators clashed over whether policy issues - particularly scholarships for students attending private schools and child-care subsidy eligibility - belong in the budget at all, with several warning that continued gridlock could jeopardize funding stability for key state programs. Prior to adjournment following the vote, Speaker John Arch (La Vista) announced the budget would be considered again on Monday. Notwithstanding the dismal vote support of LB 1071, the second budget bill, LB 1072, advanced Thursday on a vote of 35-12. LB 1072 is made up of a series of cash fund transfers aimed to balance the budget, which peaked at a $646 million shortfall this session.

Following advancement of LB 838, the Legislature took up two important bills related to housing. First, Senators advanced LB 768, introduced by Senator Rob Dover (Norfolk). LB 768, as introduced, allows the Nebraska Department of Economic Development to enter into a contract to allow an outside entity to administer housing programs. The underlying goal is to allow the Nebraska Investment Finance Authority (NIFA) to administer all housing programs for the state. LB 768 includes LB 819, introduced by Senator Bob Hallstrom (Syracuse) on behalf of the NBA, to extend the sunset of the Nebraska Rural Workforce Housing and Middle-Income Workforce Housing programs.​

The Legislature then took up LB 1067, also introduced by Senator Hallstrom. LB 1067 would create a dedicated, ongoing funding stream for Nebraska's Rural Workforce Housing and Middle-Income Workforce Housing programs by adding a $1-per-$1,000 increase to the documentary stamp tax, with all new revenue split evenly between the two funds. As initially introduced, the increase would have been $1.50 per $1,000. Both housing bills, LB 768 and LB 1067, advanced to Final Reading following debate.