2023 SESSION, 108TH LEGISLATURE 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. Banking Committee Priority Bill Surfaces on AgendaIt 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. Rural Workforce Housing Bill AdvancesAs 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. State Treasurer ESG Bill Moves from CommitteeThe 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. Committee Hearing ActivityThe 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) Upcoming HearingsLB 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) 2023 SESSION, 108TH LEGISLATURE 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. Banking Committee Priority BillThe 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. Committee Hearing ActivityThe 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. Upcoming HearingsThe 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. Action Needed - Oppose LB 483!LB 483 will be heard by the Banking, Commerce and Insurance Committee on Tuesday, March 7. The bill, introduced by Senator Jane Raybould (Lincoln), would authorize a state or federal credit union to hold public deposits of the state or any political subdivision of the state. A “Background Paper” setting forth additional information and talking points accompanies this NBA Legislative Update for your assistance in contacting members of the Banking, Commerce and Insurance Committee to encourage opposition to the measure. Background Paper - Credit Union Access to Public FundsIssue: LB 483 - Credit Union Access to Public Funds
Introducer: Senator Jane Raybould (Lincoln) NBA Position: OPPOSED Background: The following bill that would expand the powers of credit unions in Nebraska has been introduced, which is opposed by the NBA. LB 483 would authorize a state or federal credit union to hold public deposits of the state or any political subdivision of the state. Arguments in Opposition to LB 483:
Please contact the members of the Banking, Commerce and Insurance Committee set forth below to encourage them to OPPOSE LB 483.
2023 SESSION, 108TH LEGISLATURE The Legislature continued to “slow walk” the process, as only 10 bills were advanced from General File to Select File during the past week. With the deadline for designating priority bills rapidly approaching, opportunities for bills without priority designation to be adopted is diminishing. It is anticipated that Committees will, more than usual, be combining multiple bills into Committee priority bills to maximize their ability to push measures across the finish line. Action Needed - Oppose LB 483!LB 483 will be heard by the Banking, Commerce and Insurance Committee on Tuesday, March 7. The bill, introduced by Senator Jane Raybould (Lincoln), would authorize a state or federal credit union to hold public deposits of the state or any political subdivision of the state. A “Background Paper” setting forth additional information and talking points accompanies this NBA Legislative Update for your assistance in contacting members of the Banking, Commerce and Insurance Committee to encourage opposition to the measure. Public Entity Investment Bills WithdrawnThe Legislature has withdrawn the following bills, opposed by the NBA, from further consideration this session: LB 476 - Public Entities Investment Trust Act Introduced by Senator Justin Wayne (Omaha), LB 476 would have authorized the creation of trusts to provide an investment pool into which all public entities (excluding the state of Nebraska and any agency thereof) may deposit funds. LB 594 - Local Government Investment Pools Senator Brian Hardin (Gering) is the sponsor of LB 594, a bill that would have authorized a local government investment pool created under the laws of the state, including the Interlocal Cooperation Act, to allow for the purpose of investing the funds of two or more political subdivisions in commercial paper if the commercial paper a) has a stated maturity of 390 days or fewer from its date of issuance; and b) receives an investment quality rating of not less than A-1 or P-1, or an equivalent rating, by a nationally recognized investment rating firm. Balancing the BudgetThe Appropriations Committee continues to conduct hearings on State Agency budget requests and must also process 73 other pending bills which have been referred to the Committee. The Committee released its preliminary budget late last week, which contains the following highlights:
Upcoming HearingsThe following bills, opposed by the NBA, will be heard before the Revenue Committee: 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. Background Paper - Credit Union Access to Public FundsIssue: LB 483 - Credit Union Access to Public Funds
Introducer: Senator Jane Raybould (Lincoln) NBA Position: OPPOSED Background: The following bill that would expand the powers of credit unions in Nebraska has been introduced, which is opposed by the NBA. LB 483 would authorize a state or federal credit union to hold public deposits of the state or any political subdivision of the state. Arguments in Opposition to LB 483:
Please contact the members of the Banking, Commerce and Insurance Committee set forth below to encourage them to OPPOSE LB 483.
2023 SESSION, 108TH LEGISLATURE Lawmakers adjourned on Thursday for a long, four-day weekend. With one-third of the 2023 Legislative Session in the books, much work remains. Having completed two weeks of two-a-day Committee hearings, the Legislature scheduled initial floor debate on bills that had advanced from Committee on Monday, February 13. Unfortunately, the Legislative body ground to a screeching halt over confirmation reports (Gubernatorial appointments) that typically take a few minutes each to process, by spending three full mornings of debate (approximately eight hours) on the confirmation reports. At long last, on Thursday morning, bills on General File were debated, with 12 bills advanced to Select File, including three bills on the NBA Affirmative Legislative agenda. Floor Debate CommencesThe following NBA Affirmative Legislative bills were debated on the floor of the Legislature on Thursday morning and have been advanced to Select File: LB 94 – UCC Article 12 Introduced by Senator Julie Slama (Dunbar), LB 94 would adopt Uniform Commercial Code, Article 12, relating to controllable electronic records. (NBA Position: Support) LB 207 – Trust Deeds - Location of Trustee's Sale Senator Brad von Gillern (Omaha) is the sponsor of LB 207, which would clarify that the sale of property pursuant to a power of sale under a trust deed may be conducted on the premises, at the county courthouse, or in any public building in which county offices are located within the county in which the property to be sold is situated. (NBA Position: Support) LB 279 – Executive Officer Reporting Requirements Senator Kathleen Kauth (Omaha) introduced LB 279, which would eliminate the requirement for executive officers to make annual reports regarding the amount of loans or indebtedness on which he or she is a borrower, cosigner, or guarantor, the security therefor, and the purpose for which the proceeds have been or are to be used. (NBA Position: Support) In response to concerns expressed by the Nebraska Department of Banking and Finance, a Committee amendment to allow the Board of Directors to retain flexibility to obtain a credit report for its executive officers on an annual basis was adopted prior to advancing the bill. Committee Hearing ActivityThe following bills, opposed by the NBA, were heard before the Banking, Commerce and Insurance Committee on February 13:
LB 730 - Fair Access to Financial Services Act Introduced by Senator Rick Holdcroft (Bellevue), LB 730 would restrict financial institutions from limiting access to financial services (financial product or service) for any reason other than objective financial criteria. The bill would prohibit a financial institution from denying any person a financial service offered by the financial institution unless justified by such person’s documented failure to meet quantitative, impartial and risk-based financial standards established in advance by the financial institution. (NBA Position: Oppose) Many thanks to Brad Koehn, Midwest Bank (Lincoln), and Nick Vrba, First State Bank & Trust Co. (Fremont), for testifying in opposition to LB 730 on behalf of the NBA. Koehn noted that the bill, by only allowing provisions of banking services to be denied based on “quantitative, impartial, and risk-based financial standards” would prevent a bank from utilizing the “CHARACTER” component of the five-C’s of credit and management experience in making loan decisions. Vrba suggested to the Committee that “banks should be free to lend to, invest in, and generally do business with any entity or activity that is legal, without government interference. Banks should be free not to lend, invest, or otherwise engage so long as they do not violate statutory, regulatory, fair lending or other anti-discrimination laws.” He also noted that “the free-market approach to banking industry regulation has produced the strongest and most resilient financial system in the world.” LB 743 - Investment Neutrality in Public Funds Act Also introduced by Senator Kauth, LB 743 would require any investment manager, fiduciary, governing body or financial institution in making and supervising investments of any public fund to discharge its duties solely in the financial interest of the beneficiaries for the exclusive purposes of a) providing financial benefit to the beneficiaries, and b) defraying reasonable expenses related to administration of the benefits. The bill would require a fiduciary to take into account only financial (having a material effect on the financial risk of the financial return of an investment) factors when discharging its duties with respect to investments of public funds (financial does not include any action taken, or factor considered, by a fiduciary with any purpose whatsoever to further social, political, or ideological interests). (NBA Position: Oppose) NBA General Counsel Bob Hallstrom testified in opposition to LB 743, indicating that an investment manager’s fiduciary duty currently prohibits utilization of ESG factors for personal reasons by the fiduciary and that prohibiting a fiduciary from investing in certain, specified types of investments that may be in the financial best interests of beneficiaries inhibits the ability of a fiduciary to fulfill its obligations to the beneficiaries. 2023 SESSION, 108TH LEGISLATURE Friday marked the 26th day of the long, 90-day 2023 Legislative Session and the end of two-a-day Committee hearings. When lawmakers convene next Monday morning, floor debate will commence on initial bills that have advanced from Committee to General File. Floor Debate to CommenceA number of bills on the NBA Affirmative Legislative agenda got out of the chute early and should be debated on the floor of the Legislature early next week, including the following: LB 94 - UCC Article 12 Introduced by Senator Julie Slama (Dunbar), LB 94 would adopt Uniform Commercial Code, Article 12, relating to controllable electronic records. (NBA Position: Support) LB 207 - Trust Deeds - Location of Trustee's Sale Senator Brad von Gillern (Omaha) is the sponsor of LB 207, which would clarify that the sale of property pursuant to a power of sale under a trust deed may be conducted on the premises, at the county courthouse, or in any public building in which the county offices are located within the county in which the property to be sold is situated. (NBA Position: Support) LB 279 - Executive Officer Reporting Requirements Senator Kathleen Kauth (Omaha) introduced LB 279, which would eliminate the requirement for executive officers to make annual reports regarding the amount of loans or indebtedness on which he or she is a borrower, cosigner, or guarantor, the security therefor, and the purpose for which the proceeds have been or are to be used. (NBA Position: Support) In response to concerns expressed by the Nebraska Department of Banking and Finance, an amendment was agreed to by the NBA and adopted by the Committee to allow the Board of Directors to retain the flexibility to obtain a credit report for its executive officers on an annual basis. Upcoming HearingsThe following bills, opposed by the NBA, will be heard before the Banking, Commerce and Insurance Committee on February 13: Action Needed - Oppose LB 730 and LB 743! LB 730 - Fair Access to Financial Services Act Introduced by Senator Rick Holdcroft (Bellevue), LB 730 would restrict financial institutions from limiting access to financial services (financial product or service) for any reason other than objective financial criteria. The bill would prohibit a financial institution from denying any person a financial service offered by the financial institution unless justified by such person's documented failure to meet quantitative, impartial and risk-based financial standards established in advance by the financial institution. (NBA Position: Oppose) LB 743 - Investment Neutrality in Public Funds Act Also introduced by Senator Kauth, LB 743 would require any investment manager, fiduciary, governing body or financial institution in making and supervising investments of any public fund to discharge its duties solely in the financial interest of the beneficiaries for the exclusive purposes of a) providing financial benefit to the beneficiaries, and b) defraying reasonable expenses related to administration of the benefits. The bill would require a fiduciary to take into account only financial (having a material effect on the financial risk of the financial return of an investment) factors when discharging its duties with respect to investments of public funds (financial does not include any action taken, or factor considered, by a fiduciary with any purpose whatsoever to further social, political, or ideological interests). (NBA Position: Oppose) A "Background Paper" setting forth additional information and "talking points" on LB 730 and LB 743 accompanies this NBA Legislative Update for your assistance in contacting members of the Banking, Commerce, and Insurance Committee to encourage opposition to the measures. Committee Hearing ActivityThe NBA presented testimony before a number of Committees during the past week, including the following: Government, Military & Veterans Affairs Committee - February 7 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) Government, Military & Veterans Affairs Committee - February 9 LB 268 - Political Subdivision Investment Pool Introduced by Senator Steve Halloran (Hastings), LB 268 would authorize any political subdivision vested with taxing authority including quasi-public entities, joint public agencies created pursuant to the Joint Public Agency Act and joint entities created pursuant to the Interlocal Cooperation Act located in Nebraska to participate in a trust or investment pool established within the office of the State Treasurer. (NBA Position: Oppose) A big thanks to the many bankers who contacted members of the Government, Military, and Veterans Affairs Committee to express opposition to LB 268. Senator Halloran in his opening remarks indicated that the was asking the Committee to hold the bill and take no action this session. Background Paper: Environmental, Social and GovernanceIssue - Environmental, Social, and Governance (LB 730 / LB 743)
NBA Position: Oppose Background: The following bills, opposed by the NBA, have been introduced which would require adherence to anti-Environmental, Social, Governance (ESG) policies for financial institutions in Nebraska. LB 730 (Introducer – Senator Rick Holdcroft, Bellevue) would restrict financial institutions from limiting access to financial services (financial product or service) for any reason other than objective financial criteria. The bill would prohibit a financial institution from denying any person a financial service offered by the financial institution unless justified by such person’s documented failure to meet quantitative, impartial, and risk-based financial standards established in advance by the financial institution. LB 743 (Introducer – Senator Kathleen Kauth, Omaha) would require any investment manager, fiduciary, governing body or financial institution in making and supervising investments of any public fund to discharge its duties solely in the financial interest of the beneficiaries for the exclusive purposes of a) providing financial benefit to the beneficiaries, and b) defraying reasonable expenses related to administration of the benefits. The bill would require a fiduciary to take into account only financial (having a material effect on the financial risk of the financial return of an investment) factors when discharging its duties with respect to investments of public funds (financial does not include any action taken, or factor considered, by a fiduciary with any purpose whatsoever to further social, political, or ideological interests). Arguments in Opposition to LB 730 / LB 743:
Please contact the members of the Banking, Commerce and Insurance Committee set forth below to encourage them to OPPOSE LB 730 and LB 743.
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