LR 506

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                                        ONE HUNDRED NINTH LEGISLATURE
                                                   SECOND SESSION
                      LEGISLATIVE RESOLUTION 506
Introduced by Banking, Commerce and Insurance Committee: Jacobson, 42,
              Chairperson; Bostar, 29; Dungan, 26; Hallstrom, 1; Hardin, 48;
              von Gillern, 4; Wordekemper, 15.
PURPOSE:      The purpose of this resolution is to propose an interim study to
examine how public funds are deposited, held, and invested, and to evaluate the
economic      impacts        of     current        public-fund        investment      practices     on     local
communities throughout Nebraska.
      Local financial institutions have historically played a central role in
supporting        Nebraska's  small      businesses,        housing       markets,      agricultural
producers, and community development. The potential consequences of a shift of
public      funds     from        local       financial      institutions       include     reduced       credit
availability, weakened economic multipliers, and decreased economic resilience,
particularly in rural areas.
      The study shall include, but not be limited to, the following:
      (1) An inventory of where public funds are currently held and invested and
the   types    of    investment  vehicles     being       used,    including    deposits    in   local
financial     institutions,  pooled     investments,       out-of-state       investments,      money
market accounts, or other investment vehicles;
      (2)    An     examination  of    Nebraska's      statutory      and    regulatory     frameworks
governing     the     investment  of   public    funds     by    state      agencies,    counties,
municipalities,        school        districts,        natural       resources       districts,     and    other
political subdivisions;
      (3) An analysis of the economic impact of holding public funds in local
financial institutions versus pooled investment vehicles, including effects on
local lending capacity, small business financing, housing development, and
agricultural credit markets;
      (4) A review of decision-making criteria used by public entities when
selecting  deposit  or  investment  options,     including       interest-rate
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considerations,       collateral      requirements,      liquidity        needs,    fiduciary
obligations, and administrative practices;
      (5)   An   assessment   of   whether   current   practices   align    with   Nebraska's
economic development goals, particularly in rural and underserved communities;
and
      (6)   Potential   policy     options   or   legislative   changes    to   encourage   or
facilitate the holding or investment of public funds consistent with prudent
fiscal management and overall financial benefit to Nebraska taxpayers.
      NOW, THEREFORE, BE IT RESOLVED BY THE MEMBERS OF THE ONE HUNDRED NINTH
LEGISLATURE OF NEBRASKA, SECOND SESSION:
      1. That the Banking, Commerce and Insurance Committee of the Legislature
shall be designated to conduct an interim study to carry out the purposes of
this resolution.
      2. That the committee shall upon the conclusion of its study make a report
of its findings, together with its recommendations, to the Legislative Council
or Legislature.
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