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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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