Change provisions relating to redemption of bonds of political subdivisions

109th Legislature (2025-2026) Introduced by Rick Holdcroft

LB 126 lets Nebraska counties using competitive bond sales offer longer non-call periods (often 10 years), while modernizing call/prepayment rules and procedures.

Approved by Governor on February 25, 2025

Summary — LB 126 (2025)

Title: Change provisions relating to redemption of bonds of political subdivisions
Sponsor: Sen. Rick Holdcroft (Primary)
Chamber actions: Introduced Jan 10, 2025; Hearing Jan 22, 2025; Passed Final Reading 48‑0‑1 on Feb 21, 2025; Approved by Governor Feb 25, 2025.
Statute amended: Section 10‑126, Reissue Revised Statutes of Nebraska

Main purpose

LB 126 updates Nebraska law governing the redemption (call) provisions for bonds issued by political subdivisions. Its principal aim is to allow counties that sell bonds through a competitive sale (including the method described in section 10‑145) to offer longer non‑call periods (commonly a 10‑year call protection) than the statutory five‑year default, and to modernize procedural language for calling and prepaying bonds.

Key provisions

Adds an exception to the five‑year default call rule in §10‑126(1): bonds of counties sold to an underwriting firm pursuant to a competitive sale are not bound by the statutory requirement that bonds be redeemable “at any time on or after five years from the date of issuance.” (This effectively allows counties to issue competitively sold bonds with longer non‑call periods — e.g., 10 years — consistent with market practice.)

Updates calling/prepayment procedure language:

Where bonds do not specify a special call/prepayment procedure, the governing body may (rather than must) call such bonds by resolution or ordinance.
Either a resolution or an ordinance may be used to designate bonds to be prepaid, identify the bonds, set the prepayment date, and, if desired, condition the call on issuance of refunding bonds or similar funding events.
Retains notice and filing requirements: at least 30 days’ mailed notice to bondholders and filing a copy of the resolution with the paying agent on or before the call date.

Retains existing call premium limits: up to 4% for most issuers when a single issue is $500,000+; up to 2% for districts organized under Chapters 31 or 39.

Repeals the prior version of §10‑126 and replaces it with the amended text.

Who is affected

Counties issuing bonds via competitive sale (primary beneficiaries) — can offer longer non‑call periods that may improve marketability or align with underwriter requirements.

Underwriting firms and investors — may receive longer call protection depending on bond terms.

Paying agents and local governing bodies — procedural duties for notice, filing, and optional use of resolution/ordinance for calls.

Other political subdivisions generally unaffected except insofar as they already use or might adopt competitive sale practices.

Procedural/timing notes

Bill was advanced through committee (Government, Military and Veterans Affairs) and received bipartisan support in the Legislature.

Approved by the Governor on Feb 25, 2025. (No separate effective date is specified in the summary documents; generally, the act takes effect according to state law or as provided in the enacted statute.)

Practical impact

LB 126 aligns Nebraska statute with common municipal bond market practice by permitting competitively sold county bonds to carry longer call protection (often 10 years), while clarifying and modernizing how calls and prepayments are authorized and executed. This provides counties greater flexibility in structuring bond offerings to match investor preferences and underwriting requirements.