CHICAGO - Nebraska lawmakers set a hearing date for a bill that would prioritize bondholders over pensioners in the event of a municipal bankruptcy.
Legislative Bill 67 will get a public hearing on March 3 before the Banking, Commerce and Insurance Committee. It will be the first hearing for the bill.
A related measure, LB 66, which would require issuers to disclose on the front page of offering documents if bondholders have no priority over pensioners, is on hold until after the LB 67 hearing, according to a an aide to Sen. Paul Schumacher, R-Columbus, who crafted both bills. Several muni market participants testified against LB 66 in a public hearing on the bill two weeks ago.
Schumacher introduced the measures in January.
A similar bill that favored bonds over pensions died last year amid a lack of support.
Schumacher said the lack of clarity on the federal level regarding the position of bondholders versus pensioners prompted him to re-introduce the legislation.
