Debate Transcripts

LB 170 (2001)

Select File

March 22, 2001

SENATOR CUDABACK: Thank you, Mr. Clerk. Mr. Clerk, next agenda item.

CLERK: Mr. President, Select File, LB 170, first bill, Senator Erdman, E & R amendments first of all, Senator.

SENATOR CUDABACK: Senator Erdman for a motion.

SENATOR ERDMAN: Thank you, Senator Cudaback. I move the adoption of E & R amendments to LB 170.

SENATOR CUDABACK: The question is the adoption of E & R amendments to LB, 170. All in favor say aye; opposed nay. They are adopted.

CLERK: The next amendment I have, Senator Kristensen had AM0673. Senator, I have a note you want to withdraw AM0673

SPEAKER KRISTENSEN: Yes.

SENATOR CUDABACK: So ordered.

CLERK: And offer as a substitute AM0845. (Legislative Journal page 1060.)

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SENATOR CUDABACK: That is so ordered. Senator Kristensen, to open on your amendment.

SPEAKER KRISTENSEN: Thank you, Mr. President, members of the Legislature. I would start off by saying LB 170, of course, deals in the area of the Tax Equalization and Review Commission. One of the related topics that the Revenue Committee dealt with this year and did advance to the floor and it wags a request that we would work on this sort of a concept and that in dealing with the sales file, and this relates to the valuation of property and how those valuations are collected. This amendment is in fact an update to the sales file and I think in designed to do several things that might eliminate any confusion with the use of the sales file. Let me give you a little history about the sales file. It in a statewide collection of data. It in a database. It in something that we have required over the years to collect. And what it does, it's used for three things, the first of those In obviously to calculate state aid to education; and it in the basis for valuation of that property. And so all the sales that occur throughout the state, those sales all go into the sales file. That helps develop the valuation and helps determine some of the state aid to equalization issues. It in also used for statewide equalization I by the Tax Equalization and Review Commission. This morning you re going to hear about the TERC. The TERC in the Tax Equalization and Review Commission. And this helps them to do statewide equalization of similarly situated properties from one area to another, intercounty and intracounty valuation. And it also, the third thing that the sales file does in it in a tool for comparison sales in valuing certain properties. And we can go through this morning and I would like to give you a couple examples if you need them. But what this amendment does is clarify the use and the purpose of this sales file. It moves around and quite frankly does some minor things and it does two other things that I think are important. It describes what would be considered when determining a comparable sale is to clarify that that section in applicable only when you're using a sales comparison approach. It also clarifies that the sales roster in to be used when adjusting the state aid to school values. But it also would allow the compilation of assessment practices, and this is the

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one that I think if I were you I would look at. It removes the responsibility of how the ratio studies are developed, but it would also allow for the use of ratio studies for intercounty equalization and school aid purposes. What it really does in allow the Property Tax Administrator to use an accepted group of factors of standards that are standardized or an industry standard and would allow for their use in the Tax Equalization and Review Commission when they go to look at the sales file. And so there have been a couple of different Supreme Court cases that have come out recently. The Firethorn case I would point to that as an opinion although that doesn't talk about the development of the sales file. It in important that the sales file be used only an a tool. It isn't dispositive. It doesn't tell you what the value of a piece of property is, but it in a tool. And the best example of that I could use would certainly be if I had a house let's say in Minden and that house, oh, let's say it in 20,000 square feet, very large house. To determine the value of that property, you could see the sales price. If I didn't recently buy it, you could look at, if it was a new home being constructed, what its cost would be. Or you could look at what other houses in the neighborhood are valued to determine the value of this unique piece of property because it's larger than most and so there may not be other houses in town that are that large. So what would you do? You could go to the sales file, not to find the value of it, but to find a tool to help you determine what the value in. And so you could look and let's say you find a home in Scottsbluff and one in Omaha and your first reaction would be, well, but those houses are valued differently because they're in different locations. That's true. The assessor can then take the sales file and at least get some idea of what those houses are worth in other areas and then you adjust at that point in time for location saying obviously a house in Omaha would be worth more than a house in Minden or maybe the house in Scottsbluff would be worth a little less than the one in Minden. What we do with this amendment I think is basically to eliminate any confusion about the use of the sales file. It would help us in terms of trying to give the Property Tax Administrator a set of tools. If I was going to be critical of this, you could say, well, I don't want all those things in the sale file. I think that some of these sales that get put in there ought to be adjusted before

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they get in. Well, that's real dangerous to do. It's tempting to do. You'd like to say, well, I know full well that piece of property can't be worth that and so it shouldn't go into the sales file. But the sales file is a little bit, I'm trying to think of who the beat baseball fan, Senator Chambers is a baseball fan. There's a few others of you that follow baseball. Think of the sales file as your batting average. And what you do in every time you're at bat those numbers go into a database or they go in to calculate what your batting average is, so does the sales file. We don't restrict those and say, well, that hurt a curve because you were on Astroturf or because you were in a dome stadium. We take all of your at bats just an we take all the sales. And so there can be reasons to use the sales file as a tool, not a dispositive. Some people are going to say, wall, I want to adjust those values and those sales before they get into the sales file because I'm afraid that if we put them in there that they're going to raise the value of my property. They're going to raise other homes in the other area or they're going to raise agricultural land because we just know that one sale in so bad it's not unable. There's a set of standards and there's a set of things based an unique financing, based on whether they were arm's length transactions or not that will decide whether a sale is included in the sales file or not, but not locational information or anecdotal information or really coffee shop information. And so what we want to make sure happens is we have an objective set of standards %to use and those are out there. Those are acceptable and understandable things to do. That's what this amendment does. The Revenue Committee did advance this bill out. I believe it, well, it's extremely germane because it deals exactly in the area of what the Tax Equalization and Review Commission in doing. We make some other changes in here. I want to thank the Revenue Committee for their patience in working in this. They have done it and they've reworked it with some amendments. I've incorporated those committee amendments into this amendment. None of them were major. They were basically tweaking and making some clarifications. And so I will end there, Mr. President, and be happy to answer any questions.

SENATOR CUDABACK: Thank you, Senator Kristensen. (Visitors introduced.) On with discussion of AM0845 to LB 170, Senator

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Wickersham, followed by Senators Coordsen and Landis. Senator Wickersham.

SENATOR WICKERSHAM: Mr. President, as Senator Kristensen described, the amendment that he is offering is identical to the terms of LB 702 with the addition of a committee amendment. LB 702 was heard by the Revenue Committee and advanced with a proposed amendment. You've also heard a little discussion by Senator Kristensen of the use of the sales file. The amendment does a couple of other things that I think he correctly characterized as technical in nature. Part of it is intended to clarify. One of the provisions in the amendment actually reduces the responsibility for county assessors to publish on an annual basis some statistical ratios and information. That requirement in deleted. The same information would be presented in an annual report that the Property Tax Administrator's Office will prepare if LB 170 and the rest of its provisions passes. I rise in support, obviously not only because of the committee's position on LB 702, but because of my personal position with the issues that Senator Kristensen brings to us in LB 702. The sales file is the very basis from which all of the efforts to find constitutionally-required values stems from. It is necessary that that sales file have all of the appropriate information from sales in it and that we have confidence in the integrity and the usability of the information that in in the sales file. It is that aspect of LB 702 that I think is critical and in important for our consideration because I think it advances those objectives, make sure as to the extent we can that the sales file in complete and that we have confidence in the integrity of the data that in the sales file because if you do not start out with the appropriate or a valid database, you cannot make good decisions; you cannot have a resulting valuation process based on the sales file that is appropriate and fair and meets, in my estimation, constitutional standards. So I think that the amendment should be adopted. I think it moves us in that direction as well as making some other technical changes, and hope that you, likewise, will support the amendment.

SENATOR CUDABACK: Thank you, Senator Wickersham. Senator Coordsen, on the Kristensen amendment.

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SENATOR COORDSEN: Thank you, Mr. President and members of the body. I don't necessarily rise in opposition to the Kristensen amendment, but I would ask the Chair, if Senator Kristensen would respond to a question or two?

SENATOR CUDABACK: Would you respond, Senator Kristensen?

SPEAKER KRISTENSEN: Yes.

SENATOR COORDSEN: Senator Kristensen, I'm holding in my hand what is commonly called the bible of the International Association of Assessing Officers, in which there is a significant amount of time spent on generally accepted mass appraisal techniques. Is it the intent of this amendment then, since they do not really conform to the standards we currently have in statute for assessors to judge all sales by, is it the intent of this amendment to give the Property Tax Administrator the authority to question all sales and to make ineffective those guidelines that are currently in statute?

SPEAKER KRISTENSEN: Senator Coordsen, I had ... I had a little trouble hearing you. I'm going to take what you ...

SENATOR COORDSEN: I will... I will repeat myself then, if that's...

SPEAKER KRISTENSEN: Well, can...

SENATOR CUDABACK: Speak into the mike a little bit, Senator Coordsen.

SPEAKER KRISTENSEN: Is the question is, will this amendment allow the Property Tax Administrator to make adjustments to... I

SENATOR COORDSEN: The...pardon me, Senator. The question is, since the guidelines that we have in statute for assessors to use in developing sales files are, for the most part, not part of the generally accepted mass appraisal techniques, does this amendment then make invalid those guidelines that have historically been in statute for assessors to use in determining

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whether a sale is, in fact, a valid sale to be included in the sales file?

SPEAKER KRISTENSEN: It... it doesn't invalidate their authority to make those decisions as to whether to include it in the sales file, what we have. Those would be issues such as arm's length transaction, unusual financing. Those are still going to be available. Where the difference that I think is in making locational adjustment, and that the locational adjustment occurs at the time of trying to determine the value of a hard-to-value piece of property, not in the assessor's initial evaluation. So in other words, the assessor not making that adjustment and deciding whether, because of... it was an unusually high sale, for example, that the assessor cannot exclude that from the sales file just because it was an unusually high sale. This would ... this would allow that decision and, of course, if they disagree with the determination of the Property Tax Administrator, that goes to the TERC for a decision. And that's happening, as you know, on three or four cases right now. I don't think it defeats the authority of the assessor to do that, but I do think it will direct the decision that the locational adjustment that gets made in a decision that gets made by the local assessor at the time he or she values the hard-to-value piece of property, and not whether they include it into the sales file. The presumption would be include that sale in the salon file so you have all the information.

SENATOR COORDSEN: All right. Thank you, Senator. Do I have a minute left?

SENATOR CUDABACK: Yen, you do, Senator.

SENATOR COORDSEN: Okay. The minute would be used in saying that the chair of Revenue Committee informed me that the language that I was...

SENATOR CUDABACK: One minute.

SENATOR COORDSEN: ... wondering about was language that was moved from another section of statute. But, I have to tell you this morning that I'm becoming more and more concerned about the

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methods that we are using in valuing all types of property in Nebraska, and more and more concerned what seems to be, what seems to be a presumption that local county assessors are not doing an adequate job and that we here in Lincoln know how best to do it from a remote site. Thank you.

SENATOR CUDABACK: Thank you, Senator Coordsen. Senator Landis, on the Kristensen amendment to LB 170.

SENATOR LANDIS: Thank you, Mr. Speaker, members of the Legislature. I'll do my beat to try to characterize what I think I understand about this, and I'll ask Senator Kristensen for a reaction and maybe he-could give that to me. The sales file in the list of all the sales, and it's... it winds up being a benchmark, a series of benchmarks that assessors can use in trying to pick a particular value for a piece of land. And if there is a disagreement, and if you go back to Doug's original bill, you'll find in the committee statement on that one that the TERC came in in opposition and the county officials were neutral, that there's a bit of a wrangling. I think there's some wrangling going on. If I was to characterize Senator Kristensen's goal, it is to regularize and normalize the sales file process by using legitimate standards applied by essentially a single decision maker in whom he has confidences, and that in the Property Tax Administrator. I ... that's my characterization; I'll let him correct me, if not. But in other words, a relatively highly trained person who can make a decision, with some direction from us that says ... that says, you know, somewhat what the parameters are, but past that, they're supposed to play by the rules. If there has been a problem in the past, it has boon that county officials or TERC have wanted to make adjustments in the sale before it goes into the sale file. And to say, you know, that sale that went on was ... it was a legitimate sale, but it was just too expensive. They paid ... they overpaid, and the real value of that sale is something less. Then trying to make an adjustment down and then sending into the sales file and having the Property Tax Administrator saying, no, if it's a genuinely arm's length sale, it goes in. Now if you want to make adjustments later, you can, but you can't play with the number before it goes in. if it came out of any particular place, I wonder if it didn't come out

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of the Ted Turner purchases of land in which a number of people in the agricultural community would say that Ted has overpaid for his property and these sums that he's paid reflect a value that isn't common or normal and that the sales, to the extent they get into the sales file, will distort it upwards. So the goal is I think to take that value out even before it gets to the sales file, and therein lies, I think, part of the problem. Now in the committee, I was thinking to myself, m-m-m, should agricultural get... land got a break? Yeah, I think they probably ought to. Are these sales probably a little inflated? Yes, they are. Do I want them deflated somewhat? And I said to myself, yes, I did. At the time, I resisted this language thinking, uh-h, it'll be harder to give ag land a break if this gets into the sales file. On the other hand, I would agree that I think it in a... it is the more appropriate appraisal technique. But it's a close call. I think here's the value choice for me. I think this method is the more appropriate mass appraisal database technique to have, but I think the effect will be to boil out some of the advantages that local officials or TERC has given agricultural land in the past. Now that's my beat characterization as to what I think is at stake here. And I'm going to ask Senator Kristensen, if he wants to take my time, there may be part of it that's wrong or inaccurate and there may be parts in which he simply...

SENATOR CUDABACK: One minute.

SENATOR LANDIS: ... disagrees with me.

SENATOR CUDABACK: Would you respond, please?

SENATOR LANDIS: I'd give him a chance to react.

SPEAKER KRISTENSEN: Thank you, Senator Landis. Mr. President, members of the Legislature, no, that's a reasonable characterization, although I ... I will tell you this is not entirely the Ted Turner issue because that's already done, gone.. and whether that's in or out, and quite frankly I don't know if that's included in the sales file or not. I do know that your characterization of there is a wrangle in true, and the issue is everybody's desire that I know what the value is as a local

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official, well, that can't ... that property just can't be worth that. And so what you try to do, because every time there is a sale or an auction, people come in and say, can you believe what that brought? Why that possible can't be real. The reason is that the person that has the property right next door to it really wants that land, so they ... they paid something that it wasn't worth. The trouble is, there were two bidders, otherwise the property wouldn't go that high. Or if they were related, it wouldn't be in the sales file because it was a...

SENATOR CUDABACK: Time. Thank you, Senator Landis and Senator Kristensen. Senator Wickersham, followed by Senators Vrtiska, Raikes, Kristensen and Landis. Senator Wickersham, on AM0845.

SENATOR WICKERSHAM: Well, Mr. President, I think that, in part, the concerns that Senator Coordsen expressed, that Senator Landis expressed, I hope that members of the body understand and persons who are interested in this issue understand that I'm not supporting Senator Kristensen's amendment because I think it's bad for agriculture. That isn't something that I would do. I think that in general that we have, and all of us, a shared interest. Whether we are interested in production agriculture, whether we're interested in residential homeowners, whether we're interested in commercial property owners, I think we are all interested in the integrity of the process. And if we are to confer advantages or we are to take into consideration special circumstances, or we are to make other adjustments against what the burdens would otherwise be, I think we owe it to ourselves and we owe it to our constituents to have them know what we're doing. We do not have to do that by some sort of process that is kind of, if you will, undercover because if we allow folks to make adjustments in a database, that we then hold up to them an being a legitimate and valid basis for making decisions when we know it is not or we have doubts about it, then we are not being honest with them. The fact of the matter in if there are adjustments that need to be made, we have other mechanisms to cause those adjustments to be made and they can confer the benefit that we might believe is appropriate and necessary if we simply go through the processes. But to make sure that you start at the right point before you make adjustments, I think in the only fair thing, that is the honest

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thing and that is the thing that we should do to maintain the greatest level of integrity in a-process that is important to all of us.

SENATOR CUDABACK: Thank you, Senator Wickersham. Were you through, Senator? Senator Vrtiska, on the Kristensen amendment to LB 170.

SENATOR VRTISKA: Thank you, Senator Cudaback. I've been listening to the debate on this particular amendment and I'm having a real problem with it. First of all, I guess I'd like to ask Senator Kristensen a question, if I might.

SENATOR CUDABACK: Would you respond, Senator Kristensen?

SPEAKER KRISTENSEN: Yes.

SENATOR VRTISKA: Senator Kristensen, I listened and I heard you say that if a ... that if the land was bought at a much higher price than its value was, that that would go into the file but then it would be dealt with after it was in the file. Is that correct?

SPEAKER KRISTENSEN: just ... and tell me if I'm taking too much of your time. The sale itself, the actual amount of the sale goes into the sales file because it's ... it's a fact, it happened. It is when there is another piece of property somewhere else that is difficult, this in not an automatic thing, this in only one factor; they could, if they were having trouble valuing this other piece of property, look to the sales file and say, have there been other sales of property that are similar? So, primarily in ag land and residential property, there's so many of those sales out there, that's not hard to find, and you can ... and you can find other ones. It's that difficult piece of property, or that large house in my example, or that commercial piece of property, hard to find. They can go to the sales file and see where there were comparable sales elsewhere in the state, and that ... at that point in time, make the adjustment for location, saying, look, a house ... or a business in Omaha is going to be a much higher value than one in Pawnee County.

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SENATOR VRTISKA: Well, let me... let me get back to the basics, the way I see it, and I think it goes far afield than what you're talking about. When most people buy property that if they're for agriculture ... for production agriculture, most of them do appraisal work or get work done on it and they try to work out an amortization table where they can ... they become concerned about...

SENATOR CUDABACK: Senators, it's a little loud in here. Would you please hold the conversation down, please, if you would? Thank you.

SENATOR VRTISKA: ... the amount of time it would take to amortize a piece of property out has to have some influence on what they're going to pay for it. However, if you're going to buy it for an investment purposes, if you're going to buy it because you've got a lot of money, or you're going to buy it for a hunting preserve or whatever, the amortization table doesn't mean anything to you. So what ... what I'm saying is, if you start to put those kind of sales into the sales file, they re going to have to reflect, and there may be... I'm talking about where I coma from. That's the kind of sales that we're have ... they're having difficulty with. People are coming from outside of the area and they're buying land and they're paying exorbitant prices for it that no...nobody in production agriculture could ever, ever amortize it out and amortize it out into perpetuity because the land won't produce enough to ... the rate of return in way below what they're trying to base it. But you're telling me you're going to put those sales in and then use the other ones as comparable, and to me that only inflates the whole price of the land without any real value being considered in the ... in the sale. And I ... and I have a concern about that, and I ... I just want to know how you would respond?

SPEAKER KRISTENSEN: I would respond this way. one is our constitution requires us to value property at fair market value. We can't ... we can't change that. So how do you determine fair market value? What is a piece of property worth? Wall, we do a variety of things. In fact, Senator Coordsen has got a bill in there that's going to try to change some of those calculations.

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But you do them with what is a comparable sale, what's other property like that worth? That is an indication. You look at sales price. That's how you determine it. You don't look at, well, you know, I'm going to... I'm going to buy this piece of property, how do you determine and how do you prove what the intended use of the property is going to be? How do you determine if somebody bought it for an investment? Then you're looking at what they're going to do with the property, and that is not fair market value. If we want to do that, we need to change the constitution. An long an we have that phrase there, we also can look at its income...

SENATOR CUDABACK: One minute.

SPEAKER KRISTENSEN: ... approach, which in potentially...

SENATOR VRTISKA: My ...

SPEAKER KRISTENSEN: ... I'm sorry.

SENATOR VRTISKA: My only problem is you're still putting that in the file to refer back to when other land sales that may be for the same purpose, but none of it is being bought for production agriculture purposes. So to me, you're distorting the whole picture of what...the value of property worse because the people who are buying it are not buying it at what its return will be, but based on what they want to use it for. And I understand what you're saying except, to me, when you put those in the file, you're distorting the whole picture of what a value of land is actually ... is actually worth for what its intended purpose of ... what is that...what is the purpose of production agriculture land is to produce stuff ... foodstuffs and to have a fair return of ... on your ... on your purchase.

SPEAKER KRISTENSEN: That's not what the constitution says.

SENATOR VRTISKA: But the constitution says fair market value, but we're trying to determine what's fair market value.

SENATOR CUDABACK: Time. Thank you, Senator Vrtiska and Senator Kristensen. Senator Raikes, followed by Senators Kristensen,

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Landis, Coordsen, Bromm and Hartnett. Senator Raikes.

SENATOR RAIKES: Thank you, "Mr. President and members. If I could, I'd like to pursue some questions with Senator Kristensen, maybe along the lines of what Senator Vrtiska just finished with. First off, I'm trying to understand how the world would change with your amendment.

SENATOR CUDABACK: Would you yield, Senator Kristensen?

SPEAKER KRISTENSEN: Yes.

SENATOR RAIKES: First question, what would change about what sales are allowed in the sales file?

SPEAKER KRISTENSEN: There would probably not be a great deal of change in terms of the numbers that go into the sales file. What would change in whether there were any adjustments made to those prior to going into the sales file.

SENATOR RAIKES: Okay. I understand. So in effect, the same sales would go into the file, but it might change some characteristics of those sales as they're represented in the file.

SPEAKER KRISTENSEN: The value would be adjusted.

SENATOR RAIKES: The value, okay. Now let me just, as an aside, follow up on Senator Vrtiska's question. What if ... what would be the consequence, and I understand this is not a part of what you're proposing in your amendment, if for example a sale occurred and it appeared not to be...it was an agricultural area but not for agricultural use. What would be the difficulty of just leaving that out of the sales file?

SPEAKER KRISTENSEN: Well, it was ... one is you've got to go back to the purpose of the sales file.

SENATOR RAIKES: Okay.

SPEAKER KRISTENSEN: The sales file is for a complete look for

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information and data about all sales that occurred. That's crucial for that state aid formula that you want to do. We need to know...

SENATOR RAIKES: Okay.

SPEAKER KRISTENSEN: ... what all those valuations are. So that is probably one of the most...

SENATOR RAIKES: So I think what you're telling me is that we would get a biased look at what the market place is doing. And the direction of the bias would depend upon who was deciding whether or not sales go in.

SPEAKER KRISTENSEN: Who manipulated the value of the sales that went in. Let's say that you had a local official that said, look, I know if I keep values down, I get more state aid.

SENATOR RAIKES: Okay.

SPEAKER KRISTENSEN: So I'm going to adjust all those sales that go into the sales file from my area because I know then, for state aid purposes, I have less value, which means I have less ability, which means I got more state aid.

SENATOR RAIKES: Okay. So...

SPEAKER KRISTENSEN: You want to prevent that evil.

SENATOR RAIKES: All right. So if I understand, going back to the question of what sales go in, we're going to ... we're going to use the same rules, the arm's length, the special financing, that kind of thing. The rules would remain the same. The difference would be...is that the actual market price would be a part of the sales file rather than an adjusted market price. Is that what I hear you saying?

SPEAKER KRISTENSEN: Yes.

SENATOR RAIKES: Okay. Then the other thing you mentioned, uses of the sales file. You mentioned state aid, and everybody

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understands that, so I won't go into that. And also you mentioned a tool for valuing other properties, individual properties.

SPEAKER KRISTENSEN: Right.

SENATOR RAIKES: There also... in it not the case that the sales file is used to measure quality of assessment?

SPEAKER KRISTENSEN: Well, it's used as a basis for statewide equalization, of which one of those factors is assessment practice.

SENATOR RAIKES: Okay. And exactly how does that work? Very quickly.

SPEAKER KRISTENSEN: Well, you're going to look at your sales files and there in going to be an analysis that's done, roughly looking at your sales ratio an well, so you're looking at the sale. When you have other sales, compared to what the value was, you come up with that sales ratio. You're familiar with....

SENATOR RAIKES: Okay.

SPEAKER KRISTENSEN: ... the sales ratio. You can do some analysis for that. It's also the factor that they're going to use to look at state aid ... or statewide equalization as to whether you have, based on that sales file,...

SENATOR CUDABACK: One minute.

SPEAKER KRISTENSEN: ... similar property being valued similarly in another community, by looking at the sales file itself. Looking at actual sales will help you measure and determine whether that...

SENATOR RAIKES: So one of the purposes of your amendment in that connection would be to make sure that the basis for those comparisons is what actually is going on in a market?

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SPEAKER KRISTENSEN: Right. If you want to make changes, fine, do that later. But we need a fundamental base of information that has not been manipulated.

SENATOR RAIKES: Okay, and another one. I was interested in your analogy with a batting average. One of the questions you mentioned would be...is that if I decided that, well, really I struck out there but I'm a better hitter than that so we shouldn't include that, because if we do, it will lower my batting average to a point that I know in unrealistic. So one question is whether we include all my at-bats,...

SPEAKER KRISTENSEN: Sure.

SENATOR RAIKES: ... and the second one in how we decide which ones to exclude.

SENATOR CUDABACK: Time.

SENATOR RAIKES: Thank you.

SENATOR CUDABACK: Thank you, Senator Raikes. Colleagues, it is rather loud in here. If you'd just keep your conversations down, please, so we can understand what they're saying. Thank you very much. Senator Kristensen.

SPEAKER KRISTENSEN: Thank you, Mr. President and members of the Legislature. Senator Raikes, the best. example, just to expand on that a little bit in, for example, if they never throw you any pitches that you can hit. A walk in not included in your batting average because you never got a realistic chance. Same way in true with a family transaction of a sale. That really isn't a legitimate at bat or legitimate vale because of family considerations. But if you had a clause in your contract that said, look, you know, if I bat 300, 1 get a bonus. But you know, if you... I play at home on a grass field that isn't an fast, so if you only count my batting average on the road on Astroturf, my batting average there is 350, 1 ought to get that bonus, you manipulate the numbers that go into the bottom line. We want to prohibit that. You ought to count all your at-bats. You ought to count all the sales. Now if we want to do other

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things with that piece of property, fine, but the fundamental database and collection of sales needs to be as pure as possible and not have manipulation, and we need to know that that is a ... has some standards to it. And that's the purpose of this amendment is to add those standards as to when those differences are made or when those adjustments are made. Senator Coordsen will have someone who is going to come in and say, look, my piece of property in a little unusual, it's a golf course, and there just aren't many golf courses in Thayer County, so let's look at other golf courses. That's what happened in the Firethorn case that was here. There just aren't many other golf courses around, so how do value that? Do you value that as production agriculture property or do you value it as commercial property to build houses on? Well, really neither. There's nothing there that's useful for that valuation. So you look at other golf courses. Well, if you're going to look at other ones, you ought to make ... you ought to know what their sales price were or what was in that sales file for the golf courses. Once you get that valued, that doesn't mean that's the value of your golf course in Thayer County. That's means it's a tool for you to look at and say, well, here it's valued at this level, over here it's valued at this level. And then they make the adjustment at the local level at that point in time, saying, well, there ought to be some locational adjustments because weirs in Thayer County. We don't have an many people that come to play golf, our income in lower. We don't ... that property just won't sell for that. It has a lower value. They would make the locational adjustment at that time on that piece of property an opposed to making the adjustment to the golf course that went into the sales file in Lincoln or in Scottsbluff or in Omaha. I'm trying to avoid people manipulating those numbers before they get in. If we want ag land valued at 70 percent, we can do that under this. We can do lots of other things. We're not going to encumber the valuation of ag land property. What we're trying to do is keep the sales file as clean and pristine as we can and not have some local officials that say, oh, I...that just can't be the case, I know better because if I go down to the coffee shop, I'm going to catch all sorts of thunder for putting that into the sales file. Or they want to ... or they want to say, I know that if I keep values down, I get more state aid and I got to keep my school open. Or, for political

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purposes, you know, I can go out and campaign that I kept values down because I used my good judgment in what ought to go in the sales file. That's not fair to Senator Foley whose valuation is based on what actual sales were, but some other official in other counties manipulating those numbers that ... that's the whole fundamental purpose of doing the state aid to schools is we need good value information. And so the fear of my land is going to get valued too high, I don't want...

SENATOR CUDABACK: One minute.

SPEAKER KRISTENSEN: ...that for my house. You don't want that for your house, Senator Landis doesn't want it for his house, but we know if we're going to be fair, whatever that sales price is goes into the sale file. The assessor just doesn't look at the sales file and decide that's the value of your house. It's those difficult, it's those unique things that you use it as a tool. It is not dispositive. And I'm going to... if you have any further questions, Senator Raikes, I'd ... Mr. President, I'd yield my time to Senator Raikes.

SENATOR CUDABACK: Senator Raikes, you have 30 seconds, Senator Raikes.

SENATOR RAIKES: I don't, actually. I appreciate the description and I would just add that I do support this amendment. Thank you.

SENATOR CUDABACK: Thank you, Senator Kristensen and Senator Raikes. Senator Landis, on the Kristensen amendment, AM0845.

SENATOR LANDIS: Senator Cudaback, Senator Kristensen and I were having a conversation of sorts, and I'd like to go back to it. I had made a characterization saying this is a centralized way of maintaining the sales file consistent with regular practice, that it undoes a certain amount of "mushing" or messaging that might be possible under the way we do things now, and that it's a choice between I think accuracy, in a sense, and having an influence as to what kind of outcomes you're going to get. I'm going to stop at that moment, I'm going to ask Senator Kristensen for his response, his reaction to that

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characterization of mine. Then I'll continue to make some comments.

SENATOR CUDABACK: Senator Kristensen, will you respond, please?

SPEAKER KRISTENSEN: I will, very quickly, because I want to give you back your time. That's correct. The issue is, do you have an accurate database that has all the raw information that you can rely on as accurate? Or do you you have a result driven database in some areas where they say, look, this is the value I really want to get to, and because I know the value, not based on any standards, yes.

SENATOR CUDABACK: (Gavel)

SENATOR LANDIS: Oh.

SENATOR CUDABACK: Senator Landis, you may proceed.

SENATOR LANDIS: Wall, I'm glad that you want to hear, Senator Cudaback. That was for you, wasn't it, so you could understand.

SENATOR CUDABACK: Thank you.

SENATOR LANDIS: Okay, good. Well, that's ... we'll have three of us that will be listening and talking here. Senator Kristensen, let me just tell you what my concern then is and I'll give you the last of my time. My... I understand the value of good science, as Senator Raikes and Senator Wickersham called this amendment in our committee. I think you'd be thrilled to have it called good science.

SPEAKER KRISTENSEN: That ... that would be kind.

SENATOR LANDIS: My problem in this. I think there is a genuine difficulty in valuing agricultural land that stems from two related phenomenon; one, that there aren't very many sales and that, number two, location winds up influencing agricultural Bales tremendously. The person next door will pay a premium that nobody else on the planet will pay, and thereby you get a number that, although they are an arm's length, you know,

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purchaser, they have an economic interest that no one else has, and then it drives a sales file that treats everybody as if they had this kind of value. In other words, I'm nervous about the inability to make adjustments for location, the inability to make adjustments for premiums if we can't acknowledge the reality of agricultural sales, and that is that there are very few of them and that if you put them into the sales file, they're going to have tremendous effect; and secondly, they are highly susceptible to locational impacts. I got to say, I think you've won the argument that as far as neutrality is concerned, your bill does a good thing. Let me tell you where I think the Achiles' heel is and I'll give you the chance to respond so that our argument then is related, for people who might be listening. Senator Cudaback, apparently might be the only one. If we do it the way your amendment goes, I think it's going to be harder to make locational adjustments. And because of that, I think it will be harder to get agricultural values to be lowered. I think that agricultural values, over time, will start to reflect what the lone individual next door would pay for agricultural land, and that will distort and, in fact, raise what I think is a legitimate price for agricultural land. That's my fear. I give you the rest of my time to tell me my fear is either misjudged or isn't as important an other dangers that might be lurking out there. I just want to let you know what I'm thinking in the back of my head, and give you a chance to respond to it.

SPEAKER KRISTENSEN: Thank you.

SENATOR CUDABACK: You have one minute, Senator.

SPEAKER KRISTENSEN: Thank you, and I've got my light on. Senator Landis, I think the bigger fear is not ag land. The bigger fear is commercial property because there's a lot less comparable commercial property that turns over than goes ag land. And in effect, what's ... what's happening is there is more turning over of ag land because you are having a generational shift of that ownership. In other words, the people who ... the baby boomers are now coming into possession of that property, maybe not as actual operators but they're coming into possession of that property as their parents are now reaching their mid to

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late 70s and 80s. If there are estates, those properties are being sold. They're turning over. Now that does not mean that in some counties there are ... they may not have a great number of dry land sales.

SENATOR CUDABACK: Time.

SPEAKER KRISTENSEN: Thank you.

SENATOR CUDABACK: Thank you, Senator Landis and Senator Kristensen. Senator Coordsen, on AMOS45 to LB 170. Senator Coordsen.

SENATOR COORDSEN: Thank you, Mr. President and members of the body. I do apologize if there's a misunderstanding that I rose to question this amendment based upon valuing agricultural property because that in not an accurate statement. My concern is that we don't replace, inadvertently perhaps, some authority on the part of the local county assessors in identifying those sales that do not qualify for the sales files that are used to value other property. I also think perhaps we ought to ... a phrase was used, cash sales. The constitution actually says, "Taxes shall be levied by valuation uniformly and proportionately upon real prop...on all real property and franchises, as defined by the Legislature, except an otherwise provided in or permitted by this constitution". And then it go on to create a number of exceptions to that phrase, including agricultural property, although the requirement for uniformity and proportionality in... in defined. If the question in this amendment then is in the broader sense -f all classes of real property, I think that in where the discussion ought to be phrased. And what ... it's not clear to me whether the ... whether the amendment is intended to address a dispute between the Tax Equalization and Review Commission with respect to their adjusting sales files in a county, someplace or the other, and I don't even know what type it is, or if the dispute that is attempted to be corrected by this amendment lies between county assessors and the Department of Property Assessment and Taxation. So I would ask Senator Kristensen, if there is, in fact, a defined problem that we are trying to address with this amendment.

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SENATOR CUDABACK: Senator Kristensen, would you yield to a question, please?

SPEAKER KRISTENSEN: I will, Senator Coordsen. The specific problem in that I'm afraid what's happened is that those sales files and that the TERC in not ... they're trying to re ... they're trying to get to a result as opposed to interpreting what I believe the law is. And no there in a dispute there as to whether they should be able to manipulate the sales file or not, and if they do, under what standards. Now the last case, it just came out, what, yesterday, day before yesterday, that talks about there wasn't sufficient evidence prevented by the local county board of equalization. My ... my purpose is not to go and take away the discretion of that individual assessor on the difficult to value piece of property. They still need to be able to make the Senator Landis locational adjustment. But that in not ... that is to that person's piece of property and the value that they have and what tax they will pay based on that value as opposed to changing the numbers in the standard or the database. Two different things. They still have that power to go and make the locational adjustment and take into other account ... other factors for that person's piece of property. That in not my desire to go after that. Mine is to do that by systemically and institutionally doing it into the sales file stuff that really if I can't rely...

SENATOR CUDABACK: One minute.

SPEAKER KRISTENSEN: ... on that sales file, what can I rely on? What can I rely on to be accurate with state aid to schools and statewide equalization an well? So I don't know if I've answered it but my goal in not to take away that power for making that locational adjustment when you're valuing the other piece of property.

SENATOR COORDSEN: Thank you, Senator Kristensen. Well, if the intent of this and the language in such form that will ... that it will accomplish what Senator Kristensen talked about, then I find that I have not that much objection to the amendment. It seemed to me, although I do support TERC in most of its

activities, that adjusting a sales file, which is an issue between a county assessor and the Department of Property Assessment and Taxation, is in fact a different issue, and if that is what the intent is, then I really have no objection to it. But if this...

SENATOR CUDABACK: Time, Senator Coordsen.

SENATOR COORDSEN: ... falls over into the relationship between county assessors and PTA, then I think we need to carefully examine it.

SENATOR CUDABACK: Thank you, Senator Coordsen. (Visitors introduced.) On with discussion, Senator Bromm.

SENATOR BROMM: Thank you, Mr. President. I think I'm at the point where I'm trying to still understand the amendment, so I'm not in a very good position to make profound statements about it, and I may ask some questions. But there's one thing that I'll start with and then maybe somebody can comment on it if I don't get an answer. I'm not, at this point in our property tax system, in favor of giving a great deal more power to the state tax administrator, Property Tax Administrator. I'm at... I'm not at the point where I feel comfortable doing that. I'm not sure that this does it or whether it doesn't. If it does, I'm a little reluctant to go that direction. I do think that the local assessor in a better position to know the particular nuances of a sale or the characteristics or the situation than we are at the state. I just, when you consider 93 counties and the vast area we have in this state, and the peculiarities involved in communities and localities, there has to be some local judgment involved. We have seen significant adjustments to classes of property in the last several years done by the state in order to make our county comply with the sales assessment ration within the range of what's acceptable. And our county has been the recipient of that, an have most of you. I think of a sale that I'm aware of that occurred a couple of years ago of an 80 acres, and I don't know if that sale will be treated differently after this amendment than before it or not, but that sale happened to occur at the time that Caterpillar was coming into the state, and the people that sold their land by

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the square foot to Caterpillar came out to an auction and bid the land up to over $4,000 an acre. And there hasn't been another sale, to my knowledge, of a full 80 acres of land even approaching that figure I since that time nor were there any prior to that time that I 'm aware of. Now I wonder how that sale would impact our ag land values in our county after this amendment as opposed to before the amendment? And I don't think I know the answer to that, but I'm just leery. We've made so many changes to try to bring our property tax system into ... and that's one of the fallacies of the property tax system, you can never make it perfect. It's not possible to make it perfect, but in trying to do no, we've made a tremendous number of changes that are beginning to hit home pretty hard. The headline in our paper this week in, ag land value is going to be raised 20 percent in our county. At a time when we have tremendously increasing costs, not any increasing prices for return, I don't know how we can absorb that. I really don't.

SENATOR CUDABACK: One minute.

SENATOR BROMM: When I see ... when I handle transactions and I see the assessed value and I see the transaction, right now I can tell you that our assessed values are up there. Unless your...unless you qualify for greenbelt and get some break in that fashion, which right now only a small portion of our county in getting that, those values are up there. And I have to listen and try to understand more what this amendment does. I'm not in favor of giving the state more power over individual analysis of how a particular unusual sale like the one I described involving the Caterpillar situation. I don't want that sale to be put into the mix and if it were an ordinary sale because that just isn't fair.

SENATOR CUDABACK: Time.

SENATOR BROMM: Thank you.

SENATOR CUDABACK: Thank you, Senator Bromm. Senator Hartnett.

SENATOR HARTNETT: Mr. President and members of the body. Senator Kristensen, on ... in my copy of your AM0845, on the third

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page beginning with line 2, it says that the Property Tax Administrator sometimes can over ... after review of the sale determine the review that the determination by the county assessor is incorrect.

SPEAKER KRISTENSEN: Yes.

SENATOR HARTNETT: When does that ... when does that happen? Does it happen very often, I guess, and so forth, Senator Kristensen?

SENATOR CUDABACK: Would you respond, Senator Kristensen?

SPEAKER KRISTENSEN: To... I will, thank you, Mr. President. Thank you, Senator Hartnett. Realize that we're talking about now sales that are at arm's length transaction because that's the purpose that you would throw a sale out and not include it. And what this says is that you include all sales, unless they are determined to be not at arm's length, and then the local assessor makes that determination. This merely allows the Property Tax Administrator then can overrule that and review that determination to see if it's correct. And then if there's a dispute, that can go on to the TERC.

SENATOR HARTNETT: Okay.

SPEAKER KRISTENSEN: It's my understanding that there's only two or three of these a year that go to the TERC, so we're not talking about a large number of those that go to the TERC. But one of them did this year. Garden County was one of those cases where they had ... oh, they had a number of those. Again that was an assessor versus the TERC ... well, they were in the TERC but the Property Tax Administrator said, I'm sorry, those are not arm's length transaction, or they are arm's length transactions and they ought to be included. So it doesn't happen very often. This year was unusual because of the Garden County case.

SENATOR HARTNETT: So it just happens in arm's length transaction?

SPEAKER KRISTENSEN: That in ... that in what this provision is the determination of whether it was an arm's length transaction

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or not.

SENATOR HARTNETT: Okay. Thank you.

SENATOR CUDABACK: Senator Hartnett, are you ... are you finished, Senator? Thank you. Senator Jones, on AM0845 to LB 170.

SENATOR JONES: Thank you, Mr. President and members of the body. I can tell you all kinds of stories in my area just whether this in an arm's length deal or not, and I've got concerns about that. Right now I've got a case right in the middle of some ground that Ted Turner has bought that one man has got one section left in the middle of it, and he's already wrote him a contract and all he's got to do is sign it and hand it over, which would be $50 to $100 above market price, and you can understand that. But I guess my concern in, and if I could ask Senator Kristensen a question?

SPEAKER KRISTENSEN: Yes.

SENATOR CUDABACK: Senator Kristensen, would you yield?

SPEAKER KRISTENSEN: Absolutely.

SENATOR JONES: Yes. Every sale that happens goes in the sales file. Right?

SPEAKER KRISTENSEN: Every arm's length transaction goes into the sale file. That's the current practice today. This ... this amendment would just put that into statute.

SENATOR JONES: Okay. So they decide whether it's an arm's length deal before it goes in the file right now?

SPEAKER KRISTENSEN: That is the determination that would be made by the local assessor as to whether it's an arm's length transaction or not.

SENATOR JONES: Okay. If you want to make an adjustment after it's in the sales file, can the local assessor and the equalization board of that county do that?

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SPEAKER KRISTENSEN: They shouldn't.

SENATOR JONES: They shouldn't do that?

SPEAKER KRISTENSEN: No.

SENATOR JONES: Who does that now? If it's just a...

SPEAKER KRISTENSEN: I queen the whole issue here in do you make the ... why would adjust those to put them into the sales file? Now that happens and they make adjustments. What's currently happening is they're going to make some of those adjustments in value and then put it into the sales file, and that's what ... that's the manipulating of the sales file that shouldn't occur, but they're doing it, and they're not doing it with any standards. They're doing it on what they, for some reason, believe that it's too high or too low and they come up with an arbitrary number. That's what should not happen.

SENATOR JONES: When does the tax administrator see the sales file to decide whether it's an arm's length deal or not, before it goes in the file or after it goes?

SPEAKER KRISTENSEN: All of those are reported on your 521 Form as they come into the Property Tax Division, so you ... they routinely review all of those and then they do spot checks as to check to see if they're arm's length transactions. And so you will get phone calls. I've gotten them on a real estate transaction where they have people who spot check and look at those.

SENATOR JONES: Does this amendment of yours give any more power to the tax administrator?

SPEAKER KRISTENSEN: Well, it really is the current practice that's going on. What it does is take away the arbitrary manipulation and replace it with a set of standards that's accept... I mean, everybody accepts those are the right standards for valuation and for a sales file usage. So I don't ... this really isn't a granting of more additional power to the Property

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Tax Administrator because that's what they have and do right now, and that procedure is already in the statute for that purpose.

SENATOR JONES: So it don't change her power at all then as far as handling adjustments?

SPEAKER KRISTENSEN: What it changes is the standards that she ... or puts them into statute that she will rely on, or he, and it will eliminate the local discretion in terms of not, you know, just using what they think may happen or what should happen, to put the value into the sales file. Now the local still has the discretion of valuing property. This is sales file, this isn't valuing property. Two big differences here.

SENATOR JONES: Thank you.

SENATOR CUDABACK: Thank you, Senator Jones. Members, thank you for turning the conversations down. It rather easy to get carried away, and we appreciate it. Senator Jensen, Senator Coordsen and Senator Vrtiska, next on AM0845. Senator Jensen.

SENATOR JENSEN: Thank you, Mr. President and members of the body Certainly it would seem to me that if we're going to have accurate appraisals, you must have accurate sales files. And the biggest problem is when... it would also seem to me is when there are not a lot of comparable sales in a particular county or a particular area. We do not address anything in this as to how far you can go into other counties and into other areas for these sales files. Senator Kristensen, may I ask, Senator Kristensen...

SENATOR CUDABACK: Senator Kristensen, will you yield, please?

SPEAKER KRISTENSEN: We ... we have ... the sales file exists statewide. And you can go and access that statewide sales file for assistance. So, if you have low numbers, you can look for the entire state. Obviously you're going to look for things that are as comparable as possible so you'll probably look in regions that would be of assistance to you.

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SENATOR JENSEN: Well, and of course it seems to me that's the biggest problem that we have is, what is a comparable sale?

SPEAKER KRISTENSEN: Right.

SENATOR JENSEN: Is that a comparable sale, one that was sold at auction, a piece of farm ground that was valued at farm ground but then you have individuals who have come out and bought it ... or are buying it for recreational purposes, to hunt, fish, whatever it might be, and so they have purchased a piece of ground, inflated the value of that,' and you never know in that sales Zile, however, what the buyer's purpose was. To that correct?

SPEAKER KRISTENSEN: Well, you're not going to know their intent, but land in classified for usage no, in other words, if you knock off a corner of a what used to be agricultural production land to build a house, it changes that character. Now it may take a year, I mean, when do you start? Do you start when...the day they buy it and they say, I'm going to put a house on it? Do you change that value on that statement or do you wait till they start to construct it? And realize that we look at properties assessed on the first day of the year. So it's what is the usage on that first day of the year. So we ultimately do classify all this land, so if they're going to buy agricultural land and turn it to another purpose, eventually that gets reclassified and then fits into different valuations.

SENATOR JENSEN: But that will not appear on a sales file as to what... I'm referring...

SPEAKER KRISTENSEN: Right.

SENATOR JENSEN: There was a piece of ground, 160 acres in Saline County that was sold recently, at an auction. There was a lake that was put on it by an NRD. So the property came up. They declared it surplus. They sold the piece of property which might have gone for, I don't know what the property in Saline County goes for, I'm going to nay maybe $800, $900 an acre for farm ground. But this went much higher than that, and it ended up with some individuals, I understand from the Lincoln area

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bought it because they wanted a place to fish and hunt. Well, that, it nowhere in going to be in a sales file as to what they bought that ground for,...

SPEAKER KRISTENSEN: Right.

SENATOR JENSEN: ... not as a piece of ground... a lake on it,...

SPEAKER KRISTENSEN: Right.

SENATOR JENSEN: ... his water on it.

SPEAKER KRISTENSEN: But they bought it at an auction and a 0 obviously there was two bidders. We don't know what the second people want to do, maybe they wanted it for agricultural purposes, but what ... the issue in, was that an arm's length transaction? Had a willing buyer, willing seller, you had ... you had an auction, you had two willing buyers bidding up each other. Isn't that what that land...

SENATOR JENSEN: Well, I would call it an arm's length transaction,...

SPEAKER KRISTENSEN: Right.

SENATOR JENSEN: ... certainly at an auction.

SPEAKER KRISTENSEN: Yeah.

SENATOR JENSEN: It should be. But the use was...is not agricultural anymore. Yen, it is but, yes, it's not.

SPEAKER KRISTENSEN: You ... there you have the ans ... that's exactly the answer,...

SENATOR CUDABACK: One minute.

SPEAKER KRISTENSEN: ... yes, it is a...no, it's not. But the issue is, don't you want to know that that piece of property sold for that amount of amount?

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SENATOR JENSEN: Oh, absolutely.

SPEAKER KRISTENSEN: And you want to know the value of that.

SENATOR JENSEN: Yen.

SPEAKER KRISTENSEN: Now, if you want to say that that shouldn't be used to value the next piece of property that comes up for sale, then you are eligible to look at those uses that they eventually did and you could call that into question. But the issue is, what value if that property should go into the sales file? The sales file ought to be pure. It's when you value the next piece of property, based on that, that you make that adjustment.

SENATOR JENSEN: Who makes that determination?

SPEAKER KRISTENSEN: Well, the local assessor makes that initial determination of what that second piece of property is going to be worth.

SENATOR JENSEN: And he'll make that determination and that will appear on the TERC file then, too, also?

SPEAKER KRISTENSEN: Well, right...well, no, not necessarily in the TERC file but that will be their value that ... which they're going to pay tax on. If they don't like that value, then they appeal that to the TERC and then that's when you get into this, is that a proper sale to use...

SENATOR CUDABACK: Time.

SPEAKER KRISTENSEN: ... as a comparable sale?

SENATOR CUDABACK: Thank you, Senator Janssen ... Jensen, rather, pardon me. Senator Coordsen, you're recognized to speak on AM0845.

SENATOR COORDSEN: Thank you, Mr. President and members of the body. One last time. I will, in fact, in a moment be asking a question, a rather lengthy one, of Senator Kristensen. The

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answer will not be lengthy but the question will be. It's my understanding that the intent of the bill is to keep the sales files clean. Now for those of you like myself who have never been an assessor, a sales file is a list where all of the sales in your jurisdiction are kept track of, whether that's residential, commercial or agricultural. And then from that the assessor makes the analysis as to whether those sales were, in fact, arm's length transaction, and then moves over to the sales roster then the ... those sales that are qualified arm's length transactions to use to value the rest of the property in the county, whether that's commercial, agricultural or- residential. Now, Senator Kristensen, it is my understanding that the intent of this amendment is to ensure that the prices on the sales file are the actual price of the sale and not adjusted before they're placed in a sales file. Is that... is that accurate?

SPEAKER KRISTENSEN: Yes, that is accur...

SENATOR CUDABACK: Would you respond, Senator?

SPEAKER KRISTENSEN: Yes, that is accurate and that's my intent.

SENATOR COORDSEN: Okay. So that then ... that then, I think, answers the concerns I had with this amendment in that from ... it doesn't, then an I understand it, impact the ability of an assessor to use the standards for measurement in... in identifying whether a sale is a proper sale to be used for the purposes of valuing the rest of the property, establishing the property tax valuations. So since that ... the only intent of this amendment in to have a pure sales file with all accurate data in it from which to make judgments, I believe that I support this amendment on that grounds. Thank you.

SENATOR CUDABACK: Thank you, Senator Coordsen. We are discussing the Kristensen amendment to LB 170. Senator Vrtiska.

SENATOR VRTISKA: Thank you, Senator Cudaback. I would like to again engage in some conversation with Senator Kristensen, if he wouldn't mind.

SENATOR CUDABACK: Would you respond, Senator?

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SPEAKER KRISTENSEN: I'd be happy to, Senator Vrtiska.

SENATOR VRTISKA: Senator Bromm brought out some points I thought that were things that I was thinking about, so I'm not going to go over them because he talked about the sale of land that was exorbitant, and you discussed the possibility that that actually is an arm's length sale because there's two bidders.

SENATOR CUDABACK: Would you speak into your mike, Senator Vrtiska. We can't hear your question.

SENATOR VRTISKA: Okay. Because there are two bidders, isn't that what you said, so that makes an arm's length sale?

SPEAKER KRISTENSEN: Well, that ... that ... if it's done at an auction, that's as good of arm's length ... that's the definition, willing buyer, willing seller.

SENATOR VRTISKA: Well, I understand that.

SPEAKER KRISTENSEN: Okay.

SENATOR VRTISKA: But, I obviously don't agree with it, but I understand what you're saying.

SPEAKER KRISTENSEN: Okay.

SENATOR VRTISKA: The problem that I ... that I see when you call that an arm's length sale is you got a farmer out here who owns some property and he's like every other businessman, he needs to increase his income and the only way he can do it is acquire some more land. So a piece of land beside him comes up for sale and he wants to buy it. And this actually happened, because I sat at the sale. Some hunters up by Papillion, toward Omaha, came down and wanted this for hunting ground, and I sat there and watched this sale and this poor farmer would bid, and every time he would bid, he's shake his head. He knew he was way over what the land was worth, he couldn't afford it. At the same time, he wanted to expand his operation because his son was going to go into work with him. He bid more for that ground

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than anybody could ever imagine, he didn't get it by the way, the investor bought the land. But to me, that's not an arm's length sale because he's forced into a position of buying something he known in not ... in too high for the return he's going to got on it, but it's kind of like his salvation. Either bring his son into business with him or get out of business altogether. That's why some of theme sales are not ... are not fair and, in fact, do not reflect the true value of that property. Even though there's two people bidding on it and one of them happens to be involved in production agriculture, I don't consider those are fair sales, and we've made that argument but obviously we lost because this bill, in fact, would continue that same message to the ... to the purchaser of property, if I understand it right.

SPEAKER KRISTENSEN: Who ... who would you have make a determination as to what the land is worth?

SENATOR VRTISKA: Well, let me... let me ask you... let me reverse that and ask you, do you think the tax commissioner should have more authority to make theme determinations than the local assessor?

SPEAKER KRISTENSEN: Not when they go to value a piece of property. That's not the purpose of the Property Tax Administrator in to value that property for tax purposes. That in the reason we have an assessor and that is the reason if you don't like what the assessor does, you go to your local board of equalization.

SENATOR VRTISKA: I understand that but, well,...

SPEAKER KRISTENSEN: The issue is, should they manipulate the value of that sale, because you know what? On that particular day that is what that piece of property was worth, on that day.

SENATOR VRTISKA: No, I disagree. That farm, that piece of ground was never worth that because nobody could afford to amortize it out if they were going to use for production agriculture. There is no way the could do it. That's why the farmer finally quit. He knew that he couldn't...not even could

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come close. In fact, I happened to sit next to him, and he was running his calculator, and he was $200 over what the land would ever amortize out, based on the cost of farming and the cost of the return on the product he was going to raise. But as I told you before, he was in the position where he had some equity that he could use, some of the property he already had, to actually subsidize the buying of that farm, the same as the guy that was buying it who was going to subsidize ... was going to buy it for another purpose. Yet because he bought it and because it was land, hunting, he could actually rent it out and get a few dollars,...

SENATOR CUDABACK: One minute.

SENATOR VRTISKA: ... just to have something on it, but he wasn't using it for production agriculture. He was using it for his own purpose and that was for outside of the use for production agriculture, while the farmer was the guy that was going to have to pay for it by subsidizing it. So to me it was not the true value of that farm no matter what it brought.

SPEAKER KRISTENSEN: But your complaint is that it's not fair that somebody who in not a farmer could buy the property.

SENATOR VRTISKA: Well, it's fair. It is just that it is not fair then when you adjust the land, all of the land of that class based on what that farm sold for.

SPEAKER KRISTENSEN: And you have a...

SENATOR VRTISKA: That's the only unfair (inaudible).

SPEAKER KRISTENSEN: ... you hit a very good point, because that's not what happens. Because of that one sale not all the property in the county goes up. You ... you've cat on those county board of equalizations and you know that you don't, because of one sale, raise everybody's value up.

SENATOR VRTISKA: The problem we have that you haven't addressed, and that's my real problem is that that's not...that's an isolated that I talked about. I can talk to you

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about dozens...

SENATOR CUDABACK: Time.

SENATOR VRTISKA: ... of other sales that are happening right now of the same vein that's causing the board of equalization and the county assessor and the tax commissioner to all say that must be...

SENATOR CUDABACK: Time, Senator Vrtiska.

SENATOR VRTISKA: ... what your land is worth, and in actuality it is not. Thank you.

SENATOR CUDABACK: Thank you. There are no further lights on. We are discussing the Kristensen amendment. Senator Kristensen, there are no other lights, do you wish to close?

SPEAKER KRISTENSEN: Thank you, Mr. President and members of the Legislature. You know, I ... Senator Vrtiska brings up a frustrating point that in true. There is lots of property out there and sometimes we exaggerate the numbers because I ... I have them, too, Senator Vrtiska. I've got those sales. I also have retired farmers who have a considerable amount of money, who have worked their whole life and they've paid off that property, and now they are buying other real estate and they are paying a high premium for it because they want to see other people farm it. And they compete. The you guy can't buy that. But Senator Coordsen probably hit the nail best on the head by saying this isn't an agricultural land amendment. This is a process amendment. This applies to the commercial property in Senator Maxwell's district, the residential property in Senator Erdman's district, and the ag land in Senator Stuhr's district. It's all property. The issue in, what in a fair process and a system? And if we are going to use the sales file, because when we debate state aid to schools, weirs going to look very closely and we're going to assume that all property is equally valued across the property because that is how we give out $700 million of property in this state is that property is equally valued across the state. How do we know that? What do we rely on? The sales file, because the sales file in the tool you use to

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make sure that there is equalization across the state.. and it is a tool in those cases where there is hard to value property that you can go to look at. This is not an ag land value amendment. Those are yet to come. Those fights will occur. What this is, in all practicality, is what standards do you use in order to include property into a sales file, and the presumption is they all go in unless they are arm's length ... not an arm's length transaction, and that the adjustments that we all want to make occur on an individual piece of property at a later time. It's when you have a piece of property and you don't like the way that it has been valued, and so you can go to the sales file as a property taxpayer and say, look, in these areas here is what other land sold for. So, Senator Vrtiska, they could use the sales file to object to those values as easy as they can have someone use it against them, and they can say, look, here's this piece of property, similar type of property. It's the lake that Senator Jensen was talking about. Here's what those other lakes and land around them have sold for and they were lower. But what you rely on is that the sales in those files are accurate and they've not been manipulated before they put them in. Difficult concept, I understand it is. We are not making a huge change, but we are putting in play those standards that we're going to use to include those sales, and that is important because as we go along, the TERC has lost enough cases in the courts that we need to begin to give them some standards because their arbitrary use in not going to be tolerated at the court level and we are going to need to give them some statutory guidelines and some background to do this with. And that's really what this amendment is going to help them do. So I would... I appreciate your patience. Property tax is kind of like listening to dark fiber. It...it can be a little tedious and difficult but that sales file impacts everyone of you in ways that you never, ever would dream of. It affects your schools. It affects the way that property is valued, and it affects statewide equalization, and the only thing when you go to talk to your taxpayers, you want to be able to assure them...

SENATOR CUDABACK: One minute.

SPEAKER KRISTENSEN: ... that the information we're using is, one, complete and it is accurate and it hasn't been manipulated.

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That is what this amendment will do and you will be able to say, look, you may disagree with the value but the process, the mechanism, and the procedure we use is fair, and that's what this amendment does. Thank you, Mr. President.

SENATOR CUDABACK: Thank you, Senator Kristensen. You've heard the closing on AM084S offered by Senator Kristensen to LB 170. The question is whether that amendment should be adopted. All in favor vote aye, opposed nay. We are voting on amendment AM0845 to LB 170. Have you all voted who care to? Have you all voted? Record, please, Mr. Clark.

CLERK: 29 ayes, 2 nays, Mr. President, on the adoption of Senator Kristensen's amendment.

SENATOR CUDABACK: The amendment in adopted. Mr. Clerk, next item.

CLERK: Mr. President, Senator Wickersham would move to amend, AM0970. (Legislative Journal page 1047.)

SENATOR CUDABACK: Senator Wickersham, to open on AM0970.

SENATOR WICKERSHAM: Thank you, Mr. President. This is a purely technical amendment. I have no hesitation in suggesting that to you. It came to us as a result of the bill drafters' review of the bill as drafted and the committee amendments an they were incorporated into LB, 170. It does, but it was a little bit more than E & R and we didn't want to have Senator Erdman go through this long explanation. So you're going to get the benefit of things that came out of the E & R process but are a little bit more than what they wanted to include In E & R amendments. Let me give you examples of what this amendment does. In Sections 4, 20, 24 and 25, it inserts the word "real" in front of the word "property". You can sort through that but, obviously, what we're concerned about in those sections is real property as opposed to personal property. In Sections 12 and 13, we insert the words Viand horticultural" after the word "agricultural" because in most sections of the statutes we refer to agricultural and horticultural land. In Section 14, we replace the word "categories" with "classes". That's the

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appropriate reference in that section. We tweak the mailbox rule that we explained on General File a little bit making it more clear and general. We provide a definition of classes and subclasses. We add language to that that is actually restrictive language. We are ... had a broader definition. We're adding language. This is not from E & R. This was the result of a conversation I had with other folks. We are adding qualifying language that says "appropriate for the valuation of such land". Obviously, the focus of creating classes, subclasses has to be a result that is appropriate for the valuation of land. I think that's obvious but sometimes it is desirable to state the obvious so we're ... we're going to do that in this amendment. Now that standard is one that we currently have in statutes that authorize assessors to create classes and subclasses of real property for purposes of the valuation of ag land. So we're picking up that standard and applying it here in this general context. We're also inserting real classes and horticultural in a few places so that it conforms with other language in the bill. We're going to strike an obsolete reference to a cash fund that DPAT had. We are going to make again clear what our intent was about jurisdictional issues for appeals to TERC. Again, remember, we've added the requirement that you have to file the form, you have to have the fee, and you have to have a copy of the final decision. Hopefully, in the proposal that we receive back in the E & R process, that language is a little clearer than it was in the original form of the letter. That's the intent to make it-more clear. It isn't intended to make any substantive changes but that area is opened up in the amendment. So if you see that language, it isn't that we're doing anything new, at least as opposed to what we did on General File. It is in the bill drafters' estimation a clearer way to state it. So, again, I would say that all of these proposals are technical in their nature. All of them came from, as suggestions from bill drafters for clarification or conformity with the exception of the proposal to add the language that says "appropriate for valuation of such land" after the authority that is given to create classes and subclasses of land. And, again, I will assert to you that that is existing language as it applies to agricultural land. I believe it is an appropriate standard. It is something that I think you can't imagine that wouldn't be why you'd create

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subclasses and classes of real estate, and it is perhaps again stating the obvious, but it doesn't hurt to state the obvious, and so I'm going to ask you to do that. With that, I would ask you to support the amendment, and if you have any questions or concerns, I'd be happy to try to respond.

SENATOR CUDABACK: Thank you, Senator. You've heard the opening on the Wickersham amendment, AM0970, to LB 170. Open for discussion. Senator Coordsen, on that amendment.

SENATOR COORDSEN: Only a technical question, Mr. President, if Senator Wickersham would be so kind to respond?

SENATOR CUDABACK: Senator Wickersham.

SENATOR COORDSEN: On page 1 of AM0970, line 10,...

SENATOR WICKERSHAM: Um-hum.

SENATOR COORDSEN: ... the word "real" is added, and that then differs from the constitutional definition of agricultural property,...

SENATOR WICKERSHAM: Um-hum.

SENATOR COORDSEN- ...wherever I find it here, which just says a separate and distinct class of property, rather than real. I don't have a question with ... with respect to the use of the word "real" in the ... of the 970. But the ... the ... my question of Senator Wickersham is, whether he feels it's appropriate to change what appears to be a quote from the constitution? Thank you, Mr. President.

SENATOR CUDABACK: Senator.

SENATOR WICKERSHAM: Well, real property is property; property in real property.

SENATOR CUDABACK: Did you want to respond, Senator Coordsen?

(Laughter)

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SENATOR COORDSEN: Well, the... I suppose I have to rephrase because he's in a "quiptical" mood, not quizzical but "quiptical" mood.

SENATOR WICKERSHAM: Senator, I'll try %to be more...

SENATOR COORDSEN: But anyway, no, the only question I have relates to...

SENATOR WICKERSHAM: Yes.

SENATOR COORDSEN: ... what appears to be a quote of constitutional language...

SENATOR WICKERSHAM: Yes.

SENATOR COORDSEN: ...but adds a word. Does that have any impact on anything?

SENATOR WICKERSHAM: We ... we could not change the constitution. I would hope it not ... would not have an impact, and will ask E & R to remove "real" in that instance. Thank you.

SENATOR CUDABACK: Are you through, Senator Coordsen? Senator Wickersham, there are no further lights on. Did you wish to close on your amendment to LB 170? Senator Wickersham waives closing. The question before the body is, shall the Wickersham amendment, AM0970, be adopted to LB 170? All in favor of that motion vote aye, opposed nay. We're voting on the Wickersham amendment, AM0970. Have you all voted who care to? Have you all voted? Record, please, Mr. Clerk.

CLERK: 27 ayes, 0 nays, Mr. President, on the adoption of Senator Wickersham's amendment.

SENATOR CUDABACK: The amendment is adopted.

CLERK: Senator Beutler would move to amend. (AM1023, Legislative Journal page 1090.)

SENATOR CUDABACK: (Visitors introduced.) Senator Beutler,

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you're recognized to open on your amendment, AM1023.

SENATOR BEUTLER: Which amendment is this, Mr. Clerk?

CLERK: I am not sure how to respond to that, Senator. It is on page 13, line 14. Do you want a Journal page, would that be helpful?

SENATOR BEUTLER: Yes, I am with you.

CLERK: Okay.

SENATOR BEUTLER: Senator Cudaback, members of the Legislature, I passed out to you a letter from the chairman and two commissioners from the TERC board. They asked us to take a look at a particular provision and no, on their behalf, I just wanted to bring it to your attention and see what you think about it. This is not a big item by any means, but if you would read through this letter, you will see that they are indicating, for a variety of reasons, that they do not believe that the TERC commissioners need to be licensed as real estate appraisers, and so what the amendment does is simply to strike that requirement. There were actually two different kinds of problems related to that requirement. The first problem was whether it was really necessary at all for the commissioners to go through that process and become a real estate appraiser; and the second question was the way it in structured in the statute it appears that they have to have done that before they can be appointed. Now there are two amendments pending. Senator Wickersham and I have discussed this. If you agree that there should be no requirement whatsoever, then you would vote for this amendment. If, on the other hand, you think the requirement should pertain, then you can vote against this amendment and that means that the requirement will still be there, but the question will still be there when they have to qualify, before or after they are appointed. And Senator Wickersham, in that event, would clear up that problem by requiring that they meet the qualification within one year. So that's kind of where the land lies. With respect to whether this particular qualification is necessary at all, you can see that the board in their letter has laid out quite clearly that the real estate appraiser's qualifications

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are for a different kind of appraising, in their opinion, than the board itself is called upon to do. And they describe the kind of appraisers...kind of appraisals that real estate people do as being more individualized fee appraisers ... appraisals. And they point out that the Real Estate Board, which gives this test, does not offer any education or training on what they call mass appraisals, that is looking at a situation from ... of appraisals from a broader point of view. So what they say is that is what ... what in successful for them is the continuing education requirement that in there in any event. And that the continuing education that they can get is more attuned to and offers more opportunities in actually learning things that are directly, more directly relevant to what the tax commissioners do as opposed to learning what in taught in the real estate appraiser's courses. They point out, and I think this is a good point, that county assessors, themselves, the county asses ... the actual county assessors who ... who are making the initial decision are not required to be real estate appraisers. There is no requirement for them, so why should there be a requirement on the TERC board which in actually hearing appeals from them? So I think that that in essentially the argument whether you want to really require them to be real estate appraisers, whether that makes any sense, or we're just kind of piling on top of some meaningful continuing education requirements, and I tend to sympathize, obviously, with the board's position; otherwise I would not have introduced this amendment on their behalf. But I'd leave that to you. Thank you.

SENATOR CUDABACK-. Opening on the Beutler amendment, AM1023 to LB 170. Open for discussion on that amendment, Senator Wickersham.

SENATOR WICKERSHAM: Mr. President, I rise in opposition to Senator Beutler's amendment. I do so for a couple of reasons; one, because I understand his amendment, and I believe as he described it to you, it would eliminate even the current requirement that members of TERC need the qualifications to be a county assessor. Now the bill, as it stands, would require them to be ... meet the qualifications to become a certified appraiser. That requires a greater knowledge of appraisals than county assessors would have, a higher level of training. Now Senator

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Beutler raises the issue of whether members of TERC have to know or should know anything about fee appraisals because that's what certified appraisers do. They do fee appraisals. You ask them what you think the value like of your house in, what you think the value of your farm is, what you think the value of your ranch is? They go out and find comparable sales and they deliver their opinion as to what the value is. Now, doesn't that sound a lot like the kinds of questions that would come before members of TERC? If you've read any of their ... of the cases that come before them, can you imagine an appeal coming to them in which somebody says, I think the value of my home ought to be $75,000 as opposed to $100,000? And do you imagine that they might come to the TERC with an appraisal? Might they not even bring an appraiser with them? Might it not be useful for members of TERC to know something about appraising? Might it not be appropriate for them to understand when somebody is giving them a little bit of fluff or when somebody is not giving them a little bit of fluff? Might it not be very useful for them to have the same level of knowledge about that highly specialized practice that the people before them making various assertions about the work that they're presenting have? Doesn't that put you on a level playing field? Isn't that the reason we have judges who preside at court? Judges are all lawyers. They have the same expertise as the persons who are appearing before them and making representations or presenting evidence and making cases. It in appropriate that those who would be making decisions have the same level of expertise and information as those who would generally come before them and make presentations. That's what the committee proposal in for. We want to make sure that the members of TERC have that well-defined level of expertise and knowledge because I think it in important that they have that so they can consider the evidence of and the presentations that are going to come before them because they inevitably will involve those kinds of issues. And it does, if you simply read their opinions, you'll see that people do indeed come in with appraisers, they make very complicated presentations based on those appraisals, and it is up to TERC as well an the other participants to evaluate those positions and those proposals. They have to have the kind of knowledge, in my view, that the committee amendment would ask them to have in order to be successful in doing that. So I

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would ask you to reject Senator Beutler's amendment, not leave that to chance, and that then subsequent to that, that we consider the amendment that I'm going to propose that makes clear that if they don't have the qualifications that we're going to ask them to have that they have one year following their appointment to meet those qualifications. I ... that has been the practice in the past. I think it's fine to make that explicit in the statute and would ask you to do that.

SENATOR CUDABACK: Thank you, Senator Wickersham. Open for discussion on the Beutler amendment, AM1023, to LB 170, open for discussion. Seeing no lights on, Senator Beutler, did you wish to close on your amendment?

SENATOR BEUTLER: Senator Wickersham, may I ask you just one question?

SENATOR CUDABACK: Will you yield, Senator Wickersham?

SENATOR WICKERSHAM: Yes.

SENATOR BEUTLER: The TERC board, in its letter, states that county assessors, and I assume if anybody in the system should be qualified, it should be the front line people, the county assessors. It says the county assessors are not required to be real estate appraisers as you're requiring the TERC board. Is that just, one word answer, is that accurate or not?

SENATOR WICKERSHAM: Yes.

SENATOR BEUTLER: Thank you. There is the matter, as far as I can see if, in fact, this course is relevant and important, who could it conceivably be more important to than the county assessors? Why would you not make this requirement for the county assessors but make it for the TERC board to whom things are appealed? That would make no sense to me whatsoever. it would make sense to me if you thought that the real estate appraiser material was relevant to county assessors and you required it of them, but not to require it of the county assessors and then to require it of the TERC board is a logical inconsistency that I frankly don't understand. The only way

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that I can understand it is, an the TERC board has represented it to us, that the materials that are produced under that real estate appraisers set of seminar materials is simply not as valuable as the continuing education that they are otherwise required to get under other sections of the bill. So I...I sign on to the TERC board's logic on this matter. Thank you.

SENATOR CUDABACK: Thank you, Senator Beutler. You've heard the closing on AM1023 to LB 170. The question is whether that amendment should be adopted to LB 170. All in favor vote aye, opposed nay. We are voting on the Beutler amendment, AM1023, to LB 170. Have you all voted who care to? Have you all voted? Record, please, Mr. Clerk.

CLERK: 6 ayes, 15 nays on the amendment, Mr. President.

SENATOR CUDABACK: The amendment is not adopted. Mr. Clerk, next.

CLERK: Senator Wickersham would move to amend, Mr. President. (FA106, Legislative Journal page 1090.)

SENATOR CUDABACK: Senator Wickersham to open on FA106.

SENATOR WICKERSHAM: Mr. President, this is the amendment that Senator Beutler and I both discussed briefly in conjunction with his amendment. It in very simple. It says if a commissioner has not received such certificate or training, in other words become ... met the requirements to be a certified appraiser prior to his or her appointment, such certification or training shall be completed within one year after appointment; gives them an opportunity to meet the requirements, ax I've indicated that has been past practice. Current. members of TERC, when they were appointed, did not meet the requirements to be county assessors, all ... except with the exception of Mrs. Edwards. The other two qualified after their appointment. This would simply codify existing practice and I would ask for your support.

SENATOR CUDABACK: Thank you, Senator Wickersham. You've heard the opening on the Wickersham amendment to LB 170. Any discussion? No lights on, Senator Wickersham, do you wish to

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close? Senator Wickersham waives closing. The question before the body is, shall FA106 be adopted to LB 170? All in favor vote aye, opposed nay. We are voting on FAI06 to LB 170. Have you all voted who wish to? Have you all voted? Record, please, Mr. Clerk.

CLERK: 27 ayes, 0 nays, Mr. President, on the adoption of Senator Wickersham's amendment.

SENATOR CUDABACK: The amendment is adopted.

CLERK: I have nothing further on the bill, Mr. President.

SENATOR CUDABACK: Open for discussion on the advancement of LB 170 to E & R for engrossing. Senator Landis.

SENATOR LANDIS: Mr. Speaker, members of the Legislature, I'm going to vote for LB 170. 1 think it represents an improvement in our process. It takes its place along with another bill, LB 465, that will have some relationship to this, and since Senator Beutler's amendment raised the issue, let me tell you a little bit about what's coming up, although I intend to support LB 170. LB 46S will tell us that we should move from three to five the total number of members of our TERC board and that three of them be lawyers, the goal being that to be able to split into at least two panels of three, which I think is a reasonable thing to do. It- has many other very valuable provisions. The issue of training does relate. There in a foot on the dock and a foot in the boat here between LB 170 and LB 465. My preference, by the way, is to have panels of three, one of whom is a lawyer and one of whom is deeply trained in mass appraisal techniques. And we will not wind up there at the current rate in which we're proceeding in LB 170 and LB 465. What we'll have is we will have a lot of legal knowledge and I think we will have not as much knowledge about mass appraisal techniques. So when LB 465 comes back, there will be a little piece of this bill that will be back on the table as relevant when we talk about what's the appropriate makeup and training level of the members of TERC. However, LB 170 represents an improvement from where we are in public policy. I endorse it. I voted for it in committee and I will vote for it today as

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well.

SENATOR CUDABACK: Thank you, Senator Landis. Any other member wishing to speak on the advancement of LB 170? Seeing none, Senator Erdman, for a motion.

SENATOR ERDMAN: Thank you, Senator Cudaback. I move the advancement of LB, 170 to E & R for engrossing.

SENATOR CUDABACK: The motion in to advance LB 170 to E & R for engrossing. All in favor may aye. Opposed nay. It is advanced. Mr. Clerk, next item.

CLERK: Mr. President, LB 170A, Senator Erdman, I have no amendments to that bill.

SENATOR CUDABACK: Senator Erdman, for a motion.

SENATOR ERDMAN: Thank you, Mr. President. I move the advancement of LB 170A to E & R for engrossing.

SENATOR CUDABACK: Motion is to advance LB 170A to E & R for engrossing. All in favor say aye. Opposed nay. It is advanced. Mr. Clerk.

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