LB 1063 (1992)
March 12, 1992
PRESIDENT MOUL: LB 746 passes with the emergency clause. Before we proceed I would like to call the senators' attention to the south balcony. Special guests today of Senator Hillman are eight students from Gering High School and their teacher. Would you please rise and be recognized. Welcome to the Chamber this morning. Thank you. We'll now proceed with LB 1063.
CLERK: Madam President, the first motion I have with respect to
Legislative Bill 1063 is one by Speaker Baack. Speaker Baack would move to suspend Rule 5, Section 6; Rule 6, Section 7; Rule 8, Section 5 to permit consideration of 1063 on Final Reading today.
PRESIDENT MOUL: Speaker Baack.
SPEAKER BAACK: Yes, Madam President and colleagues, the motion that I have before you would allow us to read 1063 today. it's a procedural kind of thing that would allow us to read it. I will tell you the Rule 5, Section 6 is a suspension of the rule that says you have to read the A bill as a companion bill with 1063. The A bill was not prepared in time and ready in time to meet the seven-day constitutional provisions, therefore, we cannot have the A bill with 1063. It will be read later on, but it does not... is not with it. That's one ... the first rule that we suspend with this motion. The second one, Rule 6, Section 7(b) is the rule that says that the ... our rule that says you have to have a layover of two days in order for a bill to pass. We have only had one day layover, which is the constitutionally mandated one-day layover, but we have not had two. This would suspend that rule. Rule 8, Section 5 means ... is the other rule dealing with appropriations bills and it says that you cannot pass any ... any bill with an A bill until the budget bill has been passed and we, sit-ice we don't have the A bill and we are not going to be reading it with it, this would suspend that rule and allow us to read LB 1063. With that, I'd be happy to answer any questions on this rule suspension. Thank you.
PRESIDENT MOUL: Thank you, Speaker Baack. Senator Schmit, followed by Senators Landis and Moore. Senator Schmit.
SENATOR SCHMIT: I yield my time to Senator Moore.
PRESIDENT MOUL: Okay, Senator Moore.
SENATOR MOORE: Madam dam President, if I could ask for a division of the question, the simple division being on the rule suspension, have the A bill suspension rule being voted on in one set and the rule suspension dealing with the...the day requirement on reading the bill being separate. And so if I -could divide those out, I would ask that we do that.
PRESIDENT MOUL: Senator Moore, our rules do not provide for
division of suspension of the rules. Okay.
SENATOR MOORE: Okay, Senator Schmit, I'll yield the rest of his time and I'll use my time to visit about that.
SENATOR SCHMIT: Madam President...
PRESIDENT MOUL: Senator Schmit.
SENATOR SCHMIT: ...and members, I asked several times where the A bill was on this bill and I have not yet seen it. Understand it is for a very modest amount and understand it may even be for less money than what is included in 922, and it strikes me as extremely strange, first of all, that the bill hasn't* been accompanying the bill and, secondly, that it is for such a modest amount. I know that those figures are sometimes difficult to find, but I would assume, after having visited with some of my county officials, that it will take almost that much money to administer the bill in some of the counties, much less in the ... by the State of Nebraska and the Department of Revenue. Department of Revenue is always very cautious in how they estimate their cost, but they are always I think very sincere in trying to cover costs and I would have to say that I assume this is a very, very low figure, but my principal concern is this and that is that we are reading the bill when it is not necessary to read it. The bill ought to accom... it ought to accompany... the A bill ought to accompany 1063. If not, it ought to stay where it is until the A bill is here and we have had a chance to discuss the A bill. To buy the proposal as it is without knowing what the cost of it is is ridiculous. If we were to do that with any other bill we would be severely criticized. From time to time I've had bills move across this board and I have never had one read yet that did not have an accompanying A bill. I would ... I do not know what the hurry is ... well, I guess I probably know. There are some who do not want to vote for 1063 unless 219CA passes and that's a very legitimate concern, but then it would have been prudent to have had the A bill introduced and debated and discussed so we know where we are at. This is one more example of buying something without knowing the price tag. We do not know what the price tag will be to the individual citizen. We don't even know what it will be to the State of Nebraska and it is an irresponsible act as far as this Legislature is concerned. It is an act which borders upon ... upon arrogance, the idea being we've got the votes, therefore, we ought to just read the bill and the public be less
concerned about it. I have two amendments that I would like to add to the bill. One is an amendment which would provide for the refund of taxes that were collected on the basis of the ad valorem tax on market value. The other is... and the difference between the taxes that will be paid under 1063, should the bill pass. The other is an amendment that would repeal the penalties for failure to file personal property tax,, taxes on time. For those of you who have said we passed a resolution delaying that 30 days, I've been informed by counsel that the only way that that can be done if you... is that each individual taxpayer must go...
PRESIDENT MOUL: One minute.
SENATOR SCHMIT: ..must go before to the county of necessity and apply for an extension. It is... you cannot give a blanket exemption to that March 1 deadline. I want to point out that the penalty for failure to file on time is a severe one and we have already penalized substantially a number of farmers and other businesses who have had going out of business sales. We need not penalize every single taxpayer in the State of Nebraska because this Legislature cannot come to agreement on what is good and proper tax policy. We are reversing a good tax policy for an archaic outmoded tax policy and I think that to vote on this bill, to suspend the rules and to read it without the A bill is one more act of...
PRESIDENT MOUL: Time.
SENATOR SCHMIT: ...indifference and should not be condoned. Thank you.
PRESIDENT MOUL: Thank you, Senator Schmit. Senator Landis.
SENATOR LANDIS: Madam President, members of the Legislature, we've been at this now for about 16 months, a long time. We've been fighting each other. We've been doing a summer study. We've been yipping at each other, but, you know, from the very beginning everybody agreed to one basic principle--no constitutional amendment until we see the system. My agricultural and rural oriented colleagues raised that cry. My urban colleagues raised that cry. We will proceed with a constitutional amendment when we see the system that Would ultimately result. We had a big fight to create the 3-R Committee on exactly that basis and now, 40 clays into the
session, a long drawn out fight on the first two levels of debate, we get into the question of procedural regularity brought by those long-standing opponents of the bill who don't like the bill. And we've spent 12, 14 hours arguing about broilers and breeding dogs and chickens and all the rest of the list of topics that have been brought up when we entertained motions and now, critically, after 16 hours of that kind of debate, we have amendments that are required for procedural regularity. I don't buy it. Well, the reason we need to deal with this bill now at this time with this Speaker's amendment... I'm sorry, with this motion is because this one shared perspective by everyone, which is that the system should precede the constitutional amendment, has to occur today. Has to occur today because 219, if it's going to pass and be successful, has to be done today so that we can get on the primary ballot, if at all possible. Today's the last chance, in that sense, and that means that if we're going to be true to this one theme that has been sounded by everyone, we need to see if we have the vote's for 1063 today. We don't need another filibuster. We don't need another 80 ... another 8 or 10 hours. There was earlier today on the Clerk's desk 30 more amendments along the lines of the broilers and the chickens and the pink-eyed rabbits as opposed to the blue-eyed rabbits, and all the rest of the amendments that are tip there that have subsequently been taken off, but they're there ready to be reintroduced again the minute this motion fails so that we can make sure that we stop consideration of the issue. The only way to address what we have lonq-standingly promised ourselves and the people of this state is to vote on 1063 this morning, followed by a vote on the constitutional amendment. That will not happen unless we suspend the rules to keep off the desk 30 more amendments like the ones we had on Select File Inventorying each and every item around the barnyard and the corral, I cause that's What will happen if this motion fails. Senator Schrock needs about a minute of my time to make clear some legislative intent with respect to the issue of fertilizer and I would yield the remainder of my time to him.
PRESIDENT MOUL: Senator Schrock.
SENATOR SCHROCK: Madam President, members of the Legislature, I would just like to make clear, it's come to my attention after some ... visiting with some individuals that this 1.9 million ton of fertilizer that we intend to tax to raise $7.5 million on a per annual basis, that a lot of times water is added to
solutions before the fertilizer is applied for the farmer...
PRESIDENT MOUL: One minute.
SENATOR SCHROCK: ..and it is my intent, and I think the intent of the Legislature, that this water not be taxed if it is added and so I would like to read that into the record. I think that's the intent of the body. It should not affect any revenue, should not change anything, but when you add water to a solution for purposes of distribution I don't believe it was the intent of the Legislature to tax that water and it's the intent of the Legislature to tax 1.9 million ton of actual fertilizer, dry or solution, that is spread, that is applied to the land. Thank you, Senator Landis, for the remaining of your time.
PRESIDENT MOUL: Thank you, Senator. Senator Moore.
SENATOR MOORE: Madam President and members, I guess it really makes no difference so we won't divide the question. I understand that's the rules. I wish the rules had been filed separately because I ... if you're going to commit this sin I'd just as soon you do it under the street light as opposed to back in the alley. But, nevertheless, we got both of them here and the prob... twofold problem. One is the problem of the A bill and that's not... I don't know... I'm sure we've done that in the past. We've not even discussed the A bill. If Senator Warner is here, if Senator Warner would yield to a question, please?
PRESIDENT MOUL: Senator Warner.
SENATOR MOORE: Well, we know there's the 5 million dollar funding gap problem so that impacts the General Fund, but I ... as I asked you a week ago, at that time, understandably, the bill was not in its final form to have an A bill. I know an A bill was introduced on Monday and, unfortunately, we haven't even debated that on General File yet, but could you please, in a matter of 30 seconds, tell us what the administrative costs over in Department of Revenue are in that A bill, and I believe there's some amendments pending to that too.
SENATOR WARNER: That's correct. The A bill that's in your book which, as you'll recall Monday or, what, the other day we discussed the issue. The practice is that those notes are prepared after the bill was amended. This one didn't come out of committee. It would have had an A bill with the committee
amendments had that been the case. Process was followed. The A bill was for 50 thousand for the first year, 25 the second. I do have amendments that when Revenue Department came in the original numbers were estimated by the Fiscal Office which would change that to a total of 95,000 of appropriation the first... for the 95,500 instead of the 50,000, and the 25,000 for the second year would be 85,800 with a personal service limitation, instead of 15,050, the total cost is ... that is requested is $95,500 as opposed to the 50,000 that was initially put in to the bill. Twenty thousand of that was for administering...
SENATOR MOORE: Okay.
SENATOR WARNER: ...of the ... of the fertilizer.
SENATOR MOORE: Thank you, Senator Warner. And so we do know that the A bill, administrative costs of that A bill is going to be about $95,000. Had it been my bill and the administration would have been hostile, it probably would have been half a million, but that's ... Department of Revenue said it's a minimal cost. And obviously not included in that A bill is the fact, I know Senator Cudaback had an amendment filed on local governments, there's not a cent appropriated in the A bill or in the bill and, with the lid provisions on local government there's not a cent to increase enforcement to try and get to that hundred percent compliance that supposedly makes sure the homeowners don't take a hit on this. And so, that's the problem with the administrative problem. I mean, that's fine, we can suspend the rules. We've ignored the rules for some days now on this debate. We'll continue to do it now. I can live with that, but the second problem that, you know, the two amendments I have up there and, once again, the frustration, and I may add and I will commend the Chair on the handling of the cloture rule. I was certainly glad that that rule worked as it should, in my opinion, but unfortunately, with about 30 more minutes, that motion could have been made that the proponents of 1063 did and we could have had a bill that cash flowed. Two of my amendments up there, my understanding, the Cash Reserve Fund transfer, and the occupation tax, I just think it's regretful that the body allowed that to happen. With a little more time, since the amendment process that worked, worked as it did, it could have been done and the bill could have been ... with a rule suspension and, as I mentioned, I would have helped on to have made the bill cash flow. Unfortunately, that, as I said, that... I
was ... I'm not on that side of the fence and so what I say doesn't count on this issue. I think that's unfortunate, but you're passing a bill you've never even seen the A bill on. You're passing a bill that has a 5 million dollar funding gap that's going to be linked to two other bills, one of which is the Governor and Senator Landis's priority bill I believe, the Governor's income tax bill that will be discussed at length here and I think...and that's a problem that it's linked to that bill unfortunately. The Cash Reserve Fund transfer bill, which in itself I have a problem with solving the cash flow problem that way, I mean but you just ignore that until later, all for a bill that doesn't have to pass today. It only has...
PRESIDENT MOUL: Thirty seconds.
SENATOR MOORE: ...to pass, it only has to pass because some proponents of the bill don't trust us in here. That's fine. I just, obviously, I think the bill ought to be in its proper form before we pass it and to suspend all these rules to advance a bill that is that... has that many problems with both the A bill never even being debated on the floor yet with a 5 million dollar funding gap that if we don't correct on other bills we have to ... we have to eat it somewhere out of the General Fund budget, and there's some other bills that we're going to be strong arming the voting for to make it work, but those sort of tactics have been working all the way along so I ...
PRESIDENT MOUL: Time.
SENATOR MOORE: ...imagine they'll work again.
PRESIDENT MOUL: Thank you, Senator Moore. Senator Schmit.
SENATOR SCHMIT: Madam Chairwoman and members of the Legislature, it's really a deep problem when we discuss a bill on this floor. There used to be debate in this area, but as of now we like to just work out deals. And you can call it a deal or you don't have to call it a deal, but the facts are that when you are changing the entire tax policy of the State of Nebraska and it impacts the people you represent, if you do not debate and discuss the bill then I think you are being irresponsible. Now, in the event that you feel that you've got some advantages going and you don't want to discuss the bill and you don't want to answer questions then, of course, you want to shut off debate. I would imagine the Lincoln legislators are elated this
morning because of the 9 dollar tax, 9 dollar per year tax saving they're going to get on their homes. I would think that they would be super excited about that based ... following the extremely liberal treatment they received under 1059. 1 would hope that they spend that $9 per year wisely because they have certainly deserved it and they will need it to help pay the taxes that they incurred under 1059. My concern has been expressed many times on this floor, but what I have done I have done on this floor and I have done following the rules. I did not have to break the rules, very frankly, to invoke cloture. Did not have to break the rules to do anything else. Nor did I promise any chairmanships, nor did I threaten anyone else's bill, nor did I threaten or promise, either threaten to withhold, or promise to deliver additional financial support to a district to secure a single vote. If the press were as vigilant as they are supposed to be they ought to know these things are going on because they have been going on for months. This bill and the constitutional amendment would not have the votes needed to pass had it not been for that action. There will be angry denials. There will be all sorts of vicious attacks, but the record is clear. When this bill goes to Final Reading and when 219CA goes to Final Reading, it will be most interesting to see how many more votes those bills receive on final reading than they received previously. The 30 votes for the constitutional amendment has to expand to 40. Now were those votes against the advancement of the bill...of the constitutional amendment, were they just political votes? We re they cover your fanny votes? Or were they sincere votes? Are they votes you can go back home and tell the folks in Bellwood, well, I voted against the bill far as I could, but at the last minute, because of the dire need of the state, I decided not to? I am sure you read the article in the paper this morning. Senator Dennis Baack said, this is not the end of the world of the CA doesn't pass; we can still take care of it. Of course we can. The facts are that the coalition that has been in operation for some time is in operation today and they have drafted a tax policy that will increase your tax load substantially for years to come and they really do not care. And, in fact, that is probably the reason behind the bill and the reason behind the constitutional amendment. Those who believe otherwise are either naive or have not followed the procedure in this body very long. I think it's important to know that if and when the bill passes, and it probably will, that there will be...
PRESIDENT MOUL: One minute.
SENATOR SCHMIT: ...some repercussions. There will be some problems and we will be back here again, or some of you will be, at least, playing Mister Fix-It, and the same people will be in charge and making the recommendations that have made the same mistakes for the last five years. We've been going through this exercise because the majority always had the votes. They took their directions from whatever lobbying group wanted the bill passed and they got it done and the consequences are still with US. The bill, of course, is a very discriminatory bill. We know that. But it does not discriminate against certain special interests. I have read with some concern I guess, and Senator Hall says he was trying to regain his sense of humor, has proposed amendments to 219CA. The facts are that's about the way we do business in here. It is unfortunate that that is becoming more and more the norm and I refuse to be intimidated. I know that there are those ...
PRESIDENT MOUL: Time.
SENATOR SCHMIT: ..who are and if they are intimidated then we ought to go back to the farm. Thank you very much.
PRESIDENT MOUL: Thank you, Senator Schmit. Senator Warner.
SENATOR WARNER: Madam President and members of the Legislature, I'm going to repeat one more time if you do nothing, which some of you want to have happen, I hope the public understands, and I believe they do, that as of January 1 all personal property that was previously exempt, inventory, livestock, business equip... and agricultural equipment is on the tax rolls at market value. That's the issue. This business that passage of this amendment or the bill is what caused it is simply not true. I want to address the A bill, which is in your book. Speaker indicated that the rule suspension was for the seven days and that's a fact, and the other ones, the rule suspension was because the ... reading it before the budget bills. I would make the argument, but technically you wouldn't have to have done it for that reason, when Senator Moore asked me what the question was, was the cost to the Department of Revenue, which I indicated the bill is in at 50,000, with their amendments. 95,500, but the A bill also has the reduction in the county aid of 3.5 million. And you will recall, Senator Moore, that under the rules, an A bill which expenditure is less than the revenue
increase is not held up, as I recall. What is also true and was said on the floor several times with the cash flow issue and that keeping that General Fund harm ... unharmless was that LB 1268, which is the appropriation bill and that's the one that deals with the substantive language of the cash flow reserve fund, would be used to make the transfer and then the legislation for changing the filing fee for-occupation tax would restore that money to the cash reserve fund over the next two years and it's a wash, essentially. It's unfortunate that we can't pass all legislation in one bill every session so we could argue that everything we're going to do is there. It's not how it works. We have to use bits and pieces of legislation to change a policy. That historically is the case and, as a practical matter, the only case. But the whole funding mechanism is in place if the Legislature wishes to adopt it. It's not like there's a whole lot there that no one's addressed, and that's the implication of some of the remarks, so I'd urge that the rule be suspended so we can proceed and, again, the only reason for doing it is if we do not do it today then, of course, you miss the primary and if you miss the primary you've got a problem for '92, excuse...yes, for '92, and if you miss the primary you may have a problem beyond that trying to get this stability back to the financing of local governments and that's what we're dealing with. I'd urge the body to support the rule suspension.
PRESIDENT MOUL: Thank you, Senator Warner. Senator Hefner.
SENATOR HEFNER: Madam President and members of the body, it's hard for me to support the suspension rule at this time, but I do have a question or two from Senator Warner, if he'll. yield. Senator Warner, as I understand LB 1026 (sic) as written, the sales tax on farm machinery would be refunded or rebated back to January 1. 1992. Is this correct?
SENATOR WARNER: Yes, but there's more to it than that. You have... you know, it will be serve...you will have the county assessor notified that that piece of equipment -was ... was...should be on the tax rolls.
SENATOR HEFNER: Yes, you'll have to... I know, you'll have to jump through all those hoops, but after you've jumped through all the hoops, well, then you're supposed to get your refund back or rebate back. Okay, how long... have we had any commitment from the Revenue Department how long it's going to
take to process that or go through that?
SENATOR WARNER: Senator, Senator Hefner, under the ... under the statutes that now exist, the maximum time is 180 days. That's what current law permits. If they are longer-than that, then you begin to pay interest, and that's true of any refund that is authorized by this Legislature and by law. The ... my understanding, obviously, it would never, you know, they do not run that long and I can't tell you if it will be 30 days after one applies or... obviously, they cannot do it until the effective date of the legislation and getting it in gear, which would take a little bit of time, but not a ... not in the broad sense a lot more time.
SENATOR HEFNER: Okay. Say that this bill passes and it takes effect, and I realize they'll have quite a ... quite a few checks to issue on that machinery that was purchased from January I say to April 1, but after April 1, well, then the farmer could probably expect his check probably in 60 or 90 days. Do you think that would be reasonable?
SENATOR WARNER: I would...I would ... I would imagine, Senator, that it would not exceed that normally.
SENATOR HEFNER: Okay.
SENATOR WARNER: There is no problem in its terms of availability of funds to do it, so the issue is whatever the processing time would be and the absolute limit is 180 days. I think probably the normal processing time is probably less than 30 days, but...
SENATOR HEFNER: Okay. Thank you, Senator Warner. I think this proves that the rural areas really get shafted and the reason for that is because if you read this morning's paper you'll find that the Lincoln resident owners will get a credit or will pay less property taxes on their homes and the rural areas, the farmers especially, will have to pay property taxes on their farm machinery and breeding livestock. So, there again we get shafted and it looks to me like we'll also, in the rural areas, as our values go tip, will get less LB 1059 money. This is the school aid money. So I guess...
PRESIDENT MOUL: One minute.
SENATOR HEFNER: ... I'd have to say that Lincoln residents will come out smelling like a rose and, of course, you know how the rural residents are going to come out smelling, and I'm not going to repeat that but 'let's just forget that and go ahead and take care of the business before us.
PRESIDENT MOUL: Thank you, Senator Hefner. Senator Moore, followed by Senators Haberman, Withem, Schmit, and Robinson. Senator Moore.
SENATOR MOORE: Well, Madam President, I rise to correct my good friend and dean of the Legislature, Senator Warner, as well as the Governor. When I woke up this morning and was working out, he said the only alternative, this is the only alternative and that's, once again, not true, 'cause there is an alternative. That alternative is total exemption. Now it may be true there's not enough votes in here to do that, but that is an alternative. You can assume, as Senator Warner prob...has chosen to do, and I respect him for that, the court says that's not possible. The Governor can assume that's not an option. We all know what happens when we assume something and I don't need to repeat it on the floor, 'cause the court has never said any such thing. They've made "innuations". they've made several things that have been said, but they've never said it's unconstitutional for this body to exempt all property from taxation. They have not said that and Senator Warner, Governor Nelson, other members of this body, to continue to repeat that is the only choice you got is not leveling with the people of the State of Nebraska, is not leveling with the members of this body. I just don't think that's the right way to, as I said, you know, I mean that sort of shotgun wedding is not necessary. You can give them a choice. Obviously, they chose not to do. 1, on the issue, introduced LB... LR 260, which is on Journal page 1274, which has been referred to the Revenue Committee which would say, if the constitutional amendment is on the ballot in May and fails, this body goes on record saying we don't like inventory, we can come back in between May 12 and June I and exempt all property from taxation. I continue to pursue that resolution because I think the people need to know there is an option. There is not a gun to their head. -I know many supporters of 1063, many supporters of LR 219 want that gun cocked, ready, finger quivering and make sure everybody votes for this because they have no choice. They do have a choice. Senator Warner, Governor Nelson, you can assume what the court's saying, but the court has not said that and to sit there and say the only alternative is that they go
back on is not leveling with the public. Secondly, LB 1063, as I've said before, is unconstitutional. Everybody in this room knows it's unconstitutional. Everybody in the lobby knows it's unconstitutional. Every attorney in the state knows it's unconstitutional. Everybody that reads the paper knows it's unconstitutional. That's why we're changing the Constitution. I'm certainly of the opinion, and I'm not assuming here, I'm stating it's only my opinion, you cannot pass a bill that's unconstitutional. I've also introduced LR 261 which says that, if it does go in the ballot in May and it does pass by the voters, this body will come back in, as I have said, in seven days in May and reenact this legislation to make sure it's not unconstitutional. Once again that lies in that we don't need to suspend the rules today and pass this bill because we have to pass it after the constitutional amendment passes, if indeed it does. So there's no reason to pass the bill today. I mean, if you want. to pass it, you know it's no good, you've got to come back in, in May, and do it again, I think... I hope at some point in time the body goes on record admitting up, owning up to that fact that if we pass this bill now, for whatever reason the CA does get on the ballot and passed by the voters of the State of Nebraska, we must come back in, in May, and reenact this legislation 'cause you can't do it prior to the passage of the CA so, once again, there is no reason to pass this bill today. If you want to pass it today, that's fine. Obviously, there's several problems with it and we'll certainly be coming back in May and correcting those problems as well as correcting the major flaw, that is passing the bill after the Constitution .... You know, it's oddly enough you have a constitutional enacting clause. I mean, you change the Constitution to enact this legislation. You can't do that.
PRESIDENT MOUL: One minute.
SENATOR MOORE: The Constitution must be changed. We must come back and reenact LB 1063 in special session this summer. With that, rise to oppose to again suspend the rules.
PRESIDENT MOUL: Thank you, Senator Moore. Senator Haberman.
SENATOR HABERMAN: Madam President, members of the body, it disturbs me that some people are in such a hurry to suspend the rules to pass a bill that's going to cause a tax increase. Everyone who supports suspending the rules and supports 1063E are supporting a tax increase for the citizens of the State of
Nebraska. Now, as I recall, the Governor had gone on record as saying no tax increases. I want to avoid increasing the taxes. The information that I have that the taxes are going to be increased are on page 229 of the bill, which gives the county board the authority to increase the property taxes. Now some of you say, I've heard this before. Well, that's fine. If you've heard it before, you're going to hear it again. I can't support a bill that gives the county boards throughout the State of Nebraska the right to increase taxes, and this bill does that. That's right, Senator Warner. Look on page 229. Now let's see what counties are going to introduce to increase their taxes. Boone County, they lose $60,000. Cherry County loses $75,000. Dodge loses 51,000; Hooker loses four or five thousand; Keya Paha, 16,000; Logan, 12,000; McPherson, 10,000; Rock, 20,000. They're going to increase their taxes to pick up that loss. Dodge, 51,000; Holt County loses $91,000; Knox, 60,000; Adams, 50,000; Phelps, 58,000. Phelps County loses $58,000. Polk, 42,000; Stanton, 38,000. Now this is a direct loss, so the powers to be said, well, we've got to fix it so they can make up this loss so we'll just give them authority to increase their property taxes to take care of this. That's wrong, folks. That's exac. . that's wrong. We've already increased the taxes on the farmers on the fertilizer. We've got the retailers' money. Schools are going to lose money and now we're saying, county boards, you don't have to lose any money, just raise the taxes. Some people will say, well, the valuation increase will take care of this. That's not true. That's not true. No one can say that that's the truth. You have heard that we have to pass it, we have no alternative. I say we can pass another 829. We have the time yet this year. We don't have to come back. We could just pass another 829 that exempts personal property from the tax rolls. Thank you, Madam President.
PRESIDENT MOUL: Thank you, Senator Haberman. Senator Withem.
SENATOR WITHEM: Call the question.
PRESIDENT MOUL: Do I see sufficient seconds? I do. We'll now vote on the motion to cease debate. All those in favor please vote aye, opposed nay. Have you all voted on the motion to cease debate? Please record, Mr. Clerk.
CLERK: 25 ayes,. 0 nays to cease debate, Madam President.
PRESIDENT MOUL: We have ceased debate and I will recognize the
Speaker for closing.
SPEAKER BAACK: Madam President and colleagues, some of this debate has been less than enlightening, I might add. Senator Moore, to say that this is a back door approach to doing this is absolutely ridiculous, and you know it as well as I do. For us to be able to read this bill we have to suspend those three rules so what difference would it make whether I had three motions or one motion? If you're against suspending the rule on one of them you couldn't read the bill, so they just as well a 11 be in one motion. I could have also filed a mismotion, a motion to suspend the rules and do the bill without further debate, but I wanted to give an opportunity for people to debate the bill on Final Reading and that motion will be following. That's an absolutely ridiculous argument. We need to suspend all three of these rules in order for us to read the bill and I think that we are on some....we are on some very, very tight time frames here and I think that we have to deal with this now and I would urge you to vote for the suspension of the rules. Thank you.
PRESIDENT MOUL: Thank you, Speaker Baack. We will now vote on the motion to suspend the rules. All those in favor please vote aye, opposed nay. Have you all voted on the motion to suspend the rules? Have you all voted? Please.... Record vote has been requested. Please record, Mr. Clerk.
CLERK: (Record vote read. See pages 1308-09 of the Legislative Journal.) 30 ayes, 9 nays on the motion to suspend the rules, Madam President, to permit consideration of the bill today.
PRESIDENT MOUL: Motion is approved. Before we proceed, I would like to call the senators' attention to the area under the south balcony. Special guests of Senator Joyce Hillman is Roger Sato of Scottsbluff. Would you please rise and be recognized. Welcome to the Chambers. Thank you. Also seated in the south balcony are special guests of Senator Schmit. They are 38 fourth graders from Saint Mary's in David City and their teacher. Thank you. Next motion, Mr. Clerk.
CLERK: Madam President, Speaker Baack would move to suspend Rule 6, Sections 7 and 8; Rule 7, Section 3, and vote on the final passage of LB 1063 without consideration of further amendments or motions.
PRESIDENT MOUL: Speaker Baack.
SPEAKER BAACK: Yes, Madam President and colleagues, as I did yesterday, I filed a motion to suspend the rules and vote on LR 219 without further debate. I felt that I needed to do the same thing on this one and I did need to do the same thing on this one, otherwise we would have had 30 amendments this morning. Senator Schmit filed about 30 amendments this morning. He withdrew some of them, but he filed about 30 of them this morning and they' were the same kinds of amendments that we considered on Select File. For anyone to get up and argue that we haven't had substantial debate on this bill is absurd. We've had many hours of debate on this bill. It is major tax policy, there's no doubt about that, but I think it's time that we move forward. We do have deadlines that we have to meet and today is one of the deadlines that we need to meet if we want to put something on the ballot in May. I put this motion up. I don't plan to vote to cease debate on this motion. I think that people...I never vote to cease debate. I think that people have a chance now to air their feelings again on 1063 and we'll give them that opportunity to do it on this motion, but had I not filed this motion we would have been here for a lot longer today. There's no doubt about that. So, with that, I would urge you to suspend the rules and allow us to do the Final Reading of LB 1.063. Thank you.
PRESIDENT MOUL: Thank you, Speaker Baack. Senator Schmit, followed by Senators Robinson and Robak. Senator Schmit.
SENATOR SCHMIT: Madam Chairman and members, it's always convenient to use the rules when it works in your favor. It's an abomination to use the rules when it does not work in your favor. The system has to work when it is working in favor of the majority. The system does not have to work if the majority does not want it to work. This bill is the most important bill that has been passed by this Legislature in many years. This bill will have an adverse impact for many, many years upon the entire State of Nebraska. This bill will cause this Legislature tremendous problems in the months and years to come. Those who have not read the bill, and that would probably constitute several persons in this body, will be surprised when the Final Reading has been accomplished and they discover the total impact. My good friend Senator Schrock, who has stood up and said, well, we don't tax tile water in liquid fertilizer, well, then what do we tax? Do we tax just tile nitrogen? Do we- tax the 32 percent nitrogen and not tax the 68 percent water? If
that's the case, then what about 32 percent granular nitrogen? Do we only tax the 32 percent nitrogen, do not tax the 68 percent inert materials? What about the anhydrous ammonia? Do we tax the 82 percent that's nitrogen and not tax the 18 percent which is not nitrogen? I could go on, and on, and on. Well, we say we'll go back and look at the legislative intent so, if we follow the legislative intent on this one minor issue, Senator Schrock has said, encouraged by Senator Landis, who is one of the most perfectionist persons on this floor, to put that in the record and so I hope that my friends in the Bellwood Co-op are listening, I hope that my friends in Wahoo and Valparaiso and Bruno and every place else are listening, it would be interesting, a most interesting exercise if, when the taxes are paid, we just pay on the amount of actual element in the fertilizer. I would suggest that the Department of Agriculture and the Department of Revenue will take a dim, dim view of that. I never knew and, as Senator Warner pointed out when Senator Dierks introduced his amendment on the budget, intent language has no validity in the law, has no validity in the law. if there's a doubt, they'll go back and read it, but we have put all sorts of intent into the debate on this floor. I would like to say that it is my intention that inventory shall include livestock and farm equipment. Don't suppose it's going to get considered very readily. I would suggest, with all due respect for my friend Senator Schrock, that will will find tremendous debate about the extent of the value of his intent language. I want to say again, and again, and again that this body will always be able to function in this manner so long as we believe in gang voting, so long as we believe in gang lobbying, and Senator Warner mentioned gang lobbying, I didn't, but it exists. It exists inside the floor and outside the floor. My arguments have been against the bill, have been against the amendment. They shall continue that way. I shall continue my efforts throughout the season for so long as I am a member of this (inaudible).
PRESIDENT MOUL: One minute.
SENATOR SCHMIT: I would hope that those who imply that the good of the state is hanging in the balance unless we pass 1063 and 219CA will, upon reflection, admit, as Senator Moore has stated, that there are other options. Those options may not have the votes, that is not unusual, but there are other options and for Governor Nelson or any member of this body to say those options do not exist is wrong and is not accurate. Thank you
PRESIDENT MOUL: Thank you, Senator Schmit. Senator Robinson, followed by Senator Lynch, Warner and Robak. Senator Robinson.
SENATOR ROBINSON: Madam President, members of the body, I haven't... I've only spoken once on this issue. (LB) 1063, as the Governor has said, smells. Well, I'll tell you it stinks so much now I'm really... and I know I'm going to be forced to vote for it, but you've got, as mentioned on the floor, you know, we're going to hit the counties and in my area the farmers are going to pay the tax. Well, and then we dillydally around with the sales...sales tax on farm equipment. Well, I don't know. I know some of my rural friends have conjured that up and I know they're not going to vote for it. They're not going to vote for 1063 and I don't think that's right. If you've got enough courage to put it together I think you should vote for it and, I don't know, I think we'd a been better off with just four cents off on the sales tax, and actually what it gets down to is a big fight between the rural interests-who's going to pay, who's going to buy new... new equipment, who's going to ... everyone's going to get stuck on the fertilizer tax and that's a dilemma and I don't like it. I think sometimes we would be better off with ... if we'd a forgotten about the 5 cents on sales tax. What should have been done, and it's been said several times but I'm going to say it again, the best policy would be everything on or everything off, but it isn't going to happen. Senator Schmit, can say it a million times, there are options out there, but there's one thing that's not out there and that's the votes to pass it and we might as well get it in our head the votes aren't out there to pass it. And we growl, we've debated and we've argued for two weeks, but the votes are there. There's one thing I can do and that's count. I can count to 25 and I can count to 30, and we know our nose is against the concrete right now. Senator Warner has said several times, and he's correct, every thing is on and, to my rural senators, if every thing goes on you better take one good look at what happens to the formula for school aid. I've got one county that will lose a million dollars if everything goes back on. You can stand up here and rant and rave all you want to, but you better check up on how much your schools are going to lose 'cause they're going to lose a lot and you know what's going to happen? if you like the rural fabric of Nebraska, you better vote for the constitutional amendment. I've got a couple of towns out there without schools. Go take a look at them. They've disintegrated to
nothing. Now, if that's what you want, don't vote for the constitutional amendment because what's going to happen is you're going' to lose towns and you're going to lose them and they're going to start losing them fast. I'll just give you one example. I'll give you three examples. If the constitutional amendment fails and everything goes back on, you know what state aid goes to Lincoln? You know what it increases? From... it will increase from 1.4 million to 5.5 million. Millard will go from 2.7 million to 3.1 million. Bellevue, boy, Senator Hartnett's mouth will water on this one, 320,000 to a million bucks. Just think about that, folks. You know where that money's coming from? It's coming from my rural areas and it's going to go in to help the schools in the big cities. it's never been said, but I'm saying it. You better take a good look at that and chew it around awhile. If you can go back there and tell your school boards .... I've got one school ...
PRESIDENT MOUL: One minute.
SENATOR ROBINSON: -that's going to lose 350,000 bucks. I've got to vote ... I've got to vote for 1063 and I'm definitely going to vote for the constitutional amendment. I can't go back and face those people on main street and my farmers and tell them we're going to ... because they're going to eat that money that's being lost on the aid to schools. If you don't think so, vote against it. I hope you heard that, Senator Schmit. Thank you.
PRESIDENT MOUL: Thank you, Senator Robinson. Senator Lynch.
SENATOR LYNCH: Madam President and members, I know we're discussing suspending the rules, but in the process of that the comment was made about the amendments, some of them being unnecessary. I had one and I never offered it until the Lamb amendment was placed on 1063 that dealt with the buildings as it applies to those school districts that Senator Robinson just discussed, and I couldn't help but think that at if we're going to do something like that for the school boards, not the districts so much but for the school boards and I guess, indirectly, the districts to take care of their problem of cost and the distribution through 1059 for buildings, we should probably do the same thing for people. That's all. So my amendment was not ... was not the kind of amendment that would ... or was intended to cause anybody any problem and, in fact, was intended to help make 1063, if it's possible, somewhat fair. But the very fact that I won't get a chance to. offer it indicates, again, the
terrible circumstance and condition the bill is in. If, in fact, we should adjust the formula for state aid to schools based on whether or not they're building a building and were in the process of that at the time this comes into effect, I think court-ordered adjustments, CIR-ordered adjustments for salaries and conditions of employment are every bit of... every bit as and even, in fact, more important. Those school districts, this isn't for teachers, but those school districts and the taxpayers in those school districts will have to make up the difference. Senator Robinson just mentioned what it would cost school districts wherever it's at to, if they sign on... or don't sign on to 1063, but by signing on to 1063, Senator Robinson, here's one example of where it will cost the school boards, in fact, money. So all of the amendments, my point is, simply were not intended to delay anything, but at least develop some fair, uniform consideration for school boards, as it applies not just to buildings but also for people as well. I was told that I should not introduce this amendment because it would screw everything up. Can you believe that? So, to be completely frank, I think that probably indicates the terrible condition this particular legislation is in and I guess I have to close with this. I'm not sure who pays how much taxes or what school districts will lose because of what, but I don't believe all the numbers I have seen and, in fact, some of the numbers weren't even available for us to consider as we got into the final stages of the debate on 1063. But I know in Douglas County if we consider, and I remember very clearly the comment by Senator Coordsen that the people in the rural areas pay 30 percent of the responsibility as it applies to property tax with only 8 percent of the revenues, and I'd just like to remind everybody, but that in Douglas County, when you crank in sales and income tax, including distribution of 1063, we're paying close to 42 percent of the income to the state and getting back 28 percent. You haven't heard me talk about trying to apply amendments that would force more revenues back to out- county, but I didn't. Hell, we can't even get fair representation on committees, lot alone getting a fair shake in that regard as well. I don't have any hope at all that this Legislature given that kind of integrity, is going to develop any kind of tax policy that's fair to anybody at all and I think the way it's written, in the absence of this little amendment,...
PRESIDENT MOUL: One minute.
SENATOR LYNCH: ...simply because of the rule change, even makes
this bill worse. So, because of that, won't even have to withdraw it and I don't think I will at this point, depending upon what happens. It was my intention to... oh heck, I'll withdraw it. Keep those politicians happy who are concerned about this beautiful piece of legislation, being offended by something as honorable as fair play to people as well as buildings.
PRESIDENT MOUL: Thank you, Senator Lynch. Senator Warner.
SENATOR WARNER: Madam President, members of the Legislature, Senator Robinson laid out one issue very plain. It's one I keep repeating and I'm going to repeat it one more time and that's it. But everything is on now and when I say "everything", that means inventory, farm equipment and livestock at market value. Failure to pass this bill, 1063, means only one thing. If we fail to pass it, by March 31 those forms have to be in. There's 18 days left in the session. Some of you, I suppose, hold out hope that somehow or other something else will happen in these last 18 days. We have like 15 or, as a practical matter, at the most, 16 days to deal with it and a point of no return is really reached probably if we fail to act today. I just hope the body will support the passage of 1063 with the emergency clause so those filing dates are extended, otherwise they're not. I hope that you'll put the constitutional amendment on the ballot in the primary 'cause if you do not then we have a whole new problem of shifting, shifting property tax back on to people who -already are paying too much, and I hope you consider that as you push your button.
PRESIDENT MOUL: Thank you, Senator Warner. Senator Robak.
SENATOR ROBAK: I call the question.
PRESIDENT MOUL: Are there sufficient seconds? There are. I will now... we will now vote on the motion to cease debate. All those in favor please vote aye, opposed nay. Have you all voted on the motion to cease debate? Have you all voted? Have you all voted? Senator Withem.
SENATOR WITHEM: ... people to punch in and roll call vote. Call-ins, if it's acceptable.
PRESIDENT MOUL: I will remind the senators we are on Final Reading so the house is under call. Senators, please check in.
We will take call-in votes on the motion to cease debate.
CLERK: Senator Abboud voting yes. Senator Ashford voting yes.
PRESIDENT MOUL: Please record, Mr. Clerk.
CLERK: 26 ayes, 4 nays to cease debate, Madam President.
PRESIDENT MOUL: We have ceased debate. I'll recognize Speaker Baack for closing.
SPEAKER BAACK: Yes, Madam President and colleagues, I think the .time has come now for us to vote on LB 1063. It's a very crucial vote, I think, on what we're going to do on tax policy. What I think the thing that people need to realize is this isn't... this isn't setting tax policy for the state for the next 25 years. It's just a statutory provision subject to change later on down the road. It's dealing with a situation that we find ourselves in now that we simply have to deal with in a timely fashion, I think. The public expects us to. There's a lot of frustration out in the public that we're not dealing with this issue so I think we need to demonstrate to the public that we are willing to deal with this issue and we're willing to deal with it this year. With that, I would urge you to vote for suspension of the rules and then to vote in favor of LB 1063. Thank you.
PRESIDENT MOUL: Thank you, Speaker Baack. We will now vote on the motion to suspend the rules. All those in favor please vote aye, opposed nay. Have you all voted? Please record, Mr. Clerk.
CLERK: 30 ayes, 7 nays, Madam President, on the motion to suspend the rules.
PRESIDENT MOUL: Motion is adopted and we will proceed with reading LB 1063.
CLERK: (Read LB 1063 on Final Reading.)
PRESIDENT MOUL: Speaker Baack.
SPEAKER BAACK: I would, I know that technically we're under call, but I would request that all senators please come to the Chamber and record your presence, please.
PRESIDENT MOUL: Would the senators please return to their seats and please record their presence. While we're waiting for the senators to record their presence, I would like to call your attention to the south balcony. Special guests today of Senator Lynch are 18 students and 2 teachers from Blessed Sacrament and their principal. Would you please rise and be. recognized. Welcome to the Chamber. Thank you. Senator Ashford, Senator Lamb, would you please check in. Senator Rasmussen, Senator Haberman and Senator Labedz, would you please check in. All provisions of law relative to procedure having been complied with, the question is, shall LB 1063 pass with the emergency clause attached? All those in favor please vote aye, opposed nay. Have you all voted? Please record, Mr. Clerk.
CLERK: (Record vote read. See page 1311 of the Legislative .Journal.) 33 ayes, 15 nays, 1 excused and not voting, Madam President.
PRESIDENT MOUL: LB 1063 passes with the emergency clause. Items for the record, Mr. Clerk.
CLERK: Thank you, Madam President. Study resolution LR 265 by Senator Schellpeper will be referred to the Executive Board. Amendments to be printed to LR 261 by Senator Moore; Senator Rasmussen to 1084; Senator Coordsen to 360; Senator Landis to 1006. New A bill 1122A by Senator Beutler appropriates funds to implement 1122. Madam President, oh, and Senator Warner, amendments to 1063A, and a motion from Senator' Wickersham to raise or replace Legislative Bill 1172 on General File. That will be laid over. (See pages 1312-14 of the Legislative Journal.)
PRESIDENT MOUL: Now proceed with LR 219CA.
CLERK: Madam President, I have a motion. Senator Baack would move to suspend Rule 4, Section 2; Rule 7 (sic), Section 7 and 8; and Rule 7, Section 3 to permit consideration of LR 219CA without further amendment, motion or debate.
PRESIDENT MOUL: Speaker Baack.
SPEAKER BAACK: Yes, Madam President and colleagues, this was another motion put tip to just allow the process to continue on. We are on the final day on LR 219. If we're going to put it on