Debate Transcripts

LB 613 (1995)

Select File

May 25, 1995


SENATOR MAURSTAD:  Mr. Speaker, I'd move to advance LB 531 to E & R for engrossment.


SPEAKER WITHEM:  You've heard the motion.  All in favor say aye.  Opposed.  It is advanced.  I believe, looking at the agenda, we have LB 613 special ordered at one o'clock and ...  if we could have mutual consent, Senator Day, to deal with your bill and advance it in 13 minutes, I'm sure you would appreciate that but I don't think that's going to happen.  So it's go ahead to LB 613 at this point.  Mr. Clerk.


CLERK:  Senator Maurstad, Enrollment and Review amendments, initially, Senator.


SENATOR MAURSTAD:  Mr. Speaker, I'd move to adopt the E & R amendments to LB 613.


SPEAKER WITHEM:  You've heard the ...  the question is the adoption of the E & R amendments.  All those in favor say aye.  Opposed.  The E & R amendments are adopted.  Mr. Clerk.


CLERK- Mr. President, the first amendment to the bill is from




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Senator Bernard-Stevens.  Senator, I have a note you want to withdraw AM1916 and offer 2354.


SPEAKER WITHEM:  There is a request for a substitution.  Is there any objection?  Hearing none, go right ahead.


SENATOR BERNARD-STEVENS:  Thank you, Mr. Speaker, members of the body, actually this morning I woke up intending to withdraw the amendment and I still may but 1 think what I'll do is put it up there for discussion, play it by ear.  If there seems to be a strong support which I don't sense there is, I would probably bring it to a vote, but I do think it would allow for some discussion on the bill itself.  The amendment, AM2354 basically ...  well, not basically, it strikes Section 4 of the committee amendment which would leave the basic allowable growth rate for education at 4 to 6.5 percent to that range; the argument again being that public education is, in fact, in a state...  is going to be and continue to be in a state of flux at this point.  We have done some things and hopefully will continue to do things on special education.  We're also looking at a constitutional change in the next couple years, next year or so if we get something that the body can agree with, if the public can accept it and if it goes through we might have some type of lid on levies.  And with that uncertainty, I would rather keep the school growth simply where it is.  I don't see the real benefit with the exception of saying we're going to be doing something on the property tax side of just doing this at this moment in time.  I'm against lids in the beginning, I'll vote against 613 regardless of how the bill is.  I don't like the lids at state level.  I think the whole responsibility should be at the local level and they should take the heat for whatever decisions they make.  I just personally believe that the schools should be left in their particular growth rate area now, make it a local decision, make them continue to try to be accountable for the actions and wait and see what happens on the constitutional side on the levy lid and I just think it would be a better policy to follow.  I'll leave it up for a while to see if there's any interest in the discussion.


SPEAKER WITHEM:  Senator Bernard-Stevens, you're recognized to close.


SENATOR BERNARD-STEVENS:  Well, there's no discussion on that, Mr. Speaker.  I think I'll withdraw the amendment at this time.




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SPEAKER WITHEM:  T hank you, Senator Bernard-Stevens.  Mr. Clerk.


CLERK:  Senator Bernard-Stevens, I now have 1927, Senator.  Again, a note that you want to withdraw 1927 and offer 2355.


SPEAKER WITHEM:  Senator Bernard-Stevens.


SENATOR BERNARD-STEVENS:  The extremely unnegative, unpositive reaction of the last amendment and having a new definition now of placid that Senator Beutler's word that he's brought into the Legislature, Senator Beutler, I wondering if the environment is somewhat placid and a male or female deer came through a doe, and it was on a Sunday, would we would have a placid, "Placido Domingo"?  I don't know.  It's just a thought that entered my mind.  I'll withdraw that amendment.


SPEAKER WITHEM:  And the pun also?


SENATOR BERNARD-STEVENS:  I'll withdraw the pun.


SPEAKER WITHEM:  Mr. Clerk, next item.


CLERK:  Senator Bernard-Stevens, AM1955, Senator, withdraw?  Mr. President, the next amendment I have is by Senator Hall.  Senator, your amendment is on page 2060 of the Journal.


SPEAKER WITHEM:  Senator Hall.


SENATOR HALL:  Thank you, Mr. President and members, the amendment that I filed to the bill a while back deals with the original Section 9 of the bill.  If you look at the green copy of the bill, you'll see that what that did is it removed, as it was introduced, 613, the ability for the school district to exceed the allowable growth percentage of 1 percent on a 75 percent vote of the board.  In the committee amendments, that ...  the words, the ability would still be there as the bill sits on Select File for the school district to exceed the allowable growth as long as there is three-quarters of the board vote for that.  I offer this because I believe that the bill as it was introduced was good policy.  There's still the, I guess, the emergency vehicle or opportunity to exceed the limit by 1 percent if they go to a vote of the people.  Now some will argue that that's an expensive alternative but, frankly, it's in the original proposal.  It continues to be there and I believe that if we are really looking at having a lid that is effective




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that, in fact, is one that just does not allow for an extra I percent because I mean I did look up what the total number was and I believe of the roughly 550 districts that are out there or school boards, that they exceeded the or that used the 1 percent limit was somewhere in the neighborhood of 364 that just basically exercised the 75 percent supermajority for purposes of adding 1 percent to the allowable growth.  I offer this because I believe the bill as it was introduced was in a proper form and I spoke to this when we dealt with the issue on the committee amendments but decided to offer the amendment at this time and I would urge its adoption.  Thank you, Mr. President.


SPEAKER WITHEM:  Thank you, Senator Hall.  Senator Hall, there are no lights on.  Would you like to close?


SENATOR HALL:  Rather convincing argument, Mr. President, either that or there's some tee times coming up.  With that, yeah, I'll close.  I mean the proposal is one that we can vote straight up or down.  Looks like I've got an idea which way it's going.


SPEAKER WITHEM:  Senator Hall, the Hall amendment is before the body.  The question is, shall it be adopted?  All those in favor vote aye, opposed vote nay.  We are voting on the Hall amendment to LB 613.  Have you all voted?


SENATOR HALL:  Thank you.  Mr. President, I just wanted to be able to add what my options were.  Could I ask just for a record vote.  Thank you.


SPEAKER WITHEM:  Record the vote, Mr. Clerk, and provide a record vote.


CLERK:  (Read record vote.  See pages 2579-80 of the Legislative Journal.) 7 ayes, 13 nays, Mr. President, on the amendment.


SPEAKER WITHEM:  The amendment is not agreed to.  Mr. Clerk, next amendment.


CLERK:  Mr. President, The next amendment is by Senator Maurstad.


SPEAKER WITHEM:  Senator Maurstad, AM2365, 26, excuse me, 2326.  (See page 2340 of the Legislative Journal.)


SENATOR MAURSTAD:  That's correct, Mr. Speaker, colleagues, this




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is really a technical change and a clearing up of the language at both the suggestion of the counsel of the Urban Affairs Committee and also Revenue Committee; takes out the word "current" on line 21 of page 5 and on line 22 it takes out the words "to the next fiscal year".  Doesn't change the intent.  It merely better explains what the amendment was that was passed on General File.  So I'd ask the adoption of the amendment.


SPEAKER WITHEM:  Any discussion on the Maurstad amendment?  There appears to be none.  Senator Maurstad, do you have a closing?




SPEAKER WITHEM:  Closing is waived.  The question is the adoption of the Maurstad amendment.  All those in favor vote aye, opposed vote nay.  Have you all voted?  Record.


CLERK:  25 ayes, 0 nays, Mr. President, on the adoption of Senator Maurstad's amendment.


SPEAKER WITHEM:  Mr. Clerk, next amendment.  The amendment is adopted by the way.  Next amendment.


CLERK:  Senator Warner would move to amend, AM2455, Senator.  (See page 2472 of the Legislative Journal.)


SPEAKER WITHEM:  Senator Warner, on your amendment.


SENATOR WARNER:  Mr. President, members of the Legislature, this is an amendment I filed.  It's a repeat of LB 38 that was introduced a couple years ago.  It establishes a limitation on the growth of appropriations of state government.  This portion ...  LB 38 also provided the system where additional ...  or if revenue is coming in that's greater than projections, it flows over to the Cash Reserve Fund and back and forth and we have moved some money over there this year.  This was the other half of that bill which we took that out in '93.  It's a concept that was first talked about and somewhat developed back in the eighties when things were tight.  It's a fairly simple, it looks complex, but it's a fairly simple concept.  What the amendment does is a process in which the Legislative Fiscal Office and on the Governor's, comparable on the Governor's side, will make a determination on an annual basis as to what the growth in receipts have been for the last 15 years.  If you noticed in the




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Journal, it would indicate the base year for this year would be 181-82, next year it would be '82-83, but it's a moving 15-year base on receipts and what it means is that the limitation on appropriations would be consistent with and the same as, over the long haul, with the normal growth that we see in receipts without a change in tax rates.  This will run about 5.5 percent.  That's what it historically has been and would probably continue to be in that area, but the point is that if you want a limitation on the state, you want to discourage the ability to expand government in good times, and I want to tell you ...  good economic times, but have funds on hand for those short economic times that this is the kind of concept that will do that.  Those of you who have been here a while know and have seen where when the revenue growth is substantially above average and there appears to be substantial amount of revenue available, there is a tendency for that also to be the same time in which programs are expanded or programs are., new programs are approved because there's funds available, and the cycle that exists with sales-income tax comes along a few years later, we've established a new level of spending, revenue goes down and then all of a sudden we are not in a position to fund at that level and then we are either in a cut session or we're looking at increasing taxes or a special session, as the case might be.  The purpose of this is that you even out those high spots and low spots.  It gives stability to your funding when revenue times, when the economy is good, the revenue is exceeding averages, the money flows over to that Cash Reserve Fund.  In the periods of time when the economy slows down, then that same Cash Reserve Fund flows back to the General Fund giving stability to the programs that the Legislature has approved.  The key is that receipts do not grow faster, or excuse me, expenditures do not grow faster than what the receipts are over a period of time and you're not reacting on a 12-month basis or a four-year basis but you're reacting to a trend over a 15- year basis which is the key to having the stability.  There are a couple of things that are exceptions in here.  There is an exception for the transfers that occur every year.  Those of you who are familiar with the budget will recall that there will be some money transferred perhaps from the Securities Fund, Securities Cash Fund.  That will vary from year to year.  It's an exception because you don't want to build in something that is temporary in nature as far as a permanent funding source.  When those funds are available, if they are available, they can be used in a couple ways.  One, they could be used in those times when you are in a tight economic situation but the other




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thing is that it could be used for one time expenditure such as 309 or some of those kinds of things where, because the funds are available, you could do it but not have an ongoing program based upon a funding from an unreliable source of revenue.  The other thing that is an exception, of course, is the Cash Reserve Fund but that is because that flows back and forth and is intended to do exactly that, as Senator Robinson described it the other day, I believe quoting Senator Wehrbein, that that was when you park it into a savings account instead of the cash checking account and that's the concept that would be contained here as well.  But those who have an interest of also applying some kind of a limitation on state government, this is one that was not designed just lately.  It has been introduced.  It's not introduced this year again obviously, but as I begin to hear discussion as this bill was being talked about that the state ought to have a limitation too, it seemed to me that the work that went into this concept over the last seven, eight years actually might be one that would be appropriate for you to consider and to review.  So with that, again, I would hope the Legislature if you wish to put a limitation on the state would consider this one.  What it does again is it keeps expenditure growth not greater than the growth in revenue.  There is one exception I forgot.  It does allow for a change from this if you establish a new tax or a new program which also includes a new revenue source and, obviously, if you're looking at the property tax issue and you want to pass a 1059 or you want to move a number of activities over to state government that currently is being paid by property tax and you have to, as a part of that, generate additional funds, then that becomes a unit unto itself and additional revenue, because of the additional tax, so then would obviously be needed would go to the funding of the new program.  But this provides stability both of funding and of the programs over time for your ongoing programs and keeps government intact and gets away from the yo-yo effect which tends to be the case with the nature of sales and income tax in its response to the economy.  With that I'd be glad to respond to questions, and if there is this interest, I at least believe this is an approach that is workable.  It's an approach that would tend to give stability to funding of state government programs but also would discourage expansion just because of the fact that additional funds were available because the economy was good but that may be a minus in some people's side but it's a plus on the other side because you are going to be making cuts as deeply, certainly if at all, in those periods when the economy is slow and that maintains the quality of your services




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when that's possible.  So with that, Mr. President, I'd be glad to respond to questions.


SPEAKER WITHEM:  Senator McKenzie.


SENATOR McKENZIE:  Mr. Speaker and members, thank you.  With all due respect to Senator Warner, I would ask for a germaneness ruling on the amendment.


SPEAKER WITHEM:  Would you like to give a rationale as to, a very brief rationale as to why you feel it is not germane?


SENATOR McKENZIE:  Be glad to, Mr. President.  LB 613 as currently drafted in the Enrollment and Review amendments deals with Section 77 and 79 of our statute.  Senator Warner's amendment deals with Section 50, Chapter 50.


SPEAKER WITHEM:  And that's the BUM total of the ...  thank you.  Senator Warner, would you like to address the question of germaneness?


SENATOR WARNER:  Mr. President, obviously, I don't know how you're going to rule.  obviously, you're dealing in one case local government, in one instance state government so to that extent they are separate.  From my viewpoint the consistency would be in a broad area of limitation that we are attempting to apply a type of limitation to both entities of government and that's the extent of germaneness that I can argue.


SPEAKER WITHEM:  Yeah, this is another one where I had had an opportunity to take a look at it before because I had a sense that there may be a germaneness issue raised.  I would indicate ...  my ruling would be that it is not germane based on the fact that it, the current bill deals with local governments and budgetary limitations, taxation limitations on local governments.  The amendment 245S establishes an entirely different process for the state government BO it's a different process and it is a different level of government, and as Senator McKenzie pointed out, it is a different area of the statutes entirely.  My ruling is that it is not germane.  Senator Bernard-Stevens, for what purpose?


SENATOR BERNARD-STEVENS:  I want to move to override that decision.




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SPEAKER WITHEM:  You are recognized to speak on the motion to overrule the Chair.


SENATOR BERNARD-STEVENS:  And I'm going to withdraw this motion on when I'm finished, but I wanted to speak on it.  I really, sincerely wish Senator McKenzie would not have raised the germaneness issue or I would encourage Senator Warner to suspend the rules for a nongermane amendment.  This is one of the best policies this state could do, and if this is the bill we could do it on, this is the bill we should do it on, Senator McKenzie.  It's not going to jeopardize the bill, it's going to ensure that we, in Nebraska, have a reasonable policy.  Now I understand that why Senator Warner may not want to suspend the rules because Senator Jones and others have an amendment that's coming up later that they would probably want to do the same thing and I would argue that Senator Warner's policy is much better and we shouldn't suspend the rules on that one because it's not the best policy I want to talk a little bit about what I perceive Senator Warner is doing and why I argue that it is good policy and why again I'm discouraged that Senator 'McKenzie went the germaneness route to get it off.  What we have in LB 38 is anything that comes in revenuewise over our projections is automatically transferred into the Cash Reserve and that was good policy.  What Senator Warner's amendment does, if I understand it, and I think I do, is that we'll take the 15 year average and it will be a moving 15 year average each year we move up which I have a question at some point on the rationale of...  I'm not sure we could call it a base year anymore because it is going to be a moving comparison but, nonetheless, it's a 15 year average.  That average growth during that time period would be what we would limit our state to.  Now what it would be is if there was more growth than that we would have a pool of dollars that we still, I believe, Senator Warner, would have to actually transfer into the Cash Reserve because this amendment that you have does not have a transfer of proportion, is that correct?  Yeah, so we'd still have to transfer it which is not a prob ...  would not be a problem.  It would certainly have to get the votes to do so, but it would focus the attention and set aside those dollars for that particular purpose.  It makes sense to do it that way rather than the way that we do it now.  it's good policy.  My sense is this Legislature would support that policy, now is a good time to do so.  I would again hope that we might suspend the rule and I'm not going to do that.  I think it's to the discretion of Senator Warner and I will trust his judgment.  I would hope that he would suspend the rules for a




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nongermane amendment and we actually get this in and, then I would work very vigorously not to suspend the rule on the next one because Senator Warner's bill actually does I think in a better way what also some of the intentions Senator Jones was trying to do.  And Senator Jones is shaking his head yes as I think he agrees with that.  So I think there is a potential here and I would like to see us do so.  I wanted to make those comments.  It's good fiscal policy for the state.  It makes sense for us to do that.  As we're putting limitations on local, we need to put limitations on ourselves.  It's a rational way of doing so that makes sense and, Senator Jones, could I ask you a question?


SPEAKER WITHEM:  Senator Jones.


SENATOR BERNARD-STEVENS:  Jim, you're one of the cosigners of the upcoming amendments, are you not?




SENATOR BERNARD-STEVENS:  Are you the principal signer or...




SENATOR BERNARD-STEVENS:  Okay.  If we were to get this as a nongermane amendment and we suspend the rules for a nongermane amendment and agree with it, would you still want to pursue your amendment?


SENATOR JONES:  No, they would conflict.  I would just go with Warner's and I'd pull mine.


SENATOR BERNARD-STEVENS:  Okay, and would you be able to support Senator Warner's amendment?




SENATOR BERNARD-STEVENS:  And with that I think we have an opportunity, Senator Warner, to do that and I would encourage you very strongly to Just make the motion to suspend the rules for the nongermane amendment or, Senator McKenzie, if you could just simply withdraw your challenge to the Chair on the germaneness, I think we've got an agreement that we'd like to talk about this amendment and get it agreed to.  Senator Jones would not then have his amendment afterwards and we could move




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forward.  I think that's the better way for us to go and that's why I put the motion to override the Chair.  I'm going to withdraw that motion at this point, see if any seeds that have been planted sprout or if we're still kind in a placid mode, Senator Beutler, even if female deer did come in on Sunday.


SPEAKER WITHEM:  The motion to overrule the Chair has been pulled.  The amendment has been declared...  Senator Warner, for what purpose do you rise?


SENATOR WARNER:  To make the same motion, to suspend the rule in order to make a statement.


SPEAKER WITHEM:  The motion before the body then is the suspension of the germaneness rule for consideration.  It's not in writing but with the consent of the body I think we'll go ahead without it being in writing.  Senator Warner, you are recognized.


SENATOR WARNER:  I'm sorry.  The motion is in good intention, that intended to pursue it, but I was aware that there could be a germaneness issue and I tend to be one of those that favor a tight germaneness rule and tend not to want to object.  What I do want to say, though, is the fact if we do not take it up today does not mean that it won't be done because I'll be very willing to introduce it next session.  It wouldn't have taken effect until, as a practical matter, until '97-98 budget year in any event so it's not something that if it's not done now it is gone, but I gather from some interest, at least, that there could be interest in the concept.  I think the approach in here is a good one.  I can tell you this that those who would ask the question that had this been law now, that the budget this year would have came out about $2.8 million less for right now but there would have been room for like 7 million next year more.  All I'm saying is this kind of amendment, because we historically stay within the 5.5 percent or thereabout growth over time, that it would fit, but this has a wonderful concept for the evening out the lumps, the high and the lows of the economy.  So with that comment with the understanding it's a good faith amendment, I will come back with the bill next session.  There's nothing lost from that concept because it couldn't take effect till '97-98 in any event.  So with that explanation I'll withdraw the motion to question the Chair on the issue of germaneness.




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SPEAKER WITHEM:  Thank you, Senator Warner.  The motion before the body now...  let me just make a quick procedural announcement here.  People have been asking, including Senator Day, I think I'm going to change my mind on what I told you before.  We are on LB 613.  There's potential -that we may move that bill a little quicker than we thought.  I don't want to put too much pressure on people to either do that or not do that.  Obviously, if there is a lot of debate on it, we'll continue on it as long as it needs it.  But if we conclude LB 613 with a reasonable amount of time left in the afternoon, my intentions would be to move on to LB 519 and to LB 283 and not to go back to LB 592 because LB 592 1 think there are considerable number of amendments on it and we would be unlikely to get that bill completed today, so that would be the intention.  Mr. Clerk.  Mr. Clerk, next amendment.


CLERK:  Mr. President, the next amendment I have to the bill is by Senator Jones.  Senator, AM2431.


SPEAKER WITHEM:  Senator Jones, on your amendment.


SENATOR JONES:  Yes, Mr. Speaker and members of the body, my amendment is similar to Warner's.  It don't go into detail like his, but mine is putting a 4 percent lid per year for the two years and it's starting in the same time period, and if you've got the copy of the amendment, well, it says 8.2; well, that's because it's compounded to the two years and it's going to be the same problem probably as Jerry Warner's, but I just wanted to make a point that it's hard for me to go back to my local district and tell them we're going to put a lid on subdivisions, and if we're not going to do something at the state that's kind of intrigued me to do this but I just wanted to bring this to you, and in the opening here, I'd like to give a little time to Jim Jensen because he was the one that signed on it too with me.  Thank you.


SPEAKER WITHEM:  Senator Jensen.


SENATOR JENSEN:  Yes, thank you.  Mr. Speaker, members of the body, I did sign onto this bill with Senator Jones and not knowing that Senator Warner had already introduced a similar bill, and there's no question about it, those of us who go back to our districts and hear from the people and they want some tax considerations.  And this last weekend when I was back I did hear that we had put some limitations on counties and school




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districts but nothing on state government and that is really concerning to the constituents, it's concerning to me also.  There are two types of ways to come up with a budget.  If you're on a fixed income, you have a dollar figure that is up there.  That's all there is and so you must manage somehow to stay within that dollar figure.  Then you have entities like governments and school districts that will sometimes go to their people and everybody turns in their wish list and then you come up with that and then you go back to the taxpayers as %Te do here in the state and say this is what we have to have.  And that is ...  if we had a limit, then you have a dollar figure at the top that says this is as high as you can go.  The constituents, the citizens of the state, they can do their budgeting and then it's up to the state to bring everything back underneath that dollar figure.  I'm so concerned about the State of Nebraska here where we have state employees that are growing faster and faster every hour.  We add them here in the Legislature, yet ...  you know, I just pulled out the Nebraska Labor Market information which you all got at your desk.  The civilian labor force in Nebraska is 890,000 people.  Yet within state government alone we have over 17,400 people.  Figure that out, figure that out, Senators.  We have 1,600,000 people.  We have 870,000 people on the civilian work force and we have over 100,000, maybe 110,000 public employees in this state.  We're out of balance.  We're out of whack.  We just cannot keep doing that, and so to come up with a lid, be it 4 percent like Senator Jones and I signed onto, or a lid like Senator Warner's, I Just think we have to do that.  We have to maintain ourselves on a strict budget or we're going to be losing people out of the state.  Every person that moves out of the state, then there's one less to pay taxes so we just have to do that.  I would certainly encourage Senator Warner to put his bill in next year.  I would cosign it.  I would be happy to support him in it but we just must get a control on this.  I'll turn it back over to Senator Jones.


SPEAKER WITHEM:  Senator Jones.


SENATOR JONES:  Yes, Senator Jensen, thank you, and I just want to say, reiterate again the reason we did this is because it's hard to go back out in your local district and do anything without saying we're going to do something down here so I know they're all going to be asking me that, but with Senator Warner's bill being introduced just ahead of ours and it's proved not germane, at this time I'd like to respectfully withdraw mine.




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SPEAKER WITHEM:  It is withdrawn.


SPEAKER WITHEM:  Mr. Clerk, next item.


CLERK:  Mr. President, the next amendment I have to the bill is by Senator Hall.  (FA314 appears on page 2581 of the Legislative Journal.)


SPEAKER WITHEM:  Senator Hall.


SENATOR HALL:  Thank you, Mr. President and members, the amendment that we're dealing with was passed out, and I need to apologize to the body.  I did not initial it.  It was an oversight on my part.  It is AM2060.  You just received it about 10 minutes ago on your desk and it's to LB 613.  It's an amendment to the Standing Committee amendments, and because it is an amendment to the Standing Committee amendments, Mr. Clerk, I do need to make one change in the amendment, and if you can follow along on line 1 of the amendment where it says on page 5, line 10, that should be line 14 because it should be to the E & R amendments and I drafted it to the Revenue Committee amendments.


SPEAKER WITHEM:  You're asking for a substitution?


SENATOR HALL:  If I could so substitute, Mr. President.


SPEAKER WITHEM:  Is there an objection to the substitution?  Hearing none, Senator Hall, proceed.


SENATOR HALL:  Thank you, Mr. President.  The proposal is one that I bring on behalf of the City of Omaha but it does affect a number of other entities.  It says that, and I'll just read it to you.  It's a paragraph long.  "In addition to the increase permitted by section (1) of this section," and that section (1) that we're talking about is the provision that allows for the change up to 4 percent in relation to the consumer price index.  it says, "In addition to the increase permitted in subsection (1) of this section, a municipality or county may increase the anticipated aggregate receipts from property taxes by the amount necessary to comply with a final order, judgment, ruling, or award of the Commission on Industrial Relations upon an affirmative vote of a majority of the governing body.  Such vote shall be taken at a public meeting of the governing body, a




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hearing called pursuant to this subsection (1) of this section at which there is an opportunity for testimony on the increase proposed under this subsection or (b) at a special public hearing called for purposes of receiving testimony on the increase proposed under this subsection." What it is is the provision that says in relation to a ruling that comes down from the CIR that the local governing body in a public meeting or at a special meeting would have the ability to increase the receipts from property taxes for purposes of paying for that CIR.  ruling.  In effect, it's probably for the most part going to deal with police and fire unions and I believe to the extent that the City of Omaha's interest lays with this issue as that's where it directly will fall.  It is a provision that merely says that the CIR rules, we have to pay.  They want to have the ability to increase the receipts from property taxes for purposes of covering that ruling.  With that, I would respond to any questions that members might have and, again, I apologize for the fact that I forgot to initial the handout.




SENATOR CROSBY:  Thank you, Senator Hall.  Discussion on the Hall amendment, Senator Withem.


SPEAKER WITHEM:  Yes, Madam Chair, members of the body, I have not visited with Senator Hall about this at all.  I just saw that the amendment filed and I was going to pass off the baton of chairing the session to Senator Crosby anyway and I thought I'd make a comment or two about this.  I would be supportive of the amendment and draw the analogy to the lid that exists on local school districts.  Back when we passed LB 1059, one of the important parts of passage of 1059 was the fashioning of the, in that case it's a budget limitation lid.  And we did consider what should be under and what should not be under and, Senator Hall, I believe it's accurate that school districts, I don't believe you mentioned this, that school districts do, in fact, have this exception.  I don't think it has an abuse by any school district.  We've had about five years of experience with it.  The rationale being that we want ...  by imposing lids we want local subdivisions, cities, counties, school districts, all of those to exercise good sound judgment and keep their expenses those to down.  When there is an item that is physically outside of the control of those local officials, we have given exceptions.  We've done a number of those within the area of schools.  Some of them may be too great an extent but this is one that I think




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makes sense.  If a court comes down and says to a local subdivision, you have to pay additional salaries beyond those which were proposed, that is beyond the control of the local elected officials, so I think Senator Hall makes a good point.


SENATOR CROSBY:  Thank you, Senator Withem.  Senator Jensen, on the Hall amendment.


SENATOR JENSEN:  Yes, Madam President and members of the body, I thank Senator Hall for bringing this amendment forward.  Certainly cities of metropolitan class and smaller also when they enter into negotiations with their unions, they do that on a good faith initiative, but then sometimes if there is some dispute arises and it does go to a CIR board and it's overturned, those dollars sometimes are substantial and they just cannot make that up.  So I think it makes sense.  It's a good amendment.  I would certainly encourage the body to adopt it.  Thank you.


SENATOR CROSBY:  Thank you, Senator Jensen.  Senator Hall.  Yes, there are two.  Senator Maurstad.


SENATOR MAURSTAD:  Thank you, Madam President, if Senator Hall would yield to a question.


SENATOR CROSBY:  Senator Hall.




SENATOR MAURSTAD:  I think you indicated in your opening, but I just want to clarify that school districts already have this authority?


SENATOR HALL:  That's correct.  Senator Withem brought that issue up.  I was going to mention it but they do currently have that luxury, I guess.


SENATOR MAURSTAD:  I guess as I read this, I didn't realize that they had that authority, but as I read this, one of the things that popped into my mind that you might comment on is to whether or not you feel this might actually provide an incentive for municipalities and counties to maybe go to CIR as opposed to settling beforehand.


SENATOR HALL:  Madam President, members, Senator Maurstad, I




May 25, 1995 -- LB 613


don't believe that would happen.  The last thing I think that the city would want to do is to go to CIR if they can't first negotiate a compromise because that's expensive for everyone involved.  It takes time.  The ruling that might potentially come out, which could come out two to three years down the line, actually, is a crapshoot and anybody who can avoid that, I guess, rolling of the dice, if you will, will try to but sometimes you just hit an impasse and you don't have any choice.


SENATOR MAURSTAD:  And I agree in my experience that that is, in fact, the case with rational parties on both sides.  That would be the...


SENATOR HALL:  That's a prerequisite.


SENATOR MAURSTAD:  But would you agree that this might provide some incentive; if you are fairly close, you thought you were within a reasonable band of what the CIR might rule, that there is at least some incentive, if they're tight budgets ...


SENATOR HALL:  Well, there...


SENATOR MAURSTAD:  ...  if they get a ruling that...


SENATOR HALL:  Potentially you could argue that.  The fact of the matter is though if you're that close you're going to pay for it one way or the other.  You're either going to pay for it built into the budget in terms of your mill levy or you're going to come back after the fact, if we should adopt this amendment, hopefully, and then have to have a public hearing and say, look, because the CIR ruled this way, we have to raise property taxes in order to pay for it.


SENATOR MAURSTAD:  And them my last point, I just want to clarify, this ...  if expenses associated with this would not fall outside, you would have to, in fact, have taken it to the CIR and received some sort of a determination by them.  If you got there and you had a marriage at the courthouse steps, any expenses that are associated with up to that point in time you could not...


SENATOR HALL:  They would not qualify under der this amendment.  It reads the final order, judgment, ruling or award of the of I Commission Industrial Relations, which means you've had to walk through that process.




May 25, 1995 -- LB 613




SENATOR HALL:  If you settled at the door, it wouldn't qualify.


SENATOR MAURSTAD:  Yeah, and I wanted to clarify that to make sure that was, in fact, the case.  Thank you, Senator Hall.


SENATOR HALL:  Thank you.


SENATOR MAURSTAD:  I'm going to listen a little bit more to the debate here.  I have to indicate that I was not familiar with this before.  I, of course, think that we ought to provide local subdivisions as much flexibility as we can, especially when we talk about having in place the need for a public meeting and also an affirmative vote of the majority of the governing board.  Well, I guess I've got another question, Senator Hall.  It says the majority of the governing board, within the school districts, is that a majority of the governing board with the school district or is it a supermajority on the vote?


SENATOR HALL:  I believe with regard to the school boards...


SENATOR CROSBY:  One minute.


SENATOR HALL:  ...  the same way.  It's a majority.


SENATOR MAURSTAD:  So it is consistent?




SENATOR MAURSTAD:  And this would be a similar provision if they were just taking a vote to increase I percent is a majority vote also?


SENATOR HALL:  Well, the I percent provision over and above what is allowed, now that's a supermajority.


SENATOR MAURSTAD:  That is a supermajority.


SENATOR HALL:  That's a 75, three-fifths, three-fourths rather.


SENATOR MAURSTAD:  How about the ADA provisions, is that a supermajority, do you recall?  I suppose I could look in the bill.  Maybe...




May 25, 1995 -- LB 613


SENATOR HALL:  I do not believe it is.  I believe that that is just a simple majority for similar types of reasons because they are issues, as Senator Withem explained, that are outside the control of the local body.  They have been basically passed on by the federal government.  We have to comply.  This is a ruling out of the CIR.  We have to comply at the local level so it's a, I think, a majority of that governing body, but all involve I believe public hearings in which to take those votes.






SENATOR CROSBY:  Before the next speaker, I'd like to call the Legislature's attention to a guest we have this afternoon, Ron Hoffman of Lincoln is under the north balcony.  He's from the 29th District which happens to be my district.  Ron, would you like to stand up and be welcomed by the Legislature.  Thank you for being here.  Senator Will, on the Hall amendment.


SENATOR WILL:  Thank you, Madam President, members of the body, I rise in support of the Hall amendment.  I think it has been thoroughly explained and I think the questions have been good.  Certainly, I think we don't want to put ourselves in a box by putting a political subdivision in a position where it can't comply with a judgment, a ruling and I think that the safeguards in this amendment with respect to the hearings are certainly adequate to inform the public as far as what is being contemplated by this amendment, should we adopt it.  I would certainly support it and I would yield to Senator McKenzie at this point.


SENATOR CROSBY:  Senator McKenzie, you have about four and a half minutes.


SENATOR McKENZIE:  Thank you, Madam President and members of the body.  I, too, will be supporting the Hall amendment and based primarily on the fact that I believe if we look at what we have allowed for schools in terms of CIR rulings that it again makes sense for municipalities and counties to be allowed the same exemption from within the lid.  I realize the issue of potential for encouraging that kind of litigation, although...  or CIR controversies.  However, I also believe that political subdivisions don't like to find themselves in that situation




May 25, 1995 -- LB 613


unless it's absolutely necessary.  With that, I would thank Senator Will for yielding me a bit of time and ask for your support.


SENATOR CROSBY:  Thank you.  Senator Will.  Thank you.  Senator Hall.


SENATOR HALL:  If I night, I would then close on the amendment, Madam President.


SENATOR CROSBY:  All right, you may close.


SENATOR HALL:  Thank you.  Thank you, Madam President and members, I appreciate the support as well as the questions from all the members as well as the questions of Senator Maurstad and the comments of Senator Withem in relation to the similar provision that is in place right now for schools.  The measure is really...  it flies in the face of the earlier amendment that I had but not totally because the one previous said that, look, let's do away with the 1 percent provision.  This one says that you've got an issue that you can't control, one that you have been told you have to pay.  And as I stated to Senator Maurstad and he knows very well that these rulings could take as long as two years.  It's not unusual for a union to work without a contract.  I mean we've experienced that here at the state level as well and then that ruling comes down from the CIR and the ruling applies not only to the year in question but any subsequent time that has elapsed since the filing with the CIR.  It is an exemption to the lid but is an exemption that will rarely be used.  It will not be one that is commonplace in terms of the process and for that reason I do support the measure and would hope that the body would adopt it to LB 613.  Thank you, Madam President.


SENATOR CROSBY:  Thank you, Senator Hall.  You've heard the closing.  The question is the adoption of the Hall amendment to LB 613.  All in favor vote aye, opposed no.


SENATOR HALL:  I believe I'm going to need a call of the house.


SENATOR CROSBY:  There is a request for a call of the house.  All in favor vote aye, opposed no.  Record, please.


CLERK:  11 ayes, 0 nays to go under call.




May 25, 1995 -- LB 613


SENATOR CROSBY:  The house is under call.  Would all senators please record your presence and would those outside the Chamber please return and record your presence.  Would all unauthorized personnel please leave the floor.  Senator Abboud, Senator Avery, Senator Beutler, Senator Brashear, Senator Bromm, the house is under call.


SENATOR HALL:  Call-in votes.


SENATOR CROSBY:  We are voting on the Hall amendment to LB 613.  Senator Hall said he will accept call-in votes.  Senator Elmer, Senator Hartnett, the house is under call.


CLERK:  Senator Jones voting yes.  Senator Jensen voting yes.  Senator Hartnett voting yes.  Senator Vrtiska voting yes.  Senator Brashear voting yes.  Senator Wickersham voting yes.  Senator Withem voting yes.  Senator Pedersen voting yes.  Senator Avery voting yes.  Senator Bromm voting yea.  Senator Fisher voting yes.  Senator Lindsay voting yes.  Senator Schrock voting yes.  Senator Elmer voting yes.


SENATOR CROSBY:  Record, please.


CLERK:  26 ayes, I nay, on the adoption of...


SENATOR CROSBY:  The Hall amendment is adopted.  I will raise the call.  Mr. Clerk.


CLERK:  Madam President, the next amendment I have to the bill is by Senator Robinson.  Senator, I have 2389 in front of me.  (See page 2581 of the Legislative Journal.)


SENATOR CROSBY:  Senator Robinson.


SENATOR ROBINSON:  Madam President and members of the body, I bring to the body...  I don't have the amendment passed out but I can explain it.  Basically, what the amendment says is a school district shall not increase the amount it receives from property taxes over the preceding school fiscal year by more than 6 percent.  Now, as you know, there's a ...  the lid on schools is increase...  it's going to be a, I think it's 3.5 ...  4 to 5.5, isn't it?  Yeah, it's from...  it's 3 to 5.5 percent now.  it's not on...  it's not on property taxes, it's on budget- lid.  And the reason I brought this is that I have a school district that in the last two years, two years ago they increased their




May 25, 1995 -- LB 613


property tax by 12 percent; last year they increased it 16 percent.  Both of those figures do not include the increase in valuation.  And I know, with the tax study coming up, the main reason I brought this is that I think that it's incumbent upon us to take a good look at what's outside of the lids for school districts because communities cannot...  it may be three or four more years before we...  if we do get a reduction or a lid on property tax.  I think it's...  I think we have to take a look at this, it's too high, communities cannot stand those increases.  And I know some schools don't have that but most of them, if you check the increase in property tax, probably about the lowest ones are 7 or 8 percent, and I think that it's ...  I think this is something that we should take seriously.  I think the Education Committee is going to have to take a good look at the things that we place outside of the lid for school districts.  And with the ...  with all the talk we have about reducing property taxes.  Now I say 6 percent.  Well, I doubt very much if there will be many school districts that will ...  won't increase their property tax more than that.  And I want you to know I have...I have amendments in front of me that would go from 6 percent to 7 percent to 8 percent to 9 percent.  And I know that the people that are here present that we would not pass any of these.  The reason I'm bringing it here is to focus in on the things that are outside of the lid for school districts, and we know that school districts is the subdivision that takes the most property tax.  So, with that, I will withdraw the amendment.  Thank you.


SENATOR CROSBY:  Thank you, Senator Robinson.  It is withdrawn.  Mr. Clerk.


CLERK:  Madam President, the next amendment I have is by Senator Robinson.  AM2391, Senator.  Pull that?  Thank you.  Senator McKenzie would move to amend.  (AM2017 appears on page 2582 of the Legislative Journal.)


SENATOR CROSBY:  Senator McKenzie, to open on your amendment.


SENATOR McKENZIE:  Thank you, Madam President, and members, the amendment is before you, AM2017.  And I offer this just to make some statements related to the concerns that we heard in the first round of debate about when we're asking schools to make tough decisions about their budgets, that often we see things happen similar to what happens when we attempt to cut an agency's budget-, that a district will identify key programs, band uniforms, the art program, music, other areas, rather than




May 25, 1995 -- LB 613


look for cuts in spending that might come from administration and management or other such areas of the budget.  So, basically, the language of the amendment just states that when we ...  when we ask school districts to look for those reductions in their budget that we want to protect the instructional expenditures for children, that we want to encourage reduction in management, middle management, central office expenditures, positions that are not directly related to the education of children, that we want it cut from administrative travel or memberships or money that we know, any of us who have been in education, is often there, before we start talking about cutting what we're about in education for kids.  I, again, offer it for the opportunity to discuss the intent.


SENATOR CROSBY:  Thank you, Senator McKenzie.  Senator Bernard-Stevens, on the McKenzie amendment.


SENATOR BERNARD-STEVENS:  Thank you, Madam President, members of the body, I, as a Senator, I rise representing obviously the constituents of Lincoln County but also as a state senator, and I would have to oppose the amendment based upon the concept that micromanaging is not the place for the Legislature to do so, it's the elected local officials and their philosophy that should determine where cuts are or are not going to be made.  But understanding that Senator McKenzie is going to withdraw the amendment-, I would like to speak just as an individual, not as a senator representing the people, and as my own personal self.  Senator McKenzie, I agree wholeheartedly with what you're trying to do.  I have felt for a long time that one of the things that we had forgotten, as a state and maybe even as a country, is that our education system is to teach basics of knowledge and thinking skills of knowledge so that our young people can participate and improve the life that we share and that they will share as they become adults.  We've gotten carried away in all of the other things that we're trying to do, and it is not to say that athletics or art or whatever the case may be are not all, mock trial, being an example, I was a part of and supported strongly, are not all educational things.  Students can learn from all things.  All things are educational but there is going to become a point, and I believe the point is now, we just haven't quite philosophically gotten to the point where we need ...  where we're willing to make the decision yet, where we will be making decisions to augment the academic portion and the community and other areas are going to have to pick up the other part of it.  The education of a child is a community process and




May 25, 1995 -- LB 613


for too long we've just dumped it on the schools and said teach them to do all things and we expect all of these good things to happen.  And, as budget cuts are coming, and they have come on our school systems, they have not been able to adjust properly.  They have not been able to reduce in all of the areas.  They still try to maintain all things to all entities; even today some school systems are arguing whether to add soccer to the program, or add baseball to the program, and we're talking about areas that ...  and not just to pick on sports, just those two that came to mind, we're talking about schools ...  trying to get a philosophy where, as we reduce the cost of education, we also have to emphasize the academic portion of that.  And I believe at some point we're ...  we're very close to the point where there is going to be a major funding philosophy change in our schools based upon and it will come about by fiscal pressures, that they will simply have to make those decisions.  So, as an individual, I, personally, support most of all that you said.  As a senator, however, I would have...  if it would come to a vote, I would have to vote no.


SENATOR CROSBY:  Thank you, Senator Bernard-Stevens.  Before continuing, Senator Brown has as her guests in the north balcony some of the people we're talking about right now, 33 fourth graders from Underwood Hill Elementary School in Omaha.  With them is their sponsor.  Would you all please stand and be welcomed by your Legislature.  Thank you.  Thank you for being with us.  Senator Will, on the McKenzie amendment.


SENATOR WILL:  Thank you, Madam President, members of the body, I will be brief since it appears that the amendment will be withdrawn.  But I will rise in support of the amendment even as a state senator because I think we've started down the road of managing these entities anyway by the very bill itself, which is talking about spending and levy limitations.  And I think, certainly, the least we can do is...would be to include something like this which would simply state legislative intent., that we recognize what the basic function of a school system is and that is to provide education to a child and activities for those children.  They are the focus of the school district, or at least they should be, and I would see no harm at all in including something like this in the bill.  This is, in fact, I would applaud Senator McKenzie for bringing this.  If she does bring this to a vote, I certainly will be supporting it.


SENATOR CROSBY:  Thank you, Senator Will.  Senator Brown.




May 25, 1995 -- LB 613


SENATOR BROWN:  Madam President and members, I, too, like Senator Will, will be very brief and I would echo what he has said, that I will rise as a senator and support this amendment.  I have heard so much from parents in my district about this issue that I just feel like I have to pat Senator McKenzie on the back for bringing it forward.  Thank you.


SENATOR CROSBY:  Thank you, Senator Brown.  Any further discussion on the McKenzie amendment?  Seeing none, Senator McKenzie, do you want to close?


SENATOR McKENZIE:  Madam President, just to thank those members who have stood up to support the amendment, and, as I said earlier, what I wanted was on the record some of what my feelings are about knowing that we are asking schools to look for some budget reductions and knowing, in fact, that my concern is about looking for areas to protect in those budgets that are directly related to the quality of education we provide to kids.  With that, Madam President, Mr. Clerk, I would ask to withdraw the amendment.


SENATOR CROSBY:  Thank you.  It is withdrawn.


CLERK:  Madam President, Senator Maurstad would move to amend.  (FA315 appears on page 2582 of the Legislative Journal.)


SENATOR CROSBY:  Senator Maurstad.


SENATOR MAURSTAD:  Madam President, this is a very ...  a very simple, simple amendment to AM2060 that Senator Hall ...  and it was adopted by this body just...  just a couple of minutes ago, and it merely adds community colleges as one of the entities on line 3 of AM2060, if the body still has it in front of them.  It adds ...  strikes the word "or" and then adds "or community colleges" after the word "county", may increases the anticipated aggregate receipts.  As everybody is aware, community colleges are also under the CIR, have similar staffing needs and concerns, as do the municipalities, counties and school districts.  So I would ask the...  I'm sorry I couldn't get this amended before Senator Hall started his closing, but would ask the body to adopt this amendment to 613.  Thank you.


SENATOR CROSBY:  Thank you, Senator Maurstad.  Any discussion on the Maurstad amendment?  Seeing no further discussion on the




May 25, 1995 -- LB 613


Maurstad amendment, would you want to close?


SENATOR MAURSTAD:  Waive closing.


SENATOR CROSBY:  He waives closing.  The question is the adoption of the Maurstad amendment to LB 613.  All in favor vote aye, opposed no.  We're voting on the Maurstad amendment to LB 613.  Have you all voted?  Senator Maurstad.


SENATOR MAURSTAD:  Madam President, at this time I would request a call of the house and I would accept call-in votes.


SENATOR CROSBY:  There's a request for the call...  a call of the house.  All in favor vote aye, opposed no.  Record, please.


CLERK:  16 ayes, 0 nays to go under call, Madam President.


SENATOR CROSBY:  The house is under call.  Would all senators please record your presence.  Would all those outside the Chamber please return to the Chamber and record your presence.  And would all unauthorized personnel please leave the floor.  We are voting on the Hall ...  the Maurstad amendment to LB 613.  Senator Maurstad has indicated he will accept call-in votes.  We're looking for Senators Abboud, Lindsay, Beutler.  Senator Pirsch, Senator Bromm.  Senator Lynch.  Senator Vrtiska, Senator Warner, the house is under call.  Senator Wickersham, Senator Withem.  Senator Kristensen, the house is under call.  We are voting on the Maurstad amendment to LB 613.  Senator Maurstad has indicated he will accept call-in votes.


CLERK:  Senator Kristensen voting yes.  Senator Schrock voting yes.  Senator Hartnett voting yes.  Senator Withem voting yes.  Senator Bromm voting yes.  Senator Beutler voting yes.  Senator Hudkins voting yes.  Senator Preister voting no.


SENATOR CROSBY:  Senator Pirsch, Senator Wickersham, the house is under call.


CLERK:  Senator Pedersen, was that an indication?  Thank you.  Senator Pedersen voting yes.  Senator Vrtiska voting yes.  Senator Schmitt voting yes.  Senator Wesely voting no.


SENATOR CROSBY:  Senator Pirsch and Senator Wickersham, the house is under call.  Senator Maurstad.




May 25, 1995 -- LB 613


SENATOR MAURSTAD:  I would ask for a roll call vote in reverse order.


SENATOR CROSBY:  There's a request for a roll call vote in reverse order.  Do you want to wait for the two who are not here, Senator Maurstad?  Senator Pirsch and Senator Wickersham.


SENATOR MAURSTAD:  Yeah, I'll wait.  I


SENATOR CROSBY:  Senator Wickersham, would you like to check in.  Senator Pirsch is here.  There's been a request for a roll call vote in reverse order.  We are voting on the Maurstad amendment to LB 613.  Mr. Clerk, please call the roll.


CLERK:  (Roll call vote taken.  See pages 2582-83 of the Legislative Journal.) 25 ayes, 4 nays on the amendment.


SENATOR CROSBY:  The amendment is adopted.  I will raise the call.  Mr. Clerk.


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


SENATOR CROSBY:  There's nothing further on the bill.  Senator Maurstad.




SENATOR CROSBY:  Would you like to move the bill?




SENATOR CROSBY:  Shall I give you the words?


SENATOR MAURSTAD:  I would move to advance LB 613 to E & R for engrossment.


SENATOR CROSBY:  You've heard the motion.  All in favor vote aye, opposed no.  Sorry, all in favor say aye.  Opposed no.  it is advanced.  I'm sorry, I did not hear the request for a machine vote.  There is a request for a machine vote on the advancement of LB 613 to E & R engrossing.  All in favor vote aye, opposed no.  Record, please.


CLERK:  29 ayes, 6 nays on the advancement of LB 613.




May 25, 1995 -- LB 180, 519, 613


SENATOR CROSBY:  LB 613 advances.  The next bill is LB 519.