Debate Transcripts

LB 269 (1997)

General File

April 30, 1997

SPEAKER WITHEM PRESIDING

SPEAKER WITHEM: Good morning, ladies and gentlemen. Welcome to the George W. Norris Legislative Chamber. As we begin today, the sixty-sixth day of this Legislature, pleased to have with us our chaplain coordinator, Harland Johnson, who will deliver the morning invocation.

HARLAND JOHNSON: (Prayer offered.)

SPEAKER WITHEM: Thank you, Harland. Members, please report to the Chamber and check in. Record, Mr. Clerk.

CLERK: I have a quorum present, Mr. President.

SPEAKER WITHEM: A quorum is present, the Legislature is in session. Mr. Clerk, are there any corrections to the Journal?

CLERK: Mr. President, I have no corrections this morning.

SPEAKER WITHEM: Are there any messages, reports, or announcements?

CLERK: I have no messages, reports, or announcements at this time, Mr. President.

SPEAKER WITHEM: With that, let me make sure, we tried to put out an e-mail to people this morning so you'd be notified before you came to the floor, recognizing that some of you may not have read that. We will be taking a brief journey away from LB 806 this morning. The reason for that is simply to allow the folks that have amendments on that to maybe examine their amendments, visit with other people, maybe package some amendments together so we can move more expeditiously on the bill when we come back to it. We will be then, this morning, passing over LB 806, moving with the rest of the agenda, which brings us to LB 269. LB 806, though, when you come back after lunch, will be the first bill on the agenda, at least those are the plans as of this moment. With that, Mr. Clerk, LB 269.

CLERK: Mr. President, LB 269 was introduced by the Revenue Committee and signed by its members. (Read title.) It was

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introduced on January 13, referred to the Revenue Committee, advanced to General File. There are committee amendments pending, Mr. President.

SPEAKER WITHEM: Senator Kristensen, I understand you will be opening on the bill and also handling committee amendments, is that correct?

SENATOR KRISTENSEN: Yes, Mr. President.

SPEAKER WITHEM: Senator Kristensen, to open on LB 269.

SENATOR KRISTENSEN: Thank you, Mr. President and members of the Legislature. This is the portion of the session that begins with the Revenue package. We, as members of the Revenue Committee, have divided up the package, each will be dealing with a separate area, and I believe that you will be able to find this package very consistent with what we've done in the past. And let me begin, perhaps, instead of starting right out with what this particular bill does, is to try to put this into perspective a little this morning. As you remember two years ago, about this time, we introduced a piece of legislation and asked for permission, the Revenue Committee, to suspend the rules to introduce additional bills. That bill was a constitutional amendment that dealt with levy limitations. And they were constitutional levy limitations. And they were put into the package or into the mix of legislation because of the extreme concern of the citizens of the state about property tax. At that point in time, there were numerous petitions being circulated throughout the state. There were numerous legislative proposals beginning to circulate throughout the body about the amount of property taxes, the impact that that has on the taxpayer, the desires of people to on one hand reduce spending, on the other hand to increase the amount of funding for education, and various other political subdivisions. We suspended the rules. That was introduced. The Revenue Committee, in the middle of a session, began to hold hearings. We held hearings throughout the state of Nebraska, well-attended hearings; hearings that were done by video conference to crowded rooms, and the interest grew greatly. Through that next summer, the Legislature itself, in almost an unprecedented manner, had informational hearings and began the process of educating not

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only ourselves but the public on what the issues of property tax would be and what issues would have to be done. We had as many as 35 and 40 members of the Legislature come to those meetings throughout that summer. Throughout the fall, the various committees, all of who had some impact and some property tax in their various committees, held hearings about what could be done, what sorts of things could happen, to address the property tax issue. The very first day of last year's session, as you remember, there were reports from the various committees, and there was a published report which summarized many of those suggestions. Many of those bills were introduced, had public hearings, and was the second phase, and that was sort of the action phase. The Revenue Committee decided at that point in time that putting levy limitations into the constitution was not a good idea. And the reason for that was that it was going to cement those levies in there. And that this was going to be a step-by-step process of beginning to examine and narrow down how best to address the property tax. We knew that levy limitations was the first step that we wanted to do, but that if we put those into the constitution they would never be able to be changed, and they would be frozen. And so the Revenue Committee, then, last year, introduced a series of bills that would statutorily put in those limitations. The... it was not one bill, it was a series of bills, if you remember LB 1114 was probably the first one that we talked about that put in the actual levy limitations themselves. And just as a review, for the schools, as we've probably talked about and you've heard about in LB 806, make reference to, but we put that levy limit at $1.10 until the year 2001 when it will go down to 1.00. The community colleges were reduced down to 8 cents, and then in 2001, they were to go to 4 cents of levy. Our NRDs were at 4.5 cents, ESUs at 1.5 cents. The counties were at 45 cents, they are in the constitution, by the way, at 50 cents, but we put them in at 45 cents and then if they had cooperative efforts they got to use the other, the other nickel to make up their 45 cents. Within that 45 cents, the counties could allocate up to 15 cents in what we called a miscellaneous district levy. And those are all sorts of cemetery districts, hospitals, historical society, ambulance districts, parking districts, townships, drainage districts, ag societies, and so on. The cities were given the same 45 cent levy limitation, with that same attitude that they could use another nickel if there were

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come cooperative efforts. And the grand total is, and we were trying to keep the levy, at least to begin with, at $2.00, at less than $2.25. And that was accomplished, it'd be down to $2.10 in the year 2001. We also put in there, and these levy limitations would begin in the year of 1998, between last year and when the levy limitations would come into place, LB 299 was introduced and passed, and that put in place spending limitations. And there was a series, and in fact, this year is a zero growth spending limitation on many of these subdivisions. And there is an escape hatch to exceed it by a super majority or a majority of their governing body. And then if they do choose, beginning in next year, they are able to exceed these levy limitations by a vote, unless they're a village, and then it's, they can have a town hall meeting, and many of the smaller districts could do it by a town hall meeting. That was the sum and substance of what was done. Last year, also LB 1085 was passed, which allowed and gave the tools to many of the political subdivisions to begin the process of consolidation, joint ventures, mergers. We also made a distribution formula to assist, particularly the smaller communities, but many of our municipalities who are going to be put under this levy limitation, and we created a funding mechanism to assist them in living with the levy limitations. We did not necessarily do that with the counties and we did not do that with the schools. And so maybe part of this speech best belongs in 806, but I think as we, as we narrow down part of 806, we'll be able to put all this into perspective. But last year's process was not the end, and it was not put in cement. And we purposely did not put them in cement because we knew that the levy limitations were going to have to be adjusted as we began to give people two years to look at how they were going to do it. How were we going to live under those levy limitations? Counties, for example, have been very active in looking at various ways to do joint ventures, to live within those limitations. The community colleges have been extremely good in looking at efficiencies and, and in fact, doing what many of us would hope that they would do, limiting the amount of administrators, changing the way they do business. And they have come back to us and they've probably been the, on the fastest track of doing some of those things. School districts took two different approaches, I think. There were those school districts that said, we know this is a reality, we're going to have to live

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with this. And they began examining how can we cooperate with the cities and the counties. There are examples of many of those joint functions. We also had a provision last year where there'd be joint meetings for people to look at ways to work together. And really institutionally we made them come together and work. That's paying some dividends. And-there are many, many successes I think you'll find of people doing that. That was one attitude, we'll work with it, we know it's going to happen. The other attitude is, they're never going to do it. They're never going to, they're never going to stick with this; they're going to delay; they're going to repeal; and we're not going to have to live under levy limitations, and we're just going to sit here with our head down and we're going to survive this war. You saw some of that in the last few days in the 806 debate. Not all of them. And I don't want to suggest it is anywhere near all of them. But there are two schools of thought, and that's what they did. The Revenue Committee, this year, what, what approach did we take? Throughout the summer and particularly in the fall, there were series of, again, interim study meetings, primarily looking at ways ...

SENATOR CROSBY PRESIDING

SENATOR CROSBY: One minute.

SENATOR KRISTENSEN: ... to begin to put this process together. What would be the next step. Obviously, one of those considerations were that there had to be a different state aid to schools formula, and that the Revenue Committee didn't have, or at that point, was going to allow the Education Committee, because of their expertise, to work on that formula. But there are many other things that we began to exam-and how are we going to live with these levy limitations, what sorts of fine tuning do we need to do. Have scoured the statutes, found amazing things in those statutes that need to be changed, cleaned up, and fit into there. That's where this series of bills starts with. When I open on the committee amendments, Madam President, I'd like to take a little bit more time and, and start this process, and then we can discuss specifically what's in the bill.

SENATOR CROSBY: Thank you, Senator Kristensen. Before we

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continue, Senator Jon Bruning has brought doughnuts for everyone today. And it's a very special occasion because he's 28 years old today. Don't you all wish you were 28 years old today? Happy birthday, Jon. And the doughnuts, the doughnuts are under the north balcony if you'd like to have one. We will continue with the committee amendments. Senator Kristensen will introduce the committee amendments. (AM1243 is referred to on page 1304 of the Legislative Journal.)

SENATOR KRISTENSEN: Thank you, Madam President, members of the Legislature. For a moment there, Madam President, you had me going. I figured with doughnuts that we probably had a child, and that Senator Bruning would... so if you're going to do doughnuts for your birthday, we're expecting a bigger and a lot better things when you have that baby. So good luck, Senator Bruning. You're going to need it. What did the Revenue Committee then do for this year? A series of bills and, quite frankly, introduction of many, many bills that we had from years past. Different approaches. We had members who brought in local option sales tax, local option income tax, different ways of funding bills to increase income tax, bills to decrease income tax, bills to increase sales tax, bills to increase liquor taxes, all of our fees, and so on, in a variety of approaches. The committee waded through those. There is a study bill that we'll put out, it is out, it's on General File, and I assume we'll address, where we want to put many of those issues because this is not the end. This will not be the last year for the property tax package. This is just the second year of that step. What we did put out was this bill in particular. This is the bill that does many of the changes tinkering with where we need to be, examination after people saw the levy limitations, what sorts of things there could be. For example, when we do the city allocation, we have a number of entities who should be in the city allocations, city airport authorities, community real development authorities, some home health care nurses, and so on, metro area transitf. of which Senator Will will bring to you for that discussion. Last year when we passed the levy limitations bill, there was a provision in 'there that said, look, if we, we've got a catchall. And if we've not specifically assigned them under a city levy limit or anything, they're going to be put in part of this county miscellaneous districts. Many of these districts that we now put in the green

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copy of the bill are primarily designed to properly allocate them under the city levy. So this is a fairly significant change because as the levy limits come into place and there's some reality that sets in, they'll have to do that. We delay setting the final levy setting date from October 15 to October 31. It also clarifies that the budgets are to be filed by September 20. That not only, at that point this is a little bit of a technical change, but we want to do that, so it needs to only contain the amount of taxes that they're going to need and not the actual levy on September 20. But we're going to set that final levy date on September... or on October 31, and this accommodates a latter setting levy for personal property tax schedules so it's the same as real property tax. And if you remember, depending on which counties you're in, if you're in Lancaster and Douglas and I believe Sarpy, that's April 1 ... May I ... April 1, okay. If you're the rest of the state, that's May. And the second half is due on August 1, if you're in those three counties, and it's September 1 is you're the rest of the state. What we do is make it consistent and put personal property in with real property so those are done. We allow elections to combine county offices. That was something we did last year in LB 1085, to take place at a special elections for this year. So if they want to begin to do that now in anticipation of those levy limits, they can begin to do that. We also give them the ability for taxpayers if people exceed the levy limitations. Right now we have what's called illegal levies. We're not really sure what that means. The Supreme Court's always blurred those terms. But there's clerical errors where you can change a levy. This allows the right, if someone exceeds the levy limits of 1114 or they don't do the proper procedures that are set out in 1085 from last year, we now have what's called an unauthorized levy, they can take that and have a right. to sue and enforce their rights as a taxpayer. And those decisions can then be appealed to the Tax Equalization and Review Commission. The other things that we've done in the package that will follow is LB 306, and that's going to... excuse me, 309, it is 306, I'm sorry. LB 306 begins to look at some of the levy limitations for schools and where we would make some exceptions. If you're an opponents of some of these things, you're going to say, why, they're retreating. They promised us that these were going to be the levy limits. And if you'll look back, what we said last year was, if you

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believe property taxes are a problem, and you truly do, what are we going to have to do to make some changes? And we talked about that it took us several generations or several decades to get to this point. And it's going to take us more than two or three years to get back out of it. And so you're going to have gradually begin to do these things. Yes, the levy limitations were the centerpiece of that and the cornerstone of doing those sorts of things. We did make some committee amendment changes. I'm going to begin to try to run through those committee amendment changes. I know that I may not be able to get all of those done, but here are the following things that we can do. We're going to amend the Interlocal Cooperation Act to allow two or more governments to perform joint services that either one of them could have provided. Before, what happens , if you wanted to have a joint service, both of them probably had to have the authority to perform that service. And right now what we're going to say is if they go together, they can do that as long as one of them had the authority to do it. This would allow for several different functions to be done. It gives more flexibility. I'm going to try to expand on that when I have a little more time and give you some concrete examples of that. The second thing we do with the committee amendment is make earlier the date by which counties must act if they're going to turn over their assessment practices. One of the things we did last year was say, if you want to give your assessment practices to the state.. One, that probably, you've got counties where assessments are very technical, it's a very difficult task, and counties are saying to us, look, we want to give this up, it's too complicated, it's too expensive, and it's not mandatory. if you want to give it to the state you can do so, but the state needs some notice of when we're going to do those sorts of things. We moved that date from January 1 to October 31 of the year before that. So if you were going to, wanted to have assessment practices taken over for the year 1999, you'd had to done that by January 1. We're now going to make you back up to October 31 of 1998. We also provide that the qualifying levy for cities to receive aid under this is 40 cents rather than an average. And this is important because there are cities that are... that are levying right now less than the amount, and they would lose 20 percent of their aid for every cent that they were below the 40 cents. That's the technical part of it. Practicallywhat does it do? You've got cities out there that

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instead of doing an average, it's much easier for a formula to set a figure and say, look, basically that's your local effort rate. That's what you've got to ... you've got to at least contribute that amount to make it work. Similar to local effort rates that we talked about in state aid to schools. Perhaps the biggest change in the committee amendment deals in the area of the community colleges, and that's where I want to spend the rest of my time right now talking about community colleges. We have in the past addressed, and community colleges were part of the levy limitations. And I'm going to look in my notes here real quick. Excuse me as I ... I've got them here but I want to make sure I get- all of those correct. Last year in 1114, we said starting next year it's 8 cents. Then in the year 2001 they're going to be...ratchet it down to 4 cents of property tax. What we did was took a bill that many of you signed on to called LB 408. LB 408 said in 1998 we're going to keep that aid cents, but instead of dropping right off the ledge down to 4 cents, we're going to go to 7 cents and add a penny for capital construction projects. Then the next year...

SENATOR CROSBY: One minute.

SENATOR KRISTENSEN: ... we were going to drop it down to 6 cents and put a cent cap onto that, or a cent onto that for capital construction. The realization there is that you want to keep those buildings because there is some nexus to the communities. You want the buildings to be, have some relationship to the property tax and that the people basically own their infrastructure. This is a way to do that as opposed to having the state pour those monies into those buildings. The community colleges can live with that. They think that that's a good way for them to maintain that identity and have some connection to their capital construction projects. That's what, that's what the community colleges offered with LB 408. The committee did take that in and they ratchet it down to starting with next year making it 7 cents, not 8 cents, and a 1 cent for capital construction and then even next year 7 cents...

SENATOR CROSBY: Time.

SENATOR KRISTENSEN: ... and I cent, finally in the year 2000 that would be 6 cents. Thank you, Madam President.

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SENATOR CROSBY: Thank you, Senator Kristensen. Mr. Clerk, I understand there are amendments to the committee amendments.

CLERK: Madam President, the first amendment to the committee amendments this morning is by Senator Robinson. Senator, I have AM1328 in front of me, found on page 1469 of your Legislative Journal.

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

SENATOR ROBINSON: Yeah, Madam President, members of the body, this is a ... amendment was brought to me by the city of Tekamah. And this amendment changes several statutes which currently requires cities and villages to levy a tax to pay for shade trees. The statute sections are 18-801 and 18-807. They were enacted in 1871 when tree planting in our cities and villages was much more of a necessity than it is today. This was brought, as I mentioned, by the city of Tekamah. Tekamah's one of those cities that's having a tough time complying with the limits of LB 1114. And I understand that the League of Municipalities also supports this amendment, which merely makes the tree tax permissive instead of mandatory. And basically, that's what it is. And I'll try to, any questions, I'll try to answer those for you.

SENATOR CROSBY: Thank you, Senator Robinson. Discussion on the Robinson amendment. There's several lights that were turned on earlier. Senator Coordsen, on the Robinson amendment.

SENATOR COORDSEN: Thank you, Madam President, members of the body. Question for Senator Robinson if he'd respond, please.

SENATOR ROBINSON: Yes, will.

SENATOR CROSBY: Senator Robinson.

SENATOR COORDSEN: I Senator Robinson, would you consider withdrawing this amendment and refiling one simply to strike this section of law?

SENATOR ROBINSON: I certainly would. We were just discussing

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that.

SENATOR COORDSEN: I like, I think, everyone in the state of Nebraska, was not aware of this provision in statute. Doesn't seem to have any good reason to be in statute any more, whether it's permissive or mandatory. So if you would consider that, that might be the better avenue to take with respect to this issue. Thank you, Madam President.

SENATOR CROSBY: Thank you, Senator Coordsen. Senator Robinson.

SENATOR ROBINSON: Are there any other lights?

SENATOR CROSBY: Yes. Yes, there are.

SENATOR ROBINSON: Okay.

SENATOR CROSBY: I could go down... Senator Beutler, Kristensen, Hartnett, Janssen, Maurstad, and Coordsen again. Senator Beutler, did you wish to talk about Robinson amendment or...

SENATOR BEUTLER: No, what I wish to do, Senator Crosby, is give my time to Senator Kristensen so that before we get too far into this, if there are additional amendments, I'd like to afford him the opportunity, if he needs it, to finish his explanation which I thought was excellent.

SENATOR CROSBY: Senator Kristensen.

SENATOR KRISTENSEN: Thank you, Madam President. Thank you, Senator Beutler. It may not get excellent any more, that might be as much as I know. I do have my light on, Senator, Robinson. I will catch your issue. The community colleges came into the committee and basically presented us with a study and an examination of what they've done. The committee found that to be very compelling that there were many things that they had done that we would like to encourage other political subdivisions to do. With that, would require a formula and would require some aspect, if they're going to be cutting that levy and basically making a transition to some more dependence on state monies, they're not only finding efficiencies and making their operations leaner, but by reducing these property

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tax levies, they're going to rely more on some of the state funds. And so a new aid formula was provided in the committee amendments, which basically provides that the community colleges, at their levy limits, if they can get to 40 percent of their funding through that, that we will then be begin to have an aid formula from that point forward to assist them. And basically what it is it's a, a fairly, at that point, simple aid formula. They already have an existing aid formula. Just for some background for you, their current state aid formula is roughly 52 percent of the money that we put in there, and this is about $40 million right now. Fifty-two percent of that goes towards what they call foundation, which means each one of the six community colleges get roughly half that money regardless of programming, just because they exist and it's a fairness issue. Another 38 percent of this fund, and this is the current existing fund and you've got to know it before you can go to the next step, but 38 percent of it's based on each individual campus' FTE and the courses that they offer, the types of credits that they offer, depending on ... there's some that have a more expensive programming effort and some that don't, but that's some recognition that each campus is different. The remaining 10 percent of that is what they called the old equalization end of that formula. A rather complicated formula, did not amount to a whole lot, it doesn't fit anymore. And what we're going to do, and there'll be a later amendment that will deal with that particular aid formula, but I want to make sure that you understand, there is an existing aid formula out there. We supplement that aid formula now and basically set a threshold of 40 percent of the funding for those community colleges. And as they go forward and we take away property tax from them, we're only going to move over to a system that by the time, if we adopt an amendment that we, the committee's got proposed yet to come today, that you will have fairly uniform levies across the state and that you will begin to put them into a system that may reach, over the next few years, almost an equal match. It may be 40... it'll be close to 40 state, 40 to the community colleges, and 20 percent done by tuition and fees. And that would be a balance. But that's a, that's the ... another issue that we have with the community colleges and you will see another amendment to do that. There's one other thing before I move on and I want to use Senator Beutler's time the best I can to give you what I think may be some of the things that'll cause

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a little bit of discussion. It strikes the director...

SENATOR CROSBY: One minute.

SENATOR KRISTENSEN: ... of Veterans' Affairs. If you remember, we have put in there that we're going to take veterans' affairs committees, that many of those are part time throughout the state, and that we want the counties to be able to combine those veterans' affairs committees and make better use of the people that are there and combine them. And so what we've done is turned over the power to the county boards of the various counties to be able to make those veteran service offices in those counties a more efficient operation. And it isn't mandatory, we're not forcing them to do it, but if the counties want to do that, they're going to have control over that because they're the ones that have to put them in their levy, where before they just had a levy they'd certify and off they'd go. Under our system, that's no longer going to happen. The country really has control over the levy limitations. We strike out that the director of Veterans' Affairs, state level, is going to be part of that process.

SENATOR CROSBY: Time.

SENATOR KRISTENSEN: It's going to be done basically by the county boards themselves. Senator Robinson has another amendment.

SENATOR CROSBY: Senator Kristensen, your light is next.

SENATOR KRISTENSEN: Senator Robinson, I want to just finish with the veterans just real quick because Senator Robinson's going to, have an amendment that's going to come up and we're going to deal with the veterans thing so it'll make some sense to cover it now. There are a number of veterans groups who are very concerned that the county boards are just going to do away, they're just not going to have veteran services. And I suggest to you that that will not happen. But those...that's been a function county governments performed for a number of years, but what's happened is that if we're going to put a levy limitation on those counties, they need to be able to control, ultimately, how much levy is out there. They just can't have people coming

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in saying, oh, by the way, we're going to take part of your levy with this mandatory levy limit. And so we took out the mandatory function of that. If you're going to combine two or three of these counties and have one veteran service officer that can do these things, Senator Robinson will have an amendment that will say, look, you've got to at least consult with the veterans groups. You don't have to have their approval, you don't have to have their consent, but you at least got to meet with them so they know what's going on. I think there are a number of the veteran service groups around, and then veteran groups who are comfortable if you've taken out the director at the state level, that there won't be just edicts coming down from the state, thou shalt close here, here, and here, that it will be done at the county level with counties beginning to make those mergers and those changes. I want to just touch real briefly on Senator Robinson's amendment. Do you realize that when we were looking through the statutes that, that your city could have come in and on each lot, I believe, it's each lot, a dollar a lot, that they could have put an assessment on to that for trees. Never had any idea, and I bet there isn't a city around that realized. And it has been there for absolute ever. it's not an ad valorem tax, so it's not exactly a property tax, but it's one of those old things that are in there. Now my preference probably was to just strike that completely out of there, but, Senator Robinson, your amendment basically says it's not mandatory, basically moves it to a discretionary function and, and it leaves it in there. That's consistent with what we've done in the past in the Revenue Committee with taking away mandatory assessments or mandatory levy limitations and moving them over and say, look, you have up to a certain level. For example, let's take a county hospital. County hospital can, can levy up, I think it's up to 7 cents in some circumstances. Before they could always say, okay,. county, here's the 7 cents, you get it, you've got to add it onto the property tax bill. We've changed that last year and said, look, you can go up to 7 cents, but you don't get the right to pile on and force the county to levy that. The county's going to have to consider that and fit that within that 15 cent levy limitation. And this is, this is the same sort of policy, that they're going to have to fit that within there, it's discretionary, and we would hope that people... and as they begin to look in the statutes, we also found last year, for

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example, did you know that counties can have a county telephone system? So when we talk about NPPD, for example, wanting to get into the telephone service, we've got a statute that's just older than the hills that when counties first started, they could do a telephone system. Nobody's ever done it, and right now I doubt if they would want to. Senator Robinson, I'm going to yield some time to you, if you'd like, to look at that section. If you'd want to repeal it outright, I'd support that. If you want to keep it as the way it is, I don't have a problem with that. But I'd yield my time for you to, for some discussion of what we've said, and Senator Coordsen.

SENATOR CROSBY: One minute. Senator Robinson, you have one minute.

SENATOR ROBINSON: Madam President, members of the body, I'd like permission from the body to withdraw AM1328 and substitute it with a floor amendment which would completely eliminate the, that section of law, which Senator Coordsen referred to on his comments.

SENATOR CROSBY: No objections, so ordered. Substitution is made. Mr. Clerk.

ASSISTANT CLERK: Senator Robinson, I now have before me the floor amendment that was recently submitted. (See FA200 on page 1735 of the Legislative Journal.)

SENATOR ROBINSON: Madam President, members of the body, I'd move to repeal this section of law, and that's all I have. It was the section that... it was the section that Senator Coordsen was referring to that had to do with the cities having to put aside, or plant so many trees each year. So if you have any questions I'd be more than happy to address those. Thank you.

SENATOR CROSBY: Thank you, Senator Robinson. Discussion on the Robinson amendment. I have Hartnett, Janssen, Maurstad, Coordsen, Beutler, and Schimek. I will ask each one if... I will ask each one if you want to speak to the amendment. Senator Hartnett, he waives off. Senator Janssen, to the Robinson amendment.

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SENATOR JANSSEN: Thank you, Madam President, members of the Legislature. I would like to give my time to Senator Schimek.

SENATOR CROSBY: Senator Schimek, to the Robinson amendment.,

SENATOR SCHIMEK: Yes, thank you, Madam President and members of the body. Senator Robinson, I'd just like to ask you a question or two. And then if Senator Janssen wants some of his time back, that's fine, but I remember a...

SENATOR CROSBY: Senator Robinson, will you yield for a question?

SENATOR ROBINSON: Sure.

SENATOR SCHIMEK: I remember a discussion on this floor several years ago that was conducted primarily by Senator Pederson's predecessor, Senator David Bernard-Stevens, who came to the Legislature asking for additional funds because of the devastation to the trees out in the western part of the state. And it was a combination of drought and I don't, disease, I don't know what all was involved, but any where you went from Kearney west you could see that they were losing great numbers of trees. And I wonder if we're doing the right thing here in taking away all this discretion to do that when, indeed, some times there are natural disasters that would make it necessary for communities to try to come up with some funds.

SENATOR ROBINSON: Well, that wouldn't preclude the cities from spending money on trees. There may not been...

SENATOR SCHIMEK: No, I realize that, but...

SENATOR ROBINSON: Well, that would be up to the city.

SENATOR SCHIMEK: Those were ... I mean that was extraordinary circumstances, and I'm not sure ...

SENATOR ROBINSON: Well, I, I ...

SENATOR SCHIMEK: ... they could have found those funds within their regular budget, is all I'm suggesting. And I, I'm open to

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it, I just wanted to raise that question.

SENATOR ROBINSON: Yeah, well, the statute was mandatory. And that's what we're doing away with.

SENATOR SCHIMEK: I understand that. I liked your other amendment better, the one you withdrew. And, Senator Janssen, would you like any of my time back? Or your time back? Okay.

SENATOR CROSBY: You have about three and a half minutes.

SENATOR JANSSEN: Well, that, that'd be fine. Thank you. Thank you, Senator Schimek, for giving my time back. But you know, I...the way I understand the way the statute was, you assessed, you could, you could assess a dollar per lot. It was not a tax. Am I right there, Senator Kristensen? It was an assessment rather than a tax of a dollar per lot?

SENATOR KRISTENSEN: Well, it, in effect it's a tax but it's not an ad valorem tax. In other words, it's not based on the value of the property. It was ...

SENATOR JANSSEN: Set amount.

SENATOR KRISTENSEN: It was a set amount of a dollar. And it was mandatory, you shall assess a dollar.

SENATOR JANSSEN: All right, but in order to make that mandatory, then, did the council have to pass...

SENATOR KRISTENSEN: Well, I think...

SENATOR JANSSEN: ...some type of action so to put that thing into play?

SENATOR KRISTENSEN: If you read the statute with its plain meaning, they're to do it.

SENATOR JANSSEN: They are to do that on every lot in the city.

SENATOR KRISTENSEN: And nobody's ever done it. I mean it's not been used. It's not been, you know, it's not been carried out.

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That's the reason when we found it that something we wanted to change.

SENATOR JANSSEN: Well, I imagine it was probably put there when, when most of the cities were pretty much barren waste and, and just had no trees at all.

SENATOR KRISTENSEN: Oh, it's...

SENATOR JANSSEN: Prior to Johnny Appleseed, let's say.

SENATOR KRISTENSEN: It's...well, Johnny and Bud went to school together, so he's probably better to answer that. But I, you know... it's an extremely old statute, and it's probably one that was a great idea when it was put in, and nobody ever did it. I mean I'm not aware that it's ever been utilized.

SENATOR JANSSEN: You know, I, I just, you know, I just am a little, little worry... you worry once in a while because somewhere along the line someone had a very good idea. There are a reason for putting that into the statutes, and when you take something like that out, I think you should be aware of what could happen. So, with that, I'll close. Thank you, Madam President.

SENATOR CROSBY: Thank you, Senator Janssen. Senator Maurstad, did you wish to speak on... Senator Coordsen. Senator Beutler, on the Robinson amendment. Senator Schimek, your light is next. Senator Elmer, on the Robinson amendment.

SENATOR ELMER: Thank you, Senator Crosby. Senator Schimek brought to mind Senator Bernard-Stevens and his characteristic way, pleading with us about trees and the Platte Valley. And it came to mind that I don't think that any city that was involved in that devastation either realized nor used this particular statute. And that we've done some things to help along that line in many ways. And that I would believe that this statute is one that is extremely archaic, we have no more value for it. I would support this amendment in repealing the statute. Thank you.

SENATOR CROSBY: Thank you, Senator Elmer. Senator Vrtiska, on

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the Robinson amendment.

SENATOR VRTISKA: Thank you, Madam Chairman, Chairperson. I support the Robinson amendment. I just want to bring out the point that Senator Elmer just brought out, and that is that apparently nobody's using this, but also bring to your attention that in many communities you'll find around the state that civic organizations are really the primary people who are involved in planting trees that are lost or destroyed or something happens to them. And they don't need a statute in order to get them to do it, they do it because of the pride in the community and the reason that they feel that it's a good idea to keep up their community, or their park, or whatever it is. So I think that the fact that the statute has not been used for so long and seemed to have no value, it seemed to me to be a good enough reason to support Senator Robinson's amendment to just do away with the bill ... or do away with the statute altogether and let people by their own volition move ahead on taking care of the trees in their community. With that, thank you.

SENATOR CROSBY: Thank you, Senator Vrtiska. Senator Robinson, your light is next.

SENATOR ROBINSON: Madam President and members of the body, Senator Kristensen talked about being archaic. Well, that bill was passed in 1871 when I, when I was a freshman in high school. And I want you to know Floyd and Paul were a grade ahead of me in school. So you know it's archaic. Thank you.

SENATOR CROSBY: Thank you, Senator Robinson. Senator Kristensen.

SENATOR KRISTENSEN: Thank you, Madam President, members of the Legislature. I want to correct...and I mentioned that it was a dollar, I believe. And-after I looked at the statutes, one to five, and Senator Robinson corrected me with that. You know, it is an old, archaic statute. I think that the cities will be able to raise that money and they're going to have to get that out of their budgets anyway to find the tree. I don't think it's an issue of being for or against trees. I think it's a tax issue and I'm going to support it. If somebody comes up between now and Select File and says we've got to have those, that tree

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tax back, I'll be willing to listen to that. At this point in time I plan to support Senator Robinson's amendment. Thank you.

SENATOR CROSBY: Thank you, Senator Kristensen. Any further discussion on the Robinson amendment? Seeing none, Senator Robinson. He waives closing. The question is the adoption of the Robinson amendment to the committee amendments. All in favor vote aye, opposed no. We're voting on the Robinson amendment; have you all voted? Record, please.

ASSISTANT CLERK: 26 ayes, 0 nays, on the adoption of Senator Robinson's amendment to the committee amendments.

SENATOR CROSBY: The amendment is adopted. Mr. Clerk.

ASSISTANT CLERK: The next amendment I have is from Senator Robinson. Senator, I have AM1746, and I have a note that you wish to substitute amendment 1789. (AM1789 found on page 1731 of the Legislative Journal.)

SENATOR CROSBY: You wish to substitute 1789 for this one?

SENATOR ROBINSON: That's correct.

SENATOR CROSBY: No object...

SENATOR ROBINSON: Madam President, members of the body, yes, that's right.

SENATOR CROSBY: No objections, so ordered. You may open on your amendment.

SENATOR ROBINSON: Madam President and members of the body, this is referenced to the discussion ... or the discussion ... well, it wasn't a discussion, it was the words that Senator Kristensen was referring to as far as the veterans? officers, as far as whether...as far as combining those, that office and so forth. And let me get into this. The amendment deals with a section of bill that changes responsibility for multicounty agreements to combine veteran service functions from the veteran service committees to the county boards. In effect, county veteran service committees are completely taken out of the process. I

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have...I've heard some concern expressed about this from various county service officers, but I still feel the idea has merit. This amendment will simply allow for the affected veteran service committees to have input into the decision as to whether or not counties will combine veteran service officers. And for those that do not know the makeup of that, each county has a veterans' service committee. And I think they are ... those come before the county board and they pass on those folks that become members of that committee. The ultimate decision will be made by the county boards that are involved, but they must meet with the veteran service committees prior to making the decision. I believe that this keeps the intent of LB 269 in place by still allowing for input from those that will be most affected by this sort of action. I would like to thank Senator... I would thank Senator Kristensen for his help with this amendment. I would urge the body to adopt it. I'd be happy to answer any questions. Thank you.

SENATOR CROSBY: Thank you, Senator Robinson. On the Robinson amendment, I will go through the lights again. Senator Hartnett, did you wish to speak on the Robinson amendment? Senator Coordsen.

SENATOR COORDSEN: Madam President, members of the body, I support the Robinson amendment. The actions that the committee took were necessary in order to effect a control over the local budget under the auspice of the county board. And we have taken, I think, very careful steps, and there are several other proposals in 269 to correct oversights that we have made that would have caused some problems for the county board in fitting all of the various demands on the county budget within the 45 cents available to them. The Robinson amendment does, in fact, keep the veteran service committee involved in the process and give them a defined statutory opportunity to have input with the county board by requiring this meeting prior to any merger decisions by the various county boards, so I do support the Robinson amendment. Thank you, Madam President.

SENATOR CROSBY: Thank you. Thank you, Senator Coordsen. Senator Beutler, did you wish to speak to the Robinson amendment? Senator Schimek, to the Robinson amendment. Senator Janssen, to the Robinson amendment.

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SENATOR JANSSEN: Thank you, Madam President and members of the body. Senator Robinson, I understand that this would statutorily make it a must that the county board consult with the county veterans' board, is that right, service...

SENATOR ROBINSON: Service... right, that's correct.

SENATOR JANSSEN: ... officer. All right, now this board is made up of how many people in that county, do you know?

SENATOR ROBINSON: Oh, I think six to eight.

SENATOR JANSSEN: Is it six?

SENATOR ROBINSON: I'm not sure exactly, but it'd be around that, yeah.

SENATOR JANSSEN: All right, now...

SENATOR ROBINSON: If there were two of them, you know, they'd have to consult with whatever parties are involved in it, so.

SENATOR JANSSEN: All right, now are we talking about eliminating that? Would the possibility be to eliminate that county veterans' officer from that county or to merge that in, with another county?

SENATOR ROBINSON: I'd say, in most cases it would be to, a merger of it, yeah.

SENATOR JANSSEN: Now there, are there some cases now where they do that in...

SENATOR ROBINSON: Oh, yeah. There's quite a few examples of that.

SENATOR JANSSEN: So it's been permissive that they could do this the way it...right now.

SENATOR ROBINSON: Yeah. But they...and they go ... the way it's happened before, they go to the county board and discuss it.

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But it's ...

SENATOR JANSSEN: That's the way I understood it.

SENATOR ROBINSON: Yeah, but now the county board ... the county board wasn't in control, now they would be. They are now under the LB 269.

SENATOR JANSSEN: So they, the people that were act...that were in control prior to this or the way it is now, were the state veterans' officer...

SENATOR ROBINSON: I think they were, and then along with the county service committee.

SENATOR JANSSEN: All right. So they had complete control...

SENATOR ROBINSON: Right.

SENATOR JANSSEN: ... over what happened? The county board had no control whatsoever.

SENATOR ROBINSON: But evidently it worked out in several cases because they have merged.

SENATOR JANSSEN: Didn't they have ... did the county board... thank you. Maybe I can ask Senator Vrtiska a question, too. He's...

SENATOR CROSBY: Senator Vrtiska.

SENATOR VRTISKA: Yes.

SENATOR JANSSEN: Senator Vrtiska, you were a county board member for 24 years, weren't you?

SENATOR VRTISKA: Yep.

SENATOR JANSSEN: All right. Now in your 24 years, was there ever a time when you did not want to fund that county veterans' officers position?

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SENATOR VRTISKA: No.

SENATOR JANSSEN: It was up to the county board though to set the salary of that county veterans' officer?

SENATOR VRTISKA: No, the ... the veteran service committee set the salary and they submitted a budget to the county board, and the county board either approved or modified or whatever the budget. They submitted their budget to the county.

SENATOR JANSSEN: Okay. Just like any other entity would do, like...

SENATOR VRTISKA: That's right.

SENATOR JANSSEN: All right. Because the county board does have to approve all budgets, right?

SENATOR VRTISKA: That's right.

SENATOR JANSSEN: Okay. So this would, this would mean that the county board would be able to set that budget, right?

SENATOR VRTISKA: Well, that's the way I understand it, yes.

SENATOR JANSSEN: With the approval of the committee, the county committee.

SENATOR VRTISKA: Well, I have a question to ask Senator Robinson a little bit...

SENATOR JANSSEN: All right, I will give the remainder of my time to Senator Vrtiska.

SENATOR CROSBY: Senator Vrtiska.

SENATOR VRTISKA: Senator Robinson, could I ask a question, please. I was just... some material that I got from some veterans' service committees, and they were concerned about who would, in fact, appoint the county service officer. Would it be the county board or the county veteran service committee, and I would assume it'd be the committee.

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SENATOR CROSBY: Senator Robinson.

SENATOR ROBINSON: No. Under 269 it would be the county board.

SENATOR VRTISKA: It would be the county board?

SENATOR ROBINSON: But they would have to, according ... with my amendment they would have to confer with the different county service committees. But the ... but they would not appoint the county...if there's a merger, that would be up to the vote of the county boards.

SENATOR VRTISKA: Okay, as you well know, one of the complaints ...

SENATOR CROSBY: One minute.

SENATOR VRTISKA: ... one of the complaints that I heard was that many times the county board members are not veterans, and therefore they're dealing and making the appointment... they are not veterans, while all of the members on the county service committee are veterans. Isn't that correct?

SENATOR ROBINSON: That's correct. And that's why I put this amendment in.

SENATOR VRTISKA: Okay.

SENATOR ROBINSON: That's why I put that amendment in.

SENATOR VRTISKA: I just wanted to get that clear because there was ...

SENATOR ROBINSON: Yeah, because that was my feeling, too. In some counties there may not be a veteran on the county board.

SENATOR VRTISKA: Okay, I understand and I just want to make that clear that that's the way it does work.

SENATOR ROBINSON: Right.

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SENATOR VRTISKA: Thank you.

SENATOR CROSBY: Thank you, Senator Vrtiska, Senator Janssen. Senator Kristensen, on the Robinson amendment.

SENATOR KRISTENSEN: Thank you, Madam President, members of the Legislature. I want to clarify just a little bit, if I can, what I think Senator Robinson and Senator Vrtiska were talking about. We're not talking about changing the appointment of the veteran service officer. What this section deals with is the merger of two of those offices together, okay? And in many cases, you may have two, three counties go together, and this is the mechanism you ... you will then have a merged veteran service office, okay? Then the counties will have to work out, you know, how they're going to contribute and all those sorts of things. But it's my understanding, though, that that merged committee is the one who makes the appointment. We don't change the appointment process, so that will continue on. This deals only with the ability to merge. And what we're saying is, before you needed the director to authorize that. And, in fact, the state director had to be the one that said whether it happened or not, or had the say so. And we take that state director out of there, so it's purely a county and county decision. Once they're merged, then you maintain that existing committee. They then continue on with their appointment powers like they always have, decides, you know, their budgets will have to come in. The counties to that agreement are going to have to, or through the joint merger will have to figure out how much money's going to get spent and all that. But this is only merger. It doesn't change and allow the appointment process to be any different than it's always been for a number of years.

SENATOR CROSBY: Thank you, Senator Kristensen. Senator Chris Peterson.

SENATOR C. PETERSON: Thank you, Madam President and members of the body. And I rise in support of Senator Robinson's amendment. This does streamline the process. Hall County did merge the Howard Veterans'' Service Office with theirs. And what had happened in Howard County was the gentleman was ready to retire, pretty much there part-time, and so Hall County took over that responsibility and currently, I believe, are looking

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at possibly extending that to other counties, too. it's especially beneficial for us having the Nebraska Home and the VA Hospital there because the county service officers do work with the veterans specifically with many of those processes, getting those involved with those organizations. So I do support this. It does streamline the process, and it is in effect in my part of the state.

SENATOR CROSBY: Thank you, Senator Peterson. Senator Vrtiska, your light is ... did you wish to speak again?

SENATOR VRTISKA: Just a couple of things I wanted to clear with Senator Kristensen and Senator Robinson. Senator...

SENATOR CROSBY: Senator Kristensen or Senator Robinson, would you both respond?

SENATOR VRTISKA: Senator Kristensen, it's my experience as a member of the county board that the county board, in fact, with the recommendation of the veterans' organization, actually ended up appointing the members to the veterans' service committee. And so in a sense what we're talking about is those people are really appointed by the county board that are on that service, veteran service board, and they're the ones then who made recommendation as to who the county service officer would be. So ultimately, it's been a sort of a combination effort all the way through, because the county board actually made the appointment to all those people on that county service committee. Because we did that time after time.

SENATOR KRISTENSEN: But the service officer itself...

SENATOR VRTISKA: Was appointed by the...

SENATOR KRISTENSEN: ... is selected by the committee, right.

SENATOR VRTISKA: By the committee, right.

SENATOR KRISTENSEN: Right.

SENATOR VRTISKA: But I'm saying the committee was selected by the county board through a recommendation from the veterans'

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organizations.

SENATOR KRISTENSEN: Okay, yeah, and we don't change that either.

SENATOR VRTISKA: No, you don't change any of that. But I'm just saying, actually there isn't a whole lot really being changed in the whole process that we're talking about,...

SENATOR KRISTENSEN: Well ...

SENATOR VRTISKA: ... except for the purpose of...

SENATOR KRISTENSEN: For, except for the...

SENATOR VRTISKA: ... allowing merger.

SENATOR KRISTENSEN: Exactly the point. That's what we ... that's the whole purpose of the Revenue Committee's action is to facilitate the merger to occur easier.

SENATOR VRTISKA: Right. And I understand that. And there's some confusion about it, but I just wanted to make that point. And I support the Robinson amendment.

SENATOR CROSBY: Thank you, Senator Vrtiska. Before we continue, we do have a doctor of the day today, Dr. Bruce Gfeller of the Lincoln Family Practice Program. And he does live in Senator Warner's district. Dr. Gfeller, put your head out there so we can say hello. Thank you for being here today. Senator Hilgert, on the Robinson amendment.

SENATOR HILGERT: Thank you, Mr. President ... Madam President, members. I just rise in support of Senator Robinson's amendment. I, now more than ever, I think, we need to be cognizant of our...the access to veteran services in the state of Nebraska. My office has been contacted by several individuals who are veterans of the Persian Gulf conflict. About 700,000 soldiers, sailors, and airmen deployed to the area. And upon return home, it is more difficult to access the veterans' administration systems than in prior conflicts because the delayed time of release of service; there's not a large

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number of groups that exist; information concerning veterans' benefits and needs that need to be addressed often happen by word of mouth. And it has been a great help to me to direct the soldiers and airmen that served in the Persian Gulf to our county service officer. And any changes in this time that takes place I do think it's always helpful to re-educate individuals regarding the role that the county service officer plays. And I, frankly, don't see any harm in this amendment whatsoever. I think it's a good policy. The number of veterans in our population is decreasing daily, frankly. And to mandate that a meeting takes place, conversations take place, that information is adequately disseminated to the county board when different decisions about funding are made and reorganizations that we hope will create efficiencies take place, it's always positive that a re-education process takes place. So I'm very supportive of Senator Robinson's amendment and I thank Senator Robinson for bringing this before the body. Thank you.

SENATOR CROSBY: Thank you, Senator Hilgert. Senator Robinson, your light is next and it is the last light, would you like...

SENATOR ROBINSON: Okay, I'd use this as my closing.

SENATOR CROSBY: All right.

SENATOR ROBINSON: I have a question of Senator Kristensen. Senator Kristensen.

SENATOR CROSBY: Senator Kristensen, will you respond to a question?

SENATOR ROBINSON: I just want to make sure we're right on one thing. Senator Kristensen, a member of the body thought you said that the funding for the county service officer was up to the county service committee. But that is not so. And I want to make sure you ... that it's up to the county board as far as the funding of the county service person.

SENATOR KRISTENSEN: That's ... yes, and they're going to fit, they're going to fit under that levy.

SENATOR ROBINSON: Right.

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SENATOR KRISTENSEN: The...

SENATOR ROBINSON: Someone, someone told me they thought you had said it was up to the county service committee.

SENATOR KRISTENSEN: Oh.

SENATOR ROBINSON: And that's not, because vie changed that last year and...

SENATOR KRISTENSEN: Right.

SENATOR ROBINSON: Yeah.

SENATOR KRISTENSEN: The budget ... they'll prepare a budget.

SENATOR ROBINSON: Sure.

SENATOR KRISTENSEN: They'll send it to the county board.

SENATOR ROBINSON: But they do the...

SENATOR KRISTENSEN: The county board's going to have to fit within their...

SENATOR ROBINSON: They okay it then.

SENATOR KRISTENSEN: ... their miscellaneous. Right.

SENATOR ROBINSON: And I was in error a few minutes ago when I said that the county board selected the county service officer, because it is the county service committee. Thank you. And I'd urge you to support the amendment. Than k you.

SENATOR CROSBY: Thank you, Senator Robinson. You've heard the closing. The question is the adoption of the Robinson amendment to the committee amendments of LB 269. All in favor vote aye, opposed no. Senator Robinson.

SENATOR ROBINSON: Call of the house, please.

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SENATOR CROSBY: Request for a call of the house. All in favor vote aye. Opposed no. Record, please.

CLERK: 10 ayes, 0 nays to place the house under call.

SENATOR CROSBY: The house is under call. Would all senators please record your presence. Would all senators please, who are unexcused, return to the Chamber, record your presence. Would all unauthorized personnel leave the floor. Senator Robinson.

SENATOR ROBINSON: I'd accept call-in votes, too. I don't know if you heard me the first time. Thank you.

SENATOR CROSBY: Okay. We're looking for Beutler, Senator Beutler, Senator Bromm, Senator Don Pederson, would you please check in. Senator Chris Peterson, Senator Robak, Senator Schellpeper, Senator Bruning. Senator Schmitt, Schrock, Senator Stuhr, Senator Elmer, Senator Vrtiska, Senator Hudkins. Senator Lynch, Senator Matzke, Senator Withem. We're voting on the Robinson amendment. And Senator Robinson has indicated he will accept call-in votes.

CLERK: Senator Lynch voting yes. Senator Elmer voting yes. Senator Bruning voting yes. Senator Suttle voting yes.

SENATOR CROSBY: Senator Robinson, we are voting on Senator Robinson's amendment, and he has indicated that he will accept call-in votes.

CLERK: Senator Vrtiska voting yes. Senator McKenzie voting yes.

SENATOR CROSBY: Record, please.

CLERK: 25 ayes, 0 nays on adoption of Senator Robinson's amendment.

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

CLERK: Madam President, the next amendment, Senator Kristensen, Coordsen, Landis, Hartnett, Schellpeper, 1763. I have a note,

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Senator, you want to, you want to 'withdraw 1763. Your next amendment is 1790, which is the one I believe you want.

SENATOR CROSBY: No objections. So ordered.

CLERK: Senator, AM1790. (See page 1728 of the Legislative Journal.)

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

SENATOR KRISTENSEN: Thank you, Madam President, members of the Legislature. Last year LB 1085 allowed, as I discussed earlier, counties to, at their discretion, to shift their assessment function to the state. What did not happen last year with specifics on how that would occur, and as the date grows nearer, this becomes an important issue for us to flesh out. Now some of these things have evolved, and that's the reason we make it a committee... amendment to the committee amendment because it'll supplement. What this does, it talks about the shifting of the records, the property tax administrator, because mechanically that's what's going to have to happen. It would allow that those transfer of records occur. It requires the counties to maintain existing office space at no cost to the state. it would require that the records be maintained and sent over. it also sets out a mechanism for the transfer of sick leave and vacation time which had been earned by the employees and the assessors. So when this comes over, you've got to have some transfer of those sick leave and holiday days and vacation time. You also have to transfer their benefits to the state retirement. Now, as soon as I say the word state retirement I start looking around for Senator Wickersham. We have worked out much of this language with the Retirement Committee. In fact we used existing language that's already in the statute that we created last year for the transfer, how you mechanically do those sorts of things. There are some counties who don't compensate for unused vacation time and sick time and so on, and we make the accommodations for that in this amendment. We also make provisions for counties to reimburse the state for the transfer of some of the leave and benefits if that's been their policy to do so. This is a mechanical amendment that will help make that transfer of the function over there. I think this is one that I believe Montana used. They had a number of people

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who, in a number of counties, who wanted to come over and use the state assessment function. We're in better shape in this state in terms of our assessment practices and equalization. That doesn't mean that there's not a lot of problems and that doesn't mean we're still going to work on it. But I don't think you'll see the mass exodus over, but it's an excellent tool. I do expect some counties to do this. And if we're going to have them do it in this upcoming year we need some mechanical way to get those records transferred, to keep that office space, and talk about the responsibilities of performing appraisals for the state to do those types of assessment things. I would be happy to answer any questions. I believe that this is a good mechanical mechanism for the transfer of those benefits. And we are using the same language we used in other places in the statutes, so we're not creating two different systems for the transfer of sick leave, vacation time, and retirement benefits. I'd be happy to answer any questions, Madam President. Would yield back the rest of my time.

SENATOR CROSBY: Thank you, Senator Kristensen. Senator Beutler, discussion on the Kristensen amendment.

SENATOR BEUTLER: Senator Kristensen, just, just a couple of points. Not essentially to question or not because I have any disagreement, but because I also have similar provisions in a bill that I have merging the clerks of the district court, and I wanted to get an explanation on record of why this is being done because it is a little peculiar. But on page 3 of the amendment, it indicates, I don't have line numbers on my amendment, but up on the first paragraph of Section 31 it indicates that, "A county assessor who becomes a state employee and who does not have any accrued sick leave shall be granted one hundred sixty hours of sick leave." And then down in the next subparagraph (2), it also says, if they don't have any accrued annual leave they'll be granted 96 hours of vacation leave. Can you just explain to the body what that all, is all about and why it is considered a fair thing to do? Because I do, we do the same thing with the clerks of the district court in another bill.

SENATOR KRISTENSEN: Um-hum.

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SENATOR BEUTLER: And perhaps we can just establish that it's a fairly uniform procedure, and what the rational is for it.

SENATOR KRISTENSEN: It's my assumption that...

SENATOR CROSBY: Senator Kristensen.

SENATOR KRISTENSEN: Thank you, Madam President. Senator Beutler, it's my assumption that that is the current practice. If you would bring those people into the system, that's what they would gain. And that's been fairly uniform with the state employment practices. And so that's the reason that if you're going to just bring them over, you've got to assign them some of that period of time. And It's my understanding that that's the uniform period of time that they would become assigned. That's my impression when we did that of why we did it. I'll double check to make sure that's the case, and if it's not, I'll come back and correct myself.

SENATOR BEUTLER: Thank you.

SENATOR CROSBY: Senator ... thank you, Senator Beutler. Any further discussion on the Kristensen amendment? Seeing none, Senator Kristensen, to close. He waives closing. The question is the adoption of the Kristensen amendment to the committee amendments. All in favor vote aye, opposed no. We're voting on the Kristensen amendment. Have you all voted? We're voting on the Kristensen amendment. Have you all voted? Senator Kristensen.

SENATOR KRISTENSEN: I'd ask for a call of the house, please.

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

CLERK: 13 ayes, 0 nays, Madam President, to place the house under call.

SENATOR CROSBY: The house is under call. Would all senators please record your presence. Would all unexcused senators please return to the Chamber, record your presence. Would all unauthorized personnel please leave the floor. Senator

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Kristensen.

SENATOR KRISTENSEN: Madam President, I'd accept call-in votes.

SENATOR CROSBY: Thank you. We are voting on the Kristensen amendment, and Senator Kristensen has indicated he will accept callin votes. We're voting on the Kristensen amendment. Senator Kristensen has indicated he will accept call-in votes.

CLERK: Senator Tyson voting yes. Senator Landis voting yes.

SENATOR CROSBY: Record, please.

CLERK: 25 ayes, 0 nays on adoption of the Kristensen amendment to the committee amendments.

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

CLERK: Madam President, the...

SENATOR CROSBY: Mr. Clerk.

CLERK: ...next amendment, Senators Kristensen, Wickersham, Will, Coordsen, Landis, Schellpeper, Hartnett offer AM1733. (See page 1736 of the Legislative Journal.)

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

SENATOR KRISTENSEN: Thank you, Madam President and members of the Legislature. I want to try to direct you back to this particular amendment, this has been signed by the Revenue Committee members, and this assists in the community college change. This is one of the issues that I talked about in my opening, but I want to go back and give you a little background so we can try to frame the issue as we discuss it. As you know, the community colleges right now are an entity of what it would be, I think, classified higher education. Throughout the history of this state they have been a bridge between secondary education, four-year college. They've had a tremendous impact on vocational training. They offer many, many educational opportunities in the state and have primarily been organized

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into areas and districts. And property tax, obviously, has been one of the major funding sources for them. They have, and I've got, if you'd like copies, I think an excellent progress report that they delivered to the 419 committee last fall where they have taken a very active roll in beginning to streamline their activities, do some efficiency things that we in the Revenue Committee thought would be a good example for many other political subdivisions. The counties also have been extremely active in that area. And we have some other things that are in other bills that are out here yet this year to, in effect, recognize the contributions that the counties have been making towards that effort. However, in this particular process, we decided last year to give independent levy authority to the community colleges because they cross so many different counties and they have a different complexion of almost any other political subdivision. And so we did cut them down to 8 cents for next year, and then in the year 2001 to 4 cents. That was a very, very heavy cut. We knew that by doing those cuts that just going down to the 8 cents was going to be difficult for some, certainly going to 4 cents would be a very, very, well, almost an impossible place to get to. So what we have done with them was generated by their LB 408, Senator Bohlke and many of you signed on to this year, she was the chief sponsor of that, which allowed for a change in that levy limitation. Next year, in '98, there would be an 8 cents, and you would get a 1 cent for capital construction. Then in 199, you would get 7 cents for capital ... or for general operations and 1 cent for capital construction. And in the year 2000 it would be 6 cents plus the I cent. With that would be a recognition that each of those years it would take about $4 million of additional state monies to begin to get them off of that reliance on property tax. Because of their efficiencies, that was a bill that received favorable attention by the Revenue Committee. We changed it, however, and did not keep their 8 cents. We, in fact, cut the 8 cents that we originally done last year down to 7 cents but, in effect, earmarked the 1 cent for capital construction. So the committee amendment that we're looking at right now is a 7 cent for operation and 1 cent for capital construction. We'd keep that the same for '99 and then in the year 2000, so we're going to accelerate that by a year. They'd be knocked down to 6 cents and a I cent cap. With the goal in this formula that had been proposed, that we were roughly going to have 40 percent

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of the funding come from property tax, 40 percent of the funding come from the state, and 20 percent of that funding come from tuition and fees. When the committee made their amendment to go from 8 cents to 7 cents in 1998, that made that formula very difficult to live with. We couldn't get them down using that existing system. We couldn't get them down to that 40, 40, and 20 range and, in fact, we can't mathematically get them right there. And so the committee has recommended to you this amendment that would still keep, because we're talking about an $8 million expenditure over that period of time. We told them, look, we don't want you to spend ... we don't want you to solve this problem internally because, I think it's Western and Mid Plains, even with their full maximum levy couldn't get up to 40 percent by using property tax. Even if they "maxed" out they can't get there under the 7 cent levy limitation. And so what we did is worked out an internal formula where you keep the same amount of money, you don't add more money to that system, you keep the same amount of money that was envisioned, but you reallocate it a little bit between the other colleges within the system. And so we always keep the 1 cent for capital construction and infrastructure, that's obviously a large local concern. That keeps them tied in with, with their issues of wanting local control. But this amendment makes some changes to the existing formula. And we want to equalize and try to get to this 40 percent. And the base year of that 40 percent would be 1997 and 1998. So whenever we talk about base years, that's the 40 percent level that we're going to look at. Now, the only people that will benefit in the first year is going to be Mid Plains and Western community colleges. Those are the ones that were most at risk. Those are the ones that internally, through this mechanism, will be able to meet that. When we drop down to 6 cents in the year 2000, then Northeast Community College and Southeast Community College become at risk, and they're the ones that are going to begin to access this change in the formula internally. And so right now we've got a couple of different formulas that are out there. If you want, I can go into the mechanics of how those work, but fundamentally what we do is we take some of their existing money and channel that into a different formula. And then that formula is done internally with the six campuses and they effectively move money to allow Mid Plains and Western Community College to live within these new levy limitations and we don't add any more money. Now what

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we do have happen here is that those things are moved up a year. So it isn't going to be money that you're going to spend this year. The expenditures start next year. But that is part of the suggestion that the committee has. I think it's a sound one from some good policy points of view. And those are that the community colleges really have taken serious the charge of reducing reliance on property tax. Their existing formula is not sufficient to cover what needs to be done. They are lower amounts of money. Obviously, we're not talking about hundreds of millions of dollars with the community college, but we are talking about a lot of kids that will be impacted and students that will be done with this. To get this state aid equalization formula, they're going to have to have three qualifiers. Each of the community colleges are going to be have to be at their maximum levy limit to get it. If they can raise that 40 percent of their operating revenue, and that's not using their tuition, then they're going to be able to come in here. When the levy goes down that's when Northeast and Southeast Community College comes into play, and you're going to have to have a minimum levy. So they can't just go tap into this formula and utilize all that money. They're going to have to give a little of that back, for example, if they're, if they've got a good property tax base, we've got a couple of the community colleges that have a real good property tax base, that they're not going to be able to tap into this aid formula to further reduce their property tax. They're still going to have to stay up there and make some minimum effort with that. We've got for examples, Central, they can use their 40 percent very quickly and get up to 'that state aid formula. In fact, you'll take a little bit of...

SENATOR CROSBY: One minute.

SENATOR KRISTENSEN: ... of funding away from them, and that's what's going to allow Western and Mid Plains to meet their years. The bottom line is that we're going to need $8 million to fund this whole thing for eighty ... or for 1998 and 1999. Then you're going to have another $8 million for '99, 2000, when that budget process comes through. When we get done and you adopt this amendment, what's going to ... the practical impact of this is going to be, you're going to have pretty much a uniform levy across the state for community colleges. And that was one of the goals that we had from the very beginning was to try to

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reduce the reliance on property tax, one, but, two, that if you're living in one part of the state that your levy is not going to be much higher and you're going to contribute more to property tax to run that through this equalization formula that we have here, we're going to have pretty much...

SENATOR CROSBY: Time.

SENATOR KRISTENSEN: ...a uniform levy across and we'll have an overall reduction in the amount of property tax spent.

SENATOR CROSBY: Thank you, Senator Kristensen. Before we begin the debate on the Kristensen amendment, Senator Robak announces that she has 37 seventh and eighth grade students from District 9 School in Columbus with their teacher. Senator Vrtiska has 29 students from Sterling High School government class with their teacher. They're all in the north balcony. Would all of you please stand and be welcomed by your Legislature. Thank you for being here today. Discussion on the Kristensen amendment. Senator Beutler.

SENATOR BEUTLER: Senator Kristensen, if I may, let me ask you to go back and draw on your knowledge of what the Revenue .Committee has done generally so far. And I would ask you to focus on one question because I think it will be of value to me and to everybody to understand what it is that we as a body may be suggesting as a totality with respect to, and I'm going to use a negative word here, but let me just say it because this is the way some people are going to look at it,...

SENATOR CROSBY: Senator Kristensen.

SENATOR BEUTLER: ... with respect to reneging on the LB 1114 promise of property tax relief, and what I wanted to ask you to do, this comes up with the community colleges, of course, because we're, again to use the negative word, we're fudging a little bit here, but what I wanted to get a picture of is if you can do it for us go through all the revenue bills that are going to be before us and, for example, I know on the school construction fund we're fudging a little bit. Could you just kind of go through and identify the items and to the extent that you can remember, the amounts in totality of where we as a

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Legislature might be accused of backing down from the 1114 promise by allowing, without a vote or changing statutorily, those levy limits that we put in place when we originally enacted 1114 so that we can see as a group, you know, what all we're doing and might identify where it's most or least important for us or why we're doing it.

SENATOR KRISTENSEN: Madam President, if I could answer, please. Senator Beutler, I want to start and this I hinted and made reference to it in my opening but it's probably an appropriate place to start because this bill is one that obviously came up quickly this morning, I don't have the sheet that I want to put out to you that summarizes this with actual dollars, and we're going to put that together. But let me back up because the issue of and the term "fudge" I don't like because I don't think it's accurate. But...

SENATOR BEUTLER: I don't either. I'm just giving that perspective.

SENATOR KRISTENSEN: Well, and you're going to have people who, and I think this is a great philosophic point to begin as we're going to look at 806 yet today, if you truly believe, and we began last year's process with if you truly believe that property taxes are a problem, what are you going to have to do? You just can't say, well, I'm going to raise sales and income taxes and replace it with property tax. It sounds so simple to do; and as you've witnessed and all of us have witnessed, that's a very difficult thing and the agreement to get that distribution formula. LB 1114 was not the final answer. It was the first... it was the first place to start. Why is $1.10, why is 8 cents for a community college, what's magic about those numbers? And as you remember last year's debate, there was no magic about the numbers. They were targets where we began. And I think we made very clear that there was going to have to be some adjustments, but that we had a general target that we wanted to get to. And that we, as a state, we get over $2.25 of levy, maximum levy, that's when the state starts to have property tax problems. And when we retreat below that, the roar goes down. There will always be people there. What happens with this and the 12 cents that we're going to suggest for a building levy...

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SENATOR CROSBY: One minute.

SENATOR KRISTENSEN: ... is a change and is a recognition during this two-year period of time, people have come back and say can we live within this limit? And if we can't, how do we make some suggestions? I would suggest to you, too, that we're not going to say, community colleges, we're going to hold you harmless but you're going to have to find some efficiencies. We think they've found those efficiencies and sufficient numbers of those efficiencies. But, two, the major goal was to get away from property tax. This is consistent with that, but we recognize that we just, because 8 cents wasn't where they were all at. Everybody or most everybody took a cut at 8 cents when we set that last year and. then to cut that in half in a relatively short period of time was something that we knew practically wasn't going to last because you're going to do great harm. And if you want to...

SENATOR CROSBY: Time.

SENATOR KRISTENSEN: ... get rid of those service areas, that would logically occur. I'll put my light on.

SENATOR CROSBY: Thank you. Senator Hillman, on the Kristensen amendment. Senator Hillman. I don't see Senator Hillman. Senator Matzke, on the Kristensen amendment.

SENATOR MATZKE: Thank you, Madam President and members of the Legislature. I strongly support Senator Kristensen's amendment. Actually without it, LB 296 (sic) won't work very equitably for the community colleges. I've handed out a clipping from the December Wall Street Journal dealing with the importance of community colleges and economic development. What 1114 would really have done would have been to cut the funding of community colleges to about a third. It was the most drastic draconian cut included in LB 1114. The practical effect would have been to virtually eliminate community colleges-in this state. They could not have continued to provide the function and the education that they have. Interestingly, of course, we spend or we expense multimillions of dollars for economic development in this state. And it's been proven by the experience in other

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states that one of the most effective economic development tools is community colleges. The newspaper article that I handed out says and I quote in its first paragraph, "In the war among the states over economic development, many states offer tax breaks to lure companies in or dissuade them from leaving. But in North Carolina, the secret and often the most successful weapon in job training is job training at community colleges." It goes on to explain how successful community colleges have been. In competition with Maryland, it led the Governor of Maryland to want to double the funding for community colleges- in Maryland. The article points out in its conclusion that North Carolina provides $549 million for 58 community colleges. No wonder they're successful. They have been in the top three in industrial development in the nation as a state in the last few years. I think what we're faced with is a fundamental decision here as to whether we want to continue the role of the community colleges in this state. We do a great deal for young people who want to go on to a four-year college. I've always felt that Nebraska has not adequately addressed the other 50 percent of the children or kids that graduate from high school who do not want to go to a fouryear college but want to start their education at a different level. So I think it's absolutely critical for the future of the education of young people and particularly those who choose the community college or the technical or vocational education allowed in this area. I think that this is clearly not a case of fudging and I was glad to hear Senator Beutler agree that that was not an appropriate term. Because when 1114 came in and would just virtually cut the revenue for community colleges to a third, when you compare that with this bill that would still end up cutting them back to between 6 and 7 percent, it's a substantial reduction in line with the theory and the philosophy of 1114, and I think very beneficial from both the standpoint of encouraging efficiency at that level and in granting some property tax relief. And as long as we're going to support at the cost of many millions of dollars economic development programs in this state...

SENATOR CROSBY: One minute.

SENATOR MATZKE: ... we don't want to take a giant step backwards and damage or injure the community colleges which are one of our most effective economic development tools that we have. Thank

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you, Madam President.

SENATOR CROSBY: Thank you, Senator Matzke. Senator Coordsen, followed by Hilgert, Vrtiska, Beutler, Kristensen, Preister, and Don Pederson. Senator Coordsen.

SENATOR COORDSEN: Thank you, Madam President, members of the body. I apologize to Senator Kristensen for not being here during the first half of his presentation so I may be somewhat repetitive of some things he may have said in the first five minutes of the opening on this particular amendment. The... I rather suspect that he indicated to you that the Revenue Committee met yesterday and looked at the impact of this amendment as it modified the proposal that is in the committee amendments to LB 269. As he indicated, it does not change the amount of funding that we're recommending -be added to the community college system to move toward the goal that is expressed in other parts of the legislation, 40 percent of the funding for community colleges from property taxes, 40 percent from state aid, and 20 percent from tuition and other sources. I would commend the community colleges as a unit for their coming together and looking at a system that would allow all of them to function to the best of their abilities within the new framework of funding that we're providing. This amendment that Senator Kristensen has provided to you, I believe, has a number of signatures of Revenue Committee on it in support of it. It doesn't change in any great way the impact of 269, but it does provide a distribution of resources within the community college system that is, I think, more fair and more equitable and more in keeping with the needs of the individual systems as they provide their services to their areas. With respect to the issue of exceeding the lids that were proposed in 1114, 1 think the lids in 1114 were reflective of a general philosophy that in the state of Nebraska it is probably appropriate, inappropriate over a long period of time to fund postsecondary education, whether it's community colleges or any other form, from property taxes because of the disproportionate impact on economic sectors in the state of Nebraska. However, in accomplishing a goal of sometime in the future, pending the amount of resources available to this Legislature, to totally fund community colleges in the manner... in the same way, same manner that other postsecondary institutions are funded that we need to take some

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progressive steps. Senator Warner I think in the last several years, ears, certainly last year, many times indicated on the floor of the body that the package of bills that the Revenue Committee had was in fact act the beginning of a process-. LB 269 and the other components of this year's Revenue Committee package are in fact a continuation of a process. And a process by itself the word would indicate that there's continual change. We recognize in Revenue Committee that the drop from one levy to a levy that was only 50 percent as much over a period of 2 years quite probably created problems that the budget of the state of Nebraska is not going to be able to address very adequately and would likely result in some significant problems beyond the ability of community colleges to economize.

SENATOR CROSBY: One minute.

SENATOR COORDSEN: So having said that, I would again speak in agreement with the Kristensen amendment. I feel that it provides a better flow of all available resources within all of the components of the community college system and will, in fact, work to the betterment of that system in the several years to come while the Legislature is looking at how to fund community colleges totally from sources other than property taxes. Thank you, Madam President.

SENATOR CROSBY: Thank you, Senator Coordsen. Senator Hilgert.

SENATOR HILGERT: Madam President, members, I rise to ask Senator Kristensen a few questions. And while he's finishing up with George over there, I'll make a comment. In LB, 806, if it were to pass, the A bill has $100 million in state aid. if LB 306 passes with 12 cents and assuming that all the 12 cents are levied in a, I'm not going to use the word "fudge" because I guess...you know, if we retreat from the tax levies in 1114 12 cents, I heard a figure of $55 million. That's $155 million so far. We add in 269, 1 would like to know some numbers right now of to what extent... and I understand, you know, Senator Matzke very eloquently and appropriately talked about on how important community colleges are. But frankly, my concern is the numbers here. I mean if you add up the 100 million, the 55, whatever this bill does and I may be caught in a little bit of the hypocrisy because I'll be supporting the amendment that

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Senator Will has filed talking about Metro Area Transit for Omaha so I'm not getting on a high horse here. But it does start to concern me somewhat, what have we cut it exactly. And I know that this is, you know, it's a real cut but I think a lot of Nebraskans felt that we really took a big step last year and they relied on it. And many people have made reference about, you know, that's why the petitions were not supported at the ballot box and so forth because they trusted what we did. Senator Kristensen, can you tell us perhaps continue basically what Senator Beutler initiated regarding how much our...what's the dollars are we talking about here as far as the 1114 limits and then, you know, how much anticipated in state aid? And I'll give you the rest of my time, but I will say this: You know, when my father passed away when I was 15 years old, my mother did not have a college education. She went to Metro Community College and got an associate's degree, she was employed ever since. Unfortunately, she was let go by a major health care corporation recently due to some downsizing and tightening their budgets; but, you know, so I really believe in the community college system. There's no doubt about that. But I would like to have some numbers here, Senator Kristensen.

SENATOR CROSBY: Senator Kristensen, you have about two minutes.

SENATOR KRISTENSEN: Thank you, Madam President. Senator Hilgert, let me try to put as I indicated to Senator Beutler, we're going to try to put together the numbers of savings because what you're looking at is the amount of dollars that we're going to come back on now as opposed to what we saved originally which is a different view of looking at the world. Let me suggest to you this: I could tell you that we are going to do the 12 cents and we propose to do that in LB 306. Senator Schellpeper is going to talk about why we do that. That is not a total absolute raising of the bar. That has some very specific limitations to it, some very specific portions into it and has a very specific purpose for doing it. I think we should debate that on 306 and I think that you're appropriate to ask for numbers as we go along. I think that you need to make sure that you understand why those individual portions are being done at the time they're doing it, and that's the reason I'm doing community colleges right now. The savings...

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SENATOR CROSBY: One minute.

SENATOR KRISTENSEN: ...when we cut the levy down to 4 cents, if you just figure that the average levy, and I think the average levy was a little over 9 last year when we began so we cut the average ... we took everybody to 8 so if the average was 9, we obviously had people above that. We're still staying below that figure. We're not going back to where they were. We're still cutting property taxes as we go. What we're suggesting to do here is that that 4 cent cut was basically a message. And that message was, community colleges, you either have to find state funds and become part of the higher education system of this state or you're going to have to have drastic cuts in services because there's very few community colleges that were going to live on 4 cents. And that 4 cents was a message of which they heeded very well and have done some things about. So in terms of numbers, what I'm going to do for you and for Senator Beutler, I'm going to go back and get the original numbers ...

SENATOR CROSBY: Time.

SENATOR KRISTENSEN: ...that we used last year to show you the property tax savings and then you can use that to go forward.

SENATOR CROSBY: Thank you, Senator Hilgert. Senator Vrtiska.

SENATOR VRTISKA: Thank you, Madam President, members of the body. First of all, I want to commend Senator Matzke for his description of the value of the community colleges to the state. I don't think anybody here could deny the fact that the community college is one of the finest institutions in Nebraska and certainly it's an economic tool, it's an economic development tool that we need in this state and we should continue certainly to see that children have an opportunity to get that type of education. I think the whole issue boils down to a fact is, how are we going to pay for it? Do we want to raise property taxes and continue to provide that kind of skill or do we want to spread the cost out across the state and get state aid into the formula that will help provide the kind of services that we are...learned to accept and expect from the community college system? I could stand here for the next ten minutes and talk about some of the things that I've observed

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that have come out of the community colleges and some of the successes that they've been able to demonstrate through their type of teaching and learning at those institutions. I'm not going to do that obviously, but I think ... because most of you I think understand that. We need a well-rounded system of education in this state. You know, it's often been said and I'm sure all of you have heard it that we can put a man on the moon but we can't get somebody to fix the television set or the wash machine. There's nothing degrading about somebody who learns a profession who is able to go out and make an honest living by using his hands or his mind, and certainly that's what community colleges do. They teach young people to use their minds, to use their hand to do the things that need to be done in order to make this a successful country. So there again I think that we certainly do not want to deny those kinds of learning experiences for people in this state. And again, as I said before, the question is how do we provide the funding in order to keep these community colleges in place? Because I don't think anybody on this floor would ever stand up and say that they're not doing an excellent job and there has been efficiency built into the system. We all recognize that. I only wish that some of our other institutions were as efficient as the community colleges have been in the past. So again I want to commend Senator Matzke for bringing forth this bit of information he did from the Wall Street Journal. I think it certainly points out the value of community college in the field of economic development. And many of you know I've been a strong long-time supporter of economic development throughout the state and have worked diligently to try to provide more economic development, particularly in the rural areas of Nebraska. So again I want to add my support to Senator Kristensen's amendment and hope the rest of you can see fit to support it. Thank you.

SENATOR CROSBY: Thank you, Senator Vrtiska.- Senator Beutler followed by Kristensen, Preister, Don Pederson, Robinson, Hillman, Coordsen, and Maurstad. Senator Beutler.

SENATOR BEUTLER: Senator Kristensen, I'd like to engage you as quickly as possible again because...

SENATOR CROSBY: Senator Kristensen.

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SENATOR KRISTENSEN: Yes.

SENATOR BEUTLER: What I would like to do on this question of 1114 and what we "promised" or didn't promise, and I'm not trying to characterize it. Well, I am in a way because I think we're going to have a problem. This is going to be our problem area with the public. We're going to have to explain to the public some of the things that you took time to explain this morning which I think are very important. But I just want to get the facts straight to start with. With respect to the community colleges, and we're starting here simply because this is the first time it came up, but the 1114 idea as expressed at the time was 4 cents cap for them, right?

SENATOR KRISTENSEN: In the year 2001.

SENATOR BEUTLER: In the year 2001. And I'm talking long-term here. I'm not concerned about the transitional stuff. I want to understand what's out there in the end. And as I understand what's in this bill now, what you're proposing is either 6 or 6.5 cents in the long-term. What is it exactly?

SENATOR KRISTENSEN: It would be 6 cents on operations and I cent on capital construction.

SENATOR BEUTLER: Okay. So in this particular area we've got 3 cents to explain or talk about or whatever. Now in the area of the secondary schools, again long-term, it's the construction fund constitutes the only area where we're going beyond the $1.10 or $1 that we've talked about or $1 long-term. Is that ... that's essentially correct, isn't it?

SENATOR KRISTENSEN: Yes.

SENATOR BEUTLER: And that's 12 cents?

SENATOR KRISTENSEN: Yes.

SENATOR BEUTLER: Okay, so we've got...

SENATOR KRISTENSEN: But that's not 12 cents on operations.

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SENATOR BEUTLER: Right. And with the understanding that's variable and some school districts will not be able to use the whole 12 cents, others may, may change from year to year, whatever.

SENATOR KRISTENSEN: Yes, it depends on your school district and it's a recognition that the need, and I don't want to steal Senator Schellpeper's thunder, but it's a recognition of need that you just can't let your infrastructure go to pieces to pay staff and that's what will happen if you don't do that.

SENATOR BEUTLER: Okay. Now beyond those two items, is there anything else that you're currently aware of that is being recommended by the Revenue Committee, I don't think there's anything from the Education Committee, is there anything else from the Revenue Committee that-would constitute an addition to these items that we've talked about that might be interpreted by somebody as exceeding the 1114 promise?

SENATOR KRISTENSEN: No, I'm not...there aren't any number changes from the levy limitations that we put in. There are certainly changes toward distribution formulas. For example, the municipal formula you'll see a change on the motor vehicle fee end that we're going to...and motor vehicle tax end that's coming at the end of this. The other one is LB 180 which is the recognition that if we're going to have money instead of sinking it all into education that you've got to create a trust fund that it will be utilized and available for all property tax relief, not just property tax relief in the education area. And that's the big collision of the policy.

SENATOR BEUTLER: Okay. But those are sales and income tax monies that we're channeling.

SENATOR KRISTENSEN: Yes, correct, right.

SENATOR BEUTLER: Doug, they do not represent any additional levy authority as such.

SENATOR KRISTENSEN: Correct, right.

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SENATOR BEUTLER: Okay.

SENATOR KRISTENSEN: Now, excuse me, Senator Will does have an amendment that's coming, yeah.

SENATOR BEUTLER: I know there are several amendments, but what I was trying to get straight is, at least with respect to this aspect of things, what is the base that we're talking about to begin with?

SENATOR KRISTENSEN: In the bigger scheme of things, we didn't change a lot.

SENATOR BEUTLER: Okay, so we're at a...

SENATOR CROSBY: One minute.

SENATOR BEUTLER: ... maximum of 15 cents right now if we accepted or at least the potential of 15 cents over the 1114 numbers in terms of 1114 levy cap expectation if we should adopt the recommendations of the committees, the Revenue Committee in particular.

SENATOR KRISTENSEN: And given the restrictions that we've put on LB 306, that's correct.

SENATOR BEUTLER: Okay, thank you.

SENATOR CROSBY: Thank you, Senator Beutler. Senator Kristensen, your light is next.

SENATOR KRISTENSEN: Madam President, I'd waive my time.

SENATOR CROSBY: You waive off. Thank you. Senator Preister.

SENATOR PREISTER: Thank you, Honorable President. I-would yield my time to Senator Beutler if he would like to use it.

SENATOR BEUTLER: Thank you.

SENATOR CROSBY: Senator Beutler.

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SENATOR BEUTLER: Senator Preister, thank you very much. Senator Kristensen, again, I find these...

SENATOR CROSBY: Senator Kristensen, will you respond again?

SENATOR BEUTLER: ... I find these dialogues with you particularly helpful to me. I hope they're not too burdensome to you.

SENATOR KRISTENSEN: No, they're fine. Just as long as you don't talk telephones because I can't switch that quick so.

SENATOR BEUTLER: Someone who's interested in telephones can't deal with switches?

SENATOR KRISTENSEN: Yeah, that's right.

SENATOR BEUTLER: I want to talk a little bit about the allocation formula and what happens with this allocation formula. For some time now in a ... with respect to the state aid that we've given to the community colleges, we have by one means or another subsidized Western and perhaps even the other college out there, the name...

SENATOR KRISTENSEN: Mid Plains.

SENATOR BEUTLER: ... Mid Plains because of the problems they have with their sparsity and relatively low valuations, or at least the sparsity aspect of it perhaps is what causes the problem. Anyway, under what I call the pink copy, the AM1733 allocation formula, it's the amendment we're on, I got it in the form of a pink copy.

SENATOR KRISTENSEN: Oh, okay.

SENATOR BEUTLER: Under that allocation formula, as compared to the allocation formula that has been in effect up until this point in time, do we allow additional allocations to Western and other property tax short colleges in addition to some extent than what we've done in the past?

SENATOR KRISTENSEN: Yes.

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SENATOR BEUTLER: Okay. I am not against that and I don't think we're going to have an argument about that this morning. But I just want the body to be aware that there are other aspects than the school bill, other bills other than the school bill where aid formulas are being shifted and in this case shifted in the direction of benefit to certain areas of the state and I don't think there's going to be any complaint made about that today, but I think it should be noted. And secondly, insofar as the justification for this shift is represented by the sparsity factor, I think we should keep in mind when other amendments come up whether the opposite of that density doesn't present problems peculiar to others.

SENATOR KRISTENSEN: Can I expand?

SENATOR BEUTLER: And I invite you to use the rest of my time.

SENATOR KRISTENSEN: Yeah, and I think that you're accurate and there's also the recognition in there when you live in the middle of the state like I do you have ... you've got the dense on one side and the sparse on the other so you can take a...

SENATOR BEUTLER: You watch us fussing on both sides.

SENATOR KRISTENSEN: ... you wind up getting a different view from both sides. But let me tell you that there's some recognition that even under the current formula that's out there because of not having as many students that they don't, Western and Mid Plains, because of their FTE problems, not problems, just the recognition they have less students out there, that they don't qualify under the existing formula as well for some of the existing state aid...

SENATOR CROSBY: One minute.

SENATOR KRISTENSEN: ...because they just don't have the numbers. And that the other, the 38 percent of that existing state aid formula is geared towards numbers, course offerings and those types of things so institutionally they don't qualify as much. That's the reason that there was that 10 percent fund set up. As time has gone on, that 10 percent really doesn't

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send that money to them. That's the reason you're going to get rid of that 10 percent and do this particular amendment. So it's a recognition that institutionally, too, there are existing aid formulas that are geared to assist other parts of the state as well. But you've got to be candid that part of that was in the past designed to send money out there. That's absolutely true and the policy has been that if you're going to have those programs you got to find a way to fund them and obviously we're making some aid change here because of ratcheting down the property tax levies and that they're going to have a tougher time living with it.

SENATOR CROSBY: Thank you, Senator Beutler. Senator Don Pederson on the Kristensen amendment.

SENATOR D. PEDERSON: Madam President, members of the body, first of all I want to commend the Revenue Committee for the analysis that it has made of the concerns that we have for the community college system in Nebraska. It's important that we first recognize and realize that we're talking about a statewide system of community colleges much along the lines of what Senator Matzke was referring to. And I think that the important thing about this proposal is that it does several things. One thing that it does, it establishes a uniform statewide levy. I think that's very important. And secondly, it recognizes the efforts that the community colleges of this state have done to attempt to comply with what this body has been asking for which is greater efficiency in what they have done. I saw the report that was submitted to the Revenue Committee showing what the community colleges statewide have done. It's very impressive. I know personally the efforts that have gone on in the Mid Plains area to attempt to meet this goal of efficiency. And I know that, for example, they have eliminated many administrators. They have gone to the single administrator type program and it has been fairly traumatic to accomplish this, but they have done it. And they kind of reached the point where they can't really go much further to attempt to comply with the dollar limitations. I very much appreciate the efforts of the Revenue Committee and I want to go on record supporting that. Thank you.

SENATOR CROSBY: Thank you, Senator Pederson. Senator Robinson.

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SENATOR ROBINSON: Madam President, members of the body, I just wanted to...my community college is Metro Tech and I'm concerned about their ... how this bill affects Metro Tech. And I've been visiting with Mr. Baack back... I had some questions and I think I can stand and support this bill and there's some things, I don't know, they may possibly have been brought out, but the maintenance factor has been reduced from 1.8 to 1. And a concern I had was the increase in valuation and that's a problem I've had with Metro Tech the last few years. They use all the valuation and consequently the folks up in Washington County where I live their increase in taxes for Metro Tech last year they were has high as 20 percent. But I've learned from discussion that there will also be a 20 percent, excuse me, a 2 percent lid which would counteract that taking all that increased valuation. And at Metro they would go from 7.25 in '96-97 down to 5.34. And I think like Senator Kristensen said that when they came out with the bill and it was down to 4 percent, I think that was to a great extreme that would really hamper the workings of the community college system. So after looking at that where you see the maintenance going down, practically cutting it in half and with that 2 percent lid and there's no way that they could go over that lid, I think the bill or, excuse me, the amendment that's brought forth by Senator Kristensen is a good amendment, and I would urge everyone to support that. Thank you.

SENATOR CROSBY: Thank you, Senator Robinson. Senator Hillman, on the Kristensen amendment.

SENATOR HILLMAN: Yes, Madam Chairman, members, I, too, rise in support of Senator Kristensen's amendment and appreciate the fact that he has brought it. I would just kind of like to back up a little bit and have members consider what it is they really want the role of the community colleges to be in the future. I think all of us here on the floor have a regional community college not too far from them that is an integral part of our local communities. And we have a lot of ownership in that. They mean a lot of different things to us in the community. I will tell you that in Western which is located in western Nebraska it's called "Harvard on the hill" and we go to it for many things besides...educational is its primary part but it's a

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community center. It's an extremely important part. Also I think we need to look at the area that in the... I think we discussed on this floor before the importance of what is now called applied technology. It used to be "voc tech" training and how important the community college was in that role and the only one basically in higher ed that offered it and where we might be with what we perceive to be the role of community colleges in the future if something isn't done in some areas to help in the financing. When LB 1114 went into place, community colleges responded like they do to me in any instance and that's very rapidly to see how they can adjust what they need to do to meet needs in the community. And in this case it was basically reducing their budget was the highest priority the state said they had is that you need to be able to spend less money. And because of that, I know in the cases of Western the first thing they did was to sit down and figure out how they would be able to get as close to that levy limit as they could and what that would mean. There's a lot of information that I could share as far as what it would mean in the community college in our area, but basically what they came up with was the bottom line that for the most part, and there's a lot of ways that they would get down to this, but for the most part they would probably need to eliminate almost all but core academic courses, probably programs that would transfer either to target UNL or the Chadron State College which is in our area for those wishing to continue their education. That is not what I think we want to see community colleges do. That has not been their role and mission. That is not what I don't think this Legislature wants to see community colleges become. What we want is for them to continue the kinds of programs that they have addressing the nontraditional students, addressing economic development, job training, continuing education, and many other programs that they currently have that are of huge benefit. One of the discussions that we've had on the floor that I would like to also point out with community colleges in the welfare reform and how they work with community colleges and what that might mean to us in the future with welfare reform if our community colleges aren't positioned to offer the kind of training they need. And one of the big ones was in our area childcare because we do have a childcare program along with our community college that some others are seeking to do. And if you recall, Senator Bohlke had that argument that we need to fund that in an area

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where the welfare pilot program is. Those kinds of things will not happen with the reductions that we have asked. To give you one example of something that might...a few things that would happen at Western Nebraska Community College...

SENATOR CROSBY: One minute.

SENATOR HILLMAN: ... they look for the most part in staffing and they would look at faculty being reduced from 69 to 61, administration from 28 to 10, professional from 19 to 1.5, support services going from 42.4 to 12.6. The reason I bring that out is to say that they have gone into detail to figure out how they can address the reductions in LB 1114. And I guess in my point, I don't like the bottom line in what it is that we would be actually changing the role and mission of community colleges to something very different. And for that reason I support the amendment and would ask each of you to look at what kinds of things you and the expectations you're going to have of your community college in the future.

SENATOR CROSBY: Thank you, Senator Hillman. Before we continue with this discussion, Senator Withem has as his guests, and they're in the south balcony, 63 fourth grade students from Parkview Heights School in LaVista with their teachers. And in the north balcony Senator Beutler has as his guests 21 fourth grade students from Prescott Elementary here in Lincoln with their teachers. Would all of the Prescott and Parkview Heights students please stand and be welcomed by your Legislature. Thank you for being here today. Discussion continues on the Kristensen amendment. Senator Coordsen.

SENATOR COORDSEN: Thank you, Madam President, members of the body. I see Senator Hilgert doesn't appear to be on the floor. I had pressed my light when he asked the questions of Senator Kristensen. I think since I've already indicated my support for the committee amendment it might be appropriate at this time to speak just a little bit to the dollar figures that I've heard floated around the floor of the Legislature. With respect to last year's Revenue Committee package, the 1114, of course, for community colleges proposed I believe it was 8 cents and 4 cents, 4 cents being 2 years down the road after the '98-99 year. Also proposed $1.10 for K-12 education and $1 following

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two years. Senator Hilgert mentioned a $100 million figure. The $100 million figure has taken on a life all of its own. And I thought it might be appropriate to share with you how that originally came into being. LB 1114 based upon a $63 billion valuation of the state of Nebraska for tax purposes last year would have resulted in K-12 education not being able to collect $199 million and the rest of the units of local government including community colleges having a shortfall of about $100 million for a total based upon a $63 billion tax base of about $300 million in property tax reduction. So we move along down the road. The current tax year that we're in, the state of Nebraska has about a $70 billion valuation and the tax assessments that are going to be coming out very quickly, the preliminary information would indicate that the tax levy of that we are going to be paying on, for the budgets that are going to be determined now for the next year, is going to be about $77 billion. And so it's conceptually possible if we continue that valuation increase that by 1998-99 year the valuation in the state of Nebraska that the various levies are going to be applied to could well be in the neighborhood of $85 billion, $23 billion more...$22 billion more than what the original projections were made. What that means in real terms is that when we speak of static levies that either the collections are more money but also the shortfall is more money with respect to the community colleges and then that levy is applied to all of the property in the state of Nebraska. The time of implementation if, in fact, and I don't have my figures with me, but committee counsel shared with me that their opinion is that the average levy for community colleges is about ... was about 9 cents last year which would have resulted in about $54 million being collected by all the community colleges across the country, across the state. If you move to the 4 cents 2 years or 3 years down the road and if in fact $85 billion, that would be 35, $36 million available which would be $20 million less without factoring in for inflation'. The Revenue Committee took a look at that and thought that that was too big of a reduction and too quick of a reduction. So what we've essentially done is halve that amount of money. If we have 6 cents in the out years, then that would be approximately the same money that is being collected today from property taxes ...

SPEAKER WITHEM PRESIDING

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SPEAKER WITHEM: One minute.

SENATOR COORDSEN: ... without factoring in the inflationary costs of growth. Have I lost everybody by now? But that's something when we talk about these sorts of figures, levies are only one single small part of a mathematical formula. Valuations and budgets are where the rest of it come in. I think we all understand that, we all know that. Once in a while we need to be reminded of it. The $100 million, wherever you might figure that structured, is in fact more or less of an artificial figure. We don't know with absolute certainty what the real need is going to be in order to allow the various units of local government to deliver service at, in a more economical manner in the year 198-99. But it was the intent of the Revenue Committee to make an allowance for with respect to K-12 education, K-12 education, about half of what the loss would have been, that would have been available for property tax collection...

SPEAKER WITHEM: Time.

SENATOR COORDSEN: ... and the other half would have had to have been made up by local economies. The same thing applies to community colleges. Thank you, Mr. Speaker.

SPEAKER WITHEM: Senator Maurstad.

SENATOR MAURSTAD: I'll waive.

SPEAKER WITHEM: Senator Beutler. Senator Elmer.

SENATOR ELMER: Question.

SPEAKER WITHEM: Do I see five hands? I do. The question is, shall debate now cease on the pending Kristensen amendment? All of those in favor vote aye, opposed vote nay. The question currently before the body is, shall debate now cease? Record, Mr. Clerk.

CLERK: 25 ayes, I nay to cease debate, Mr. President.

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SPEAKER WITHEM: Debate is ceased. The Chair would recognize Senator Kristensen to close.

SENATOR KRISTENSEN: Thank you, Mr. President, members of the Legislature. I'd yield the first two minutes of my closing to Senator Elmer.

SPEAKER WITHEM: Senator Elmer, you have two minutes.

SENATOR ELMER: Thank you very much, Senator Kristensen, Senator Withem. One thing that I'd like to have people recognize when we're talking about community college and the system that the Revenue Committee has put together to fund in a fair way all of our state college or all our community colleges across the state, recognizing they serve a great need to the entire state, in that we are accomplishing some of the goals that we really with to attain while we are addressing 806 in that the citizens as a whole are sharing to a greater extent in educating our children which is all of our obligations. And secondly, that we are going to try to achieve, as nearly as possible, what the community college bill will try to achieve here and that is the expectation that if you own property in several areas of the state you could expect to pay a very similar amount to support the community colleges as we would like to do with our K-12 systems. And with that, I hope that that philosophy can be carried over also recognizing that it's almost ten times as much of a problem for the K-12s because of their number. And with that, I would return the time to Senator Kristensen.

SPEAKER WITHEM: Senator Kristensen, you have about 3.5 minutes.

SENATOR KRISTENSEN: Thank you, Mr. President. Thank you, Senator Elmer. This amendment, to recap for those of you who have been off working on other important issues, helps the community college system adjust and adapt to what we are proposing to do in the committee amendment. And the committee amendment changed the original levy amounts which were originally set at 8 cents and 4 cents in 1114 last year. The committee now recommends that it be dropped to 7 cents with a I cent for capital construction being earmarked and then in the year 2000 so we're going to speed up by a year, dropping it down to 6 cents as opposed to the 4 cents in the year 2001. To do

5412

that, by accelerating and now allowing them to have the 8 cents that they desire, you'll put two of the community colleges in a difficult position. This allows for some accommodation and a reallocation of state aid formula internally. It doesn't put more money into that formula. It just redoes internally and assists Western and Mid Plains to allow them to live within the levy limitations that we are going to put in place beginning next year. It also recognizes that there may be people who will generate some state aid among the community colleges that they're going to have to recapture part of that and put it back into the formula. It also collapses the existing state aid formula 10 percent of that and puts that into this fund as well and that's the technical parts. What it practically does is it allows the community colleges because we're going to accelerate the lowering of the levy limitations this year that you place two or three of these community colleges in a position where they can't raise 40 percent of their operating budget from their existing property tax requirements. If we don't allow some change in the state aid formula to recognize that...

SPEAKER WITHEM: One minute.

SENATOR KRISTENSEN: ... those people are going to be at great risk. Instead of just putting more money into the system and fixing it because we could just give everybody more money and fix it-, this recognizes that you're going to keep the same amount, the same pool of $8 million and make them live within that same pool. And you will see, we've got some numbers if you'd like to see them, about how that plays out in other years. But I think this is a good amendment to help them exist within their $8 million range that we had recommended as a committee and will not place at risk Mid Plains or Western Community College.

SPEAKER WITHEM: Thank you, Senator Kristensen. You've heard the closing. The question now before the body is, shall the Kristensen amendment 1733 be adopted to the committee amendments to LB 269? All in favor vote aye, opposed vote nay. Record, Mr. Clerk.

CLERK: 27 ayes, 0 nays, Mr. President, on adoption of Senator Kristensen's amendment to the committee amendments.

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SPEAKER WITHEM: The Kristensen amendment is adopted. Mr. Clerk, anything else pending to the committee amendments?

CLERK: Nothing further to the committee amendments, Mr. President.

SPEAKER WITHEM: We are back now then to discussion of the committee amendments. A couple of lights carried over from the previous amendment. Senator Hillman, do you wish to discuss the committee amendments? Senator Robinson, do you wish to discuss the committee amendments? Senator Beutler, your light is on.

SENATOR BEUTLER: Yes. Again, Senator Kristensen, a couple of questions if I may.

SPEAKER WITHEM: Senator Kristensen, will you respond?

SENATOR KRISTENSEN: Yes.

SENATOR BEUTLER: And I don't quite... I want to get a better feel for how the funding mechanism as a whole would work. First of all with respect to tuition, the community colleges right now I assume can charge whatever tuition they choose to charge. Is that correct?

SENATOR KRISTENSEN: Yes.

SENATOR BEUTLER: Okay. That being the case, tell me how tuition increases and decreases would work with respect to the state aid formula. If you increase tuition, you have increased your overall budget and that would entitle you to an increase in state aid. Is that true or not true? What I'm trying to get a feel for is whether the system as a whole provides incentives to increase or to decrease tuition or has a negative effect. But it just seemed to me and I have not been able to analyze this very much, but it just seemed to me that as you increase tuition you would increase your overall budget which would give you greater rights to state aid allocations. Is that the way it would work?

SENATOR KRISTENSEN: To be candid with you, I've not analyzed it

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from that point of view either. Where I've come from is that you focus on, and I think the way the aid formula is, it focuses on the 40 percent trigger on the property tax end first. That's one of those three qualifiers that you've got to get to. And so what's -going to happen is that you need to be at that maximum levy, okay? Then the next one is that if you can't raise, if you can raise the 40 percent of the operations then that's when you trigger in... it doesn't look at the tuition side of it. it looks at the operations side not including tuition and that's where that other 40 percent comes in. So I'm having a little trouble... I need to sit down and examine that as to what that ... whether there would be a negative incentive. In other words, if you raise tuition can you get more state aid? I mean that's probably the bottom line.

SENATOR BEUTLER: Let me leave that question with you and ask you one more that I'll leave with you.

SENATOR KRISTENSEN: That's a fair one.

SENATOR BEUTLER: And what then would be the effect of declines in valuation? You know, generally speaking we have increases in valuation fairly characteristically; but we did have a period in the eighties where they just went to you know where. And I suppose that possibility exists in the future, in fact, likely will come around at some point in time. And if you have a decrease in valuation, how does that affect things?

SENATOR KRISTENSEN: Well, I think the decrease in the valuation basically you're going to pump up the state aid needs then. And I think that that's going to trigger more state aid to be needed to take care of that.

SENATOR BEUTLER: Okay, so we might find ourselves in a kind of tight situation if state revenues are down at the same time that valuations are down.

SENATOR KRISTENSEN: If there's a significant decrease in the valuation bases, now that's not happened. Obviously, there are places where values have gone down.

SPEAKER WITHEM: One minute.

5415

SENATOR KRISTENSEN: These areas are fairly large so the risk is not as great. You know, for example, if you had a particular town, you probably have a greater risk that that can fluctuate, these are wider areas. But I think you're correct as a general premise, valuations go down, you can't raise as much money from the maximum levy, thus more state aid gets triggered in to keep the system going. I think that's accurate.

SENATOR BEUTLER: Okay, thank you.

SPEAKER WITHEM: Senator Kristensen, there are no further lights on if you'd like to close on the committee amendments.

SENATOR KRISTENSEN: Thank you, Mr. President, members of the Legislature. Senator Beutler, I'm going to take a look at that tuition issue here quickly for you. I think we've summarized through our discussion the committee amendments for LB 269. 1 1 d be happy to answer any questions and then we can begin to debate the bill if anyone has a need to do that. I know there's some amendments on the bill itself, but I would move the committee amendments at this time.

SPEAKER WITHEM: You've heard the closing. The question is shall committee amendments be adopted to LB 269? All in favor vote aye, all opposed vote nay. Record.

CLERK: 28 ayes, 0 nays, Mr. President, on the adoption of Senator Kristensen's amendment or committee amendments, I'm sorry, excuse me, committee amendments.

SPEAKER WITHEM: Committee amendments are adopted. Mr. Clerk, I understand there are amendments filed to the bill itself.

CLERK: Mr. President, Senators Hartnett, Landis, Schellpeper, Kristensen, Coordsen and Wickersham offer AM1426. (Found on page 1639 of the Legislative Journal.)

SPEAKER WITHEM: Senator Hartnett, I understand you're handling the amendment.

SENATOR HARTNETT: Mr. Speaker, members of the body, this deals

5416

with the area of volunteer fire departments'. One of the issues that we've had in dealing with the Revenue Committee is how to handle volunteer fire departments, And what it does, it allows the counties with more than 100,000 inhabitants to create a separate public safety commission under LB 1177 for fire service and fire services. Last year we had a bill that for public safety would be both police and for fire. What we've done with the large county, three largest counties is to allow them to have a...just for fire service itself. The second part, it allows counties to. allocate their level of authority for interlocal agreement to miscellaneous districts instead of taking it themselves. The situation we have in the area, my county, and also in Douglas County is we have volunteer fire department but there are paid members of the fire department; and they do not fit under the 2 or 3 cent levy. So this would simply allow them if Millard would go to the county board, say, of Douglas County or Sarpy County and say we want more money to run our fire department, they could allow them within that only the Millard district, people that live in that district. The county can't go over the 50 cents that it's authorized. So there's a limited amount that it does. It allows the county to allocate to subdivision levy authority in excess of their statutory limits although they will still not be allowed to exceed the limits. So in the case maximum levy is 7 cents, the county board could authorize a portion of the budget of 8 cents. But the county could say, no, it couldn't go to a vote of the people. It's simply to take care of a situation where there is volunteer fire department and paid people that's in ... we've simply limited to the three largest counties, Lancaster, Sarpy, and Douglas County. And it simply allows some flexibility as it relates to this problem dealing with volunteer fire department. Senator Janssen has a study that we're going to look at this because that's one of the situations that we addressed or tried to address in the Revenue Committee is volunteer fire department. But this kind of meets a need where you have both volunteers and paid fire department. Be glad to answer any questions as it relates to... another part of the amendment deals with...puts a cap on the county agriculture society of 3.5 cents. So I'd be glad to answer any questions.

SPEAKER WITHEM: Senator Schellpeper.

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SENATOR SCHELLPEPER: Yes, thank you, Mr. Chairman and members. I just want to explain a little bit about the county ag society. We talked about when we had ag society bill earlier about if when they go to a bond issue outside of the levy caps and there was no limit in that. I think Senator Beutler brought that up and this would take care of that concern. Every other entity has a cap as far as as high as they can go. There wasn't any in there for ag societies and so that's why the 3.5 cents is in there for ag societies so every entity now, if this would pass, would be underneath a certain levy limit and this is the same levy that several others have and so that's why we put it in there for ag societies. Thank you.

SPEAKER WITHEM: Senator Hilgert.

SENATOR HILGERT: Mr. Speaker, members, if Senator Hartnett could yield to a question.

SPEAKER WITHEM: Senator Hartnett, will you respond?

SENATOR HILGERT: And maybe, I don't know if you want to defer this to Senator Schellpeper or not. Regarding the county ag societies, the language of the amendment says that if the county agricultural society votes to exceed the appropriation given by the county they cap it at 3.5 cents. Do you want to ... yeah.

SENATOR SCHELLPEPER: Am I on?

SENATOR HILGERT: That's within the levy limits of 1114. Let us be very clear on the record about that.

SENATOR SCHELLPEPER: Right. They can't go over the levy limits in 1114 unless they have a bond issue.

SENATOR HILGERT: Right.

SENATOR SCHELLPEPER: And then they still can't go over 3.5 cents with this amendment.

SENATOR HILGERT: And I do think ... thank you., Senator Schellpeper. I do think it's important to establish a very clear record regarding some of these changes to LB 269. Thank

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you.

SPEAKER WITHEM: Thank you. Senator Hartnett, yours is the last light on. Would you like to close?

SENATOR HARTNETT: Unless there's any questions, I think... Senator Bromm come over. We still need to deal with volunteer fire departments across the state, but this is simply taking care of a problem in the three largest counties so I'd ask you to support this amendment to LB 269.

SPEAKER WITHEM: You have heard the closing. The question how is the adoption of the Hartnett amendment to LB 269. All of those in favor vote aye, opposed vote nay. Record.

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

SPEAKER WITHEM: The Hartnett amendment has been adopted. Mr. Clerk, anything further?

CLERK: Senator Will had an amendment but I've been instructed to pass over it until he arrives, Mr. President, so I have nothing further on the bill at this time.

SPEAKER WITHEM: We are now then discussing the motion to advance LB 269. Senator Kristensen, there are no lights on. Excuse me, Senator Coordsen's light did go on and I had not quite completed my sentence so, Senator Coordsen.

SENATOR COORDSEN: (Laughter) Ah, the clock is ticking, Mr. Speaker. The only thing I wanted to mention was very briefly and I don't think this was brought up this morning that much of 269 is the result of input that local units of government had given to the Revenue Committee over the interim. At one point in time we had two pages that were generally single sentence statements double spaced and those for the most part wherever it was possible were in fact incorporated in 269. They're a number of proposals. A couple of things that we haven't talked about, two things I did note that we haven't talked about and they're not of import, but it does provide in there the flexibility for county boards with notice to meet in

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other places than their general meeting rooms in the courthouse. And I think that it was important that that be noted in closing. Most of these, as I said, in 58 sections there are numerous proposals, only a few of which we covered this morning. Almost exclusively those changes are the result of input by local government officials pointing out procedural problems, mechanical problems with 1114 as it existed. So with that, I would encourage your support of LB 269.

SPEAKER WITHEM: Senator Robak on a motion to advance.

SENATOR ROBAK: Mr. Speaker, members of the body, I might be out of order, but I have some questions for Senator Kristensen. Is that proper at this time?

SPEAKER WITHEM: We are debating the motion to advance and it certainly is proper at this point to request another member to respond to questions. Senator Kristensen...

SENATOR ROBAK: Thank you.

SPEAKER WITHEM: ...Senator Robak has a question she'd like you to respond to.

SENATOR ROBAK: Senator Kristensen.

SENATOR KRISTENSEN: Yes, Senator Robak.

SENATOR ROBAK: I have a problem with 269 because in my community we have an airport authority. And some of the members on the airport authority seem to think that this is unworkable and had to be amended which 269 affects airport authorities. I'll try to simplify it, but 1114 seemed to attempt to transfer the financing of airport authorities to the county. Is that right?

SENATOR KRISTENSEN: Well, we didn't make a specific or we didn't put a specific in it so they fell under the miscellaneous districts of the county.

SENATOR ROBAK: That's right. By Section 1, the county is allocated up to 15 cents of its authority to finance all other

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political subdivisions not specifi ... covered in this section to levy taxes as authorized by law which do not collect the 15 cents per $100. Is that correct?

SENATOR KRISTENSEN: Yes, Senator.

SENATOR ROBAK: Okay. Now don't go away. City airport authorities in towns like Columbus, now with the exception of Grand Island, have always been supported in the city levy and this probably should continue. LB 269 cleans up LB 1114 so it's now workable and it's clear that the city shall still have the responsibility to finance the authority under its lid of 45 percent, 45 cent per $100. However, LB 269 transferred the responsibility of the airport authorities from coming under the county lid to coming under the city lid without changing lids. The county still has 15 cents to finance the various political subdivisions that lost their authority to levy tax. Yet one of the major recipients, that is the airport authorities, was transferred to the city and yet the lids remain the same. Are you following me?

SENATOR KRISTENSEN: Yes, I am, Senator, yes.

SENATOR ROBAK: And what is your comment at this point?

SENATOR KRISTENSEN: Well, my comment is that we under 269 changed the airport authority to the city levy if the city created the airport authority. And if they didn't, then it still remains under the miscellaneous levy.

SENATOR ROBAK: Well, then they did and it's under miscellaneous so, therefore, they're losing their...

SENATOR KRISTENSEN: Did the city create the airport authority?

SENATOR ROBAK: Well, I believe they did. It's been years and years and years ago.

SENATOR KRISTENSEN: Okay. If they did, then that...under 269 that is going to go under the city levy because that's who created it and who's done that.

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SENATOR ROBAK: But yet that city... it's under the city levy without changing lids.

SENATOR KRISTENSEN: That's correct.

SENATOR ROBAK: Okay, the lid still remain the same so it seems logical that the 15 cents of the counties should be reduced by I or 2 cents and this sounds terrible, but it's only for those towns that have airport authorities within them, reducing the county lid to 48 percent or 49 cent and increasing the city lid from 45 cents to $100 to 46 cents or 47 cents per $100. In other words, you're going back to the city lid.

SENATOR KRISTENSEN: Well, Senator, what happens here is that if you're going to make ... we made some broad policy choices that many of those miscellaneous levies ultimately the county is going to have to pick up. They're not going to be able to fund all of them so the county board is going to have to pick and choose who they want to fund. If they did not create the city airport, we didn't think that that was probably a proper policy to make the city under or to pick up the city airport under the...

SPEAKER WITHEM: One minute.

SENATOR KRISTENSEN: ... county's miscellaneous levy.

SENATOR ROBAK: But all the counties do not have airport authorities within them. All the cities don't have... I think there's probably like how many in the state? Do you have any idea?

SENATOR KRISTENSEN: Oh, I suppose there's 50 or 60 of them.

SENATOR ROBAK: No, I think there's 30.

SENATOR KRISTENSEN: Okay. My recollection was 50 or 60 but I could stand corrected.

SENATOR ROBAK: So this would not affect every county in the state. It would only... I'd like to put an amendment on this like Senator Robinson did to help his little area down there

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with what he did today on select File since we don't have time today. And may or shall I mean if the city wants to do it.

SENATOR KRISTENSEN: Okay, but realize what we did is that they still got to live within their levy limitations. We're not changing the overall levy limitations in there.

SENATOR ROBAK: No.

SENATOR KRISTENSEN: Okay. I'd be happy to look at that amendment, make sure that members of the Revenue Committee get a chance to look at it as well.

SENATOR ROBAK: Okay.

SENATOR KRISTENSEN: Sure, be glad to do that.

SPEAKER WITHEM: Time.

SENATOR ROBAK: Well, we're not little Podunks ... is it time?

SPEAKER WITHEM: Sorry, your time is up. Senator Dierks. Oh, excuse me, Mr. Clerk. I understand you have an amendment on the desk.

CLERK: Mr. President, Senator Will would move to amend the bill. Senator, AM1741. (Found on page 1682 of the Legislative Journal.)

SPEAKER WITHEM: Senator Will, to open.

SENATOR WILL: Thank you, Senator Withem, members of the body. This is an amendment that deals with the Metropolitan Area Transit Authority in Omaha. And I need to give you a little... I just walked in the door so I need to collect my thoughts for a minute. I need to give you a little history on how this came about. There is ... the Metropolitan Area Transit Authority was created by statute. It is an entity created by the state that serves the city of Omaha and this in essence is the bus company that serves Omaha. It is a public transit authority. Under current statute, the transit authority is governed by an appointed board and state statutes at this time give the board a

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10 cent levy that they may ... up to 10 cents that may be used for operation of the transit authority. What happened in a nutshell last year when LB 1114 was passed, there were a number of exceptions to the levy limits and I want to, without having the information in front of me right now, I want to say there were eight specific exceptions or exemptions, however you would want to characterize them, to the levy limits for the different, the various political subdivisions. Frankly, I don't know that others did, but I certainly never contemplated that 1114 applied to Metro Area Transit. I simply assumed that their levy limit was something that was not a general levy limit that we were talking about in the major areas such as cities, counties, and school districts. And that, in fact, they remained outside 1114. Over the interim, that became a question that I visited with the executive director of Metro Area Transit and he said, you know, this is something that probably is best specifically put into statute. So I introduced LB 348 this year which was referred to the Revenue Committee. And what LB 348 would have done is simply added Metro Area Transit to that list of entities that are exempt from the limitations enacted under 1114. That was, in my mind at the time I introduced it, this was a clarifying bill. This was a bill that would clarify that they were outside those limits which my initial inclination was that they were because Metro Area Transit literally, in my experience. at least , did not arise in the discussion either in committee or on the floor. Eventually, the provisions of LB 348 were, with some variations, placed by the Revenue Committee into this bill, LB 269, by way of a committee amendment. What the committee amendment at that point did was say Metro Area Transit is indeed added to this list of exceptions, but their levy limit drops from 10 cents to 8 cents. In fact, their actual limit at this point is about 5.5 ... their actual limit, their actual levy I should say is about 5.5 cents if I recall correctly. My argument for this, number one, I've already spelled out in that I don't think, literally, that Metro Area Transit was contemplated being under 1114. Secondly, that this has been an incredibly responsible subdivision. I will have some handouts for the members at some point that demonstrate that. I apologize, I was caught a little unawares by this bill coming up so quickly. But in fact, that was my argument in committee and the committee initially did adopt that amendment. There was then some second thoughts on some parts of the committee, some

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members of the committee. There was a motion to pull that amendment back out and that in fact is what occurred. I still believe that the full 10 cents is probably legitimate. However, what I have done with this amendment is reduce that levy limit further down to 6 cents and placed it under the city of Omaha. Currently, that is not the way that the Metro Area Transit operates. While they are governed in general terms by the city of Omaha, the appointed board operates the authority and establishes the level of the levy. They've been very responsible. I understand that there is an argument that this is an appointed board as opposed to an elected board and certainly philosophically there's some merit to that. However, I do believe that we can demonstrate that the transit authority indeed has actually not only decreased its levy but actually decreased its revenue because of the efficiency of its operations. And for that reason, I think my initial, my original bill has a considerable amount of merit. However, in the interest of accommodation, I think the amendment that I'm introducing would cut that levy limit to six cents, would charge the city of Omaha with that levy; and, as the amendment is drafted, would require the city to have that levy. I think that this is an extremely responsible way to treat Metro Area Transit. I think it is the only transit authority in the state that I know of. Omaha certainly has, because of its size and the number of people that live there, has unique needs when it comes to transit. And I think the transit authority, if any entity can make a case that they should be treated the way my amendment would treat them, I think it's Metro Area Transit. With that, I hope at least this morning we can open the discussion on this amendment.

SPEAKER WITHEM: Thank you. To address now then the Will amendment to LB 269, Senator Dierks.

SENATOR DIERKS: I believe I'll pass. I'd like to talk to the original bill.

SPEAKER WITHEM: Senator Coordsen.

SENATOR COORDSEN: Thank you, Mr. Speaker, members of the body. The Revenue Committee discussed, voted on, voted to put it in, voted to take it out after further discussion. It was generally

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our opinion I would think with the exception of Senator Will and I had at one point in time sided with Senator Will understanding the need to have some guarantees for access to property valuations to secure the better rating for bonds to balance off the federal funds that go to pay for a good portion of the equipment, if not all. However, however, this is, I would think by anybody's definition, a function of the city of Omaha in the same way that other miscellaneous districts are functions of other units of government, be that county, primary class cities, first class cities and on down the line. It was the considered opinion of the Revenue Committee not to include this provision within the recommendations for modifications in the 1114 package. Senator Will shared with us at that time that he intended to bring this as an amendment on the floor and certainly that was well within his right to do. It is my opinion that the city of Omaha, for the purposes of providing for the necessary funding authority that's needed to continue the operation of the Metropolitan Area Transit Authority, that they do like each and every other unit of government in the state of Nebraska is going to have to do beginning in '98 and '99 and on out to the future and that is to make a provision within their budget, their 45 cents, to accommodate that city service. I would stand corrected if I'm wrong, but I understand that this is a service that is for the most part wholly within the city. I'm not so sure how far it goes out into the county. If it is a function of county government, then that presents to us another situation whereby by a Select File amendment there may be the ability to consider the ... this particular transit authority as a county function and eligible for access to the county levy, the 15 cents available within the 45 cents. But beyond that, we have, as I indicated, spent a significant amount of time discussing this issue, reasoning through. And the Revenue Committee made the conscious decision not to include this exception to the lid, to the city lid for Omaha in 269. So I would recommend that the body of the Legislature does not include this at this particular time. Thank you, Mr. Speaker.

SPEAKER WITHEM: Senator Schellpeper.

SENATOR SCHELLPEPER: Thank you, Mr. Chairman and members. I also rise to oppose the Will amendment. I think this body has to realize that once you start letting one agency outside the

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levy limits there's going to be others. I know they make the arguments that this is a very unique board. It's a very good board. It's only for a metropolitan city. That's right, but once you let one entity outside of your levy limits the whole thing starts crumbling, starts falling apart. LB 1114 last year was a very strict levy limits. This is a major erosion of that bill. At the Revenue Committee hearing, the city was asked if this would fit underneath their levy limits and there was no testimony presented that it would not fit underneath their current levy limits. That it would fit. They had to do some other things, but so do other cities. Every other city in this state has to do some other things also. This morning I heard that it's going to affect their government payment that they get government subsidies. Well, other cities do, too. It's not something that will be jeopardized. It's not something that will be harmed as long as it's underneath their levy limit. Now a city the size of Omaha, once you start letting out the MAT or somebody else, then they're not affected at all by the levy limits, not at all, because everything will operate just like it is currently. But if you let them go outside with this 6 or 7 cents, then right away you're having problems with all of the other cities in this state. I think it's a bad precedent to set. The MAT board is not elected by the voters. it's appointed by the city council and it should be underneath that city council. They're not elected by the 'voters who actually are controlling that board. I think it's a bad precedent to get started. And the Revenue Committee, like Senator Coordsen stated, we spent a lot of time talking about this how we were going to do this. It was approved at one time. We thought, well, maybe we should do it and then we got to thinking about it. Senator Warner had some grave concerns about this because he said you can't do that. You can't start letting one agency out. Otherwise, the whole concept of LB 1114 falls apart, the whole concept. This is gone down once you start letting one agency out, one city, we're unique, we need to be out. Now if you don't want to stick with LB 1114, you want to start raising all the other levy limits, then that's a whole different story. But that's where it is and I would recommend that this body not support the Will amendment at this time. Thank you.

SPEAKER WITHEM: Senator Kristensen, on the Will amendment.

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SENATOR KRISTENSEN: Thank you, Mr. President, members of the Legislature. Let me talk about what this amendment is not about and what this debate should not be about. From at least our information and from the testimony that we've received, Metro Area Transit runs a pretty good operation from what we've heard and from the way we've seen. That's not the issue of the quality of service. It's not the issue of anything else. -This is -the issue of where should their property tax money be allocated under levy limitations. Last year we had a couple of philosophic principles that we went by. *One of them was, who are they governed by? Do they have a free-standing elected body, for example, the governors of the community colleges, directors of the NRD, so on and so forth? The Metro Area Transit is not that way. They're appointed by the city. They were created by the city. Originally they fell under the miscellaneous districts much like what Senator Robak had talked about her airport had done. And by way of clean-up this year, we've decided if they're created by the city that they're being, you know, basically have the attachment to the city. That's where they should be and that's where their levy should fall under their count towards their levy limit. You don't hear the city of Omaha coming and saying we don't have room for them because their levy obviously has room for them. That's not an issue. The issue is it's not particularly fair to put them under the county levy when it's primarily a city bus system. Now they do operate outside. In fact, they go across the state lines and they receive some compensation back for that, that goes to their federal funding. But if you're looking at a policy decision under whose levy limits should Metro Area Transit be placed, it should be under the city, that's primarily where their nexus is at. Since the board is not a free elected, free-standing board, we think that's where they ought to be. Quite frankly, the discussion was if you put us under the city, the city is going to play politics with us, and they're going to cut us down and we won't be able to exist. If you put us under the county, we can't live with them because the county board, they're going to play politics with us and they're going to do away with us, or they're going to cut us back until we can't operate. The bottom line is, I can't solve all those internal politics of that community, and they're asking us to do that. We made a policy decision. If you don't put them under the city limit, who else is going to come in? You're going to have

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airports, you're going to have a variety of other entities who are all going to come in here and want you to put them in different places, and you've lost some of the policy choice. And we think that they're better off in the city because that's logically where everybody else is at in that same type of situation. It's not an issue of are they doing good business or bad business. The issue is that it doesn't make any sense to put them outside of the levy, one; and, two, that they're better suited to be under the city levy limit. I would vote and urge you to vote against the Will amendment for matter of really consistency, but a matter to keep good policy because if you let this one occur, there's no way to say "no" to many, many others that are going to want to do the same sorts of things. And ultimately you're going to destroy the framework of 1114. I'd urge that you reject the amendment.

SPEAKER WITHEM: Thank you, Senator Kristensen. A group of people have come down to hear the next floor speech that Senator Vrtiska will be giving. They have his wife, Doris, Kris, Kim, Baylee Vrtiska from Tecumseh, the son and daughter-in-law and granddaughter of Senator Vrtiska. And we have Lori, Bryan and Trey Seibel from Lincoln, the daughter, son-in-law and grandson of Senator Vrtiska. Would you stand and be recognized. Senator Vrtiska, you're recognized to speak, and you better be good with that audience there.

SENATOR VRTISKA: Thank you, Mr. Speaker. This wasn't very good timing. Believe me, I didn't know they were coming in at this time, or I would have turned my light out, maybe I should anyway. But I do have a question I wanted to ask Senator Will, if I could, please.

SPEAKER WITHEM: Senator Will, will you respond?

SENATOR WILL: Yes.

SENATOR VRTISKA: Senator Will, I understand what you're trying to do, and I guess in a sense it has some merit. But I just wondered, do you think that, knowing many of the counties that have handibuses and some of the cities that have handibuses, do you think that they too should be included outside of the limit, in order for them to help finance those...that type of

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conveyance also? 'Cause that kind of fits in the same place, doesn't it?

SENATOR WILL: I guess my initial reaction to that, Senator Vrtiska, would be that while certainly the subject matter and the activity is the same, our Metro Area Transit is unique in that it's an independent authority at this point. And I think those other activities are probably now being conducted under the auspices of those subdivisions. But certainly I would not reject the idea out of hand.

SENATOR VRTISKA: Well, I guess, when I first listened to your introduction on this I had some concerns about, has been expressed by some of the other people, that we are again making attempts to circumvent what we intended to be a hard and fast rule under 1114. And now we're trying to find ways to get around it. I understand what you're trying to do, and certainly it's laudable on your part. But, of course, from my perspective it comes back to the same issue because the county board or the city councils have to, in fact, take money out of their budget in order to support those kinds of activities, as far as handibuses and those type of conveyances, or discontinue them. And neither one is a good option, because in many cases the cities or the counties don't have that kind of funds either. So I guess what I'm thinking is that if, in fact, and I ask you the question, if you thought it was a good idea for the city of Omaha, wouldn't it also be a good idea for many of the other places, too? And you seem to think it fits a different category. I don't know that I would necessarily agree because it still provides the same type of service.

SENATOR WILL: And that's why I indicated, Senator Vrtiska, that I would not reject the idea just on the surface. I think I think there is a distinction, but I wouldn't reject the idea, if that's something you wanted to explore.

SENATOR VRTISKA: *Well, I guess I don't want to debate the issue at any length. I just wanted to make that point that it had become difficult for me to vote for your amendment because, again, we're starting to tear into the fiber of our activities of a year ago. And I can understand from your perspective that it's a difficult decision for you not to come forward with. But

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at this point I suppose I'll have a difficult cult time in supporting it, because I don't expect I could probably get support for an amendment that would do what I would want to do either. So I can give you my sympathy, but I doubt if I can give you my vote. Thank you.

SPEAKER WITHEM: Senator Hilgert.

SENATOR HILGERT: Mr. Speaker, members, regarding the comments that were related to the body by some of the members on the Revenue Committee talking about the concerns of politics that might be played, I would only direct you to today's front page story regarding the politics that can be played in the city budgeting process, "Deputy Chief's Memo Raises Red Flag on Police Budget". So certainly I would offer this as exhibit A regarding that concern. I would direct you to Metro Area Transit Authority's history of the use of the property tax. In 1994, 195, '96, 197 their levy that was authorized by statute was 10 cents. The actual levy in '94 was 7; '95, 6.3; '96, 5.9; and '97, 5.4; 54 percent of what their authorized levy was. In real dollars, in real dollars it went from 7.2 million, 6.8, 6.8, every year it's gone down somewhat in real dollars, even when ... you know, not even factoring for inflation. I would submit to you that if every taxing authority that relied on property taxes in the state of Nebraska was at 54 percent of their authorized levy, we wouldn't have a property tax problem, we wouldn't have had to have 1114. I've heard an argument that, well, this is bad policy because it takes a certain body out of the limits, et cetera and so forth. I would also submit to you that the taxpayers of this state, at least the taxpayers in my district, do not look at the check that they pay for their property taxes and bifurcate that check and think that, well, this is to one authority, this is to another authority, they pay their bill. What they're interested in is holding to the line on property taxes.. And the very same people that are advocating for 269, saving the community colleges, the very same individuals that will be asking you for a 12 cent retreat on our 1114 and LB 306, are the same people that are now saying, but 6 cents for city of Omaha is bad policy. We're going to have 1114 crumble. My friends, I think the 1114 debate has already started to take some cracks in it. And if we are talking about the legitimate purposes for taking 12 cents and adding it onto

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our levy limits in 306 that we will be discussing, that Senator Schellpeper will be discussing, and that we've heard the debate about the other levy limits, I mean what's wrong with the people from Omaha have ... preserving their bus system at, I might say a 40 percent reduction. Their levy authorized by statute was 10 cents, Senator Will's amendment goes to 6 cents, which is a 40 percent reduction on the authorized levy. That's a 40 percent cut in the ability to have... levy property taxes. I would encourage the body to listen to the representatives from Omaha that will be impacted from this, and that also, just as the Omaha senators are considering school districts that are not perhaps in our district, I don't have any Class I's in south Omaha and downtown Omaha, but I'm sensitive to the LB 806 debate, I encourage my fellow senators to also be sensitive to our metro area and allow us to preserve our quality...

SPEAKER WITHEM: One minute, I'm sorry.

SENATOR HILGERT: ... bus system. So, with that, I would encourage the body to adopt Senator Will's amendment. If you want to... and just be careful about how the debate is going regarding these levy limits and start adding in the ... because I ... when you talk about policy, I think the policy is the pocketbook, not necessarily what A pays, B pays, C pays, D pays, 'cause I think to the taxpayer it's one check. And I think this is a very valid amendment that needs to be done to preserve our Metro Area Transit in the city of Omaha. Thank you.

SPEAKER WITHEM: Senator Will, for what purpose are you rising?

SENATOR WILL: Mr. Speaker, I'd like to withdraw this amendment and refile it for Select File.

SPEAKER WITHEM: It is withdrawn and shall be deemed refiled for Select. Mr. Clerk, anything else?

CLERK: Senator Robak has 1813.

SPEAKER WITHEM: Senator Robak.

SENATOR ROBAK: Mr. Speaker, I will withdraw that and file the amendment on Select File. Thank you.

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SPEAKER WITHEM: It shall be deemed withdrawn and refiled for Select purposes. I'm going to hit the clear light here, because most of those lights were on, I think, to discuss the last amendment. Mr. Clerk, anything further on the bill?

CLERK: Nothing further on the bill, Mr. President.

SPEAKER WITHEM: Senator Dierks to discuss the motion to advance.

SENATOR DIERKS: Thank you, Mr. Speaker. I'd like to ask Senator Kristensen a question, please. Senator Kristensen, there's two pieces of the legislation that I have a little concern about. One of them deals with removing all the funding authority for the weed districts. Would you explain to me why that's in there.

SENATOR KRISTENSEN: That was an oversight last year when we eliminated most ... many of those miscellaneous special levies from last year. And so what we're doing is just making it consistent from what we did in 1114 last year. It's that old levy, it now will have to come under that miscellaneous levy of the county, and so they don't have their own specific levy.

SENATOR DIERKS: Okay. The other question I have is, maybe I'm reading it wrong, but does this bill require that for airports to exist they have to be city airports and they're not going to be county airports?

SENATOR KRISTENSEN: No. What it does do, if they are a city created airport, that they're going to be under the city levy. If they are anything else, they become a miscellaneous district and are under the county's levy authority. So if they have to come within again that miscellaneous 15 cents that we talked about earlier, but that's the distinction we make.

SENATOR DIERKS: Okay. If we have... in Holt County we have two different city airports. I think that's rather strange. Most counties in the state, I think only Douglas County has two. They have thought about trying to become a county airport, but they are both ... one's Atkinson-Stewart city airport, and one is

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the O'Neill city airport. Would this bill prevent their moving to a county....

SENATOR KRISTENSEN: No, it wouldn't, Senator. In fact, I could... I'd offer some suggestion to them is that city airport authority could use, remember we've got that extra nickel in there, levy authority, if they do a joint purpose. They could keep those authorities and join together and use that nickel, that extra nickel of levy authority that the city has as a joint venture to provide air service, and so that's how they could get, in effect, that you wouldn't take that money away from the county or the city. They could access that joint venture nickel that we've put in there. I think that would be a good thing for them to do.

SENATOR DIERKS: Okay, thank you.

SPEAKER WITHEM: Thank you, Senator Dierks. Senator Kristensen, deja vu, I'm recognizing you to close on advancement of the bill.

SENATOR KRISTENSEN: (Laugh.) Thank you, Mr. President, members of the Legislature. I appreciate the body's attention to the first portion of the revenue package. This portion is obviously the one that does make many of the technical changes to live within our framework that we established in 1114. My good friend, Senator Hilgert, I would urge you to be careful with the terms that you use, because there's a difference between wanting to have someone be outside of levy limits as opposed to someone who is already ... have and does have independent levy authority and increasing their ability to do that, because they're two entirely different concepts. And obviously what we're doing, and we'll discuss it on Senator Will's amendment, Senator Robak will give us a chance to discuss that as well, that there's a big difference between trying to get yourself outside of levy limits so you can be a freewheeling agent and being already there and increasing the amount that you have to live with. (LB) 269 does a variety of things. I think we've tried to cover most of those. Obviously, the biggest changes are the community college and the aid formula that we do for them, the Veterans' Service Committee, the...allowing for the merger of those is going to be an issue that is much easier to do now. And I think

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we've taken away many of the concerns that those people have. We also have some joint services that we had last year, we streamlined that, we do away with some of those votes. It makes it cheaper and easier for people to do their mergers in joint services. There's a number of those things that we just discussed with Senator Dierks. When we moved people over under their appropriate levy limitation, which was away from 15 cent miscellaneous district, over into city levies. We also... Senator Coordsen, I think, highlighted one of the changes from where they had to have the meetings, that it doesn't have to be the traditional courthouse setting. We also change the formula for the community colleges to allow them to use some state aid, to come in, basically rewards them for being efficient. I think there's a number of things that here have been good policy. I know we're getting close and the people had their eyes on LB 806 this morning, but we made a lot of progress and take the first step of the property tax package. The next part of the package will be LB 306, and that's where we begin the discussion of what's the next step in terms of some of the changes for the levies for, for example, the school districts. With that, I hope that you would vote to advance this bill to the next round of debate. We will then take up the amendments that Senator Will and Senator Robak had. And I'd be happy to answer any questions between now and Select File. Thank you, Mr. President.

SPEAKER WITHEM: Question before the body now then is the advancement of LB 269. All of those in favor vote aye, opposed vote nay. Record, Mr. Clerk.

CLERK: 36 ayes, 0 nays, Mr. President, on the advancement of LB 269.

SPEAKER WITHEM: LB 269 advances. Senator Wehrbein, your light is on, did you wish to address anything? Mr. Clerk, do you have items for the record?

CLERK: Mr. President, I do. A confirmation report from Natural Resources Committee. Senator Beutler has amendments to (LB) 517 and (LB) 658 to be printed; Senator Robak, amendment to LB 269; Senator Withem to (LB) 798. That's all that I have, Mr. President. (See pages 1738-42 of the Legislative Journal.)

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