COMMITTEE ON REVENUE
January 24, 1997
The Committee on Revenue met at 1:30 p.m. on Friday, January 24, 1997, in Room 1520 of the State Capitol, Lincoln, Nebraska, for the purpose of conducting a public hearing on LB 342, LB 270, LB 187, LB 28, LB 86, and LB 317. Senators present: George Coordsen, Vice Chairperson; D. Paul Hartnett; Doug Kristensen; David Landis; Stan Schellpeper; William R. Wickersham; Eric Will. Senators absent: Jerome Warner, Chairperson.
SENATOR KRISTENSEN: Welcome to the Revenue Committee of the Nebraska Legislature. This afternoon we're going to hear the following bills in the following order. First, we're going to start with LB 342, next LB 270, followed by 187, then LB 28, LB 86, and finally LB 317. Senator Warner will not be with us this afternoon, so I'm going to open the hearing. For those people who are present this afternoon, to my far right, Senator Stan Schellpeper. Senator Paul Hartnett is next. To my far right over on the end is our Committee Clerk, Erma James, and Legal Counsel George Kilpatrick is present. We have other members who are around the Legislature introducing other bills. They'll be coming and going this afternoon. And George, if you would, would you please introduce LB 342.
GEORGE KILPATRICK: Thank you, Senator Kristensen, other members of the Committee. My name is George Kilpatrick, Legal Counsel for the Revenue Committee, here representing Senator Warner in introducing LB 342. This is a bill that deals with a change in the law that Senator Warner was the sponsor of a couple of years ago. The number of that bill was 1290. You may remember it. It called for adjusting the valuation of schools to 100 percent for purposes of distributing state aid. It so happens that there was not, at that time, a procedure for correcting clerical errors that might happen in the... either placing property in the proper school district, a miscalculation, or other things that might happen. At that time, there was no opportunity... there was no opportunity for property tax, in general, to correct those sorts of clerical errors. There has since been a bill passed for... to deal with clerical
Committee on Revenue
January 24, 1997
errors in the assessment of property tax, and this provision has not been changed. What this bill would do is provide a procedure, including a hearing, although no appeal, for ... or a petition, I guess. There isn't a hearing either ... to correct clerical errors that may occur in the process of adjusting school valuation for purposes of school aid. This bill is made to be retroactive in order to correct clerical errors from last year. Those would have to be filed by March of this year. From this year "thence forward", the deadlines are that it would have to be filed by October 1, and then decided by November 30 in future years. I do believe there is ... will be some testimony dealing with a particular situation, and I'll be happy to answer any questions.
SENATOR KRISTENSEN: Thank you, George. Questions by the Committee. Senator Hartnett.
SENATOR HARTNETT: George, these are errors at the school district or at the county level? Where would they ... or...
GEORGE KILPATRICK: Well, it could be either, but ...
SENATOR HARTNETT: ... maybe both.
GEORGE KILPATRICK: ...typically what you're talking about is the communication between the County Assessor and the Property Tax Administrator. So typically, it'd be an Assessor error, but it could be anything.
SENATOR HARTNETT: Yeah. Okay.
SENATOR KRISTENSEN: Other questions? Senator Hartnett?
SENATOR HARTNETT: No, no.
SENATOR KRISTENSEN: Okay. Very good.
SENATOR HARTNETT: I want to get one of the Pages.
SENATOR KRISTENSEN: Okay. Thank you, George. Can I see a show of hands of those who will testify in favor of LB 342? Okay. Dennis, come on up. Anyone here to offer negative testimony or oppose 342? Any neutral testimony? Okay. Very good. Good afternoon.
Committee on Revenue
January 24, 1997
DENNIS POOL: Good afternoon, Senator, Kristensen, and members of the Revenue Committee. My name is Dennis Pool. For the record, that is P-o-o-l. I represent the Department of Education. I am the Nebraska School Finance Administrator. We are here to testify in favor of LB 342, and I would like to just, specifically, explain a situation that might help you understand the necessity of doing these kinds of corrections. One of the things that school districts have been telling the department people is that we need to have more predictability in our state aid calculations. That those need to be consistent early enough to help schools do them some planning. The problem that weirs having with the adjusted valuation... it was typified this year in that there was a school district whose County Assessor incorrectly placed a significant amount of value that should have been in District A in District B's adjusted valuation.. What happens, then, is when we use this valuation in our state aid calculation, we will use that April 1 for the first estimate that we're going to give them for the 97-98 certification of state aid. What will happen is, we know going into that calculation it will be wrong, because that error has not been corrected. There's no provision for it to be corrected. So, while we're trying to be out front and help schools with their ... doing their planning, weirs going to ... not certify, but we're going to give them a state aid estimate that we know is going to be incorrect because of this valuation change. And it does not only affect these two school districts, it affects the entire state because the district that the value was assessed in is an equalized district. The district it should have been assessed in is a nonequalized district, and so, when we change this valuation around, it will significantly change the equalization aid, which will affect, eventually, everybody's aid to a certain amount. So, we would like to see this correction provision be implemented so that it could help school districts in their planning processes. Thank you.
SENATOR KRISTENSEN: Thank you, Mr. Pool. Any questions by the Committee? I see none. Thank you very much. Anyone else who wishes to testify on LB 342? All right. That will close the hearing on LB 342. Next is LB 270, introduced by the Revenue Committee. I believe, Cathy, are you going to introduce this bill for us? That was my understanding, so