Floor Transcripts

LB 269 (1997)

Select File

May 19, 1997


SENATOR CROSBY:  At 1:30 we're going to LB 269.


CLERK:  Madam President, 269.  Senator Bruning.  Enrollment and Review amendments first of all, Senator.


SENATOR BRUNING:  Madam President, I move we adopt the E & R amendments for LB 269.


SENATOR CROSBY:  You've heard the motion to adopt the E & R amendments to LB 269.  All in favor say aye.  Opposed no.  They are adopted.


CLERK:  Madam President, first amendment I have to the bill is by Senator Will.  Senator Will is excused.


SENATOR CROSBY:  Is anyone authorized to take Senator Will's amendment?  Seeing none.  The next one.


CLERK:  Senator Robak has the next amendment.  Senator Robak is excused, Madam President.


SENATOR CROSBY:  Anyone authorized to take the Robak amendment?  The next one.


CLERK:  Next amendment, Senator Janssen.  I had a note from Senator Janssen that he wished to withdraw AM1807.


SENATOR CROSBY:  No objections?  It is withdrawn.  The next one.


CLERK:  Next amendment.  Senator Maurstad.  Senator Maurstad, AM1860.




SENATOR CROSBY:  Senator Maurstad.  Senator Maurstad.  Move on


to the next one.


CLERK:  Senator Kristensen.  Senator, I have AM2104, but I have a note that you want to offer 2241 instead.  (AM2241 appears on page 2028 of the Legislative Journal.) Is that right?


SENATOR KRISTENSEN:  That's correct.


SENATOR CROSBY:  Substitution.  No objections?  The substitution is made.


SENATOR KRISTENSEN:  Thank you, Madam President.  Would you like me to open on this particular amendment?


SENATOR CROSBY:  Yes, you're recognized to open, Senator Kristensen.


SENATOR KRISTENSEN:  Thank you, Madam President, members of the Legislature.  This particular amendment, to give you some background, to bring you up to speed about LB 269, again this is the property tax provision.  The amendment 2241 incorporates a number of things that we talked about on General File, suggestions that we had that weld looked at.  There's some noncontroversial changes.  I'm going to try to go through them one at a time and help you through that.  If there are questions, I'll be glad to answer them.  The first thing that we look at to do ...  there's a new Section 3.  That section would strike the sunset for a weather control district.  Now a weather control district has been in the statutes for a long, long, long time.  Last year under 1114 we sunsetted those because we weren't aware that any of them were in existence, or if they were in existence, they had not been levying taxes.  It seemed right to take care of them.  Lo and behold, one is up this year in Senator Elmer's district, and they have one that they want to be active.  They're looking at that.  So what we do is take away and strike the sunset so that weather control district can, in effect, do some levying.  Now, what we do with this is still keep it within the 1114 levy limitations.  So it's still limited, it's still within the purview and the confines of 1114, but we just don't do away with weather control districts.




That's the first change.  The second one is...  and I ...  you're going to hear me mention the words "306".  This is not the levy and these are not the dollars of 306 that we had discussed before.  These are provisions that were in 306 that were basically to provide some more money to the commission on government...local government restructuring and innovation.  These are the ones that give grants for local governments' restructuring project, looking at ways to consolidate, looking at ways to do joint projects and so on like that.  We think that commission has been extremely effective.  It's been good so far.  We have a number of people who've liked-it.  We have people who want to continue it.  And so what we do it give it some more life for another year.  We are also looking for the commission to examine restructuring possibilities for,, like, police, ambulance, emergencies, and we've also got them looking into the possibility of local review of capital construction projects.  This is not the controversial parts of 306 that have, I know, been running around the Capitol today that there are people who want to put the five cents or six cents for maintenance and construction.  That is not in this amendment.  That's not part of this.  The other parts that are changes here occur in the allocation formula, the Municipal Equalization Formula that we did last year.  This is, basically, a reallocation between some of the cities.  It's based upon the average need of those cities in that particular group.  It adds no more money.  What it does is changes...  and roughly this is changes between the smaller cities and villages, and that's where most of the mix is.  it doesn't effect, greatly, anybody over the population of 5,000.  We also have added a new Section 57 -which requires school districts to report their levies for special building funds.  If you remember last year, Senator Janssen, you put on an amendment on to 1114, and hopefully through the afternoon maybe we can talk about those numbers that we did with 1114 and the amount of loss to schools.  You may have saw that in yesterday's World-Herald." That amendment deals with building funds, not bonds ...  not a bond that's been voted in, this deals with building funds.  Senator Janssen's amendment, and it was amended a little bit, but basically it said, from April...anything that was in existence on April I of last year is outside the levy limitation.  That was designed to allow people who had those building projects that were in process that they weren't going to be interrupted and stopped.  Our problem is, we do not know




how many of those are out there, and so what this does is just allow us the ability to find out and requires them to report that to us so we know...  so we can have better numbers when we go to estimate the fiscal impact of these things when it comes to lost aid or lost amount of property taxes a school can use.  We also strike from the bill...  if you remember, we talked about the county boards and their ability to do a review of the levy, once everything was put in, that the county board was going to have the chance to review that to make sure there wasn't an unauthorized levy.  In other words, if they violated 1114 or 1085 from last year.  That was going to be a procedure where, instead of going and appeal to the Tax Equalization Review Commission right away, the county board could have and effectively take one more look at it.  Because of discussion on General File, we felt that there was some questions about the scope of review.  That that may be difficult, timing-wise, to do, and so what we do is just take it out and allow for the appeal to the Tax Equalization Review Commission.  What we're going to do is we're going to try to develop a better procedure for next year and to look at that, so we take that out of the bill.  We do some clean up things in E & R, and that's basically what this amendment does.  I believe there is an amendment to this amendment, if I'm correct.




CLERK:  Senator, I ...




CLERK:  I'm not ...  tell me whose it is, can you?  I'm not sure I have that.


SENATOR KRISTENSEN:  I assume it's mine and I believe it's 2285, and it would have been the last one.  Okay.  What I'll do is we'll go on and' I can always get it correctly done.  Madam President, I'd be...  I would yield back my time on the closing (sic) of this amendment.  Be happy to answer any questions.


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




SENATOR ROBINSON:  Madam President, members of the body, Senator Kristensen, you mention the equalization part of the ...  to cities and villages under 5,000 but you change the formula or whatever, but you said there was no money in it?


SENATOR CROSBY:  Senator Kristensen.


SENATOR KRISTENSEN:  No new money.  I'm not, we're not, in this amendment we're not...


SENATOR ROBINSON:  No money beyond what was put in last year, is that correct?


SENATOR KRISTENSEN:  That's correct.




SENATOR KRISTENSEN:  We spent enough last week.


SENATOR ROBINSON:  We give it all to the schools?


SENATOR KRISTENSEN:  No.  What happened, Senator, was that we had ...  under another bill to come, LB 271, which is the motor vehicles, the fee bill, we take some of that money, that's the second portion of this and that's where we put money over into the cities and the counties through that Highway Equalization Fund, that's...  the Highway Allocation Fund, excuse me.  That's the...that's where we put money into it.  This has some, an existing formula.


SENATOR ROBINSON:  How much money is that?


SENATOR KRISTENSEN:  It depends on which county you're in.  I'm trying ...  we're basically revenue neutral on the highway allocation formula for the next year.  We do not add any more money unless you take money out of LB 180, which is the next bill up.  We reserved some money back for there and that's going to be really the point of the discussion.


SENATOR ROBINSON:  That would be the place that there would be additional ...




SENATOR KRISTENSEN:  That's the appropriate place.


SENATOR ROBINSON:  ...  additional money, right.  Now I didn't hear the first part of your testimony or opening.  Did you have, I'm trying to think now, the...  I forgot what I was going to say.  I'll get back to you.  You want some more time?  I'll yield the rest of my time to you, Senator Kristensen.


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


SENATOR KRISTENSEN:  I'm just going to briefly go back over a couple of those, Senator Robinson.  Maybe I'll strike your memory.  The first part is the weatherization districts for Senator Elmer's district that they did not want to lose their ability to do that, to create that levy.  The second portion was the basically making sure we make that Nebraska Commission on Local Government Innovation and Restructuring, keeping those grants coming.  That is $100,000.  Maybe that's what you were thinking about to keep that one going.  The other parts are basically redoing the internal allocation of money between the smaller villages and those cities between 805,000.  That seemed to be where the biggest problems were.  And then we also strike out a section dealing with appeals and we also put in a reporting function for Senator Janssen's amendment from last year so we know where those building funds are so we can have some handle on how much impact that is.  Sure, and I'd yield back to Senator Robinson his time.


SENATOR CROSBY:  There's still about two minutes.


SENATOR ROBINSON:  Senator Kristensen, did you mention at the beginning of your opening on your amendment the ...  any changes in the maintenance or you're referring to Senator Janssen I think in the bonds, but did you make any changes as far as I call it the maintenance fund, that 12 cents?  You made no statements on that?


SENATOR KRISTENSEN:  I did make statements to make it hopefully crystal clear that that is not in here.


SENATOR ROBINSON:  That's in LB 306 yet, if anything happens to






SENATOR KRISTENSEN:  That's what I would call the levy provisions of 306.  That is not in here.


SENATOR ROBINSON:  Okay, thank you.


SENATOR CROSBY:  Thank you.  I will make a quick introduction and then ask the Clerk for the next amendment.  Senator Schellpeper has a guest under the north balcony, Bev Sprieck of Pilger.  And Bev is also the mother of Trisha, one of our Pages.  Mrs.  Sprieck, would you stand so we can welcome you.  Mr. Clerk, I understand you have an amendment.


CLERK:  Madam President , I do.  Senator Kristensen, 2285 in front of Me.  (See pages 2084-86 of the Legislative Journal.)


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


SENATOR KRISTENSEN:  Thank you, Madam President, members of the Legislature.  This particular amendment is really a cleanup to the amendment I just explained.  It does exactly the same thing.  It just inadvertently left out some of the original Section 63.  It should have been the first division of LB 306 that I was talking about which was adopted.  It should have been in this particular amendment.  It's a matter of drafting and this is a corrective amendment just to make sure it does what I explained in the opening of 2241.  It also strikes out agriculture societies in three places and that's because Senator Schellpeper had a bill through earlier this session that clarified their status and we just need to make the revision and take the references to them out to be consistent.  with Senator Schellpeper's bill.  I'd move the amendment to the amendment.  It cleans up and clarifies 2241, makes no major substantive changes.


SENATOR CROSBY:  Thank you, Senator Kristensen.  Discussion?  Senator Maurstad.


SENATOR MAURSTAD:  Thank you, Madam President.  If Senator Kristensen would yield to a question.






SENATOR MAURSTAD:  Senator, in the amendment before us you refer to the Nebraska Commission on Local Government Innovation and Restructuring.  And the underlying amendment also deals with that.  And I have a question as to whether subpoint eight on page 3 of the underlying amendment.


SENATOR CROSBY:  Senator Kristensen, will you reply?


SENATOR KRISTENSEN:  I will.  Senator Maurstad, just so I know what page you're looking on...




SENATOR KRISTENSEN:  Is this of 2241?




SENATOR KRISTENSEN:  Okay, thank you.  Okay.


SENATOR MAURSTAD:  Point eight at the top, is that new language or was that in LB 306 also?


SENATOR KRISTENSEN:  That was also in 306.


SENATOR MAURSTAD:  Okay, thank you.  If you could respond to a question relative to subsection 8, is that part of what was in LB 306 relative to setting up the commission?  I mean should we do this before we do the actual setting up of the commission that we're talking about in 306?  Is there any relationship between the two?


SENATOR KRISTENSEN:  Well, there's obviously a relationship.  There ...  the 306, as it began, was a fairly broad conceptual model.  What this has primarily done is to give it a little more makeup into how it actually works.  I'd call this more of an implementation study or look at how we do it more specifically.  I'm comfortable with this simply to give them the examination of how that may work.  Again, it's in the same line as 306.  1 don't think that it precludes 306, but, you know, right now we




don't see 306 on the agenda.  This probably is a better step than no step at all.


SENATOR MAURSTAD:  So if I understand this language correctly, the Commission on Local Government Innovation and Restructure would study the issue of whether or not local level review of facility needs should occur and then they'll make some type of report or recommendation to somebody?


SENATOR KRISTENSEN:  Yes, I think that's correct, although we don't spell out who they make their report to.  But I think that it depends on which county you're in.  In some counties, this works rather well and in other counties they're a little hesitant to do some of these things.  But certainly the review of those projects and those facilities I think everybody would agree with.  It's how you do it that probably is the difficult thing to do.


SENATOR MAURSTAD:  One final question at this point, Senator.  The amendment to the amendment talks about administering of any grant.  Is there a grant that is in the works now?


SENATOR KRISTENSEN:  Not that I'm aware of.  There's not one that's currently in the process of distribution anyway.


SENATOR MAURSTAD:  Is the thought here that this would be a state grant or would this be a federal grant or a grant from some nonprofit?


SENATOR KRISTENSEN:  No, it would be a grant from the state.


SENATOR MAURSTAD:  Okay.  Okay, thank you, Madam President.


SENATOR CROSBY:  Thank you, Senator Maurstad.  Before continuing, Senator Witek has guests in the north balcony.  They're 40 fourth grade students from Holling Heights School Omaha, with their teachers.  Would all of you please stand and be welcomed by your Legislature.  Thank you for being here Senator Kristensen, there are no further lights.  I'll recognize you to close on your amendment to the amendment.  He waives closing.  The question is the adoption of the Kristensen amendment to the Kristensen amendment.  Would all of those in




favor vote aye, opposed no.  Record, please.


CLERK:  26 ayes, 0 nays, Madam President, on adoption of Senator Kristensen's amendment to his amendment.


SENATOR CROSBY:  The amendment is adopted.  We're back to the original amendment.  Senator Maurstad, discussion on the Kristensen amendment.


SENATOR MAURSTAD:  Thank you.  If I could have Senator Kristensen respond to a question or two.


SENATOR CROSBY:  Senator Kristensen, will you yield again?




SENATOR MAURSTAD:  Senator, on page 7 of AM2241, we look at again, as we did in LB 306, a new section that appears would reduce the amount of state aid for cities that generally would have a local option sales tax.  The...  I was looking at the fiscal note on 306 to try to see if we had been provided any information on what kind of a loss would occur as a result of this section.  And I may have missed it, but I didn't find it.  Do you have information on what type of a fiscal impact this will have on municipalities?


SENATOR KRISTENSEN:  Well, I want to make sure what we're making reference to.


SENATOR MAURSTAD:  Okay, I'm sorry.


SENATOR KRISTENSEN:  Because part of this was LB 304...


SENATOR MAURSTAD:  Excuse me.  I said 306, 1 meant 304.


SENATOR KRISTENSEN:  And part of this has been incorporated back in here.


SENATOR MAURSTAD:  That I understand.  But we do have an opportunity, I guess, to discuss it again and I don't know that it got a great deal of discussion on General File.  There was a lot going on that particular morning on a couple of other




sections on 304.  When the question was divided on 304, this was advanced without a lot of discussion.  And I may have just not been present during the discussion, so I thought I'd just take this opportunity to ask a couple of questions about this section that was in 304.


SENATOR KRISTENSEN:  Okay.  I've got those numbers but I don't have them sitting right in front of me so I'm going to have ...  when I get off the mike let me grab those and I'll respond to that.


SENATOR MAURSTAD:  Thank you.  While, Madam President, while Senator Kristensen is looking, acquiring those numbers I just want to point out, because I don't know how much discussion there was on General File, that what we're looking at here will have a significant impact on a number of cities across the state who, for a number of years, have, by the vote of their citizens, decided to address the over reliance on property taxes by adopting a local option sales tax.  Those that did that with that purpose obviously have lower tax levies because they've chosen to tax themselves differently.  This section will cause, I believe, for a number of those cities to lose a substantial amount of state aid and in fact could lose all of their state aid.  And I want to make sure that my colleagues are aware, if they weren't before, that there will be a number of cities who now receive state aid that will not in the future and that the amount of state aid that they will lose will be distributed back through the Municipal Infrastructure Redevelopment Fund, if I understand the mechanics of this amendment.  And so maybe I'll close at this point and then when Senator Kristensen has an opportunity I can pursue a couple of other questions with him relative to make sure that I understand exactly what we're attempting to accomplish with this particular section of the amendment.  Thank you, Madam President.


SENATOR CROSBY:  Thank you, Senator Maurstad.  Any further discussion on the Kristensen amendment?  Senator Maurstad, did you want to continue?


SENATOR MAURSTAD:  Yes.  I see Senator Kristensen is back at his mike.  Maybe I can ask him a couple of questions.




SENATOR CROSBY:  Senator Kristensen, will you respond again?




SENATOR MAURSTAD:  Senator Kristensen, were you able to locate the fiscal impact as a result of this section?


SENATOR KRISTENSEN:  I was able to grab some of the changes.  In terms of actual new dollars into the aid formula, it doesn't put new dollars.  What it does is shift those dollars that are in there.  And under the old formula, we established what a minimum effort was, and that was the average.  And that roughly was about 38 cents.  What we did here was we just said, look, 40 cents and that's where we're going to set as the minimum effort and then there's a phase-out provision for the aid.  So if you go down lower than the 40 cents, you're going to lose some of that aid and it basically phases out at 35 cents.  So in terms of dollars, there's no new dollars into it, but it does shift some of those dollars.  Basically I think if you look at it, it probably goes from the villages to some of those cities between 805,000, if I had to characterize where the shift went.


SENATOR MAURSTAD:  Thank you, Senator.  And that's exactly how I would characterize it also.  And with some of the other actions that we've been taking, what I was trying to secure and couldn't find in the fiscal note was if we knew what the approximate value of that shift that was going to occur.  Is it a $1 million shift that will occur, a $4 million shift?  Do you have that information by chance?


SENATOR KRISTENSEN:  I don't.  I can tell you roughly what I think.  It's ...  totally it's an $11 million program.  My guess is that the shift in this is probably something less than a million dollars.


SENATOR MAURSTAD:  Less than a million?


SENATOR KRISTENSEN:  That's the best of my knowledge.


SENATOR MAURSTAD:  Okay.  Do you happen to know how many cities currently levy less than 35 cents now?








SENATOR KRISTENSEN:  I've got that over here in our printouts and stuff.


SENATOR MAURSTAD:  Because that in essence would be the dollar amount, wouldn't it?  Because if they have less than 35 cents, they're going to forfeit all of their state aid.


SENATOR KRISTENSEN:  Not necessarily.






SENATOR MAURSTAD:  Explain why not for me.


SENATOR KRISTENSEN:  Well, you've got to look in what class they're in.  And what we're going to go to now is an average of, let me grab my note back here, you're going to go look at what the average need within that group is.  And then you're going to have basically the minimum effort is going to be the 40 cents, but you're going to look at what their average within the group, so that doesn't mean that everybody below 35 cents is out.  But I think effectively what it does is you have a phase-out.  if you want to characterize it that way, you probably can.  I think it isn't true for everybody, but it's ...  I suppose for characterization purposes you can put most everyone in there.


SENATOR MAURSTAD:  Okay.  And the $11 million that you're talking about, is that the total amount of aid that goes to municipalities regardless of size?  That's the total state aid to cities, villages?


SENATOR KRISTENSEN:  That's the pool of money that we put in last year.  That's not ...  that's in addition to what other aid we send to cities.


SENATOR MAURSTAD:  So the dollar amount that we're talking about in this particular fund is different than the total amount of




state aid to cities?






SENATOR CROSBY:  One minute.


SENATOR MAURSTAD:  So as a result of that then, and I'm just trying to search for some information...


SENATOR KRISTENSEN:  Sure, that's fine.


SENATOR MAURSTAD:  ...  because I, as you know, I supported this amendment on LB 304.  But as I've looked at it, I've had some other questions that cropped up into my mind.  If this isn't the pool of dollars that would be state aid from the General Fund, could you tell me where the other funds would be coming from?


SENATOR KRISTENSEN:  Primarily comes from the insurance tax and the collection fee of the, let's see, I think it's the city sales tax, if I remember correctly.


SENATOR MAURSTAD:  Okay, so the $11 million represents total General Fund state aid.  Is that correct?


SENATOR KRISTENSEN:  No, no, no.  This is their ...  we've got a whole...we've got another set of...




SENATOR KRISTENSEN:  ...  monies out there.


SENATOR CROSBY:  Senator Kristensen, your light is next.


SENATOR KRISTENSEN:  Thank you, Madam President, members of the Legislature.  Senator Maurstad, we've got two different sets of monies here.  One, we've got the basic state aid that we send out from the state.  This money, this 11 million that we're talking about here, is in effect the money that we put in place last year to deal with the levy limitations and the impact to small cities.  And this is the ...  municipal equalization is




probably the easiest way to characterize it.  And you can...Madam President, if Senator Maurstad would like to have my remaining time to continue the dialogue, he certainly may.


SENATOR CROSBY:  You have about four and a half minutes, Senator Maurstad.


SENATOR MAURSTAD:  Thank you, Senator.  So in essence then this particular section would only apply to the Municipal Equalization Fund.  So if they do have a city sales tax in place, then the thinking is that they aren't in need of these additional funds as much as the smaller towns and villages that have a greater impact as a result of 1114 having to lose from $1.05 down to 45 cents in levy authority.


SENATOR KRISTENSEN:  I would say that's correct and, of course, the addition is, the philosophic point of view is they also, if you have the local option sales tax that you're using, that's something that's available to generate money.  Now some places could put that in and obviously aren't going to have enough ...  there just won't be enough activity to generate and be able to make that work.  So their ability to use it is limited.  So that's taken into consideration, at least from a philosophic point of view.


SENATOR MAURSTAD:  Senator, thank you.  I appreciate the information you've provided me, and I hope some of our colleagues it might not have been as clear as I demonstrated I was not quite a clear.  And I think.  that the information certainly is very helpful, and I would ask my colleagues to adopt the Kristensen amendment.  Thank you. 


SENATOR CROSBY:  Thank you, Senator Maurstad.  Senator Schimek.


SENATOR SCHIMEK:  Thank you, Madam President, members of the body.  I did not get in entirely on Senator Kristensen's explanation at the beginning so I appreciate Senator Maurstad following up with the questions that he did because I think there's some confusion on the floor among the people I've talked with as to what this really does.  And, Senator Kristensen, I don't even know for sure what questions I want to ask.  So I guess what I want to ask of you is that, in your closing, -or I




.would give you some time now to just go over this one more time in as brief of steps as you can to tell us what this does.


SENATOR KRISTENSEN:  Do you want the entire amendment or do you wan the section that Senator Maurstad was talking about?


SENATOR SCHIMEK:  I think the section that Senator Maurstad was talking about would be helpful.


SENATOR CROSBY:  Senator, you have about four minutes.


SENATOR KRISTENSEN:  I'll try to go slow and I'll fill in numbers, if I need to, later.  Last year when we put in the levy limitations, there were a number of communities who were above, substantially above the levy limitations that we put in.  Okay?  Some of them were due to the fact that if they bought a tractor or a loader that would take their levy up to $3 and $4.  Well, it's real hard for them to come from that level down to the 40 cents.  It was a much greater swing than the schools.  It was primarily because of their smaller budgets.  We, in an effort to mitigate that and help deal with that, we created a municipal equalization pool of money and a formula.  We funded it, like I told Senator Maurstad, through the sales tax collection fee and some of the insurance tax premium money that went into this pool, and that's what went out and was the initial investment and that's right around $11 million to assist.  What this amendment does is it redoes the formula.  It's not as complicated at LB 806 but it's got some of the same foundations except we're dealing with a lot less money, and that you look at what people's average within their groupings.  And our groupings are basically cities with a population of more than 5,000, then you've got the groups from 800 to 5,000 and then those basically less than 800.  We redo the formula a little bit here, basically take away and give a little more money to that group between 800 and 5,000.  And the philosophy of doing that is that those were the villages where we allowed them to go over their levy limit by having a town hall meeting.  Remember, they don't have to vote.  They're the.  village end.  And the villages primarily have a meeting.  It's a majority of the people that are there.  They vote to go over their levy limit and so it is not as difficult for them to live with the levy limits as it is those towns from roughly 800 to 5,000 where they've got to do votes to exceed.




And so this changes the mix a little bit between the villages that are smaller and those communities from 800 to 5,000.  So that's what the amendment does.  Senator Maurstad was pointing out that this isn't all their state aid money.  There obviously is a per capital fund that's I think roughly $17 million that we send out to cities right now.  That goes per capita, so the larger communities get a lot, more of that than those smaller communities do.  Then we also have the Highway Allocation Fund.  That's the fund that deals with some of the fuel tax, some of the registration, sales tax issues and so on, half cities, half counties.


SENATOR CROSBY:  One minute.


SENATOR KRISTENSEN:  But that's not tinkered with here.  That's just for your information.  That's as short as I can make it.


SENATOR SCHIMEK:  You did very well, Senator Kristensen.  I think it made it very clear.  It kind of tied in with what was said earlier that I didn't catch when I was standing back there and that's the bit about the smaller villages, because it was my understanding that those were the ones who were really in deep trouble, if you will.  And so you've explained to me, at least to my satisfaction, why the emphasis is on that 800 to 5,000 community.


SENATOR KRISTENSEN:  That's right and that still goes back to our philosophy that we had last year, that for those smaller villages you need the ability, in effect, they're governed by town hall meeting.




SENATOR KRISTENSEN:  And that's what we're going to allow them to do to exceed it.  And they may have a single purchase that may *send their- budget sky high and make them on paper look terrible.  But if you examine it closely, it 's because they're so small.


SENATOR CROSBY:  Time.  Thank you, Senator Schimek and Kristensen.  Senator Janssen.




SENATOR JANSSEN:  Thank you, Madam President, members of the Legislature.  Senator Kristensen, I'd like to ask you a few questions, if you would answer.


SENATOR CROSBY:  Senator Kristensen.




SENATOR JANSSEN:  Senator Kristensen, on the scenario where a city has initiated a half cent sales tax to get them below the 45 cents, at or below, and they're in a county that their valuation is going to be raised, thus driving that levy asking down even further yet, will this still, in effect, take more of the, let's call it lop-off money, because basically we're talking...


SENATOR KRISTENSEN:  Well, that's a terrible word.  I don't...


SENATOR JANSSEN:  Well, it's basically the same thing.




SENATOR JANSSEN:  Because that's equalization money that they will not receive then.  Even by their own initiative, as Senator Maurstad had talked about,...


SENATOR KRISTENSEN:  It's an entirely different formula in terms of how it works.  The lop-off, the reason that's not there is because nobody can gain over 100 percent on this one because there just isn't enough money.  There isn't enough things ...


SENATOR JANSSEN:  Well, let's not...  I'm sorry I brought that up.  All right.


SENATOR KRISTENSEN:  Apology accepted.


SENATOR JANSSEN:  All right, so no one can get over 100 percent of their (inaudible).


SENATOR KRISTENSEN:  Well, when you talk 100 percent, there's no one who is going to be able to get enough money out of this formula that they'll reduce their property tax to zero because




that's the real danger.  That's the reason Senator Maurstad accurately was pointing out there's a floor here that roughly is 35 cents.


SENATOR JANSSEN:  Okay.  Now the Municipal Equalization Fund will ...  that is where this money will be coming from then.


SENATOR KRISTENSEN:  That's correct.


SENATOR JANSSEN:  And you anticipate, what, $11 million in that?


SENATOR KRISTENSEN:  That's right.  That's roughly the pool.


SENATOR JANSSEN:  All right.  Now a town below ...  up from zero to 800, that is the one we're talking about that is going to have the biggest problem right?


SENATOR KRISTENSEN:  Primarily the ones from 800 to 5,000.


SENATOR JANSSEN:  All right, now they can go over their levy at a town, would be a town board meeting?


SENATOR KRISTENSEN:  No, it's a town hall meeting and that's going to be the smaller village types that we had...




SENATOR KRISTENSEN:  I think 800 was the cutoff on that vote, too, if I remember correctly.  I look at staff and they agree, yeah.  That was the ...  the philosophy was the villages are small enough that they can basically meet as a town hall, village hall meeting.  They've got a minimum number of people there.  With a majority vote they can exceed their levy.


SENATOR JANSSEN:  What would the ...  how would that have to be advertised then?  I'm sure it would have to be advertised three places or published in an open newspaper.


SENATOR KRISTENSEN:  Right.  It's the usual notices for a village meeting.


SENATOR JANSSEN:  But then the majority of the people at that




meeting can impose upon themselves to exceed the levy.  Is there a percentage that they can exceed that?  Is there a ceiling on how many?


SENATOR KRISTENSEN:  I think they're unlimited, if I remember right.  I don't...  I just...  I have to go look because I'm not sure on the village what their top end is.  I'll check.


SENATOR JANSSEN:  All right, then the towns from 800 to 5,000, they are restricted only ...  they are restricted only to the...  either sales tax or any other means of raising revenue.


SENATOR KRISTENSEN:  Right.  They've still got those.  Staff corrected me.  It was $1.05 is the cap that a village can go up.


SENATOR JANSSEN:  Now would this equalization fund grow, if there are more cities that...


SENATOR CROSBY:  One minute.


SENATOR JANSSEN:  ...impose upon themselves a 1 percent or half percent sales tax, and keep them from gaining any of the equalization fund?  Then would it keep growing?


SENATOR KRISTENSEN:  Well, the fund will grow because of the increase in the collection fee.  Obviously, the more handled, the more collected, the larger the fee, that pours over into the fund.  I don't know the historical growth of that collection fee.


SENATOR JANSSEN:  Well, do you think...  Senator Kristensen, do you think that towns or cities would not pursue the half cent sales tax because of losing some of the equalization fund?


SENATOR KRISTENSEN:  No, I don't think so.  I do n't think so.  I think the way the formula works is there would still be an incentive.  If they've got to come up and raise local revenues to meet their levy limitation, what they're going to get under the formula or less under the formula will not compare anywhere near to what they...






SENATOR KRISTENSEN:  ...  would be able to generate from that sales tax.




SENATOR CROSBY:  Thank you, Senator Janssen.  Senator Maurstad.


SENATOR MAURSTAD:  Senator Kristensen, another couple of questions.  You mentioned just a little bit about the philosophical aspect of this and one other philosophical aspect last year there was an attempt to just let those smaller communities increase their levy and tax themselves for their needs, to give them a little bit more flexibility at the local level.  In essence what we're looking at here is a...  instead of allowing the smaller towns and villages to increase their levy, we're just going to provide them additional state aid to put into place a situation where they won't have to raise their levy past that 45 cents.  It's a little different philosophical way of helping out the smaller towns and villages.  Is that correct?


SENATOR CROSBY:  Senator Kristensen, will you answer?


SENATOR KRISTENSEN:  I'm ...  yes, Madam President, I would answer.  Senator Maurstad, I was just trying to go through how you phrased that, because I'd not heard it phrased quite like that.  What this does ...  at least to me recognizes the fact that because they are so much smaller to live within...  and their budgets are wide varieties, that small purchases can make big swings in the levies, that this is just going to be a form of assistance.  They're still going to have to make the philosophic cut, even with the equalization aid and their maximum levy that they can levy.  They still may be faced with some cuts or voting to exceed.


SENATOR MAURSTAD:  But instead of recognizing that they're going to have to make some pretty severe cuts and instead of say ...  the state policy that we're indicating, and correct me if I'm wrong, the state policy that we're indicating is instead of letting them levy an additional amount over the 45, letting them have a special, or not special, letting them have a different levy lid than the larger cities, we're saying instead of allowing you to




do that we're going to put in place this or redistribute the Municipal Equalization Fund so that you receive more money there than you were before.  It's kind of an offset, isn't it?


SENATOR KRISTENSEN:  Well, I don't know if it's an offset but...


SENATOR MAURSTAD:  Not a dollar-for-dollar offset.


SENATOR KRISTENSEN:  That's exactly right, exactly right.


SENATOR MAURSTAD:  But to a certain extent it's an offset.  Thank you, Senator.  I appreciate...  I hope that was...I'm not always as clear as I should be but I appreciate your helping make my...make the point that I think we've made.  In addition for those that are keeping track, $5 million of this $11 million that we're talking about comes from the collection fee, as Senator Kristensen has indicated.  Those are dollars that have been going into the General Fund for General Fund use, so this is another $5 million that the state is allocating to help with the effects of LB 1114 as we try to determine what the full and complete extent of our assisting local government is this session with replacement dollars.  Thank you, Madam President.


SENATOR CROSBY:  Thank you, Senator Maurstad.  Senator Schimek.  Senator Cudaback.


SENATOR CUDABACK:  Madam President, members, I'd like to ask Senator Kristensen a question, please.


SENATOR CROSBY:  Senator Kristensen, will you yield?




SENATOR CUDABACK:  Senator Kristensen, when you were talking to Senator Schimek earlier there, my ears perked up when you mentioned this will be a change in the mix, so to speak.  Does that mean the villages and so on, this doesn't change what currently they can do as far as their town hall?  This doesn't make it tougher on their villages in other words?


SENATOR KRISTENSEN:  Senator, it would change the amount of equalization, Municipal Equalization Funds that would flow to




some of those villages, not all of them, but it depends on how they are compared to the rest of the people in that grouping of small villages and depends on what their levy is.  But as a whole, as a rule, this is going to take some of that money away from the villages and move them up to the next class of cities from 800 to 5,000.  And the purpose of the villages below 800 is they have a lot more leeway in how to exceed the levy if they want to.  It is not the cumbersome, well, I shouldn't say cumbersome, it is not the process of an election.  They could do it in a meeting, but that's the law of last year.  I mean that's not what we're doing here.  What we're doing here is changing the mix to ...  because there were a lot more problems in the city groupings between 800 and 5,000 than there were even below 800.


SENATOR CUDABACK:  But I guess my ...  now maybe I don't understand this, but what comes to my mind is just because they can maybe tax their people more we are taking...  easier for them to tax the people more you might say, property.  We are taking some of those dollars from them and redistributing, is that right or wrong?


SENATOR KRISTENSEN:  We're not taking any property tax dollars from them.


SENATOR CUDABACK:  No, I realize that.


SENATOR KRISTENSEN:  We're taking aid that we send to the villages ...




SENATOR KRISTENSEN:  ...  and saying that the towns between 800 and 5,000 have a more difficult time of living with 1114 than the villages did.


SENATOR CUDABACK:  I know.  But what we said last year was the fact that we were all going to come by these dollars in that same fashion, but what we're saying now, because it's easier for a village to get extra money, right.


SENATOR KRISTENSEN:  Exceed the levy.




SENATOR CUDABACK:  So we're going to take some of those dollars that they could have had and give to somebody else because it's not quite so easy to get tax dollars?  That just doesn't seem quite...


SENATOR KRISTENSEN:  You've got it.  That's it.


SENATOR CUDABACK:  It doesn't seem quite fair to me.  I mean I really don't like it, but I guess...




SENATOR CUDABACK:  I'm not trying to be controversial here either, but I'm just saying...


SENATOR KRISTENSEN:  No, you're fine.  I just want to make sure you understand the concept and if you don't like it, I mean I understand that and you're certainly free to vote against it.  But remember that the law sets today that those villages are, probably a good share of them, are going to have a meeting and exceed the levy limit anyway.  The amount of money that they get is not going to change and help them and assist them that much.  What will change is if you take the money from a number of those places and put them over into this formula a little bit more, that will keep some of the other communities from doing the votes and some of those things.  It will help them live with that a little bit better.


SENATOR CUDABACK:  But before I guess their expectations were they was going to receive these free so-called dollars,.  if there is a free lunch, there isn't any, but we all know that, but they were going to receive those monies without, you know, tax dollars.  But now that's going to be taken away from them and put to another mix right, or another group.


SENATOR KRISTENSEN:  We're changing the mix, that's correct.


SENATOR CUDABACK:  So they could get hurt in other words.


SENATOR KRISTENSEN:  We're not taking it entirely away from villages.






SENATOR KRISTENSEN:  You change the formula so generally money flows from the villages.  They're not getting as much.  More goes over to the other ones.


SENATOR CUDABACK:  So they will be getting less money than they would have gotten the old way.


SENATOR KRISTENSEN:  As a whole, without increasing the total funds, yes.




SENATOR KRISTENSEN:  If -you want to put more money into that fund, then you can do that.


SENATOR CROSBY:  One minute.




SENATOR KRISTENSEN:  We chose not to do that.


SENATOR CUDABACK:  Okay, thank you.


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


SENATOR BROWN:  Madam President, members of the Legislature, I would like to ask Senator Kristensen a couple of questions, if I could.


SENATOR CROSBY:  Senator Kristensen.


SENATOR KRISTENSEN:  Yes, Madam President.


SENATOR BROWN:  In your opening you talk about this not really having much impact on communities over 5,000.


SENATOR KRISTENSEN:  That's correct.


SENATOR BROWN:  Can you detail a little bit if there's any impact and what that is, specifically for communities over






SENATOR KRISTENSEN:  Well, generally what we're going to do is we're going to look at what the average need for those people in that grouping is and we're not really ...  that doesn't change much from what the minimum effort was as an average before.  That group...


SENATOR BROWN:  Under 1177 or...


SENATOR KRISTENSEN:  Yeah, I think it's 1177 or it's 1085, one of the two last year.




SENATOR KRISTENSEN:  There's not that much difference, Senator Brown.  Those are pretty much the same.  It's amazing that they don't have that great of change.  The bigger change was in the lower ends.  And they, for example, villages oftentimes just spend less and the reason they do that is they don't have the same expectations.  They don't maintain streets, they don't have, you know, law enforcement that some of the other communities have.  So that's the reason the change in the villages were made.


SENATOR BROWN:  Okay.  Well, from the perspective of an urban senator, I've heard a lot about, in the last couple of weeks, about how little my community does to help out.  And I know that last year the amount that the city of Omaha lost to help out other communities in the state, under the municipal equalization formula, was about $1.7 million.  And we've been able to move forward with that loss, but it would be nice if it were acknowledged once in a while, and so I just felt like I needed to say it, and also that I will be watching to make sure that we continue to be treated fairly in the future.


SENATOR KRISTENSEN:  Thank you and I think, Senator Brown, you bring up a point.  That's what all this is about.  I mean it's a balancing.  You know, we've got a number of things that we're going to do on state aid formulas for a variety of reasons.  You can't give everybody exactly the same, and you bring out an excellent point.  It's one that ought to be noted and I would




hope that some of my rural colleagues would note that.


SENATOR BROWN:  Thank you.  When I look at the amount that Douglas County pays into the state, in a variety of ways, and then the amount that comes back..  we are fairly significantly contributing towards our ability, as a state, to do state aid.  And sometimes.  it, doesn't feel like anybody notices, so thank you.


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


SENATOR ELMER:  Thank you, Senator Crosby.  I hate to keep grilling Senator Kristensen, but would Senator Kristensen yield?


SENATOR CROSBY:  It's all right.  Senator Kristensen, will you respond again?


SENATOR KRISTENSEN:  Madam President, I ...  never mind.  Yes, Senator.


SENATOR ELMER:  Senator Kristensen, we've been talking about the population levels at which these changes would occur.  Is that number of citizens in a municipality going to be determined at each census time?


SENATOR KRISTENSEN:  Yes.  It's based on the class, so as the populations change, they'll change classes.


SENATOR ELMER:  Well, just as an example, my hometown of Indianola operates as a city.  At times its population has been over 800.  We have a city mayor/council relationship.  it's actual population is like 630.  How would that place that in this particular thing?


SENATOR KRISTENSEN:  How are they classified right now?  Are they classified as a village right now?


SENATOR ELMER:  I think they're classified as a city.


SENATOR KRISTENSEN:  Then that's where they would be placed under the formula.




SENATOR ELMER:  So the population isn't necessarily what governs.  so if a system is running as a village and it happens to have grown, it might be 1,000 people, but still operating with a village board as a village government.




SENATOR ELMER:  So they would be down in that other class.  Is that correct?


SENATOR KRISTENSEN:  It's the best to my understanding.


SENATOR ELMER:  Okay.  Then the next question is and many of our incorporated villages are, you know, 30, 40, maybe 70 people.  And their levies in some instances are like $1.50.  Would the change we're making here encourage them to "disincorporate"?


SENATOR KRISTENSEN:  Well, that's always been a discussion point, and Senator Elmer brings up a great point that will there be a disincentive for people to disincorp...  or unincorporate.  There's a variety of reasons that they may want to do that because they may lose some foundation, well, it's not foundation aid, but it's basically aid that gets sent out to them, too.  They are going to have to factor that in.  For some of them, they may want to say, look, we're just going to let the county take over these.


SENATOR ELMER:  And what impact might that have on the county?


SENATOR KRISTENSEN:  Well, to the extent that if the county chooses to assume their expenses, that's going to be a greater obligation to the county, put greater pressure on the county levy.


SENATOR ELMER:  Yeah.  They may have intact sanitary sewer systems or water systems, perhaps a swimming pool, perhaps a little bonded indebtedness or something like that.  What happens to those things?


SENATOR KRISTENSEN:  I don't know what happens to the bonded indebtedness if they "disincorporate." I think the property goes to the county.




SENATOR ELMER:  Are there provisions for the county to try and help out in those kind of circumstances?


SENATOR KRISTENSEN:  Well, the county is going to have to fit those under their general levy.




SENATOR KRISTENSEN:  And that's ...  that counties...


SENATOR ELMER:  I think ...


SENATOR KRISTENSEN:  ...  may want to watch, because that certainly could be something that will happen in the future.


SENATOR ELMER:  I think that sounds like food for future sessions.  Thank you, Senator Kristensen.


SENATOR KRISTENSEN:  You're welcome.


SENATOR CROSBY:  Thank you, Senator Elmer.  Senator Bromm.


SENATOR BROMM:  Thank you, Senator Crosby.  Thank you, Senator Kristensen, for all of the explanation.  And I spent a little time with George.  I think it's beginning to soak in just a little bit, particularly the provision that divides the municipalities into three groups based on size.  And my understanding is, and correct me if I'm wrong, Senator Kristensen, but my understanding is that prior to this change the equalization fund would have been distributed based on average, an average levy of all classes of small towns and this divides it into three classes based on population.  And then you measure the spending based on the cost grouping or the size grouping that you're put into.  Is that correct?


SENATOR KRISTENSEN:  Right.  It'd be based on the average need of those in that group.


SENATOR BROMM:  Of that size grouping.






SENATOR BROMM:  And the village grouping, the smaller group, has a lower spending per capita than the second class towns, for example.  Is that correct?


SENATOR KRISTENSEN:  I think that's generally true, simply because of the nature of the services that they try to deliver.




SENATOR KRISTENSEN:  For example, there are some communities who are smaller and let's say they're in that 3,000 range, they want to try to offer some of the same service as communities that have 30,000 and 40,000 in them, and that gets to be pretty expensive.  Villages by and large don't try to be all things to all people, just do minimum services or those sorts of things, so they do spend, on the average, less.


SENATOR BROMM:  Do we have a data sheet or I hate to use the word printout or abstract or something that shows how this money will actually be disbursed?  Has that been done by fiscal or by anyone?


SENATOR KRISTENSEN:  I've got some over here if you ...  give me time to dig those out.  I'll look at them.  Since it's not a huge exchange, we didn't do a real detailed study,...




SENATOR KRISTENSEN:  ...  but we can show you at least the tendencies and roughly where they're at.  Part of our problem is numbers, because, you know, we've got so many communities all over, we don't have extensive reporting by cities and villages...




SENATOR KRISTENSEN:  ...  on levies and expenditures.  In the school area, of course, you've just got mounds and mounds of information, because over the years we've collected that.  You don't have that here, so we can only do tendencies and basic policies.




SENATOR BROMM:  Okay.  Well, thank you and I'll be over to look at that information.  I do support the concept of looking at the size groupings of these towns and their respective cost needs.  I think that makes some sense, because little bit larger towns do try to provide sometimes and in most cases more services.  And their taxes are generally higher accordingly and their needs would be higher, so it does make some sense to do that.  And I can't help but draw a little bit of at least a minor parallel to some of our discussion in the education area, because different sizes have different needs and you can't get around that, no matter what you do.  So with that, I will yield the rest of my time.  Thank you, Senator Crosby.


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


SENATOR WILL:  Thank you, Madam President, members of the bodySenator Maurstad has indicated to me that he might have some additional input on this conversation, so I would yield my time to him at this point.


SENATOR CROSBY:  Senator Maurstad.


SENATOR MAURSTAD:  Thank you, Madam President.  I just rise after that opening by Senator Will, 1 just rise to indicate that ...  urge my colleagues to support the amendment.  I think we've had good discussion on it.  Things...people have a lot better understanding now.  We had a great deal of concern last year about this group of towns and cities that we're trying to help and I think it 1 s important that we do that.  This amendment, I believe, will do that, so I would ask for support of the amendment.


SENATOR CROSBY:  Thank you, Senator Maurstad.  There are no further lights.  Senator Kristensen, I'll recognize you to close on your amendment.


SENATOR KRISTENSEN:  Thank you, Madam President, members of the Legislature.  Actually all the questioning was effective by people.  It makes me think through it again and it makes and reminds me that there are a number of things we did last year that are ...  directly come into play this year and that's probably




true on all the property tax bills.  This amendment again deals with the weatherization control districts.  That's not a big issue.  Senator Elmer's district has one.  We're just not going to strike and sunset them out.  It does provide $100,000 to the local government innovation restructuring area for grants for those local controls.  Senator Maurstad, you had asked about those grants.  We also make the formula change that we've just talked about with the last several speakers.  One of the most important things we do and.  Senator Bohlke, I would assume that you would be interested in this, is that it allows and requires school districts to report the amount of their levy for special building funds that are exempted under 1114 of last year, popularly known as the Janssen amendment from last year.  We want to get a hold of how many people have those and the amount of those, because you have special building fund levies.  Obviously not all of them were done or ongoing before April I of last year.  We also take out an appeal by the county board.  That's not a big issue.  We're going to try to make that a little better next year, and we do some E & R changes, and that roughly is the amendment.  I would urge its adoption, Madam President, and thank the body for its attentiveness and patience with us.


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


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


SENATOR CROSBY:  The amendment is adopted.  Mr. Clerk, do you have items for the record?


CLERK:  I do, Madam President.  Enrollment and Review reports LB 877, LB 151 and LB 232 to Select File.  They also report LB 116A, LB 610A, LB 853A as correctly engrossed.  A series of study resolutions, LR 146, LR 147, LR 148 by the Retirement Committee; LR 149 by Senator Stuhr; LR 150 by Senator Stuhr.  Those will all be referred to the board.  Senator Dwite Pedersen, amendments to be printed to LB 150; Senator Chambers, to LB 389.  (See pages 2086-96 of the Legislative Journal.)




Madam President, the next amendment to LB, 269, Senator Janssen, but I have a note that he wishes to withdraw.


SENATOR CROSBY:  No objections, it is withdrawn.


CLERK:  Madam President, the next amendment by Senator Schellpeper.  Senator, AM2187.  (See page 2035 of the Legislative Journal.)


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


SENATOR SCHELLPEPER:  Yes, thank you, Madam Chairman and members.  AM2187 is actually LB 84 that I put in for the public power districts in the Revenue Committee.  It came out of the committee with the entire committee supporting.  We were going to put it onto consent file, but it never got on there in time because of the late date.  But it deals with a technical property tax issue that we've been working on for about the last three years that deals with public power co-ops, not public power, public power coops.  It addresses a unique situation where a nonprofit corporation has personal property which it damaged or destroyed, they call it involuntary converted in the tax language.  But due to a storm, that corporation does not have insurance to cover the loss, if the insurance proceeds covered the entire loss, the adjusted basis for the property tax on the replacement property would be the same as the adjusted basis for the property which was destroyed.  However, due to a quirk in the tax code, there is no insurance proceeds.  The adjusted basis for the replacement property would be the cost of the replacement property.  Consequently, their property tax valuation could increase very largely.  The amendment is primarily...  it will take care of only the co-op, because public power is structured different.  We currently have 11 co-ops that do business in this state.  Severe storms, over the last few years, have caused millions of dollars in damages to electric transmission and distribution facilities.  Insurance coverage for these facilities is not available.  Fortunately, these storms have not hit co-op service areas to any great extent.  However, if they did experience any bad storm damage, the facilities, which are presently at various stages of depreciation, would be valued as new when rebuilt.  This would




really increase their property taxes and contribute to rate disparities with neighboring tax exempt public power districts in the muni systems.  It's a bill that we put in trying to make sure that the co-ops in this state would be treated, the same as what public power is treated, because they serve the same type customer and they should be treated the same.  So this should help them.  We've been working with the Revenue Department, the State Tax Commissioner doesn't have any problem with this.  We worked with her over the last year and she has 'no problem with the current amendment that came out of the Revenue Committee with the entire committee supporting.  So I would be glad to answer any questions and move for the adoption of this amendment.  Thank you.


SENATOR CROSBY:  Thank you, Senator Schellpeper.  Before we continue with the debate on the Schellpeper amendment, Senator Schellpeper does announce that he has guests in the north balcony, 14 fifth through eighth grade students from St.  John's Lutheran School in Stanton with their teacher.  Would all of you please stand and be welcomed by your Legislature.  Thank you for being here.  Discussion on the Schellpeper amendment.  Senator.  Matzke.


SENATOR MATZKE:  Thank you, Madam President and members of the Legislature.  I support Senator Schellpeper's amendment in this regard.  It's a technical corrections amendment actually dealing with involuntary conversions.  Involuntary conversion is a tax term more commonly identified with income tax.  And involuntary conversion means that your property has been converted or changed into something else either by a condemnation or by seizure or, in this instance, by storms or casualty loss.  As Senator Schellpeper mentioned, there are 26 rural power districts in this state.  They pay no taxes at all because they're units of government.  We also have 11 electric power co-ops which are nonprofit corporations.  They're required to pay personal property tax.  What this bill does is somewhat level the playing field between the two organizations.  They all serve the same purpose, they're all nonprofit providers of electricity largely to rural areas.  But the co-ops, the rural electric co-ops, get hooked if they have a severe storm loss.  If their power lines are destroyed, they're not insurable.  You can't buy insurance on power lines because of the great risk




involved.  Nobody writes that kind of insurance.  And if there's a storm loss, the co-op has to replace them out of its own pocket.  And what this bill does is it leaves the valuation of those.  lines or other property destroyed at its original tax basis rather than providing a stepped-up basis.  Now if you don't have an amendment such as this, the REA co-ops actually suffer three strikes.  They get hooked three times.  First of all, if they have a huge disaster loss, they have to repair it at their own cost.  Secondly, they would get stuck with a bigger personal property tax bill.  And third, they would have an increased basis, which is of no value to them, because they don't...  they're nonprofit, they don't pay any income tax, so they have no use for the depreciation.  So we need to enact this amendment to clarify this tax question.  The bill corrects the tax treatment.  There's no reason for a provision for a stepped-up basis because the nonprofit co-op doesn't pay any income tax and has no use for that depreciation.  So to prevent three adverse results from a huge disaster or storm loss, we need to adopt this amendment.  I would urge its adoption by the body.


SENATOR CROSBY:  Thank you, Senator Matzke.  Further discussion on the Schellpeper amendment?  Seeing none, Senator Schellpeper, to close.


SENATOR SCHELLPEPER:  Thank you, Madam Chairman and members.  I think Senator Matzke said it exactly like it should be said.  When you talk about the co-ops and you talk about the public power, it's something to put them on the same playing field, an equal playing field.  I think it's something that this body should have done before.  We've always had some problems with the Tax Commissioner.  We finally got that straightened out with her and so I would urge the body to approve this amendment.  Thank you.


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


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




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


CLERK:  Senator Withem, AM2257.


SENATOR CROSBY:  Senator Lynch, do I understand that you are going to handle this for Senator Withem?




SENATOR CROSBY:  You can open.


SENATOR LYNCH:  Madam Chairman and members, this amendment has to do with the proposed water service in the southwest area of our communities in the Omaha-Douglas-Sarpy County area.  And at first glance it appears to be an amendment that would simply protect the Metropolitan Utilities District.  I don't think that's really what was intended by Senator Withem.  He also agrees.  The problem is more important and it is more complicated than that, so I would ask permission to withdraw that amendment and offer another one.


SENATOR CROSBY:  No objections, the amendment is withdrawn.


CLERK:  Madam President, the next amendment is by Senator Withem.  Senator, 2256.  (See pages 2096-99 of the Legislative Journal.)


SENATOR CROSBY:  Senator Lynch, to open on the other amendment.


SENATOR LYNCH:  Yeah, Madam President and members, this amendment was passed around earlier to the people on the floor.  It provides a process.  it provides a process where, for example, in this case a need for water exists in an ever expanding area that I previously described to you.  It's a very good piece of legislation.  It's a good amendment because it applies to a number of things we discussed here most recently.  It applies to intergovernmental cooperation.  What can we do to help encourage jurisdictions of government , cities and counties, counties and SIDs, and all three and the rest put together?  it also addresses directly and indirectly the levy limit issues that we have, and it's an attempt, I think, to help resolve the




possibility for higher levies.  Taxes is also a user fee in my opinion and anything we pay, I think Senator Chambers has addressed that in the past, any kind of fees, user or otherwise, can be considered as a tax issue.  This proposal has a number of things.  It defines on the first page what we mean.  It says, "Whenever a municipality undertakes any project with an estimated total cost of either $500,000 or more -or the equivalent of 10 percent or more of the total General Fund expenditures of the municipality in the most recent year available, whichever is greater, the governing body of the municipality shall act in conformity with the provisions of this act." And what it simply provides for is that whenever any kind of a proprietary function, that's water, that's sewer, it could be a number of other things, is undertaken for expansion and involves other agencies of government that surround that, that could be counties, that could be other smaller cities or villages, it could be sanitary improvement districts in this case or others, there should be a process in place so that everyone agrees that the proposal made for this proposal ...  for this proposal is in the best interests of everyone.  It provides that the governing body of the municipality or any other subdivision must adopt a resolution identifying what they would hope to accomplish with this proposal.  And in fact, they conduct a professional search by hiring someone professional to do engineering studies.  This consultant would look at alternatives.  In this case, in the case of Papillion, for example, it involves the expansion of their municipal water works.  It also provides that when that consultant is finished with the responsibilities that first of all there should be a process where the consultant is hired only after a search through a bidding process to make sure that there is no conflict of interest, that in fact the recommendation is in the best interest of all of those people involved, those within or without that particular municipality.  It provides as to when that engineering report is available and there should be a public hearing it could be received.  And it provides for a certain period of time also when that information can be gotten to all of the agencies that would be directly or indirectly involved like SIDs that would use water that surround that particular municipality.  It's important that this process take place.  It also provides that there is in a sense a veto power if any of those other participating, directly or indirectly,




agencies of government would disagree with whatever the cost was or with the recommendation of the consultant, that would in effect cause this project to stop except that that agency, that subdivision of government, that municipality, could in fact call for a general election of the people in the area.  It would take on the part for the veto power a three-fifths vote, not just a simple majority but a three-fifths vote of any of those sanitary improvement districts or cities and villages and I think that's important.  It should not be easy just to veto out what may or may not be a good idea or a good project.  But even if that happens, this provides an alternative because we're talking about alternatives.  This provides that a general election can be held at the next general or at the next primary election or even at a special election if that's the desire of that subdivision of government.  And then at that time, at that general election, where all the people, including those people involved in the municipality and all of the people involved in the SIDs that surround that area and in particular with this particular water project, would have a chance to voice their opinion.  And if in fact a Majority agreed that this should be accomplished, obviously the project could be undertaken.  I think it's important for us as we proceed with levy limits, as we proceed with encouraging people to develop intergovernmental cooperation, as we concern ourselves with property taxes that this kind of an alternative exists.  I would hope that...  I'd try to answer any questions technical or otherwise you might have.  And I would ask for your support for this very important amendment.


SENATOR CROSBY:  Thank you, Senator Lynch.  Discussion on the Lynch amendment?  Senator Schellpeper.


SENATOR SCHELLPEPER:  Yes, thank you, Madam Chairman and members.  Senator Lynch, if you'd answer some questions, please.


SENATOR CROSBY:  Senator Lynch, will you yield?


SENATOR LYNCH:  I'll certainly try.


SENATOR SCHELLPEPER:  Senator, if you were going to do a project in Omaha that's going to cost $500,000 or more, you'd have to have a vote of the people of everyone that was in that district




or that was concerned or that had an...


SENATOR LYNCH:  Only if it involved just simply the people in that jurisdiction.  For example, within the city limits of Omaha, then there would not have to be a vote of the people.  But if in fact the city of Omaha or in this case the city of Papillion or anyone else involved itself in what we call in this bill a proprietary function, that's like a water system or a sewer system, then those people directly or indirectly involved would have and should have a say so in that.  That would be people that live in SIDs and need water.


SENATOR SCHELLPEPER:  So if they were going to annex a town besides...  outside of the city, then the entire town would have to vote?


SENATOR LYNCH:  No.  No, I'm sorry to say even though I think that's a good idea, I don't think this bill has anything to do with the annexing laws, and you can correct me, if I'm wrong.


SENATOR SCHELLPEPER:  No, but I mean if they're going to serve water to this town.


SENATOR LYNCH:  Well, usually in our area the people that live in all the ...  by the way, we have about 100 and some SIDs in Douglas County outside the city limits of Omaha and Waterloo and Valley and all the rest of the towns.  But in any case, I think they're generally served by the Metropolitan Utilities District so it would not be...it could not be and would not be called or considered a proprietary function, because it wouldn't be the expansion of anything, because they're already using it.  But if they decided they wanted to put in a new system that served those people in the city of Omaha and the SIDs, yes.  They would and should have to conform to this regulation.


SENATOR SCHELLPEPER:  Say that you had a new subdivision that was going to cost $1 million to put in water.  Just that subdivision would vote on it or the entire city?


SENATOR LYNCH:  No.  Only if, you know, only if the city...if the city were going to own, for example, in the case of Papillion, if I can answer the question this way, they own the




water service and they want to expand that water service into other jurisdictions, then people have the right to be involved with that decision.  In the case of an SID that wants to develop its own water system, depending on how far it is removed from MUD, in most cases it's not practical to try to develop your own sanitary, your own water system, if you're within a few miles of MUD and can in fact maintain good access to those services.


SENATOR SCHELLPEPER:  As I read the amendment, Senator, it basically just sets out the criteria and certain steps to go through.




SENATOR SCHELLPEPER:  There's really no dollars involved...




SENATOR SCHELLPEPER:  ...  except the $500,000 project over that, right?




SENATOR SCHELLPEPER:  And this will affect any project in the state or just in the ...  doesn't have anything in it, I don't think, for just the metropolitan.


SENATOR LYNCH:  No, only...it's only city, county or village projects.


SENATOR SCHELLPEPER:  Okay.  Thank you, Senator.




SENATOR CROSBY:  Thank you, Senator Schellpeper.- Senator Tyson.


SENATOR TYSON:  Thank you, Madam President.  I have a couple of questions for Senator Lynch.


SENATOR CROSBY:  Senator Lynch.


SENATOR LYNCH:  Yes, I'd be glad to answer.




SENATOR TYSON:  Senator, would you object if we entitled this the "Consultants Full Employment Act"?


SENATOR LYNCH:  The consultants ...


SENATOR TYSON:  The "Consultants Full Employment Act".


SENATOR LYNCH:  ...  act.  Well, no, not really.  No, I don't think...  I don't think that was our intent.




SENATOR LYNCH:  But you can call it whatever you want to.  I don't care.


SENATOR TYSON:  I would call it...  I don't want to use the kind of language here that I would normally call it.  Would you object to amending Section 70(1) exempting all cities that lie within one degree of the sixth principal meridian?


SENATOR LYNCH:  I can see you, but I couldn't hear you too good.  Under Section 70, what line did you...


SENATOR TYSON:  Seventy, number 1.


SENATOR LYNCH:  Oh, "Municipal means any city of any class village or county."


SENATOR TYSON:  Yeah.  What I'd like to do, Senator, is to add the language "except for any city lying within one degree of the sixth principal meridian." Would you object to that?


SENATOR LYNCH:  Well, you know, if I understood what you were talking about, I might, to tell you the truth.


SENATOR TYSON:  Well, the sixth principal meridian happens to be...


SENATOR LYNCH:  I used to know a girl named Meridian, but I don't know what that is, by golly.




SENATOR TYSON:  Senator, the sixth principal meridian also happens to be the county line between Stanton County and Madison County.


SENATOR LYNCH:  Oh (laughs).


SENATOR TYSON:  one degree is about 64 miles.  That would take me out of Madison County.  I wouldn't have to worry about this.  But the point that I'm trying to make here, Senator, is that this ...  you say there's no cost involved.  As a matter of fact, there is cost involved, the cost of hiring a consultant...




SENATOR TYSON:  ...  because I've been on a lot of lettings of consultants.  None of them work for free.


SENATOR LYNCH:  Senator, if I can...  even though you didn't ask it ...  make a statement, it is kind of a question and...


SENATOR TYSON:  Feel free.


SENATOR LYNCH:  ....I would hope that if anybody spends a half a million bucks, they'd try to get some professional help before they do it.  In this case.  it would mean hiring an engineer and a consultant, not an engineer necessarily, probably an engineering firm would involve a consultant ...  the consultants would involve engineers to make sure that this $500,000 was not, as we say in the plumbing business, down the drain.  You're going to get something for it eventually.


SENATOR TYSON:  The point that I would make, Senator, I take what you...  I've participated in a great amount of that kind of business.




SENATOR TYSON:  And I think that there are consulting engineers, Black and Veatch, someone like that, on all of these projects.  But this act as or this amendment, as I read it, and this is the point, this does not enter into the engineering or feasibility of it.  It comes into the intergovernmental cooperation type of




thing, and a lot of cities standing out here by themselves have no one to cooperate with in the sense that you're speaking of...


SENATOR CROSBY:  Senator Tyson, you need to talk into your microphone.


SENATOR TYSON:  This ...  thank you, Madam President, my apologies.


SENATOR CROSBY:  It's also for the tape.


SENATOR TYSON:  This amendment which may have some secular objective doesn't meet the requirements of the cities, villages, counties, et cetera, away from the Metropolitan Utility District general area.  And I think this thing ought to be zeroed in on a little bit closer.  We're talking here about the expenditure of more money because as you add to the objectives of a study, the consultant's cash register keeps ringing.


SENATOR CROSBY:  One minute.


SENATOR TYSON:  And it is on this basis and only this basis, Senator Lynch, that I am rising in objection to this amendment.  I feel that it should be considerably more closely focused than it is or language put in it that removes 99 percent of the state of Nebraska.  Thank you, Madam President.


SENATOR CROSBY:  Thank you, Senator Tyson.  Senator Maurstad.


SENATOR MAURSTAD:  Thank you, Madam President.  I rise in strong opposition to the amendment, AM2256, similar in nature to the discussion we had relative to, in my view, of the state setting up a commission to overview other projects, building or otherwise, and it gets back to the whole issue of whether or not people at the local level have the ability to govern themselves appropriately without the state setting in with some type of a process such as what is being described in the amendment.  Now I recognize that the amendment may have been brought to us by Senator Withem with very good intentions.  I believe he indicated on the floor the other day when we were looking at this of a circumstance that he had in his district that brought about the idea to go about addressing municipal projects in the manner in which this amendment would.  But again, in my district




there just has not been a problem with these types of circumstances.  And to require all municipalities, regardless of size, on a particular size project, dollar amount, to have to go through all of this to me is a waste of not only financial resources but also people resources.  And I could see some real detrimental effects as a result of this in those circumstances where new areas of the city may need to have utilities brought to it for growth, subdivisions growing up, that type of thing, and the type of time line associated here would, I believe, be detrimental to those smaller communities that are trying to grow.  Once again, I'm not opposed to the intent for which the amendment is brought.  I just can't agree that we need to provide such strict constraints on municipalities in dealing with the issues that they have to confront on a day-to-day basis.  So I would ask my colleagues to not support the amendment that is before us and in fact vote against it as soundly as possible.  Thank you, Madam President.


SENATOR CROSBY:  Thank you, Senator Maurstad.  Senator Bromm, on the Lynch amendment.


SENATOR BROMM:  Thank you, Senator Crosby.  I have tried to follow this as best I could and I'm having some difficulty and it's not Senator Lynch's fault necessarily.  It's when you run into something like this and you try to think of exactly how it works and the ramifications, it's not always easy to envision it all.  The time line that was passed out provides somewhat of a road map.  Senator Lynch, if I could ask a question or two.


SENATOR CROSBY:  Senator Lynch....




SENATOR CROSBY:  ...will you respond?




SENATOR BROMM:  Senator Lynch, the governing body that's referred to in the time line that was handed out refers in every case to the governing body of the municipality that's undertaking the project.  Is that correct?






SENATOR BROMM:  We're not talking about...




SENATOR BROMM:  ...  anything other than that same governing body?


SENATOR LYNCH:  No, it applies to all of the people directly or indirectly involved that would be affected by that decision, so it would apply to a three-fifth majority of any SID that were involved ultimately in having to pay the cost of that decision and, of course, the governing body that wants to expand, in this case, the water system at the city of Papillion.


SENATOR BROMM:  Okay.  So if you had a city and you had ...  you had several SIDs that were getting water from the city, and the city were going to undertake a project, and the project met the parameters of this amendment, then if one of the SID boards rejected the project by a three-fifth vote, the question...  either the project either doesn't proceed or the project goes to the voters of the entire area that are affected by the project.  Is that relatively accurate?


SENATOR LYNCH:  That's right because there should be...




SENATOR LYNCH:  ...  there should be an alternative to one single agency, maybe more than one, vetoing any of the project.  The people in the area who have to pay the cost who are involved directly or indirectly should ultimately have the right to vote on that, if their representatives who vote for them can apparently agree to it.


SENATOR BROMM:  Okay.  Thank you, Senator Lynch.  I guess I wish that the proposal that's before us were a legislative bill and that it had undergone the scrutiny that many of our legislative bills undergo in this body or that ...  the scrutiny that I believe they should undergo.  I understand the general concept that's being proposed.  I'm not necessarily in a position to say that it's a real good idea or a real bad idea, but I know that it's a




significant idea and I think it's significant enough that the matter should be introduced as a bill or at least have more of an opportunity to be evaluated than it's going to get at this point in the session and on Select File with this bill.  I realize, that from reading the paper a week or so ago, that there's a project in Papillion that may be affected by this proposal, and I don't know that to be a fact.  Maybe that's been stated on the floor and I haven't heard it, but in any event we're talking about putting something in the statutes that will affect all municipalities potentially of all sizes, any class city, any city of any class, village, or county.  And I think to have the possibility of having anyone who's affected by the project...


SENATOR CROSBY:  One minute.


SENATOR BROMM:  ...  put them in a position, the governing body, of having to go to a vote of the entire territory, simply by one board, by a three-fifths vote rejecting the project is a pretty significant ...  pretty significant whammy that you're giving to a number of governing bodies.  And I ...  I don't think we should do that casually, lightly or quickly.  I would urge the body at this point in time to reject the amendment.  Thank you.


SENATOR CROSBY:  Thank you, Senator Bromm.  Senator Chris Peterson.  I'm sorry, Senator Peterson.  The Clerk does have an amendment to the amendment.  I beg your pardon.  Would you turn your light on again and then I'll put it in order.


ASSISTANT CLERK:  Madam President, Senator Hartnett would move to amend the Withem amendment.  (See FA350 on page 2099 of the Legislative Journal.)


SENATOR HARTNETT:  Madam President, members of the body....


SENATOR CROSBY:  Senator Hartnett.


SENATOR HARTNETT:  ...  I simply, with this amendment, I simply amend it so that it's located in counties with a population in excess of 100,000 people.  And it's ...  as it's...what it does, it simply limits to three counties--Douglas, Lancaster and Sarpy County--and it simply...  I think what the amendment as offered by




Senator Withem and carried by Senator Lynch simply allows more time for more input into the process that goes on with...in this area.  So my amendment just simply limits it to three counties.  We've done this with lots of other legislation.  It's not something that we haven't done before.  So with that, I'd just simply offer this amendment to limit it to counties of 100,000 population.


SENATOR CROSBY:  Thank you, Senator Hartnett.  You've heard the opening on the Hartnett amendment.  Discussion.  Senator Chris Peterson.


SENATOR C. PETERSON:  Thank you, Madam President, members of the body, and I'd rise in, I guess, support for Senator Hartnett's amendment, but still in somewhat opposition to the entire amendment itself.  I have several questions for Senator Lynch.


SENATOR CROSBY:  Senator Lynch, will you yield once more?




SENATOR C. PETERSON:  Senator Lynch, after the process is gone through and the voters, if they've gone all the way to the election and the voters vote this down and they decide then after 12 months to start over, following your time line, does that mean they have to hire another consultant, and it has to be a different one because of that catch about ...  can't...  excuse me, wrong Chris, you can't do anything after three years?




SENATOR C. PETERSON:  Could they use the same consultant, same report, or will they have to do another report through another consultant?


SENATOR LYNCH:  Well, it's ...  as far as I'm concerned, they could use the same consultant.  They...  same consult...  if it were the same consultant probably would have to modify the original report, especially if, during the vote, some things came out about the report that left some technical questions about the cost.  But they could use the same consultant.




SENATOR C. PETERSON:  Okay.  And maybe I'm just not following this, I just don't see where it's at.  Who actually pays for the consultant, the municipality that is undertaking the project, or, if it goes into other governing bodies, are they going to be forced to pay the consultant too?  Who actually takes care of the fee?


SENATOR LYNCH:  Well, the jurisdiction of government that requests the project would pay for it.  However, since it's a subdivision of government, in this case it is a rebuilding of their existing water system, all the people that use that system would pay for it ultimately, because that engineering consulting cost becomes part of the cost of the project, so everybody pays for it.  Original cost would be the jurisdiction that wants it.


SENATOR C. PETERSON:, Okay.  Would...  is there a possibility that it would always have to be a consultant?  Or would the resolution itself be enough to be sent to the other governing political subdivisions for the notification and use in-house people?  I'm trying not to see this as an unfunded mandate for every project over the amount.  Would the resolution accomplish this, or does there still have to be...




SENATOR C. PETERSON:  ...  outside private consultant above and beyond the own in-house help there might be?


SENATOR LYNCH:  Yes, it could be in house, if, in fact, I'm trying to search for the language now, it's already in there, it does provide that based on certain abilities and (inaudible) of course.


SENATOR C. PETERSON:  On line 11, page 2, that is what that means, shall not apply to any individual who serves as a...




SENATOR C. PETERSON:  ...  direct full-time employee of the municipality.


SENATOR LYNCH:  Yeah, like...  like so many people, when I read




bills I'm not quite sure what they say either, but it's my understanding, from those who wrote this, that in fact in-house staff could in fact provide the information.


SENATOR C. PETERSON:  Okay.  Again, I'd like to see how the discussion goes and I have some questions about what we're going to be requiring municipalities to do, especially maybe those that don't have the in-house to do that type of thing, if we're adding another cost on to them.  But thank you for your answers, Senator Lynch.


SENATOR CROSBY:  Thank you, Senator Peterson.  Senator Schimek, followed by Senator Lynch, Hartnett, and Beutler.  Senator Schimek.


SENATOR SCHIMEK:  Yes, thank you, Madam President, members of the body.  Senator Lynch, I have missed parts of this discussion, so forgive me,...


SENATOR CROSBY:  Senator Lynch.


SENATOR SCHIMEK:  ...  but I'm not certain that I understand the thinking behind this particular amendment and particularly if you could give me...  first, if you could give me kind of a general explanation, but then particularly the part that Senator Peterson was just examining about that consultant and I'd like to ask you a specific question about that too, but what's ...  what's the thinking behind this amendment?  I'm just not quite tracking here today.


SENATOR LYNCH:  I guess the thinking behind it is basic rights, the rights of people to know.  Now Senator Maurstad mentioned earlier that we're hamstringing ...  we're putting constraints on subdivisions of government, and it's just the opposite of that.  This bill provides the opportunity for citizens who are going to have to pay the darn bill to understand what they're voting on and that they approve of it.  That's all.  No more, no less.  It provides a process when any jurisdiction of government wants to expand any of its, as it's called, proprietary functions that are going to cost more than a half a million bucks, that- the citizens who have to pay, especially where there are jurisdictions outside of the area that wants to spend that




money, who are going to have to share in the cost of funding and paying for it, to have the right to know the difference and how much it's going to cost, and most importantly if in fact what they want to do is in the best interest of everybody and is in ...  and is, in fact, at the best cost.


SENATOR SCHIMEK:  Okay, and I guess as a concept I don't think I have...




SENATOR SCHIMEK:  ...  a problem with that, except that I know that such a concept was just turned down by the voters of Lincoln as to whether they wanted to vote every time the city sold more than $20 million worth of property, and so...  and the question that came out then was, you know, what do we have representative democracy for?  So I guess that's the other ...  the flip side of the coin.  But to get very specific to...  on page 2 regarding what Senator Peterson was asking you about, where it says any consultant that is employed to conduct such a study or develop such plans or proposals shall not enter into any other contract or maintain any other contractual relationship with such municipality other than, et cetera, et cetera.  Why that provision?  It seems to me that almost might border on unconstitutionality,...




SENATOR SCHIMEK:  ...  but I'm not suggesting it does, but why...


SENATOR LYNCH:  Is that...


SENATOR SCHIMEK:  ...  do we want that in there?


SENATOR LYNCH:  Okay.  You want that because you do not want to jeopardize the good name and credit of the city of Plattsmouth or Lincoln or anyone else with any kind of in-house personnel where there could be a conflict of interest, especially a conflict of interest.  I think...


SENATOR SCHIMEK:  But doesn't it say, except this prohibition shall not apply to any individual who serves as a direct




 full-time employee...


SENATOR LYNCH:  I...that's the way I read it.


SENATOR SCHIMEK:  ...  of the municipality?


SENATOR LYNCH:  That's the way I read it, is to avoid conflict of interest.  I ...  can I say something about city of Lincoln and what the city of Lincoln people turned down?




SENATOR LYNCH:  Oh, I can do that when I get my time, so that's all right.


SENATOR SCHIMEK:  ...  well, I don't have anything more...


SENATOR CROSBY:  One minute.


SENATOR SCHIMEK:  I want to ask you,...




SENATOR SCHIMEK:  ...so if you want to go ahead, Senator Lynch, that's fine.


SENATOR LYNCH:  Oh, in the one minute I have, I don't think we can compare what we're suggesting here with what happened in the city of Lincoln, unless the city of Lincoln was going to help build the ISTE building or another...  or another...  or a building in Waverly or some other incorporated city of village.  This applies only when there is a kind of a project over half a million dollars that involves other jurisdictions who have to share in the cost.  I don't think any building the city of Lincoln is going to build is going to be built in any of the SIDs outside of the city of Lincoln...




SENATOR LYNCH:  ...unless you know of some that are and then, of course, that would be interesting.  If in fact the people in that SID would be asked to help pay for that building the city




of Lincoln wants to build in their SID, if I lived in that SID I'd kind of want the right to say whether I want them to build it if in fact I'm going to have to pay the cost and I have no right to vote for them.  They're outside...




SENATOR LYNCH:  ...  of my jurisdiction.  I can't vote for them yes or no.


SENATOR CROSBY:  Thank you, Senator Schimek.  Mr. Clerk, do you have a clarification?


CLERK:  Madam President, yes, a clarification, just so the body knows, Senator Hartnett has modified his amendment.  The amendment before you reads as follows:  In line 10, page 1, after the word "village" insert "located in a county with a population in excess of 100,000 but less than 175,000".  That same language is on...  in line 11 as well:  "with a population in excess of 100,000 but less than 175,000." That is the amendment before you.


SENATOR CROSBY:  Thank you, Mr. Clerk.  Continue discussion on the Hartnett amendment, Senator Lynch.


SENATOR LYNCH:  I would...


SENATOR CROSBY:  Senator Lynch.


SENATOR LYNCH:  ...  I would punch my light again and yield my time, since we have another new train of thought here, to the eminent professor, former professor from Creighton, Dr.  Paul Hartnett.


SENATOR CROSBY:  Senator Hartnett.


SENATOR HARTNETT:  Madam President, members of the body, this...this simply is limited to one county now in the state of Nebraska, because we have a lot of SIDs in Sarpy County and so forth and it simply gives a right for people to vote, I think as Senator Lynch has explained with amendment.  It simply limits it to a county of over 100,000 and less than 175,000 population, so




that's simply what the amendment does, is that it simply is a limiting aspect.  Be glad to answer any questions, so....


SENATOR CROSBY:  Thank you, Senator Hartnett.  Senator Lynch, did you want the rest of the time, or...  ?


SENATOR LYNCH:  Yes, I ...  I could use it.


SENATOR CROSBY:  You have about three minutes, four minutes.


SENATOR LYNCH:  We're on Senator Hartnett's amendment.  Obviously, you all can count and you all know what kind of counties exist out there and you all know that this only then now applies to Sarpy County.  That's-fine with me.  I don't care.  But to be completely frank, I wish Senator Maurstad were here and Senator Tyson.  Can they hear me?  Were they around here somewhere?  Well, I don't know.  Now that they talked, they left, but I wished they would stick around and listen too.  But in any case, this is a classic good government bill.  It gives people the right to vote when somebody in another jurisdiction, who they can't vote for, decides how to spend their money.  Think about that a minute.  When somebody in another subdivision of government tells you this is how you're going to spend your money, wouldn't you want the right to say yes or no?  That's what this does.  This is a classic good government piece of legislation, and it does just the opposite of what Senator Maurstad says about tying( the hands of somebody.  I hope we do tie the hands of those elected officials in these jurisdictions that want to spend your money and you don't have a chance to vote for them.  God bless you, I hope you get the chance, and in this case we finally got an opportunity to address the issue.  And I want to share this with you.  Please listen to this everybody, I would appreciate it.  I'm going to wait until they die down because it's important they all hear this, because the question was raised by Senator Bromm that-we should have had a hearing on this.  Well, to tell you the truth., the city and the jurisdiction decided to do this, didn't do it until a couple, three weeks ago.  Didn't do it until a couple or three weeks ago.  Now what does that mean, everybody?  That means that you're not going to do nothing now, are you?  Somebody that ...  maybe Senator Maurstad's friend or somebody else in some of these cities, knows how to work politics, I guess, and the




timing of everything, so they threw this project in here knowing full well that this kind of effort, that should have a public hearing, and should go through the process, might next year, but as far as their project that they want to do, that they want to tax other people who can't vote for them to pay for it, did it at a time when that won't happen.  If there's no other excuse or reason to do it, that should be.  So if you're out there listening, those of you who are concerned about the right of jurisdictions, we don't want to limit their abilities, talk about their obligation to do business so that people can participate as well.


SENATOR CROSBY:  Thank you, Senator Lynch.  Senator Hartnett, your light is next.


SENATOR HARTNETT:  Any other lights?  Any other...  ?  I'd simply...


SENATOR CROSBY:  Yes, Senator Beutler, Lynch, and Bromm.


SENATOR HARTNETT:  I would simply pass for now.


SENATOR CROSBY:  Senator Beutler.  He passes.  Senator Lynch.


SENATOR LYNCH:  I would support Senator ...  what we're on right now, Madam President, is the amendment ...


SENATOR CROSBY:  The Hartnett amendment.


SENATOR LYNCH:  ...to the amendment by Senator Hartnett, and Senator Hartnett and I would suggest we support that if that's at all a concern.  And I would like to suggest that we not only do that, but that next year ...  next year we come in with a bill that could involve anybody and everybody in the state that would do the same thing, and go through it in an appropriate way, like Senator Bromm suggested we should, and he's right, and do it in such a way and at such a time when we all can be involved and all the cities can be involved.


SENATOR CROSBY:  Thank you, Senator Lynch.  Senator Bromm, did you just wish ...  did you wish to speak again to this amendment?




SENATOR BROMM:  Yes.  Thank you, Senator Crosby.  And I appreciate what Senator Lynch is carrying and trying to accomplish here in a short period of time and I will support the amendment to the amendment.  If the body chooses to adopt the amendment, then I would rather see it as restrictive as possible at this point in time, and so I will support the amendment to the amendment.  I'm not convinced that I will support it after the adoption of the amendment to the amendment, however.  And I'll tell you, we all have these situations that arise, that cause us some difficulties in our local governing bodies, and it isn't restricted to any one area of government.  There's some things going on in my area that would...  it would be nice to have some solution for.  But the bottom line is that, I think, we have local political subdivisions for good reasons and, generally speaking, I support letting them do what they're elected to do, what our statutes authorize them to do.  The statutes are relatively broad when it comes to powers of conducting or initiating such things as water projects by a city or a village or a county.  And this is, quite frankly, like putting in a referendum process that could be initiated by any one political subdivision that's affected by the action of the governing body.  And that can be a pretty significant tail twisting, if you will.  The governing body, the elected governing body, whether it's the county board or the city council or whoever it is has a lot of responsibility to all of the patrons that are affected by their action, and I think to some extent we've got to let that system work.  And I ...  there may or may not be an abuse going on in the situation that's triggering this.  I don't know that.  I'm not in a position to know that.  But just as a matter of principle I hesitate to change the statutes in this fashion.  I will support the amendment to the amendment, but I will oppose the amendment being attached to 269.  Thank you.


SENATOR CROSBY:  Thank you, Senator Bromm.  Senator Lynch, there are no...did you wish to speak again, Senator Lynch?  I'm sorry.  Senator Lynch.


SENATOR LYNCH:  Appreciate it.  I turned my light on again, Madam Chair, to directly respond to Senator Bromm's last comment.  I agree with everything you said.  People should have a right to vote.  There should be a referendum, there really




should be.  But don't you think the referendum ought to be that the people that vote in that referendum are the ones that are being taxed?  That's all.  Just let it soak in a minute.  That's all I'm saying.  Just give them a chance to vote.  And, to be completely frank, the referendum wouldn't even happen if, in fact, all of the jurisdictions, by a three-fifths vote, agreed that this is what they should do.  It's as simple as that.  So I don't disagree with anything Senator Bromm said, except he forgot to mention apparently supports people not being able to vote on referendums in jurisdictions that they don't have the right to vote for officials in.  Big difference.  Big difference altogether.  With that, I...we're voting on Hartnett's amendment to the Hartnett amendment, right?


SENATOR CROSBY:  Thank you, Senator Lynch.  Senator Tyson on the Hartnett amendment.


SENATOR TYSON:  Thank you, Madam President.  I rise in very strong support of the Hartnett amendment for all of the reasons I outlined before.  The citizens are voting a referendum every two to four years.  And I will tell you from...  again from personal experience it is very difficult to outline to a large group of people, number one, the time constraints and, number two, the future necessity of water projects, wastewater projects and the like.  We have gone all through this.  In my district I think we have had four increases in water rates and sewer rates over the last eight years, but they have been supported because people understand that we have to have an adequate supply of water and adequate treatment of it, especially in view of state and federal regulations.  I urge everyone in this Chamber to support the amendment to the amendment and, like Senator Bromm, I will be voting against the amendment itself.  Thank you.


SENATOR CROSBY:  Thank you, Senator Tyson.  There are no further lights.  Senator Hartnett, to close on your amendment.


SENATOR HARTNETT:  Madam President, members, what this amendment does, it simply is limited to counties with...  in ...  with a population in excess of 100,000 with ...  but with a population less than 175,000.  That's simply what the amendment does, is simply a limiting factor as it relates to this bill.  So I'd ask for the support of this amendment to the amendment.




SENATOR CROSBY:  Thank you, Senator Hartnett.  You've heard the closing on the Hartnett amendment to the Lynch amendment.  All in favor vote aye, opposed no.  Record, please.


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


SENATOR CROSBY:  The Hartnett amendment is adopted.  We're back to the original amendment.  Any further discussion?  There are no further lights, Senator Lynch.  Would you like to close your amendment ...  on the amendment?


SENATOR LYNCH:  Yes, Madam President.


SENATOR CROSBY:  Would you like to use this as your closing?


SENATOR LYNCH:  I could.  I had my light on, but I'm not sure.  I don't think I've talked for 5 minutes in the last 30 years.  Had an old politician, was elected 26 times.  I asked how come he served so long.  He said, 'cause I never made a speech longer than three minutes in my life.  But I'm going to have to maybe take at least the five minutes here.  First of all, I want to remind you that this is classic good protect the general public legislation.  It provides that the elected officials you have, first of all, should vote to try to cooperate with each other.  But if they don't, it gives someone who might have a pretty good idea the chance to overcome that one or two ...  those one or two vetoes out of maybe five or six, or whatever it is, with a general vote of the population.  And why the general vote of the population?  It's because they're the people who are going to have to pay for this.  I couldn't help but think, I wonder if ...  how we would take it if somebody over in Iowa said we ought to put in high stakes gambling in Nebraska and we'll collect the taxes from it; you can pay for it of course but we'll collect the taxes from it.  You don't represent somebody with just good faith.  You only represent somebody when they can vote for you or against you.  There is not constraints at all on any of the subdivisions in government involved with this.  All this is...provides is they have the right to vote and they have the right to know.  It can't be confused with what recently happened in Lincoln, because Lincoln isn't going to build any buildings




in Waverly or anywhere else.  They're going to build them in Lincoln, in the city of Lincoln, and the people have the right to make the decision that they trust who they've elected.  This bill provides that same thing.  If that ...  those elected officials from that jurisdiction vote to do this it will go, unless of course there is some disagreement from jurisdictions who would not like to see that project done or don't believe what they think it costs.  Now, there was an issue, not recently, in another major town as it involved the cost on another project.  This bill simply provides a process.  It's a process that I think is ...  I guess when you think in terms of what's American or not, boy, if there's anything American it's the right of people to vote and it's a right of people being able to be represented by people they vote for and represented, in some case, for people they vote against.  But at least they have the right to vote.  If this project had come up early last year or any time, we would have had ...  we would have had this very bill, this amendment as a bill in time for your consideration', and I'm sure it would have passed given the proAmerican, pro-representative attitude a lot of you have.  But to fear something like this, because you might have gotten a call from the League of Municipalities in the last few minutes, really is no excuse at all.  Just think about this.  Just think about what it does and what it can accomplish, and, if you don't support it, what's going to happen to all those people who are going to have to pay the bill in this particular case?  And it, in a sense, if we don't do this, makes a mockery of all that good talk that some of you have thrown out about good government and what we've got to do to encourage people to cooperate with each other to save money.  This is, in fact, in effect a property tax bill.  We're doing everything we can to encourage jurisdictions to work with each other to do it the right way, and the right way is to make sure that you get the kind of professional help you need to make sure it's the right way.  I think we've answered almost all the questions and I think we've answered them very well.  I hope...


SENATOR CROSBY:  One minute.


SENATOR LYNCH:  ...  hope you would agree.  To make sure I never talk for five minutes, I will simply close by saying, please, this is good.  This ...  you'll go home tonight feeling wonderful,




if you vote for this legislation, and I would ask for your support.


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


SENATOR LYNCH:  I hate to do it, but I would ask for a call of the house.


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


SENATOR LYNCH:  ...  a vote please.


ASSISTANT CLERK:  21 ayes, 0 nays to go under call.


SENATOR CROSBY:  The house is under call.  Would all senators please record your presence.  Would those unexcused senators please return to the Chamber and record your presence.  Would all unauthorized personnel please leave the floor.  Senator Brown, Senator Bruning, Senator Chambers, the house is under call.  Senator Schellpeper.  Senator Wesely.  Senator Matzke.  Senator Schellpeper and Senator Wesely.  Senator Schellpeper.  Senator Lynch, we're waiting for Senator Schellpeper.  Senator Schellpeper is here now.  All present and accounted for, a roll call vote's been requested in reverse order.  We are voting on the Lynch amendment to LB 269.  Mr. Clerk, will you please call the roll in reverse order.


ASSISTANT CLERK:  (Roll call vote taken.  See page 2099 of the Legislative Journal.) Vote is 16 ayes, 9 nays on the adoption of the amendment, Madam President.


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


ASSISTANT CLERK:  The next amendment I have is offered by Senator Jones.  (AM2279 appears on page 2100 of the Legislative Journal.) 7496


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


SENATOR JONES:  Madam President and members of the body.  my amendment just simply takes out Section 11 and Section 12 of LB 269.  And the amendment, is the Interlocal Cooperative Acts of public agencies in state and may gain new powers by signing interlocal government agreements.  And I give you a couple examples of that.  It's ...  as the Interlocal Cooperative Act now stands, two or more public agencies may exercise jointly only those powers, and under LB 269 two or more public agencies may exercise jointly powers, privileges, and authority that only one of the public agencies is currently capable of exercising.  And I got a couple problems with it, I think, that I think I should bring out before we get discussion on it.  One is the state public agency may gain powers of local government agencies.  This would result in less local control.  The Interlocal Government Cooperative Act defines public agencies to include agencies of state government, and there's a concern that the agency of the state government might be over the local agency, and that's a concern of the way it's wrote now.  And another problem would be...  appointed officials may gain power now exercised only by elected officials.  This would reduce accountability to the electorate.  And another example of that would be appointed officials of the Department of Economic Development could exercise power currently exercised only by the city council members.  And another problem I see in it would be an official of public agencies could, through interlocal agreements, acquire powers that he or she is not qualified to exercise.  An example of that would be if a school district and the Nebraska State Patrol had a common goal, such as stopping the sale of illegal drugs, they could sign the interlocal agreement which would allow each public agency to give the other each power to exercise jointly in order to achieve that goal.  So it could be given to somebody that really wouldn't have ...  know anything about it.  So...  I brought this amendment and I was hoping to get some of the Revenue Committee to talk on it a little bit for discussion and see how it goes from that.  Thank you.


SENATOR CROSBY:  Thank you, Senator Jones.  Discussion on the Jones amendment.  Senator Kristensen, followed by Coordsen, Chambers, Janssen, Beutler, and Tyson.  Senator Kristensen.  And




Lynch and Maurstad.  Senator Kristensen.


SENATOR KRISTENSEN:  Thank you, Madam President, members of the Legislature.  First of all, I want to explain why there are these sections that are opened up; secondly, why we made the changes we did; and third, I'd rise to oppose Senator Jones' amendment.  And I have no problem with the discussion that he wants to occur, but realize what it will do.  When we started with the process of wanting to put joint operations together, one of the things that we ran into was that you both had to have the power to do the joint venture.  In other words, if you wanted to go out and have fire protection, you both had to have the authority or the ability to do fire protection.  If you didn't, you weren't allowed to have any local ...  interlocal agreements.  You couldn't do those things.  So what we did in committee was decided that there are a number of these things that are out here where, if one of the entities has the authority' to do it, you may well be able to join with them, through an agreement, to carry on that function.  There's lots of these functions out here.  Now, what Senator Jones does is he strikes out two of the main sections in the Interlocal Agreement Act entirely.  Now, that Interlocal Agreement Act is what a number of communities rely on for joint projects.  We have them all over the statutes.  Almost...  I don't know of any county or city that does not have an interlocal agreement to do something.  I mean, they're just pervasive across, and they were all born out of the attitude that counties, cities, school districts, all of these other divisions, should cooperate and work together.  And what we're doing here is allowing and beginning to allow different entities, who not necessarily have those functions, the power to perform that.  For example, if two or more governments want to perform it, they can do them individually, or they can do them together jointly.  And I think at this point in time...I know Senator Jones has a constituent who feels like that the interlocal agreement is going to cause all sorts of havoc.  Quite frankly, it's been one of the best functions that we've got.  Again, it has to be reduced in writing.  It has to be proved by both of the political subdivisions.  There's plenty of protections in there.  You have elected boards to do these sorts of things, and I think that repealing this sections would be a grave mistake, would cause a tremendous amount of havoc for all subdivisions.  And if you want them to enter into these




agreements and put them in writing where people know where they're at and you can identify them, you ought to keep these sections of law.  To wipe out these two would really cause havoc and...  I know that Senator Jones has a constituent who fears that people working together may do things that she doesn't want to be done.  But quite frankly, that's the reason we elect those local political subdivision boards to cooperate, to look after the various entities, and I think there's plenty of protection to do that.  We did, in committee, discuss this.  We think it's one of the better features of 269.  It goes through...  and since there was not the constitutional amendment that was passed in the last election, this is just another mechanism to allow for some of these joint processes to be done.  I would hope that...


SENATOR CROSBY:  One minute.


SENATOR KRISTENSEN:  ...  you would defeat the Jones amendment.  And, Senator Jones, I don't know...  I would...  if you had any questions, Senator Jones, I'd be happy to, in my last minute, if you'd ask it and I'll try to respond.


SENATOR CROSBY:  Senator Jones.


SENATOR JONES:  Yes.  I think we're talking about the same person and she's concerned about two local subdivisions, like the police or the State Patrol or schools, that could be joined together, and one or the other of them would have the authority over and they might not know what they're doing.  And she's also concerned about a person that's appointed, in place of elected, that could get the job of doing it, and I guess that's what the main concern is.


SENATOR KRISTENSEN:  Okay.  In response to the latter first, realize that we're talking about subdivisions or public agencies or entities, so some of those ...  you know, those are primarily going to be political subdivisions that are dealing with each other.  We do...




SENATOR KRISTENSEN:  ...  have interlocal contracts such as auditing.




SENATOR CROSBY:  Thank you, Senator Kristensen.  Senator Coordsen, on the Jones amendment.


SENATOR COORDSEN:  Thank you, Madam President, members of the body.  Senator Kristensen covered much of what the problem with the Jones amendment is.  Bear in mind,.* again, that what we're embarked on is a process and part of that process is to create situations in statute whereby there is ability for local units of government, and that's what this is designed for, to enter into interlocal agreements.  And as Senator Kristensen mentioned, currently, most units of government have some limitations on what they can enter into an interlocal agreement to do.  An illustration is that, for an example, local units of government decide that they want to enter into an interlocal agreement to do one local fueling source for their vehicles.  And by interlocal agreement they could share in the cost of that and escape all of the problems that are inherent within a fuel distribution system for government vehicles.  That's only one small illustration of what could happen.  There are still some restraints on interlocal agreements that exist in the constitution, but we feel that this is one of the key elements of 269 is to allow local units of government the maximum flexibility to agree to do things together, to do things cooperatively, that are not allowed to them to do, unless both have that authority in statute today.  You might see an interlocal agreement, for an example, between a county and a fire department.  What the reasons to do that would be, currently I have no example, but that could well happen as local government looks on how better to provide their services.  As I understand the situation, Senator Jones has a constituent that is very concerned that this will expand the power of state government into local government functions and local government will lose all of their current authority.  I think it would be appropriate at this time to mention that, number one, everyone that is party to the agreement has to agree to the agreement.  The state of Nebraska by itself can't force an interlocal agreement.  I don't know that there is something that might be appropriate for a state agency and a local unit of government to participate in.  I simply don't know what that would be.  But most importantly, this is to allow the utmost flexibility within the constitutional constraints for local government...  for local




government to enter into interlocal agreements between themselves to perform a function that one of those units of government currently has statutory authority to perform.  I think this establishes, Senator Jones, a legislative record on what the intent of this is, and I'm hopeful that that will be helpful to your client ...  to your constituent.  Thank you, Mr. President.




SENATOR BRASHEAR:  Thank you, Senator Coordsen.  Senator Chambers, to the Jones amendment, followed by Senators Janssen, Beutler, Tyson, Lynch, Maurstad, Witek, and Jones.  Senator Chambers.


SENATOR CHAMBERS:  Thank you, Mr. President, members of the Legislature.  I would like to ask Senator Kristensen some questions.


SENATOR BRASHEAR:  Senator Kristensen, will you yield?


SENATOR CHAMBERS:  Senator Kristensen,...




SENATOR CHAMBERS:  ...  I am just now looking at what Senator Jones is attempting to do for the first time.  I keep seeing "agency".  Is there anything in Section 11 ...  which two sections?  He's striking Section 11 and Section 12?


SENATOR KRISTENSEN:  Yes, that's right, Senator.


SENATOR CHAMBERS:  Is there anything that says something other than "public agency"?  Because, to me, that is not the same as a political subdivision, unless there's a definition of "agency" which means political subdivision.  So, is there something in Sections 11 and 12 which refer to anything other than a "public agency".




SENATOR CHAMBERS:  Because that's all I see listed here.




SENATOR KRISTENSEN:  I think that's true, Senator.  I think that's true.


SENATOR CHAMBERS:  Does this interlocal agreement define "public agency" as including a political subdivision?


SENATOR KRISTENSEN:  I'm looking for the definition right now, Senator.


SENATOR CHAMBERS:  Okay.  Then while he's...




SENATOR CHAMBERS:  Oh, go ahead.






SENATOR KRISTENSEN:  I just...  it does if you look at the term under 803, it's a different section.  It talks about:  "Public agency shall mean any county, city, village, school district, or agency of the state government, or of the United States in drainage district, sanitary improvement district or other municipal corporation or political subdivision, and any political subdivision of another state."


SENATOR CHAMBERS:  Okay.  And that's what I needed for me to continue with the discussion.  Is there anything that would prohibit a community...  a municipality, which has taken a vote to levy a sales tax, from agreeing with a governing board of another city, which did not agree by a vote to levy a sales tax, to go ahead and levy one?  One has the authority, the other one does not.


SENATOR KRISTENSEN:  It doesn't go to taxing functions, to the best of my knowledge.


SENATOR CHAMBERS:  Is that a certainty, because I really don't know.  I'm asking because...




SENATOR KRISTENSEN:  The reason I don't think it is because we don't change the sections in Chapter 77, which are the taxing sections, which are the authorization.  These go to operations, basically, and the performing of a function, as opposed to the authority to tax.  And the way that the tax code, at least as I've always understood it, is that you have to have specific authority to tax, and that's a specific statutory...


SENATOR CHAMBERS:  Okay.  Would ...  well, see, I'm wondering how many things that exist in the statute now that might be overridden by this interlocal agreement, which was one thing, but now that it's being changed to say that one of these agencies has the power to spread its cloak over another agency which does not have that power.


SENATOR KRISTENSEN:  If...  just remember to keep-in mind that it's got to be, basically, a contractual arrangement.


SENATOR CHAMBERS:  But still, one doesn't have the power and the other provides the cover for both of them.  And I don't feel very comfortable with this being done, not just because of Senator Jones offering an amendment , but this kind of language is always troubling to me.  Why is it that we don't leave it where both have to be able to exercise that function or perform it?  If it's a function that goes along with being a city or a county, is the purpose of this amendment to say that under the present law it may be a power that a county has....




SENATOR CHAMBERS:  ...  but not a city, but through this instrumentality, a city now has its powers expanded beyond what a city is allowed to do.  That's what it can do, can't it?


SENATOR KRISTENSEN:  Yes, except, of course, in that example, there's not ...  the cities are pretty broad instrumentality, so it's probably the other way around.  Yet, some of these other political subdivisions that would want to have the city perform functions for a variety of reasons.  I mean, we had numbers of people that came in and wanted the flexibility to enter into interlocal agreements, because they thought they could be more efficient in some areas.






SENATOR KRISTENSEN:  I'm going to try...


SENATOR CHAMBERS:  Oh, go ahead.


SENATOR KRISTENSEN:  ...  to dig some of those out, too, for you.


SENATOR CHAMBERS:  Okay.  And before my few seconds run out, I think we're in that period of time where everybody is talking about efficiency, and they seem to think that if everybody gets together and puts something in the pot, then it's going to be a better broth.  But I don't agree with that.  I'm going to listen to the discussion, though.


SENATOR BRASHEAR:  Thank you, Senator Chambers.  Senator Janssen, to the Jones amendment.


SENATOR JANSSEN:  Thank you, Mr. President, members of the Legislature.  You know, when I look under Section 12, 1 realize what Senator Jones is concerned about.  But it says in there that these undertakings, at least one of the public agencies entering into the contract must be able to do so by law.  Well, that brings me back to thinking about two police departments in the particular district that I represent were fortunate enough to enter into an agreement to provide law enforcement in those two towns.  It's worked quite well for them, it saved the cities a considerable amount of money, and if I remember right, .1 believe they were one of the first ones to do this.  You get into law enforcement, several towns in the counties throughout the state have had an agreement with the county sheriff to provide law enforcement in those smaller communities.  And it's...I would hate to see something like that be lost, especially when it's working to the betterment of those people.  And saving the tax dollars and also, some of the communities are receiving grants for doing this, because of the way they're working, they have a ...  it costs a lot ...  the costs are down.  They're able to perform their duties more efficiently, and in my estimation anyway, much better law enforcement protection to those towns and the communities in the area around them.  So, Senator Jones, I do disagree...  respectfully disagree with your




opinion about what's happening here, and I will be voting against your amendment.


SENATOR BRASHEAR:  Thank you, Senator Janssen.  Senator Beutler, to the Jones amendment.


SENATOR BEUTLER:  I would waive, Senator Brashear.


SENATOR BRASHEAR:  Senator Beutler waives off.  Senator Tyson, to the Jones amendment.  Senator Tyson, to the Jones amendment.  Senator Tyson waives off.  Senator Lynch.


SENATOR LYNCH:  Mr. Speaker and members.  Could I ask Senator Jones a question or two?


SENATOR BRASHEAR:  Senator Jones, will you yield?


SENATOR JONES:  Yes, I will.


SENATOR LYNCH:  Senator Jones, is it my understanding that you introduced this bill (sic) on behalf of someone in your district who said they should have the right to know?  You can just say that "yes" or "no".




SENATOR LYNCH:  Okay.  Do you think that that person in your district ...  you can answer this "yes" or "no" either ...  probably wasn't given a chance to participate or maybe even participated but disagreed with it...  one of the two ...  they disagreed with what the fire department was going to do?  They disagreed with it, so...


SENATOR JONES:  I think there's several ...


SENATOR LYNCH:  So, one...


SENATOR JONES:  ...things that she don't like that's happening...






SENATOR JONES:  ...in the county.  Yeah.


SENATOR LYNCH:  So she disagreed with it?




SENATOR LYNCH:  So you're introducing a bill (sic), in other words, that would give someone like your constituent veto power, is that what you're talking about here?




SENATOR LYNCH:  Yes or it no I mean, that's what you're saying.  No, just "yes" or no Would that ...  you want to have a bill (sic) that would give that person in your district a veto, a veto, over what the majority of people want to do?  Is that what you want?  Yeah.  And if that's ...  you see, if all three...  I won't question you any more.  I've got about 75 1 could ask you here because you voted against my amendment.  (Laughter.) And see, I don't understand it because everything you want to do, Senator Jones, is contained in my amendment.  If you would have voted for it, you wouldn't have had to worry about this amendment because some people like her and others would have had the right to know and participate.  Now, that's enough on that, but I just wanted to show you how sometimes we really, probably don't think through legislation or understand amendments.  He blindly supports this because his constituent said this is what they want to do, but apparently he either wasn't listening or didn't understand my amendment because he voted against it.  Just want to point that inconsistency out.  It's an important lesson for all of us, and it's most interesting because it just happened.  Just happened, the vote before this one.  Oh, by the way, I'd share one little more bit of information:  The city of Papillion charges, for it's own residents in the city, $1.15, I think, per thousand gallons of water.  For the people who live outside the city limits but use their water system, they charge twice as much, $2.30.  1 thought I'd throw that out in case some of you want to feel good about voting against that amendment or not voting at all, as the case might be.  I would hope that we would not support this, but I say it with mixed emotions because I can understand how she might feel about what's happening in that district and would like to do something about it, and she




did the right thing.  She got a hold of her senator and her senator introduced a bill (sic).  Probably everybody else who doesn't like the bill are a little upset with Senator Jones.  Now she might be happy.  But those are the political decisions you weigh.  But at least in the amendment before this it gave those who are elected to do your business a chance to make their decision.  It also gave those who might disagree a chance to vote if, in fact, it came to that.  I don't think this amendment offers either of those and I cannot support it.


SENATOR BRASHEAR:  Thank you, Senator Lynch.  Senator Jones, to your amendment.


SENATOR JONES:  Mr. President, members of the body.  I just want to talk a little bit more about it because I think we had a real good discussion on it, and I think that Senator Kristensen and Senator Coordsen answered a lot of the questions on it.  And I hope with this discussion that we can maybe figure out if we can change a word or two in it that would make it more, you know, understandable on this, because their concern is, you know, the agency of the state ...  the agency of government might have power over the local and the locals think they lose control.  Well, I think that we should look at it a little bit closer and maybe we can figure something out.  But I think with a good discussion on it., maybe it'll ...  we can get something more out of it, but ...  understand it.  But with that, I would like to withdraw my amendment.


SENATOR BRASHEAR:  The amendment is withdrawn.


CLERK:  Mr. President, the next amendment I have is by Senator Will.  I had a note from Senator Will that he wished to withdraw AM1741 and offer AM2290.


SENATOR BRASHEAR:  Is there any objection to the substitution of the amendment?  If not, it's so ordered.


CLERK:  Senator Will, AM2290.  (See pages 2100-01 of the Legislative Journal.)


SENATOR BRASHEAR:  Senator Will, to open on his amendment.  Senator Chambers, for what purpose do you rise?




SENATOR CHAMBERS:  Mr. President, I signed on to that amendment also, a group of us did, and if Senator Will is not here I would not want the amendment to go by the boards because we've done a lot of work on it and ...  here he comes.


SENATOR BRASHEAR:  Senator Will is present.


SENATOR CHAMBERS:  I give my time to Senator Will.


SENATOR BRASHEAR:  And to open on the amendment, Senator Will.


SENATOR WILL:  Thank you, Mr. President, members of the body.  May have to spend a couple seconds catching my breath, but this is the amendment that has been worked out among several of us interested in the Metropolitan Area Transit issue.  You might remember I brought an amendment to this bill on General File and this is something that we discussed and then withdrew.  And the gist of this, as opposed to exempting the Metro Area Transit levy limit from the...  or their levy from the limit set under 1114, we would instead, under this amendment, give them a six-cent levy, three of which would be under the city and three of which would be under the county, and this would not be an exemption.  This would be under these two subdivisions.  They would be required to levy three cents each, and it would go towards the operation of the Omaha bus company.  This is something that, frankly, neither the city of Omaha nor Douglas County are particularly thrilled with, but it is something that would continue the operation of the bus company, would give them their levy.  Currently, they levy 5.5 cents.  This would allow them to continue operating within the parameters that they currently do.  It would, I think, address a lot of the concerns that are out there from the perspective of other members of the body with respect to the levy limit being under an elected board and not being an exception to 1114.  So I would hope that the body would accept this in good faith as a compromise, something that has been talked about by Senator Chambers, myself, Senator Landis, other members of the body.  I think...I don't want to, initially at least, get into the importance of the Metro Area Transit.  I think that's obvious.  This is a transit authority that a lot of people are dependent upon to get to work, to get different places that are necessities.  It operates very well,




very efficiently.  Frankly, my preference would be to give them a separate levy, but at this point I think, in keeping with the ideas behind the Revenue Committee proposals, behind LB 269, sharing this levy between the city and county equally and requiring the two to make this levy is probably the best place we can land on this issue.  In addition, because we're giving the county three ...  we're taking from the county three cents of ...  under their levy limitation, we would allow the county to approve the members that are appointed to the Metro Area Transit Board.  Currently, the Mayor appoints the members of the board the ...  with the approval of the city council.  Under this amendment to 269 the Mayor would approve the members to the Metro Area Transit Board and approval would be by both the city council and the county board, so that's what we would be giving the county in exchange for the fact that we are requiring them to levy an additional three cents.  The three cents levied by the county would be within the same geographic area as that levied by the city, which currently is the city limits of the city of Omaha, and it would simply be allocated to the county limit.  And this is, as I said, this is not something either the city or county is particularly pleased with, but that probably means we're pretty close to something that makes a lot of sense.  And with that, I would yield the remainder of my time to Senator Chambers.


SENATOR BRASHEAR:  Senator Chambers, you have about five and a half minutes.


SENATOR CHAMBERS:  Thank you, Mr. President, and thank you, Senator Will.  As has been pointed out, this was arrived at because members of the Revenue Committee did not want to give MAT an exemption to take them out from under this levy limit that has been imposed upon others and let them be sitting out there like a fifth wheel or an extra finger.  So this was particularly pleasing to me, because the city of Omaha and the county of Douglas don't like to work together.  This will force them to join in an effort which will benefit the citizens who live in an area over which both the city and the county have jurisdiction.  In a sense, it's like being able to stick a fork in both of their baked potatoes, and that I think is a very wholesome result.  This does not exempt anybody from the levy limit, not Omaha, not Douglas County.  It simply takes three




cents, as Senator Will said, from each and makes it available to MAT.  The city and the county have no choice in the matter, so we can continue to look for public transportation in Omaha to at least have some money to operate with.  Since I signed on to this amendment And have talked to some of the members of the Revenue Committee to see what they were willing to agree with, I expect, after this is adopted and is enacted into law, to talk to the people who are on the board of MAT and their executive director about some of their practices and activities that I don't think particularly are in the interest of all of their ridership.  That's a separate issue, but I do support this amendment.  I think it will be adopted.  The Revenue Committee agrees and, since it's really an Omaha matter and you see all these different Omaha senators who have signed it, that by itself wouldn't mean anything.  What makes that listing significant is the fact that my name is on the list too, so that can let you know that it's probably the best that we're able to get.


SENATOR BRASHEAR:  Thank you, Senator Chambers.  Senator Coordsen, to the Will amendment.


SENATOR COORDSEN:  Thank you, Mr. President, members of the body.  This is an issue that we have wrestled and hassled and really put quite a lot of effort into *trying to find a reasonable solution that would allow the Metro Area Transit Authority access to a property tax valuation base, which they need, as I understand, for the purposes of issuing the bonds to match the funds that are granted from the federal government to buy the transportation equipment.  I believe that this is a reasonable compromise.  I have been made aware that this ...  the municipal buses do serve, under contract, areas outside of the city limits of Omaha.  And I think this provides an answer to how do we go about providing to Metro Area Transit the taxing authority that they need in order to do the things that it's necessary for them to have the taxing authority for.  So, Mr. President, I do rise in support of the Will amendment.


SENATOR BRASHEAR:  Thank you, Senator Coordsen.  Senator Kristensen, to the Will amendment, followed by Senators Chambers, Schellpeper, Robinson, Hilgert, and Will.  Senator Kristensen.




SENATOR KRISTENSEN:  Thank you, Mr. President, members of the Legislature.  Senator Coordsen accurately reflects the Revenue Committee's thought process on this.  I can tell you that because ...  that I believe this to be the only transit authority in the state that this is the type of arrangement we can make work for this, so it's fairly narrow.  The other thing that happens with this is that the Metro Area Transit crosses, not only the city into the counties, it crosses from county to county.  I think that's correct, Senator Chambers.  I believe it also crosses state lines for pick up.  That is unique.  That's what causes us a great amount of trouble with this.  But in an effort to keep the transit authority going we've basically taken the potato, I think, and sliced it in half, given half to each.  And I see those names on there, Senator Chambers.  I see most of the cream of the Legislature.  I see your name.  I don't know whether it's sour cream or not.  But the reason that we did this is for this one unique area it makes some sense to divide a levy and mandate the levy, because that's what this is doing.  it's different than any other entity that I know of in the state.  It's also one of those where we are cutting their levy down.  I believe they have a maximum of an eight-cent levy and we are restricting that now down to six cents, so they're losing levy authority.  That fits.  within our policy.  The other policy is they're under the control of an elected board.  They're now under the control of two elected boards.  That fits within the Revenue policy.  And the final item was that there be some accountability.  And I assume, Senator Will, that, in the years to come, that the Metro Area Transit Authority will be back to this Legislature for a variety of funding sources, and they've got to make sure that, through this record, we are giving them the funds now that they're going to need to continue to exist, and that's an important fact of why we can make this arrangement.  It is one we've struggled with for a long time.  Because it's limited, it's narrow, and we are cutting their levy authorities, it's one that I think fits within our overall policy that we established last year, and I would support the amendment at this point in time.  Thank you.


SENATOR BRASHEAR:  Thank you, Senator Kristensen.  Senator Schellpeper, to the Will amendment.




SENATOR SCHELLPEPER:  Yes, thank you, Mr. Chairman and members.  I rise to support the Will amendment also.  I did have some concern that we were allowing an entity to earmark a certain levy amount.  But it's better to, as long as it's underneath the city or and the county levy limit, I guess I.  will go along with it.  We never did have a concern in the Revenue Committee about the operation of MAT.  It was always run very well.  It does a very good job.  They go over to Council Bluffs and pick up people I think from the casino over there, so it does bring that money back to this state, so that does help that a little bit.  But I think it's a way for this body to work out a compromise.  And Senator Chambers, I think, was involved with the compromise and Senator Will, but it's something that we can live with, although I think it does set a certain amount of a precedent with this earmarking part of the levy, but it's something that we could live with.  Thank you.


SENATOR BRASHEAR:  Thank you, Senator Schellpeper.  Senator Robinson.


SENATOR ROBINSON:  Mr. President, members of the body, Senator Will, I have a question.


SENATOR BRASHEAR:  Senator Will, will you yield?


SENATOR ROBINSON:  What's the mill levy of the city of Omaha?


SENATOR WILL:  Senator Robinson, I want to say it's in the 30-some cent range right now.  In fact, as I'm thinking about it, it is right around 40 cents, actually.


SENATOR ROBINSON:  How did this compromise come about, or is it a compromise?


SENATOR WILL:  It's a compromise among those of us ...  some of us on the floor that are interested in this.  Frankly, the compromise was struck without the input of the city or the county, initially, which probably makes a pretty good compromise.  (Laugh)


SENATOR ROBINSON:  Maybe things work out better that way, huh?




SENATOR WILL:  That was my theory.


SENATOR ROBINSON:  The...I think we do have to understand that the transit system in Omaha is very important, and could you tell me the difference in area, do you have what the difference in area would be between the county and the city?


SENATOR WILL:  Just in geographically,...


SENATOR ROBINSON:  Yeah, you have any idea?


SENATOR WILL:  ...  Senator Robinson?  I know population-wise it's about 80 percent.  I suspect geographically there's ...  it's probably ...  the city of Omaha would be a little smaller than that.  Probably we're talking about two-thirds of the county, I would guess.


SENATOR ROBINSON:  Okay.  Where the...  that's in the city of Omaha then, is what you're saying.


SENATOR WILL:  Right, about...  and 80 percent of the population in the city of Omaha.


SENATOR ROBINSON:  I'd like to stand and to support this amendment.  But I think Senator Chambers ought to realize that the importance of his signature isn't nearly as great as he thinks it is, so....


SENATOR BRASHEAR:  Thank you, Senator Robinson.  Senator Hilgert.


SENATOR HILGERT:  Thank you, Mr. President, members.  When this amend ...  when a similar amendment to address the problem with the Metro Area Transit funding, I supported that amendment and I did so somewhat with some doubt in the back of my mind.  The services that they provide and the responsible stewardship of the property tax dollar that MAT has shown in the past is what persuaded me to support the prior amendment.  I referenced the fact that, in even real dollars, the number of dollars that MAT has spent since 1994 has decreased and actual levy has gone down from 7 cents down to 5.4 cents.  I even support this amendment wholeheartedly.  The problem with the last amendment was that it




was ...  I saw it as somewhat of a retreat on our commitment to property tax relief, but yet I recognize the services that MAT had and supported it anyway.  That outweighed it.  But certainly this amendment should have very little, if any, objection from the body regarding our commitment to property tax reduction in the state of Nebraska and those of us who represent constituencies in Douglas County and Omaha, while at the same time preserving the quality services that MAT provides.  So I wholeheartedly encourage the body to adopt this amendment and to support Senator Will's amendment, of which I certainly also cosponsored.  So with that, I'll yield the rest of my time back to the Chair.  Thank you.


SENATOR BRASHEAR:  Thank you, Senator Hilgert.  Senator Will, to your amendment.


SENATOR WILL:  Thank you, Mr. President, members of the body.  I just want to briefly reiterate my support for this amendment.  I think that, that as ...  as the members of the Revenue Committee have indicated, it's in keeping with, I think, the theory behind the property tax limitations that we are talking about throughout this session, throughout the last several sessions.  And I appreciate the support of Senator Schellpeper, Kristensen and Coordsen on this measure, as well Senator Landis, and I just want to thank them for their assistance and their help and, frankly, this is the most support I've ever had on the mike for any amendment I've introduced, so I'm going to yield back my time.


SENATOR BRASHEAR:  Thank you, Senator Will.  Senator Kiel, to the Will amendment.


SENATOR KIEL:  Thank you, Mr. President.  After that I'm not sure if I should rise in support of it or not.  I am pleased to rise in support of this amendment.  As we have considered giving property tax relief and tax relief to citizens in the state of Nebraska, part of what we've looked at is providing some tax relief to owners of vehicles in the licensing of their vehicles, and I think what this does is provides some relief, if you will, to perhaps those folks who don't have vehicles to drive or rely upon a transit authority to get them to where they have to go.  With that, I would yield back the remainder of my time.




SENATOR BRASHEAR:  Thank you, Senator Kiel.  Senator Kristensen, to the Will amendment.


SENATOR KRISTENSEN:  Thank you, Mr. President, members of the Legislature, and I ...  Senator Will, I've had two different discussions and I want to make sure that I get our understanding.  What this does is it's three cents from the county, three cents from the city.  That's a total of six cents.  That's basically a mandatory levy.  Now if, for some reason, they are only using...  I think right now they're at, what, 5.8 or 5.7, if they're down at 5 or something like that, instead of giving them money that they don't ...  they haven't budgeted, a little technical correction would be that it's 3 cents, if they ask for it from the city, and 3 cents from the county, if they ask...  if MAT asks for it.  In other words, you shouldn't mandatorily raise money that they haven't budgeted for.  Would that...?  And I know that we're kind of doing Revenue Committee on the floor, but that's how it's been done.  But I believe that's an issue and if we just put in the words "if requested".


SENATOR BRASHEAR:  Senator Will, will you yield?


SENATOR WILL:  Certainly.  Senator Kristensen, if I understand correctly, what you're saying is as the amendment is currently crafted there would be a mandatory six cents, three from the city and three from the county.




SENATOR WILL:  And what you are saying ...  right now I think they're at 5.5, a little more than that, historically they've also been higher, so that's why I landed at the 6-cent figure.


SENATOR KRISTENSEN:  Oh, and I have no problem with the six cents.  I'm just saying it's the mandatory portion.  If they don't have that amount budgeted you're automatically dumping that much money into them.


SENATOR WILL:  But if I'm understanding then what you say is, and I think I'm agreeing with you, if they request the 3 cents then it's mandatory, but if...






SENATOR WILL:  ...but if their budget is not that high and they can be a good government body and levy lower than 6 cents, then they can come in and say, oh, we....actually we only need 2.85 cents from each entity.




SENATOR WILL:  I have no problem with that.  We need to draft it.  It shouldn't be hard.


SENATOR KRISTENSEN:  It should not be hard and I don't know how many other speakers there are, but, if somebody could put a couple lights on, that's a real quick, easy technical change that I think then puts us in great shape and...


SENATOR WILL:  If Senator Chambers would return the favor I've done several times for him, maybe we can take up some time while we draft this amendment.


SENATOR BRASHEAR:  Thank you, Senator Kristensen.  Senator Lynch, to the Will amendment.


SENATOR LYNCH:  Yeah, Mr. Speaker and members, I was going to say something else about stop talking about it, but if I say it you might have to act on it and I don't want to do that.  But after hearing what Senator Kristensen and Senator Will just discussed, I would also agree that this, by the way, very efficient, quasigovernmental organization would understand that as well.  For years they've been living with, budget-wise, an amount less than what they had the authority to levy.  In fact, at one time, I'm talking now just to bring you up to date on a couple things while they're getting that amendment written.  For years they never did levy the maximum they were allowed by law.  Know, there's another interesting thing I might mention as long as we're just spending time a little bit, and that is that there are two busing organizations in the state that do receive, from the Department of Transportation in our state, some kind of a subsidy.  I think I mentioned this before and some of you...  can you hold it ...  wait, I'm going to wait till these people stop.  I




can't even hear myself here, Senator Beutler and his good friend talking over there, and I'm not usually that picky, but I can hear more what they're saying than I'm saying myself, so they can whisper a little quietly.  I'm glad they're not going to confession.  I'd a known everything he did for a long time to come.  But in any case, it's not confession, but I did want to share with you this, though.  (Laugh) I know.  If...  I never commit any sins, so I haven't been to confession for two or three minutes now I don't....  But, it's all right, we're spending a little time here so it doesn't hurt to say that, I guess.  That reminds me of an awful lot of stories I can't tell you either, by golly, and I could tell them 'cause I'm a Catholic.  But we're not supposed to laugh at ourselves, are we?  I guess we're beyond that, unfortunate ...  unfortunately.  But as it applies to busing transportation system, Senator Crosby can correct me, but I think there are 30, 35 to 40 transit systems in the state, some obviously larger than others, and the largest is Omaha, and the next largest is Lincoln.  Lincoln's is a municipal system and so obviously it wasn't affected by the recommendation of the Revenue Committee, as it applied to taxes.  But I did want to share with you though that there is a million dollars that's been designated by the Department of Roads for distribution back to transit systems.  And to qualify, except for Omaha and Lincoln, every transit system in this state requests and gets 50 percent of whatever their deficit is.  So whatever they're spending, and they all do good work I'm sure, whatever they're spending out of that million dollars they get 50 percent of that.  What is left is then given, in proportion I think, as much as we can, to Omaha and Lincoln.  Some time ago, two or three years ago, this legislative body, and we're grateful for that, did approve a stipend.  It was a little more than what we had in the past.  But at the present time, again you can correct me if I'm wrong, Senator Crosby, but I think we get, in Omaha and Douglas County, something like 20...  18 percent of our deficit, not 50 percent.  I think Lincoln gets about the same.  So for what it's worth, that is not an issue today but it's something for you to chew on and think about that, you know, we could, if we wanted to suggest the old equity issue, we got to do for one what we do for the other, it would take about another $2 million, $2 million of road money to reimburse Douglas County or now Douglas County and the city of Omaha and the city of Lincoln and Lancaster County, the difference between




what they receive in the form of aid and, in fact, their deficits.  We're not suggesting that today.  It seems like this recommendation is a reasonable one and a good one.  I would also agree with Ernie...




SENATOR LYNCH:  ...  that there are some problems, 'cause he and I both live in areas where buses are pretty important to get people to work.  It's one reason they sneak across the river on occasion and go outside the city limits, and I'll give you a couple of examples.  Quality living, there are kids who work off campus.  There is some requirement that the Metropolitan Transit Authority cannot take kids actually to work, and some of these are in wheelchairs.  Can you imagine getting left off of a public transport bus six blocks from K-Mart where you work, outside the city limits on 90th Street, and then figure out how you're going to get there in your wheelchair?  That not very easy, not very easy at all.  So they do make ...  they try to, as wrong as it might be in -some bureaucrats' minds but I think necessary in most of our minds, they do the best they can to serve these people.  I'm talking until the Chairman says my time's up and I know it was ...




SENATOR LYNCH:  ...  a few minutes ago and....


SENATOR BRASHEAR:  Thank you, Senator Lynch.  Senator Chambers, to the Will amendment.


SENATOR CHAMBERS:  Mr. President, members of the Legislature, Senator Lynch I thought was going to give me some new material, and then he said there are stories that he cannot tell, so I guess I will just have to be disappointed, Senator Lynch.  You were about to get on a roll, you were in the zone, and then you said, but forget it.  So since we are just passing time here, I would point out that the efforts that various individuals have put forth on this proposition have really been productive, and it shows how something which initially seems to be one of those knots that cannot be untied; nevertheless, can be if several minds with the facility for mastering "knotology" get together




and work it through.  Now, if my good friend, Senator Tyson, there had been involved, we probably would not have gotten anywhere in terms of a solution, but we would have had much philosophizing.  We would have had many gems of wisdom on economics, especially that old, outmoded, useless kind that he just loves, but we would not have arrived at a solution.  So, when you can take people from the Revenue Committee, who want to hold firm on a policy position that has been taken, and you have others who are looking at a specific situation which needs to be rectified but it seems as though it cannot be without colliding with that policy, and somehow an accord is reached where the policy remains intact, and the other problem is solved, it shows what statespersonship can do.  If all, Senator Tyson...  Senator Tyson almost choked on that one.  (laugh) But if all issues, Senator Tyson, that confronted us in the Legislature could be handled in this manner, I'm sure there'd be far less heartburn and pre-ulcer conditions.  But what we must do is take advantage of an opportunity when it presents itself, and in this particular case, there was an opportunity to bring discordant, divergent elements together in harmony.  And instead of producing a cacophony of chaotic racket, we have a concord of sweet sound.  It is the music, Senator Wickersham, that has power to soothe the savage breast, and as a result, this afternoon I think we're going to come up with something that is of value.  I don't know who is working on that amendment.  Senator Will tells me the amendment is ready, so I'm going to end my soliloquy, Senator Tyson, on that note.


SENATOR BRASHEAR:  Thank you, Senator Chambers.  Mr. Clerk.


CLERK:  Mr. President, Senators Will and Kristensen would move to amend Senator Will's amendment.


SENATOR BRASHEAR:  Senator Will, to open on the amendment to the amendment.  (See FA371 on pages 2101-02 of the Legislative Journal.)


SENATOR WILL:  Thank you, Mr. President and members of the body.  I think this is a matter we can probably dispose of rather quickly.  This would address the concern raised by Senator Kristensen and that is that there...  as originally drafted, the amendment would have required each entity, the city and the




county, to levy three cents.  Senator Kristensen's concern was what if the transit authority does not need that entire six cent levy.  Basically what we've done, Senator Kristensen and I have drafted an amendment that indicates that that three cents would be levied only if requested by such authority, which would put the ball back in the Metro Area Transit board's court that if they don't need six cents, which right not, they are not at six cents, they would not be required to ask for that much and, indeed, the city and county would not be required to levy that much.  But it would still maintain the designated funding source under the county and the city.  With that, I would yield the remainder of my time to Senator Kristensen.


SENATOR BRASHEAR:  Senator.  Kristensen, you have about nine minutes, thank you.


SENATOR KRISTENSEN:  Thank you, Mr. President and members of the Legislature.  The Will amendment to the amendment, I guess I signed on to it, too, basically would guarantee that MAT could not walk in and have a budget of an amount that would require only five cents a levy but, say, oh, by the way, the statute says you've got to give a six, so they could say, we've got a low budget; and then have this unused money.  So you want to make sure that their budget and whatever political pressures are to keep budgets down, translates into a levy as well.  And I think this is a responsible way of handling that issue, and would hope that you would adopt it again.  It just says that you still keep the six cents, but only if it's requested by the transit authority.  You don't automatically mandate it, just give them the money and say, here, spend all of it because you're going to get all of it again next year.  So with that, I would yield our time back to the Chair and request the adoption of this amendment to the amendment.


SENATOR BRASHEAR:  Thank you, Senator Kristensen.  Senator Wehrbein, to the amendment to the amendment.


SENATOR WEHRBEIN:  Mr. Speaker, members, I just want to say I support this.  I had been understanding of the previous proposals not to have an exclusion outside of the levy, but I had been concerned that, in the case of MAT, it was kind of unique in the state, in Omaha.  It was being very well run, and




I ...  so I am pleased to see that there was this approach, and I support the amendment.


SENATOR BRASHEAR:  Thank you, Senator Wehrbein.  Senator Wickersham, to the amendment to the amendment.


SENATOR WICKERSHAM:  Thank you, Mr. President.  I'll support the amendment to the amendment and to the amendment.  But I must say that this has been not the most peculiar issue that I've seen come up, in my few years in the Legislature, but it certainly has to rank up there.  What we are doing with the amendment to the amendment and the amendment is literally providing for the support of a local enterprise that could be supported by voluntary actions on the part of two local governing boards or even one of the governing boards acting alone.  Both have indicated that ...  well, I shouldn't say the boards have indicated, but it's been indicated to me and I think to other members of this body that both of the governing boards that might ultimately be responsible for the operation of an essential service in their communities are unable to do that without such amounts of political infighting and bickering that the institution and the service could not survive that kind of activity, so it's been placed as a responsibility for the Legislature to solve what is essentially a local political issue.  I hope we have done it.


SENATOR BRASHEAR:  Thank you, Senator Wickersham.  Senator Lynch, to the amendment to the amendment.  Senator Lynch has called for the question.  Are there five hands?  There are five hands.  The question is, shall the amendment to the amendment be adopted?  No, the question is, shall debate cease?  All those in favor vote aye, those opposed nay.  Have you all voted?  Mr. Clerk.


CLERK:  25 ayes, 0 nays, to cease debate, Mr. President.


SENATOR BRASHEAR:  Debate has ceased.  Senator Will, to close on the amendment to the amendment.


SENATOR WILL:  Thank you, Mr. President and members of the body.  As I indicated, I think that this simply corrects what I view as a technical flaw in the original amendment, that would allow the




metro Area Transit Authority, if they continue to operate in the efficient manner that they have, not to receive the full six cents, if they don't need.  And that's the sum and substance of the amendment.  Senator Kristensen and I agree on it.  I would hope that the rest of the body would agree with us.  Thank you.


SENATOR BRASHEAR:  Thank you, Senator Will.  You have heard the closing.  The question before the body is the adoption of the amendment to the amendment.  All those in favor vote aye, those opposed nay.  Have you all voted?  Mr. Clerk.


CLERK:  34 ayes, 0 nays, Mr. President, on adoption of Senator Will's amendment to his amendment.


SENATOR BRASHEAR:  The amendment to the amendment is adopted.  Further speaking to the Will amendment?  Seeing none, Senator Will to close on AM2290.


SENATOR WILL:  Thank you, Mr. President and members of the body.  Just briefly, I would hope the Legislature would adopt this amendment.  I'd prefer to put a little more positive spin on this than Senator Wickersham did.  I think this is something that has been worked out.  We...  I don't think anyone would deny that there are problems from time to time between Douglas County and the city of Omaha, but I think, in this case at least, we have...we have come up with a solution to the provision of an essential service in Omaha.  it's something that we, as a Legislature, have crafted a solution to.  I think we can, frankly, be proud of this amendment, and Douglas County and city of Omaha may not totally agree with it, and they may not totally agree with each other, but I think that we have arrived at a solution, at least for the time being, will ensure that Metro Area Transit continues to operate and within the levy limitations that we, as a Legislature, have established.  So I would urge the adoption of this amendment.


SENATOR BRASHEAR:  Thank you, Senator Will.  You have heard the closing.  The question before the body is the adoption of the Will amendment.  Those in favor signify by voting aye, those opposed nay.  Have you all voted?  Mr. Clerk.




CLERK:  32 ayes, 0 nays, Mr. President, on adoption of Senator Willis amendment.


SENATOR BRASHEAR:  The Will amendment is adopted.  Mr. Clerk.


CLERK:  Senator Robak offers (AM)1813.  (See page 1740 of the Legislative Journal.)


SENATOR BRASHEAR:  Senator Robak, to open on your amendment.


SENATOR ROBAK:  Thank you, Mr. Speaker, members of the body.  I'm spilling coffee.  You'll just have a wait a minute.  I'm going to introduce LB 1813 (sic).  If all of you that voted for the Will amendment like the Will amendment as much as you said you did, you'll love this one because it has almost exactly the same concept.  LB 1114, which was passed last year and which has not had a chance to work, incidentally, said in Section 1, paragraph 8, that the county is allocated up to 15 cents of its authority to finance all other political subdivisions not specifically covered in this section, to levy taxes as authorized by law, which do not collectively exceed 15 cents per $100.  This really is ...  is a response to a shift in levy responsibility concerning city airport authorities.  City airport authorities, for towns like Columbus, have been supported in the city levy and officials believe this probably should continue.  Now along comes 269 which is going to clean up LB 1114 and says it would make it clear that the city shall still have the responsibility to finance the airport authority under its lid of 45...  45 cents per $100.  However, LB 269 transferred the responsibility of the airport authorities from coming under the county lid, to coming under the city lids ...  city lid, without changing lids.  The county still has the 15 cents to finance the various political subdivisions that lost their authority to levy tax, yet one of the major recipients, that is airport authorities, was transferred to the city and the lids remain the same.  It seems logical that 15 cents of the county should be reduced, and the city lid increased, to keep the total the same.  Therefore, this amendment specifically increases the city lid by two cents per $100 of taxable valuation for a city airport authority established in the Cities Airport Authority Act.  The result is the county lid would be 48 cents per $100 and the city lid




increases to 47 cents per $100.  1 would ask you to bear in mind that this only affects those cities that have city airport authorities, and there are only 51 city airport authorities in the state, and not all of them levy property taxes, because they have other sources of revenues for their funding.  With that, I'd be happy to answer any questions you might have at this time.  Thank you.


SENATOR BRASHEAR:  Thank you, Senator Robak.  Senator Kristensen, to the amendment.


SENATOR KRISTENSEN:  Thank you, Mr. President and members of the Legislature.  The Revenue Committee did discuss airports at great length during the hearing process.  We did it last year as well.  There are I think, Senator Robak, I don't know about the number of city airports but I do know there are 62 public airports that we have in the state.  Roughly half of those, or 32 of them, have their own separate levy that they report to the state.  The other ones either report or include it under the city or under the county levy.  The policy choice that's here, what Senator Robak is asking you to do, is for those cities, and I think she correctly described that, for those cities who have a city airport, she's asking for two more cents and increasing the levy limitation by two cents for those cities that have that airport.  The problem that we've had in committee with that is, one, it wasn't uniform across the board and, two, is that it's a raising of the.  levy limitations of 1114.  And we have consistently tried to resist all those changes that increase the levy limitations.  As with the MAT one, we reduced that one.  That's the reason that was one that was doable.  Here what this would do is increase that by an additional two cents.  Senator Robak has a legitimate point in terms that, if it's a city levy, that in some of those cities they're going to have to put the city airport under their levy.  And the reason that we've got it done this way is those that were created by the city are going to be created under...or going to be counted under the city levy, those that were created by the county are going to be under the county levy, so they're under their respective levy lids, and those levy limitations of those two entities.  To go ahead with the city and just grant another two cents, you may then have people who will go out and, for other reasons, create them so they can gain the two cents.  We think, for uniformity's




sake, that we will not...  I think the majority of the Revenue Committee, at least the last votes that we've had, we would resist any increase in 1114 levy limits.  Again, it's probably a good cause, but it retreats on the policies that we established in 1114 and, with that, would oppose the amendment.  Thank you.


SENATOR BRASHEAR:  Thank you, Senator Kristensen.  Senator Robak, to your amendment.


SENATOR ROBAK:  In response to Senator Kristensen, I would just like to say that this is ...  this bill, LB 269, transfers the responsibility of the airport authorities from coming under the city lid to coming under the city lids without changing lids, and that seems a little bit strange to me that you would do that without changing the lids, because you still have that 15 cents to finance various political subdivisions that lost their authority to levy taxes, and one of those recipients was the airport authority.  And I believe he made a comment about county in this.  That's under a different statute.  I don't believe I touch upon that, do I?


SENATOR BRASHEAR:  Senator Kristensen, will you yield?


SENATOR KRISTENSEN:  Thank you.  No, in your amendment you do not.




SENATOR KRISTENSEN:  I'm just saying that in the bill we take those that were county-created...




SENATOR KRISTENSEN:  ...  and those airports that were created by the county, that counts towards their levy limitations.  And in the bill, we did the same thing with the cities.  We just want to make sure that we divide the airports up so they're at least under somebody's levy limitations.


SENATOR ROBAK:  So I'm...  I'm saying that in this amendment, what we're going to do here is just ...  we're just affecting...  this amendment only affects those cities that have a city airport




authority, not a county airport authority.  If they don't have a city authority, this does not affect them one way or the other.


SENATOR KRISTENSEN:  That's correct.


SENATOR ROBAK:  And then all city airport authorities do not levy property taxes, even if they do have a city airport authority.  They don't levy property taxes under the city levy because they have other sources of revenue, and I believe Lincoln is one of those city airport authorities.  So this ...




SENATOR ROBAK:  ...  I don't how many this would really affect, but that's ...


SENATOR BRASHEAR:  Senator Kristensen, will you yield?


SENATOR KRISTENSEN:  I don't have the exact number.  My ...  because it ...  the way I read the amendment is that they're going ...  the city is going to get an additional two cents ...




SENATOR KRISTENSEN:  ...  if there's an airport there, and that's...




SENATOR KRISTENSEN:  ...  the objection the Revenue Committee has always had about increasing the levy limits for that area.  it's where do you ...  where do you begin and end and where do you draw the lines?


SENATOR ROBAK:  Well, right here.




SENATOR ROBAK:  I would just like to say that I think that we're making a grave mistake if we transfer the responsibility from a county lid to a city lid without changing lids, and I ask for your support of the amendment.  Thank you.




SENATOR BRASHEAR:  Thank you, Senator Robak.  Senator Hillman, followed by Senator Schimek, to the Robak amendment.  Senator Hillman.


SENATOR HILLMAN:  Thank you, Mr. Speaker, members of the Legislature.  I have a little bit different scenario.  Senator Kristensen, perhaps you could tell me how this would work.  What is happening in Scotts Bluff County, it had always been a selfsupporting airport authority, no taxes involved at all, either county or city.




SENATOR HILLMAN:  With the changes in the landings and the GP Express, and so on and so forth, it can no longer run without some type of a tax support.  So they're in the process of putting together the county and two cities in an airport authority, to do the support.  What would happen with something like in Senator Robak's amendment where it would only grant cities only?


SENATOR KRISTENSEN:  For your specific airport, it depends on how they were created.  Do you know how they originally were created?


SENATOR HILLMAN:  No, under the new...  it will be a new authority.  I mean, they're just developing the authority.


SENATOR KRISTENSEN:  If they're going to create a brand new authority?




SENATOR KRISTENSEN:  And it's a jointly-funded, 50-50, my guess is that then they could access the nickel that would be available to the county and to the city under that joint operations.  Remember, we've got that extra nickel, if you do joint projects together.






SENATOR KRISTENSEN:  They could access that nickel and then not count towards either one of their existing levy limitations.




SENATOR KRISTENSEN:  So I think that, you know, that's where a lot of people...  I'm trying to think...I think Senator Jones or maybe Senator Dierks, I can't remember when the last time, we got a lot of these where people are doing that exact same thing.  They're starting to come together, they're merging functions, they're jointly working together.  That's the reason we put that extra nickel out there as an incentive to do those joint projects.  So that'd be a perfect example of doing that.


SENATOR HILLMAN:  And then Senator Robak's amendment granting cities even more, how...what would happen then?


SENATOR KRISTENSEN:  She would give them an additional two cents of levy authority, so you would just add two cents to their ...  their levy limitation, and say ...


SENATOR HILLMAN:  But just cities, not ...


SENATOR KRISTENSEN:  ...  and say...


SENATOR HILLMAN:  ...not the county part of it, even though they're with...


SENATOR KRISTENSEN:  No, she doesn't deal with the counties.  She only deals with the cities.


SENATOR HILLMAN:  Right.  But even if they are collectively part of the airport authority, the cities could collect more money than the county then?


SENATOR KRISTENSEN:  That's correct.


SENATOR HILLMAN:  Outside the budget?


SENATOR KRISTENSEN:  That'd be right.


SENATOR HILLMAN:  Okay.  Thank you.




SENATOR BRASHEAR:  Thank you, Senator Hillman.  Senator Schimek, to the Robak amendment.  Senator Schimek waives off.  There being no further speaking, Senator Robak, to close.


SENATOR ROBAK:  Okay.  Thank you, Mr. Speaker.  I would just say that in closing that 1114 was passed that last year and hasn't had a chance to work yet, and this bill comes along and puts us into a...changes the responsibility to finance authority under the lid of 45 cents per $100, transfers the responsibility of the airport authorities from coming under the county lid to coming under the city lids without changing lids.  And it would only affect those ...  this bill...amendment only affects those cities that have a city airport authority.  It doesn't affect any other city, any other city would not be affected in this.  All ...  not all...in the...we...  if they, that is, if they had...if they levied property taxes for an airport.  Some...  airports don't all ...  city airport authorities do not all levy property taxes because they have other sources of revenue, so it wouldn't affect everybody with airport authority.  And I just ask for your support of this amendment.  Thank you.


SENATOR BRASHEAR:  Thank you, Senator Robak.  You've heard the closing.  The question before the body is the adoption of the Robak amendment, 1813.  All those in favor signify by voting aye, those opposed nay.  Senator Robak.


SENATOR ROBAK:  Call of the house, please.


SENATOR BRASHEAR:  Senator Robak has requested a call of the house.  The question is, shall the house go under call?  All those in favor signify by voting aye, those opposed nay.  Mr. Clerk.


CLERK:  16 ayes, 0 nays, to place the house under call, Mr. President.


SENATOR BRASHEAR:  The house is under call.  All senators absent from the Chamber please return to the Chamber.  All unauthorized personnel, please leave the floor.  The house is under call.  All senators present in the Chamber, please check in.  Senator Coordsen, Senator Suttle, please report to the Chamber.  Senator




Witek, please check in.  Senator Cudaback, the house is under call.  Senators Schellpeper and Schrock, the house is under call.  Senators Janssen and Wesely, please report to the Chamber.  Senator Lynch, the house is under call.  Senator Schrock, the house is under call, please report to the Chamber.  Senators Wesely and Lynch, the house is under call.  Senator Robak, all senators are now present.  How would you have us proceed?  Senator Robak has requested a machine vote.  Senator Robak, we've already had one machine vote, so we can proceed by call-ins or roll call.  Senator Robak has requested a roll call vote.  Mr. Clerk.


CLERK:  (Roll call taken.  See page 2102 of the Legislative Journal.) 4 ayes, 23 nays on the amendment.


SENATOR BRASHEAR:  The amendment is not adopted.  Mr. Clerk.  The call is raised.


CLERK:  Mr. President, the next amendment I have is by Senator Maurstad.


SENATOR BRASHEAR:  Senator Maurstad, to open on your amendment.


SENATOR MAURSTAD:  Mr. President, since this...  the aspects of this amendment were in the Kristensen amendment earlier, I'll withdraw this amendment.


SENATOR BRASHEAR:  The amendment is withdrawn.  Mr. Clerk.


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


SENATOR BRASHEAR:  Senator Bruning, for what purpose do you




SENATOR BRUNING:  Mr. President, I move we advance LB 269 to E & R for engrossing.


SENATOR BRASHEAR:  Senator Wehrbein, to the question.


SENATOR WEHRBEIN:  Mr. Speaker, members, I just...  I know maybe Senator Kristensen will do this in his closing, but...  or I'd like to just have him refresh us a little bit about what is in




the bill at this point and, especially, Senator Kristensen, in reference to the oversight committee whether...  I've frankly lost track of where that is at this point, if it's even in or what we're ...  what we're doing for statewide oversight.


SENATOR BRASHEAR:  Senator Kristensen, will you yield?


SENATOR KRISTENSEN:  I will.  Senator, I'm going to try to hit...  I'm going to go broad and try to get as narrow as I can.  What I think 269 now does is, first of all, it reaffirms what we did with 1114 last year, and 1085, in many of those structure issues, we put the levy limitations.  As you know, we've had a number of people here who come and wanted to make changes in levies, wanted to make some changes in those things.  We basically reaffirmed that 1114 is the mechanism for property tax reductions.  We also have gone, and I'm just going to go down some of the things we've done, the last one being Senator Robak's issue with the airports.  We are either going to make them, if they're city airports, they're going to go under the city levy.  If they're county airports created by a county, not if they're operated but as they are created, they'll go under that area.  The same thing we'll do with home health nurses and so on.  The Metro Area Transit Authority, what we've done is taken three cents.  Where before they all under the county, under the miscellaneous levy of 15 cents, we've now split the MAT levy, reduced it by two cents, sent half to the city, half to the county, if they've requested it.  We've repealed some of the areas, in terms of voting on joint services.  That was Senator Hillman...  yes, Senator Hillman brought this up with her airport.  We have two entities that want to jointly go together.  Before they had to vote to do that.  To make it easier to do that, we've repealed out the sections for requiring a vote for those joint services to get to that nickel.  We've changed the levy-setting date from October 15 to October 31.  That's basically done to accommodate and make personal property tax collection -similar with real property tax collection.  It's a matter of making it uniform.  We've taken and allowed for county offices, the elections to combine those offices to take place at special elections, and they can do that in this upcoming year.  So that speeds up the process, if we want to do some of those reductions.  We've also limited the requirement for some of those levy-setting areas where they have to state their rates.




We now make it easier for them to do that.  We allow for appeals.  If someone thinks 1114, 1085, for example, or now 269 have been violated, we allow them for an appeal.  We didn't have that before.  It goes to the Tax Equalization Review Commission.  Through the committee amendments, we amended the Interlocal Cooperation Act to perform those services.  That was the issue we touched on earlier today, with...  if you have the individual authority, you don't need both entities to have the same authority.  That would be like having a fire authority.  A county doesn't have the ability to spend money for fire districts.  The fire districts does that.  A county and a fire district can go together, perform that joint function.  That ...  that allows that flexibility.  We've turned over the assessment function.  For example, if we're going to...  a county wants to turn over their assessment function to the state level, we've made that, instead of January I that they have to let the state know, moved it back to October 31.  It makes it easier to do, gives the state some ability and some functions and flexibility to do that.  We've changed the community college levies, and we've taken them and now...and I'm not going to have time to do that in this...  I'll do that in my closing.  I'll outline what we did with the community colleges but, in effect, what we've done is changed their levies and made a mechanism for a distribution formula to them to wean them down, and eventually, if that stays in place, you'll probably see some day total state funding but they've...




SENATOR KRISTENSEN:  ...  they've done a number of structure changes so we changed their levies and added some ability for a distribution formula to them.  Then the items that we did today are in there.  We did some of the clean-up things.  I'll cover the rest of those so I don't hurry through those.  But, in effect, I think, bottom line; we've reaffirmed 1114.  We made back our commitment that we're going to try to do as many flexible things and give local governments the tools, and I stress the tools not the mandates, to be able to live within those levy limitations.  It's extremely crucial.  It's not the last step, it's the second step.  (LB) 1114 and the package last year was step one.  This is step two.  We're going to have to move to step three next year.




SENATOR BRASHEAR:  Thank you.  Senator Wehrbein.  Senator Robinson.


SENATOR ROBINSON:  Mr. President, members of the body, Senator Kristensen, I have a question for you.


SENATOR BRASHEAR:  Senator Kristensen, will you yield?




SENATOR ROBINSON:  The...  I have a hospital district in my Legislative District, and there are two ...  there are two towns in that hospital district.  Could they have an interlocal agreement for their share of ...  there's some rural land in there, but could they use their...  could they have an interlocal agreement with the county on the ...  their share of the hospital district?  I just thought about that.


SENATOR KRISTENSEN:  Do you have one or two hospital districts?






SENATOR ROBINSON:  And the two towns are in it.




SENATOR ROBINSON:  Could they...  in the...  in the two cities, or the two towns, could they have an interlocal agreement with the county on their share of the levy for the...


SENATOR KRISTENSEN:  It's possible.  Realize that...  and there's a difference between a county hospital and a hospital district.


SENATOR ROBINSON:  Yeah, it's not a county hospital, it's a hospital district.


SENATOR KRISTENSEN:  Okay, it's a hospital district.  If it's a...if it's a hospital district, their levy authority is still in place.  I think it's ...  I think it's seven cents, if I'm






SENATOR ROBINSON:  Yeah, around there.


SENATOR KRISTENSEN:  I think, off the top of my head, it's seven cents, but that's going to be allocated under the miscellaneous districts of the county.  Okay?


SENATOR ROBINSON:  Yeah, I understand that, yeah.


SENATOR KRISTENSEN:  Could ...  could you...  so those people in those communities are already paying for that service...




SENATOR KRISTENSEN:  ...  because they're in the district.


SENATOR ROBINSON:  That's correct.


SENATOR KRISTENSEN:  Now, what you're asking is, could they enter into an interlocal agreement to pay more, have the cities pay even more of that share?  I'm not...  I'm not sure how that fits.


SENATOR ROBINSON:  Well, they're ...  they're paying it through the county now.


SENATOR KRISTENSEN:  Exactly.  Exactly.  That would still stay in place.


SENATOR ROBINSON:  Because they're...maybe I'm off base, but could they take any...  could they, say, take some of their money out of...  out of city funds as an interlocal agreement?


SENATOR KRISTENSEN:  My guess is that because they're in the district, that's going to be harder to do.  I think it's possible.


SENATOR ROBINSON:  Well, I can see it'd be harder to do, but...


SENATOR KRISTENSEN:  What would probably be the better example is if you've got a community that is outside of the district who




wants to participate and who wants to share in the hospital services for their community members, I believe you could enter into that local agreement.


SENATOR ROBINSON:  Well, I ...  one of the towns is a very low...they have a half cent sales tax and their city levy is quite low.  And that's why I was thinking about that, but it might be too difficult to do, but...


SENATOR KRISTENSEN:  I assume what they'd want to do is try to shift...ultimately that money is got to sit under the county levy limit.




SENATOR KRISTENSEN:  Though they can't shift...  if they get their funding from somewhere else, they're still going to have to include their ...  that district under that miscellaneous levy.


SENATOR ROBINSON:  Well, I'll visit with you about it.




SENATOR BRASHEAR:  Thank you, Senator Robinson.  There being no further speaking, Senator Kristensen, to close.


SENATOR KRISTENSEN:  Thank you, Mr. President and members.  I think my response to Senator Wehrbein was fairly conclusive of the major topics.  We do change the community colleges.  I think that's an important step.  Again, we talked about that on General File that those are entities who have, in the past year, been perhaps the most aggressive in doing some changes internally to meet and deal with levy limitations.  As a response to that, we are going to take ...  the current levy limitation is eight cents and four cents and, well, it'd be four years from now, recognizing that we knew when we put that four cents in place, in effect, there was hardly any of the community colleges that could live with four cents.  That was the message that community colleges, you either have to change or you're not going to exist in the function and the form that you're in today.  What we've got for a committee amendment right now is we take that eight cents that's currently there.  We




reduce that by a penny, and we say that's for operations and we give you one cent for capital.  That's '98-99.  In '99 you keep the same process; the year 2000 we ratchet them down to six cents for operation and one cent for capital construction.  We have an existing aid formula.  That aid formula kicks in place, basically is going to allow, as with aid go down, that we are going to target roughly and try to get a spot where we can have 40 percent of state funding for those community colleges.  We reallocate some of the monies.  We do that.  I think that's a good policy.  It's one that I know is going to be painful for the community colleges to live with at some point in time.  I think they've done some internal things again with this formula, to readjust and give from some of the campuses who fare a little better under levy limits, to help the entire system.  If they're a smaller system, they can do that, and that has been fruitful.  The other items that we've done today.  We have kept going the Nebraska Commission on Local Government Innovation and Restructuring.  We've added money to that to make sure it keeps going.  We keep the weather control districts, their levying authority.  We make some changes to the municipal equalization formula that we've talked about today.  Those are primarily going to help those cities from 800 to 5,000.  We've taken out some of the appeal processes that the county board would have had, we left them with the Tax Equalization and Review Commission.  Perhaps I think is going to be one of the major things and maybe the debate will come on the very next bill, but we're going to require schools to report the amount of their levy for special building funds, not bonds, but levy funds for special buildings.  And those are exempt under the Janssen amendment that we passed last year.  We don't have any idea of how much money that is.  The bottom line is 269 is in position to take the property tax package to the next step.  I think the body has been very deliberate.  I applaud the body and the Revenue Committee for their commitment towards 1114 and continuing that process.  I'd hope that you'd move it to Final Reading and eventually adopt the bill.  And I'd be happy to answer any other questions, but I think this is a great second step.  Thank you.


SENATOR BRASHEAR:  Thank you, Senator Kristensen.  You have heard the closing.  The question before the body is the advancement of LB 269.  All those in favor signify by saying




aye.  Those opposed nay.  It is advanced.  Mr. Clerk, items for the record?