Floor Transcripts

LB 271 (1997)

Select File

May 20, 1997




SPEAKER WITHEM:  Good afternoon, ladies and gentlemen.  The Legislature will be reconvening in just a few moments.  We'd like to invite the members to return to the floor, record their presence.


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


SPEAKER WITHEM:  Quorum is present.  Mr. Clerk, do you have any items for the record?


CLERK:  Nothing at this time, Mr. President.


SPEAKER WITHEM:  Okay, Mr. Clerk, one-thirty, we will be dealing with major proposals and related bills, bills on Select File.  Mr. Clerk, LB 271.


CLERK:  (LB) 271, E & R amendments first of all, Senator.


SPEAKER WITHEM:  I don't see Senator Bruning.  Senator Kristensen, can you move the E & R amendments?


SENATOR KRISTENSEN:  Mr. President, I move the E & R amendments to LB 271.


SPEAKER WITHEM:  All those in favor say aye.  Opposed.  They are adopted.  Mr. Clerk.


CLERK:  Senator Chambers would move to amend with (AM)2004.  (See page 1968 of the Legislative Journal.)


SPEAKER WITHEM:  Senator Chambers, (AM)2004.


SENATOR CHAMBERS:  Mr. President, members of the Legislature, I have the amendment but I'm going to have to see precisely what this one will do.  I believe this deals with the exemptions, but let me get my copy of the bill and be sure.  Yes, that's what it's going to deal with.  When we start on page 2 of the E & R amendments, which would be AM7153, my amendment would begin on page 2, and if you want to read through it you can see what it does, but I can go through this white copy if you want to look




at that and tell you what is being stricken.  If you go to page 2, in line IS, the word "and" will be added at the end of line 15.  Then I begin to strike language beginning in, line 20, on page 2, through line 27.  Then I would go to the top of page 3 and strike lines 1 and 2.  Then we would proceed to page 9 and on that page beginning in line 3 we would strike the digit "(I)" in the parenthesis; strike beginning in line 24 through line 27; go to the next page, which is line 10, strike through lines 1 through 17; and then go all the way to page 36.  I'm in a very kindhearted mood so I'm letting a lot of it be untouched.  And on page 36, starting in line 21 with the capitalized "0" in the word "On", strike everything in lines 21 through 27 and line 1 at the top of page 37 and that should be what this amendment is going to do in terms of removing language.  But the effect and impact of it can be gathered if you turn to page 2.  Starting in line 2 we have this language:  "In addition to the registration fees provided by Chapter 60, article 3, and the motor vehicle fee imposed in section 7 of this act, a motor vehicle tax.  is.  imposed on motor vehicles registered for operation upon the highways of this state except:" and then you'll find a list of seven exceptions.  I leave the first three untouched:  "Motor vehicles exempt from the registration fee in section 60-335; (2) One motor vehicle owned and used for his or her personal transportation by a disabled or blind honorably discharged veteran" and so forth.  "(3) Motor vehicles owned by Indians as defined in 25 U.S.C..  479;" and "(4) Motor vehicles owned by a member of the United States Armed Forces serving in this state in compliance with military or naval orders if such person is a resident of a state other than Nebraska".  Those four exemptions remain.  Then the axe or the pruning sheers come out starting with the fifth exemption:  "Motor vehicles owned by the state and its governmental subdivisions and exempt as provided in subdivision (1)(a) of section 77-202".  That exemption would be stricken and, yes, they would be paying this tax.  Number six, the motor vehicles owned and used exclusively by an organization or society qualified as a tax....for a tax exemption provided in subdivision (1)(b) or (1)(c) of section 77-202 (1 was told,, Senator Hilgert, I might be struck by lightning for trying to do this and I'm just trying to take precautions) if an application for the exemption provided in this subdivision has been approved under subsection (2) of section 6 of this act and truck, ...  trucks,




truck-trailers, trailers, semitrailers, or combinations thereof .registered under section 60-305.09.  That is what this amendment is dealing.  with and you will probably not get as detailed and complete an explanation of an amendment of this kind on any bill.  If you read the language as contained in the amendment it might not be easy to see exactly what is being done, but if you look at the portions of the bill as I described them and see what, it is that I'm striking, there should be no doubt in anybody's mind what is being attempted here.  I do not like LB 271.  Anybody who does not like LB 271 should vote for this amendment.  That would help generate opposition to the bill, But whether there is opposition to the bill generated because people will support this amendment who may not like the amendment but they also don't like the bill, I don't like all these exemptions anyway..  I had brought a bill, Senator Hilgert, it may have been last session, to start taxing the property of churches and other operations that don't want to pay their fair share.  But in a moment of what you might call charity, I was willing to exempt a certain amount of that property from taxation so that if you had an operation of a church which was really ministering to the spiritual needs of the parishioners, the land on which that building would be.  situated and a reasonable amount of other property would have been exempt.  But when you start going beyond that into various enterprises and activities which to me generate a profit but which the churches don't want.  to acknowledge will constitute a profit, they ought to pay taxes.  The Mormons pay taxes, Senator Hilgert.  They feel that you should render unto Caesar what is Caesar's.  If you go to all types of churches you see them having fish fries and they sell chicken, fried chicken..  Have you seen ...  ?  Senator Hilgert has seen that.  I believe they probably have chicken dinners at churches throughout this country.  But, see, for the purpose of gelling fried chicken, Senator Hilgert, God raised up the Colonel.  That's why God raised up Colonel Sanders, to sell fried chicken.  It should not be done in or through the churches.  So I think they should be taxed.  I'm not going that far today.  I'm not going that far this session.  The only thing that I'm doing is taking away the tax-exempt status on vehicles of some of these people.  It will give an opportunity to discuss what is actually behind LB 271.  Senator Kristensen has frankly told us repeatedly, and others who are interested in this bill have stated repeatedly, that they're




interested in a total amount of money being realized through the taxing of these vehicles.  I'd like to ask Senator Kristensen a question.




PRESIDENT ROBAK:  One minute.  Senator Kristensen, will you yield?




SENATOR CHAMBERS:  Senator Kristensen, in determining what the total amount of money is that they want to realize from taxing these vehicles under this new system, they are not going to give the same property tax break to vehicle owners that others will get under 1114, will they?  They want to continue to get a certain amount that would be derived from those pay the vehicle tax under the current system.  Isn't that true?


SENATOR KRISTENSEN:  Yes, our goal has always been that you are going to keep, as a state, as you state, revenue neutral as close as we can.  That, you know that, to me parameters is if you're in 67 percent of being neutral, that's pretty close.


SENATOR CHAMBERS:  But others with real property will get a break with all we're talking about in terms of reducing property taxes.  brook will not extend to those who own motor vehicles.  Isn't that true?


SENATOR KRISTENSEN:  Well, no, not necessarily, Senator, because remember it's your levy rate that goes against the value that's assigned to the vehicle.  So no matter what the vehicle value is as you determine it, if your county that you're in lowers its levy rate, your tax on your vehicles goes down, too.








PRESIDENT ROBAK:  Thank you, Senator Chambers.  Senator Hilgert.




SENATOR HILGERT:  Thank You, Madam President and members.  .1 rise to oppose the Chambers amendment but ...  and we'll probably get somewhat of a decent discussion I think by several members upon this amendment simply because we adopted the consistent policy that the state has had to keep the tax exemption on just some time ago when we last dealt with 271.  But before we get into that, I was wondering if Senator Kristensen would yield to a few questions.


PRESIDENT ROBAK:  Senator Kristensen, will you yield?




SENATOR HILGERT:  Senator Kristensen, this is kind of a...somewhat of a complex issue and I was wondering if I could just ask a few questions, if I would.  If I have a $1,000 car...


SENATOR KRISTENSEN:  Let me...  let me...  it depends on what kind of car it is.  Let me get to my charts.






SENATOR HILGERT:  Well, obviously, it's American made but beyond that raggedy.




SENATOR HILGERT:  Let's just say it's valued at $1,000.


SENATOR KRISTENSEN:  Okay.  How...  just...  I hate to do this to you, but if we're going to do this let's do it a step at a time.




SENATOR KRISTENSEN:  When you say it's worth $1,000, how did you come up with that figure?


SENATOR HILGERT:  Let's say that's what the state...  it's value, however they do that.






SENATOR HILGERT:  I'm just going to try to make that assumption that the state has assigned a $1,000 value to this generic car.




SENATOR HILGERT:  How do you figure the taxes on that $1,000 car right now?


SENATOR KRISTENSEN:  Well, right now they take, and it's assigned by the property tax administrator just using a figure that they put out every year based on manufacturer suggested retail price...




SENATOR KRISTENSEN:  ....but basically it's an arbitrary figure.  They assign the value to your car based on that and then that value you have the levy, wherever you're residing, that levy is applied to your value which equals the amount of the tax.


SENATOR HILGERT:  And that levy combines school and county, and city and NRD and all that.


SENATOR KRISTENSEN:  It's your levy.




SENATOR KRISTENSEN:  Right.  It's just like owning a house...




SENATOR KRISTENSEN:  ...  only it's personal property.




SENATOR KRISTENSEN:  Well, it's a motor vehicle but...


SENATOR HILGERT:  ...  under 2 71 when we're trying to take and go.  to a mixed system to where we have taxes and fees, we're*




using ...  are we using the levies that are currently in place?




SENATOR HILGERT:  Oh, is that ...  when we ...  when we're talking about revenue neutral it...


SENATOR KRISTENSEN:  We're talking about collecting roughly the same amount of taxes...


SENATOR HILGERT:  Based on the current levy?


SENATOR KRISTENSEN:  ...as we did ...  based on the levy.  I mean that's the only one we've got to deal with.  We know total amount of taxes we collected last year for example...




SENATOR KRISTENSEN:  ...  and that's what we're trying to get to, roughly in that ballpark, 6 or 7 percent either way.


SENATOR HILGERT:  Well, once 1114 comes into effect, and let's say LB 271 was not adopted into law, would not our property taxes on our vehicles be reduced?


SENATOR KRTSTENSEN:  Well, sure.  Well, depends on which county.  you're in.


SENATOR HILGERT:  Okay, let's assume a county that has...well, a location that's combined levy is ...  exceeds the 1114 parameters.


SENATOR, KRISTENSEN:  Okay.  If you've got that particular levy and there are some that reduce, that's potentially true, yes.


SENATOR HILGERT:  So if we pass 271 and we take some of that taxation to a fee-based system, we would not be able to realize the property tax savings once 1114 goes into play to the same extent if this was not adopted?


SENATOR KRISTENSEN:  Well, not in any...  I mean...


SENATOR HILGERT:  If...  if you...  if you're currently...




SENATOR KRISTENSEN:  ...what you're doing is mixing...


SENATOR HILGERT:  ...  at a location that would benefit from 1114.


SENATOR KRISTENSEN:  Okay, got to make sure that we're not mixing concepts because you jump from statewide to an individual county, so you got to keep it ...  we got to keep it consistent here.  You will have, if you use your term of jumping to this system, if you go to this system you will have a different...




SENATOR KRISTENSEN:  ...  method of determining value.  That's the first thing that you look at, right?




SENATOR KRISTENSEN:  The fee also comes into play here but is less.  I mean right now we're probably talking the neighborhood of a mix that's about 15 percent of what will be collected.  Okay?




SENATOR KRISTENSEN:  So in those areas, if you're going to come down in the valuation and you're going to come down in your tax levy, yes.


SENATOR HILGERT:  Will ...  will we ...


SENATOR KRISTENSEN:  You'll have a ...


SENATOR HILGERT:  ...  adjust the fee once 1114 comes into play so that the taxpayers could enjoy the benefit, the same benefit as if 271 was not adopted, meaning...  ?










SENATOR HILGERT:  Okay.  Thank you.




PRESIDENT ROBAK:  Thank you, Senator Hilgert.  Senator Kristensen.


SENATOR KRISTENSEN:  Senator Hilgert, you just threw me for a loop 'cause I was trying to...I was...I was not being fair to you 'cause I was trying to guess where you were ultimately headed, so I'll let you come back on your time.  Thank you.  Generally, and I want to remind the body, what Senator Chambers is doing and, Senator Chambers, tell me if I'm incorrect so the body knows what we're basically voting on, you're taking out the fee and the tax exemption?  Is that right?


SENATOR CHAMBERS:  This amendment deals only with the tax-exempt status of certain vehicles.




SENATOR CHAMBERS:  have a second amendment that would do away with the fee altogether.


SENATOR KRISTENSEN:  Okay, so we're just looking at the tax right now?




SENATOR KRISTENSEN:  The tax-exempt status on these particular ones.




SENATOR KRISTENSEN:  Some of them may have a constitutional exemption if it's a tax.


SENATOR CHAMBERS:  Oh, you're asking me?






SENATOR-CHAMBERS:  I don't know which ones.  You mean like churches?


SENATOR KRISTENSEN:  Right.  And I don't know the answer.  I'm just...  I'm putting it out there, because we put the fee to everybody, Senator Chambers.  As you know that was the Revenue Committee's desire, was to treat everybody differently or ...  not to treat everybody differently.  We put the fee out there so it .applied to everybody and we did that because it wasn't a tax.  It was something that we could attach to everybody.  And I just want to make sure that I know so I can look at this.  You're talking.  about repealing a tax against all these different entities, except for the ones that you indicated to leave in.  Is that correct?


SENATOR CHAM13ERS:  Repealing the exempt status.


SENATOR KRISTENSEN:  Exactly.  I'm sorry,...








SENATOR KRISTENSEN:  Okay.  And, I'm going to have to look at...  I'm going to look at the constitution on some of this,.  but Senator Chambers brings to you the policy choice that says, look, some of these people should be paying a tax regardless of the type of entity they are by the fact that they use the roads, they use whatever.  These tax dollars will go into the coffersof the county and the schools and wherever for the services that they've rendered.  It brings into discussion payment in lieu of taxes that we've done many times.  Now, given what the body did last week, where they wouldn't take a fee for ...  a $25 fee that would ultimately go down to a $15 fee that the body Voted out.- I don't know how they're going to react to....  This 'is substantially more for those entities, so if you didn't like the fee you're not going to like this tax at all.  So just ...  as you look through this understand, and I know, Senator Chambers, you've got an uphill fight because if they ...  the fee that we were going to put on was only $15 and if they didn't like that




this is probably a larger amount.  But, again, we're going back to a different system and I know, I'll repeat it, for those of you who are listening it will become repetitive, but as we found out with this bill that sometimes you got to keep reminding people what the bill's about, it's a change in the method of determining value.  It also changes the method in which you collect the tax from those vehicles.  Senator Chambers' policy right now is to say, the tax side of it, take the exemption away from those certain areas.  And I'm going to, Senator Chambers, if I could just ask you a couple questions and then it will give me a time to think a little bit as you answer.  If you ...  you also strike out some of the procedural parts -in here for the exemption, if I was correct, some of the....  I understand the stuff on page 2.  Back here on 36...




SENATOR KRISTENSEN:  ...  and 37 and I'll finish '.my question quickly and won't take any time, I think you leave some of the procedure...  if you're going to leave some of these vehicles in.  there that are exempt you still may need the procedure dealing with their exemption, and I ...  I'm going to look at that as well and I was just going to offer that to you, that I think you took out some of the mechanisms for this.  But if people want the policy then we can worry about cleaning up the mechanism.  at a later time, and that's probably how I'd leave it with you, but just...  I want to raise that point so, if people want to substantively talk about the amendment, that there's some things that they can look at.  I know that I'm out of time and I'll put my light on in a little bit.  Thank you.


PRESIDENT ROBAK:  Thank you, Senator Kristensen.  Senator Vrtiska.


SENATOR VRTISKA:  Thank you, Madam President and members of' the body.  I'd like to ask Senator Kristensen a couple of questions if I ...


PRESIDENT ROBAK:  Senator Kristensen, will you yield?


SENATOR VRTISKA:  Well, he's busy.  Let me ask Senator Chambers a couple of questions if I could and before I get to Senator






PRESIDENT ROBAK:  Senator Chambers.


SENATOR VRTISKA:  Senator Chambers, I was just looking, you're talking about exemption of some state and municipally owned vehicles, is that right, that will be...




SENATOR VRTISKA:  ...  they're now exempt, that would not be exempt-any more?




SENATOR VRTISKA:  I guess just out of curiosity, where do they get their money to pay the taxes on this?


SENATOR CHAMBERS:  Pennies from ...  pennies...




PRESIDENT ROBAK:  Senator Chambers.


SENATOR CHAMBERS:  Madam President, members of the Legislature, pennies from heaven, Senator Vrtiska.  Where else?  No, they would get their money through levying taxes.


SENATOR VRTISKA:  Well, yeah, I understand that and I guess the problem I have is kind of, you know, it's kind of like robbing Peter to pay Paul in a sense, 'cause you really have to raise the taxes on the local subdivisions in order to pay the tax.  Isn't that...  ?  And...


SENATOR CHAMBERS:  We would pay more attention to how much money this costs and then it might give us a better indication of what private citizens are paying when we change a system from what it is to one like this.  But there are other things that...


SENATOR VRTISKA:  But just a minute, Senator Chambers.  If ...  in fact...






SENATOR VRTISKA:  ...  what you're saying I underestand but if you would at the present time exempt them under the same system they already have, wouldn't it have the same effect?


SENATOR CHAMBERS:  Well, wait a minute.  Ask that question again.  You mean if they're exempted under the current system...


SENATOR VRTISKA:  And you put them...


SENATOR CHAMBERS:  Then we go to a new system and I don't want them to be exempt any more.


SENATOR VRTISKA:  No, leave them in the same system but still not let them be tax exempt, is what I'm saying.  What would be the difference?


SENATOR CHAMBERS:  What would be the difference between leaving them exempt under both systems?  Substan ...


SENATOR VRTISKA:  No, I'm just saying if ...


SENATOR CHAMBERS:  ...  actually, no difference.


SENATOR VRTISKA:  Now I'm just saying if we got...


SENATOR CHAMBERS:  The difference comes...


SENATOR VRTISKA:  ...  the present system we got and if you would.  then make these pay taxes based on how that you want to make this bill, it'd do the same thing, right?  They'd have to .collect the money and pay the taxes.


SENATOR CHAMBERS:  Oh, right, if they had to pay it under either system, right, they'd have to collect the money and then pay the tax.








SENATOR VRTISKA:  Senator ..Kristensen disappeared again.  wanted to ask him a question.  Oh, there he is.


PRESIDENT ROBAK:  Senator Kristensen.


SENATOR VRTISKA:  Senator Kristensen, I guess I'm curious about when we talked about this before.  On this system, you, if I remember right, you indicated that the money would be divided.  between the cities and the counties.  Is that right?


SENATOR KRISTENSEN:  The fee would be.


SENATOR VRTISKA:  The fee, not the ...  but not the tax.


SENATOR KRISTENSEN:  Not the tax.  The tax...


SENATOR VRTISKA:  The tax would do what?


SENATOR KRISTENSEN:  ...  the tax stays as constitutionally required.  It stays in the area that it was taxed in and then it would be distributed pro rata based on people's levies.  So if total levy and your school was at $1, half of it goes to the school.  If the county's at 50 cents, half would go to the county ...  or a quarter would go to the' county and the other quarter would go to the city, so per their levy.


SENATOR VRTISKA:  Are you saying, then, for the purpose of budgeting they can use the same system as they do now?


SENATOR KRISTENSEN:  No, I've got an amendment that's yet to come that's going to deal with budgeting.


SENATOR VRTISKA:  That's the problem that I was having with...




SENATOR VRTISKA:  ...  this.  but you do have something to...


SENATOR KRISTENSEN:  I've got an amendment coming down the line, if we can get to it, that will give that counties and the subdivisions some direction for budgeting.




SENATOR VRTISKA:  Okay.  That was one of the concerns I had because I.  felt like we were getting into some pretty unsavory waters with the way it was being developed.  But you...  if...


SENATOR KRISTENSEN:  And realize that it would just be the first year.


SENATOR VRTISKA:  Yes.  Right.  That was the point I was going to make.


SENATOR KRISTENSEN:  And that it's not going to be a...I mean it will be a change, but it won't be as dramatic as those that...  I mean, if you're for the bill, the change is not going to be dramatic.  If you're against it, it's a big change.  I mean it's...




SENATOR VRTISKA:  Well, I understand that and I ...  I, at this point, have a lot of ...  some concerns.  I think they'll probably be addressed before we get done here and maybe I'll have another chance to talk again, but there are a couple things that I was talking with Senator Chambers about regarding exemption of these particular vehicles and where they get the money.  Obviously they have to raise taxes in order to pay taxes into the system.  I don't know if we did that with the system we got now the same thing would be in effect.




SENATOR VRTISKA:  Other words, they're exempt now.


SENATOR KRISTENSEN:  Well, but exactly.  It won't be ...  it won't be what are they going to do with the money because what you're going to do is put more value on to the tax rolls and so actually others' taxes may go down.


SENATOR VRTISKA:  Okay.  Well, the other problem I have obviously has to do with some of the discussion and I don't need to talk to you about it.






SENATOR VRTISKA:  I don't have any more time, but I'll turn on my light after while.  and I want to visit with Senator Chambers a little bit more if I could, but I'm out of time.  Thank you.


PRESIDENT ROBAK:  Thank you, Senator Vrtiska.  Mr. Clerk.


CLERK:  Madam President, Senator Will has a priority motion to bracket the bill until May 22...


PRESIDENT ROBAK:  Chair recognizes...


CLERK:  I'll...assuming....  Well...


PRESIDENT ROBAK:  Chair recognizes Senator Will.


SENATOR WILL:  Oh, well, it was worth a try.  (Laugh) This motion would bracket the bill for two days.  I have a couple of concerns with the bill, number one, with the actual impact it will have on various counties in that.  I know my county has indicated that.  they're not quite sure where they're going to land as far as the impact of the bill if this system is changed.  Secondly, I kind of have a philosophical objection to the bill in general because of the impact that it will have on some older vehicles and those owners.  It may be a parochial concern, but we all represent our districts and, frankly, I'm not...  I'm not at the position right now where I could support LB 271 in its current form.  The bracket motion is for two days only.  it would allow the bill to come up again on Thursday., I thought perhaps in offering this motion that it would give us a little additional.  time to debate the bill.  Senator Vrtiska, you can get up again and talk about the bill.  And simply at this point I would like to debate this motion, see whether 271 is really a place where we want to be with respect to taxing motor vehicles.  It's not an issue that I have supported in Revenue Committee and I think that a bracket motion is appropriate to debate at this time.  I would give the rest of my time to Senator Chambers.


PRESIDENT ROBAK:  Senator Chambers, there are eight minutes remaining.




SENATOR CHAMBERS:  Thank you, Senator Will.  Madam President, members of the Legislature, I want this as a test vote.  If all of the people who came to ask me, can we stop this bill, would vote to-stop it, we'd stop it.  So this is a test vote.  I don't really know where the senators are on this bill.  I'm opposed to it.  It still is designed to favor the big shots, the ones who buy the expensive cars.  Some people who buy those expensive cars are not pushing this bill just in order to give themselves a break, but if they can get a break who would turn their back on it?  But this bill was designed for that purpose and those new car dealers who want to keep saying that they have no in this bill, if God struck a liar dead there wouldn't be a new car dealer walking alive on this earth, and that's what makes me so disgusted with them.  They want to walk around with their hands folded and the holy look in their face and say we don't have any interest in this bill, we didn't ask for it.  I've been here for awhile and I know of things that they've done to try to enhance their sales.  That's what salespeople do.  And salespeople are known to not tell the truth.  And I also know that the people with the money are the ones who get the breaks from the Legislature.  So if all that we're interested in doing is coming away with a certain total amount of money, we have three levels of cars.  We have the baby cars which are the ones that are new.  Then, Senator Dierks, we have the middle-aged cars, which a lot of people will have.  Then we have cars like mine--the geriatric cars.  The geriatrics certainly should not bear the burden of this.  The middle-aged cars should not bear the burden.  To do that is to say that if you maintain your vehicle, if you are frugal and if you want to keep it once you've made the last payment on it and get some value from your car you're going to be penalized for it.  And why?  Not because your car causes more damage to the roads, not at all.  There are people who like to drive very expensive fancy, flashy cars and ,they don't want to pay what they ought to pay for that.  In some states they have or used to have what they call luxury taxes.  You tax at a greater level or higher level those individuals who can get those things that are really not essential, that are not necessary.  If you purchase a car and you want all of these extras on the car, fine.  If you purchase a house and you put a lot of extras, you're going to pay for those.  You won't be like the judge, but they caught him, in Lancaster County who got a $313,000 house and he didn't...  it didn't even make him




suspicious when he got a property tax bill for $760, didn't even make him wonder what's going on here.  But nevertheless....  Right, from burns to burns.  What happens is that the Legislature placates the big money people.  That's what this bill is designed to do.  If I could get a sensing that a goodly number of my colleagues are opposed to this bill, we could launch an effort to kill it.  -But if the only thing that's going to happen is people calling me on my phone or coming to my office and asking me, can we stop this bill, but they're not going to do anything to help stop it, I only have one vote.  I have two lungs and they provide me with an inexhaustible supply of oxygen, but that is not enough to kill this bill.  It would be enough to delay it, but it nevertheless would eventually move to Final Reading.  We have to get a test vote to see how many are opposed to the bill.  That's what I hope this vote on Senator Will's motion will be.  I know that an amendment was adopted that is supposed to mitigate the damage being done by this bill.  Maybe you're going to spread the net and catch a few more of those big shots and make them pay a penny or two more.  I don't know if that's really what the amendment does, but it's not going to help those with the middle-aged cars..  So in the process of discussing Senator Will's motion I hope there will be some forthright commentary and information provided on these crucial issues, at least they're crucial as far as I'm concerned.  Let those pay these fees, if we're going to call it that instead of a tax, who are best able to do so.  We know that people buy cars for differing reasons.  I want to hear why this bill ought to be passed, 'and I'd like to hear a reason other than just saying the schools and these others who are deriving money from this property tax want to realize the same amount that they will even after 1114 kicks in and helps some of these ,real property owners.  We won't help those who own the vehicles.  They continue to pay up here when the others will pay down here because the property owners, when it -comes to vehicles, they are not organized.  They have no voice and those who sell them these vehicles, the new car dealers, want to gouge them in order that they can sell these high-priced cars.  That's all their interest is.  That's all their interest is.  And they'd like those people to pay not tax at all, not that they care about those people who buy the car paying tax, but if they don't have to pay tax, they'll buy more of these cars.  So I don't want, and I none of them have, I don't want a new car dealer to approach me and say,




Senator Chambers, we're not interested in this bill, we're not pushing for it.  If they're not interested and not pushing for it there should not be a new car dealer out there, shouldn't be one anywhere near the Capitol Building, and maybe there are none out there, but I'm going to find out, not today, but I'll make a determination if any of them have been skulking and lurking around here and that will tell me where they are.  But none of us was born yesterday and we know what their interest is.  Senator Kristensen, if you will, there won't be time to answer this question, I know, on the time I have left so I'm Just asking that you'll do this, when you explain the amendment that was adopted the other day I want you to show me, if you can or ,if it does, where.  the middle aged cars are going to ...  middle-aged car owners, owners of middle-aged cars are going to get a break...




SENATOR CHAMBERS:  ...  as a result of that and if those at that upper crust level are going to pay more.  Thank you, Madam President.


PRESIDENT ROBAK:  Thank you,.  Senator Chambers.  Senator Chambers, your light is next if you wish to continue.


SENATOR CHAMBERS:  I would like to ask Senator Kristensen that question because we may want to talk back and forth on this awhile and he couldn't do it all on his time I don't think, so I'll ask...


PRESIDENT ROBAK:  Senator Kristensen.


SENATOR CHAMBERS:  ...  him that question.


SENATOR KRISTENSEN:  Thank you, Madam President, members of the Legislature.  Senator Chambers, let's ...  as we begin to do this, what would you call a middle-aged car?


SENATOR CHAMBERS:  Well, where is ...  what are those years that they bracketed?


SENATOR KRISTENSEN:  Well, but we're not ...  we're not doing on




the years, Senator.  What we're doing is on the manufacturer's costs.  That's the reason I was a little confused when you talk about middle-aged cars...


SENATOR CHAMBERS:  Well, let's say cars starting, say, between four and seven years old, maybe four and six.


SENATOR KRISTENSEN:  Well, but that doesn't...  I'm not being difficult, it doesn't help me to know how old the car is to start with.  What's important is I need to know what price range to start with because then once you have that you work down the age.  Okay, you can't do age and work backwards.  You got to start with, just roughly what the value of a new car ...  when it was new, what did it cost?


SENATOR CHAMBERS:  Senator Kristensen, will the amount the people have to pay in this vehicle tax diminish at a consistent rate throughout the age ...  throughout the taxable life span of that car, or will there be a point reached when there will be an acceleration?


SENATOR KRISTENSEN:  They will decrease during their life, that is true.






SENATOR CHAMBERS:  Okay.  If we go to page 4...




SENATOR CHAMBERS:  ...  and I'm just going to take these numbers that we see, in line 6 it says first, the first year, $1 or 100 percent.  But let me use it as a dollar.




SENATOR CHAMBERS:  Second year 90 cents.  That's 10 cents difference.






SENATOR CHAMBERS:  Third year 80 cents.




SENATOR CHAMBERS:  Fourth year 70, fifth year 60, sixth year it's not 50 but 51.




SENATOR CHAMBERS:  So that's a different rate.  Then seventh...




SENATOR CHAMBERS:  ...  should be 40, but it's 42.  Eighth....  So tell me why that's happening like that.  It's not diminishing by that same increment of ten or a tenth every year.  Why is that difference, or did the amendment change that?


SENATOR KRISTENSEN:  No, it didn't change that.  I honestly don't remember why we did that.  I mean I'll go back and look at it.  My guess is what we were trying to do was try to keep it as neutral as we could and that's the percentage, but in terms of is there a magic why that was there, I'm not aware of why that's there.


SENATOR CHAMBERS:  If you multiply by .51 whatever it is you're multiplying, more will be paid than if you multiplied it by .50.




SENATOR CHAMBERS:  Is that true?


SENATOR KRISTENSEN:  Oh, sure.  Absolutely, but it's...


SENATOR CHAMBERS:  So at that point you get a lesser break than everybody else has in terms of the rate of decrease.


SENATOR KRISTENSEN:  It is, but you're talking about one-tenth of a percent.


SENATOR CHAMBERS:  But there's a difference.




SENATOR KRISTENSEN:  Oh, absolutely.  Would...


SENATOR CHAMBERS:  If ...  then why don't we collect all these...


SENATOR KRISTENSEN:  wouldn't suggest that.


SENATOR CHAMBERS:  ...  are you willing to collect all these odd tenths of percentages that we see down here and go to the most expensive vehicles and make them, through the fees that they pay, make up the difference...




SENATOR CHAMBERS:  ...  that will be..  that will exist?  In other words, let it continue to decrease at that .10 all the way down.


SENATOR KRISTENSEN:  But, Senator, can I stop you for just a minute?




SENATOR KRISTENSEN:  This is the rates that are for everybody whether you've got a cheap car, an expensive car.  These ...  when you talk about these years, that applies across the board to everybody.


SENATOR CHAMBERS:  It's like saying that the rich people and the poor people are neither one of them is allowed to sleep under a bridge in the rain but you know that the rich are not going to do it so it really applies to the poor.  So these rich people are ...  most of them are not ...  these kind of people are not going to keep their car this many years.  Most of them are going to trade these cars off to get the benefit.  Ordinary people are the ones most likely to fall into the category we're talking about.  We're way down here into the sixth year.


SENATOR KRISTENSEN:  I just don't have any data that supports that.  Now, I might...




SENATOR KRISTENSEN:  ...  I might believe that....  I'm sorry, Madam President, did you say "time">








PRESIDENT ROBAK:  Thank you, Senator.  Senator Bromm, your light is next, followed by Senators Kristensen, Wickersham, Vrtiska, and Chambers.


SENATOR BROMM:  Thank you, Madam President.  I have a lot of questions on this bill and I think a lot of us probably do.  I don't think a lot of us fully understand what all of the impacts are going to be.  I appreciate Senator Will's bracket motion as an opportunity to speak on the bill and, as it stands right now, probably be voting for the bracket motion to give us more opportunity to review the bill over the next couple of days.  One of the main points that Senator Hilgert was getting at and I think is a relevant consideration, we've undertaken a property tax reduction effort in this state through 1114 and other bills and, as we have discussed in (LB) 806 and so forth, we're attempting to reduce property taxes.  What we're doing at- the same time with this bill is shifting from a property tax method of taxing vehicles to a fee-based method of taxing vehicles, which is an effort to keep the amount of revenue collected statewide about the same, think Senator Kristensen said within maybe 6 percent or something like that.  Well, if we let the levy limits come in as the law provides for, we will have a property tax reduction in 19899 not only on real estate but on motor vehicles as well.  However, if we adopt and pass- this legislation we will not have that reduction in property tax or savings because this is intended to be, revenue neutral.  I oppose that concept.  I don't want to just save property tax for real estate owners, but I am just as interested in saving property tax for owners of vehicles.  That's one point that I feel is rather significant and I need to know that we all understand that that's exactly one of the effects of the bill.  Now I also have a philosophical problem with the bill in the sense that we're going to reduce the tax on people who may be




need the help the least.  If I can't afford an expensive car don't I think I should be buying it.  And if I can afford the higher priced range of cars where the most savings is in this bill, then I don't think paying the extra tax should be that much of an obstacle.  I have that concern..  I have some concern about how the ...  how the tax or the fee is divided as well.  Now.  property tax, as you know, goes to help support ESUs, goes to help support NRDs, it goes to support many of the other political community colleges, other governmental entities that we have seen fit to support.  Now we are putting property tax limits on those folks, but in this bill we're taking away this property tax from them altogether because they're not going to share, as I understand it, in the division of the tax.  if" Senator Kristensen, if I could ask to confirm that.


PRESIDENT ROBAK:  Senator Kristensen.


SENATOR KRISTENSEN:  No, you're inaccurate there.


SENATOR BROMM:  Okay.  Senator Kristensen, I was speaking with someone from the Revenue Committee and I'd like to clarify that.




SENATOR BROMM:  Whereas now the ESUs and NRDs receive property tax from motor vehicles, is that correct?  They...




SENATOR BROMM:  Okay, after this is adopted the tax portion will still be divided amongst those entities?


SENATOR KRISTENSEN:  Right, 85 ..  roughly 85 percent of the system...




SENATOR KRISTENSEN:  ...  will go where it's always gone.


SENATOR BROMM:  The 15 percent is going in a different fashion then, is that correct?




SENATOR KRISTENSEN:  It goes to the highway allocation formula, that's correct.


SENATOR BROMM:  Okay.  And that's going to be divided the way the highway allocation would be between cities and counties.


SENATOR KRISTENSEN:  That's correct.


SENATOR OR BROMM:  And that's ...  and that clarifies that.  There will be some change but not an entire change.  There are other questions and not enough time on this particular speaking time to get into them, but there are these concerns and I think most of all another area I want to go into further is there will be a tax shift resulting from this bill.  There will be a tax shift.




SENATOR BROMM:  Thank you.


PRESIDENT ROBAK:  Thank you, Senator Bromm.  Senator Kristensen.


SENATOR KRISTENSEN:  Madam President, members of the Legislature, it's apparent that a few days with a lot of issues bill and so I will, as distinctly as I can, go through what the purpose of the bill is.  You have $150 million of property taxes that are collected from motor vehicles.  That is at risk.  This is not a property tax reduction bill.  This is not designed to reduce the property taxes for people who buy expensive cars.  The purpose of the bill is, the system right now of determining values is.  arbitrarily done.  It is picked out, basically out of the air, by the property tax administrator and they just assign values of cars under the guise that that is in relationship to what that vehicle's value actually is.  You can't defend that system, we're subject to lose that system and you've got to change that system.  What we do through this bill is to, in effect, put into statute what occurs.  As the vehicle gets older it is worth less.  so at the beginning we determine what it's value is by it's suggested manufacturer's price and then each year it has a factor of less value.  That's not designed to reduce the reliance on property tax.  What is done is designed to save the system of motor vehicle taxation.  The second thing it does is




it takes that fee, and part of this is still tax, 85 percent of it, 15 percent of it goes to a fee.  That tee is designed to assist those counties and cities who are having trouble living under the levy limitations.  And so for those who say that there's going to be a tax shift, we've got a farm group out there who's acting irresponsible again and they don't understand the formula, they don't bother to come in to the Revenue Committee with a tax plan but they sit out in the weeds and complain, and they ought to be ashamed of themselves.  Because they're the same groups that were out there during this petition process saying, we've got a better plan, we've got to do things differently, but they don't bother to come in here and present their plans.  The other thing that this does is provide ...  after we run it through this system you're going to have more uniformity and it will not matter where that car is necessarily licensed and taxed at because the fees will be roughly the same across the state, so you get away from the tax situs problems of registering it in one other county or in another state.  Now, if you have high levies generally what this is going to do is that you're going to pay less under this system.  If you've got a county that's got higher tax levies and they're going to come down under 1114, you're going to wind up paying a little bit less, a and that's probably the way it ought to be.  The purpose of the bill is to save the system of taxing.  It's not designed to be a property reducer.  It is designed to take some of that money and put, it into the highway allocation formula so that some of these communities can live under.  those levy limits, because they're extremely difficult.  The trouble is that we're not talking about tremendous amounts of money and so you have to do a little here and a little there to make that formula work.




SENATOR KRISTENSEN:  It we don't change, you're going to lose .the system of taxing motor vehicles and then I want to see where the counties are at.  They'll be the first ones in here and the cities will be the first one in here, we've got to make up that tax basis.  This isn't a bill that's just been in front of the Revenue Committee for one year.  It's been there for five years, six years, a long, long time, and what the problem has always been is when do we make the shift?  This was the appropriate, year because we're trying to make those cities and counties live




within those levy limits and that's the reason it's part of the property tax package, not to reduce the reliance on property tax.  And so you can let the system go if you want to do that, but that's what you're going to be doing is letting the system go.  So, Senator Chambers, I know you were busy.  That's primarily the purpose of the bill in as distinct terms as I can do it.


PRESIDENT ROBAK:  Time.  Thank you, Senator Kristensen.  Senator Wickersham.


SENATOR WICKERSHAM:  Madam President, I want to be brief and just state that I oppose the bracket motion.  I have spoken before on th13 bill and expressed my concerns about maintaining a system for taxation of motor vehicles in the state of Nebraska.  Senator Will and I had a nice discussion about that and some related issues, but what you have now before you in the amendment I think is a more appropriate and practical and workable system than what we currently have in place.  As I related before, we have many inequities in the current system and this will address some of those inequities.  There are those who may assert that it creates others.  That, I will advise you, is my opinion about any taxing system, that there will be people who do not like it for some specific and particular reason that applies to them.  That will always be the case.  But in broad scope it seems to me that this amendment does as much toward the objectives that we can of having a reasonable, practical, workable, predictable system for the taxation of motor vehicles.  It has been accomplished in other states, although I don't think with this degree of detail, and the degree of detail that you see before you is what is necessary to reduce the regressivity of the tax or the system.  And I was uncomfortable when we had a very small number of brackets because that meant the system was fairly regressive.  The system that you have before you is not nearly as regressive and I think to the extent it is regressive it is acceptably so.  If you want to worry about regressive taxes, the current property tax is extremely regressive and you should be in favor of eliminating it entirely.  I oppose the bracket motion.


PRESIDENT ROBAK:  Thank you, Senator Wickersham.  am.  We have very special guests visiting the Legislature today.  We have a Rotary




exchange team from South Africa.  They are Henk Jooste,.  Barend Pretorius, Andre Brandmuller, Joe Grosel, and Ronnie DuPlessis.  They are seated under the south balcony.  Gentlemen, will you stand and be recognized, please.  Welcome to the Nebraska Legislature.  And another very special guest is visiting the Legislature today.  Senator Arlene Nelson is back.  Senator, will you also be recognized.  Welcome back, Senator.  Senator Vrtiska, your light is next.


SENATOR VRTISKA:  Thank you, Madam President, members of the body.  I don't see Senator Kristensen.  He's hard to keep track of.


PRESIDENT ROBAK:  Senator Kristensen.


SENATOR VRTISKA:  There he is Senator Kristensen, just a short question.  I don't want to take up a lot of your time because I've been...  I was gone and I don't know exactly what took place, but one of the things I'm concerned about or I guess I have a concern about is really don't really know at this point how this is going to affect overall, do we?  I mean we don't have any printouts that show a series of cars and all this stuff.


SENATOR KRISTENSEN:  Well, Senator, it depends on what you want.  I mean we've got...we've been trying to calculate because, as you know, we don't have records of all those vehicles around.  We've gone and picked out some counties and tried to begin to calculate that and we know the gross numbers for the state and we can tell you that within about 6 or 7 percent we're collecting the same amount of revenue under this system as we will under the old system.


SENATOR VRTISKA:  Okay, but I guess one of the things that I was concerned about, since we're not exactly sure in certain.  ...  Let me...  let me address something else.  If 1114 is in place and we go to $1.10 or $1.00, in fact isn't that going to somewhat level out what everybody's paying?


SENATOR KRISTENSEN:  No.  No, not necessarily.


SENATOR VRTISKA:  Well, they're going to have...  it's certainly not going to be like it is now where you have a certain levy in




one school district and another levy in another school district., and a county and so forth, and so you're going to be more....


SENATOR KRISTENSEN:  But remember you're talking about a percentage of the tax that you're paying, and remember that motor vehicles, it depends on how you get to the value,




SENATOR KRISTENSEN:  That's what this discussion's about, is value; not tax rate.


SENATOR VRTISKA:  But the tax rate still enters into it.  I mean that's the final analysis, the amount of money you collect on that particular vehicle.




SENATOR VRTISKA:  And it is different depending on the school district, the town, the county or whatever You live in, and based on the new, when it kicks in it's going to be more...it's going to be more the same across the state.  Isn't that right?  I'm not saying I'm against your bill.  I'm just trying to figure out what is ...  where is the big difference going to come at that time?


SENATOR KRISTENSEN:  The bill ...  well, the levy limitations only come into play because it depends on what county you're in.  You can be in a high...in a county where you're going to pay a pretty high fee on those vehicles and a high tax, but you may not be, you know, the levy limits may not have that much of an impact in that particular county.  I ...  here's an example.  I'll use Senator Wickersham's district.  Right now if you're in Dawes County and you got this $1,000 car, you're going to pay $30.  If you're in the county right next to it you're going to pay.  roughly half of that.  You're paying $17 in the county next to it under the current system.  And what we're trying to do is...


SENATOR VRTISKA:  Under the current...


SENATOR KRISTENSEN:  ...  level that out a little bit.




SENATOR VRTISKA:  Under the current system, but what happens when...




SENATOR VRTISKA:  ...1114 comes in and you can't exceed, other words levies can't be higher in one county than they are in the other?


SENATOR KRISTENSEN:  That's...  1114 caps levy rates unless you choose to go over them.




SENATOR KRISTENSEN:  So, depending on whether they choose to go over them or not, it depends on which county you're in.  I mean I understand.  I assume what you'd like to see is a printout 'from every county.  My trouble is we've got to do those by hand because...


SENATOR VRTISKA:  I know, I know.  I don't expect that.  I just I guess my thinking was maybe this is ...  and you just made the comment that this has been around for six years or whatever.  I was thinking maybe...




SENATOR VRTISKA:  ...  if we had those printouts in, say in another year, maybe we could deal with it more realistically, but I know that's still not going to be ...  still going to be a difficult job, too.


SENATOR KRISTENSEN:  Well, our problem is, is that with schools over the years we have required elaborate reporting, tremendous amounts of statistics, numbers and calculations for schools.  We don't do that with cities and counties.  And we've had the discussion so we know how much they're spending in these areas, how much valuation is and get down to even individual cars, but you know that information just isn't that readily available to US.


SENATOR VRTISKA:  Okay, thank you.  I guess we're a little off




the subject.  The issue I guess before us is a bracket motion and at this particular time I will not support the bracket motion 'cause I'd like to see some more debate and maybe see what actually comes out of this.  So, with that, I'll give my little bit of time back.  Thank you.


PRESIDENT ROBAK:  Thank you, Senator Vrtiska.  Senator Chambers.


SENATOR CHAMBERS:  Madam President, members of the Legislature, I was just making ...  getting ready to make a comment to Senator Bromm about the remarks that have been made about the unconstitutionality of the present system.  If that were the case it would have been challenged.  There are enough people with enough interest in the taxing of vehicles to have taken it to court.  They just want to say that, but they have no basis for it.  They have no basis for it.  Senator Kristensen, 1114 will cap the amount that can be levied, as you pointed out to, Senator Vrtiska, so there could still be a different levy in different counties.


SENATOR KRISTENSEN:  That's correct.


SENATOR CHAMBERS:  But when you said that these counties or whoever it is that's going to do the levying want to go over, they'd have to get a vote of the people to do that, wouldn't they?




SENATOR CHAMBERS:  To exceed it.  And they...




SENATOR CHAMBERS:  ....don't want to do that.  Or if it's such an easy thing why are we doing all this talking around here about giving replacement money for what's going to be lost as a result of 1114 going into effect?  It means that some counties and some of these other subdistricts and whatever they are, subdivisions, are going to realize less money from property tax than they did before LB 1114 took effect.  Isn't that true?  They will...






SENATOR CHAMBERS:  ...  realize less...


SENATOR KRISTENSEN:  That's correct.


SENATOR CHAMBERS:  ...  under 1114.  Those are only real property owners who will benefit from that.  Isn't that true?


SENATOR KRISTENSEN:  Well, Senator, obviously anything that's subject to the levy, so the motor vehicle, in a certain county you could also say that's true of motor vehicles.


SENATOR CHAMBERS:  Then why don't we draft LB 271 to be based on what the lower levy limit is going to be when 1114 kicks in, instead of dealing with the amount of money we want to derive based on the current system where there can be a higher levy limit?


SENATOR KRISTENSEN:  Because that's not the purpose that we brought the bill here for.


SENATOR CHAMBERS:  You want to gouge the vehicle owners.  Isn't that true?  That's what's...




SENATOR CHAMBERS:  ...  happening in effect though, isn't it?


SENATOR KRISTENSEN:  No, I don't-think that's true.,


SENATOR CHAMBERS:  As compared to real property owners, motor vehicle owners are gouged because they derive no benefit from 1114, since they are not going to be deemed to be taxed.  You just want a total amount of money and whatever it takes to get that is what 271 is designed to do.  Isn't that right?


SENATOR KRISTENSEN:  I don't...  I don't want to be disagree...  I want to be agreeable but not disagreeable to that degree.  Senator....






SENATOR KRISTENSEN:  ...  that's not ...  that's not the case, okay?


SENATOR CHAMBERS:  Then let me give you an example.




SENATOR CHAMBERS:  If you have a new car, talking about Omaha, that would cost $40,000 dealing with it new, it would currently be taxed at $2.40, the levy, which would make them pay $960.




SENATOR CHAMBERS:  Under LB 271 on this $40,000 car, there'd be the $740 whatever you want to call that "no longer a tax", plus the $15 fee and they would pay $755.


SENATOR KRISTENSEN:  I think that's a little different than my off the top of my head calculation, but you're very close in the ball park.


SENATOR CHAMBERS:  They're going to pay...








SENATOR CHAMBERS:  Now if we have a six-year-old car and it was purchased at $15,000, the current value, since it's six years old, would be $2,300.  Under the current system that owner would pay $55 in property tax.  Under 271 that owner would pay $120 or more than...




SENATOR CHAMBERS:  ...  double the amount that currently they pay.


SENATOR KRISTENSEN:  I'm struggling to follow the chart, but I'm making your assumption that you followed my chart correctly, Yes.




SENATOR CHAMBERS:  So those in the middle area, now we're, getting to it, from six years on let s say, are going to pay .double what they pay, and those who have these newer cars and high priced are going to pay less than what they currently pay, and I think that was the intention of the bill.  When you say "revenue...




SENATOR CHAMBERS:  ....neutral", you don't mean the individual owners.  You mean when you get ...  talk about the total amount of money in the pot.


SENATOR KRISTENSEN:  I am, I'm talking about the total amount in the pot.  I don't think you're right when you say "double" though, because what you're doing is...


SENATOR CHAMBERS:  Right, it's more than double.


SENATOR KRISTENSEN:  ...  you were ...  well, you were using a car that costs twice as much to begin with, more than twice as much, so it's real unfair to say that it's double, they're paying double more.


SENATOR CHAMBERS:  No, I don't mean double.  I'm not comparing what the lower price owner's paying compared to the higher price owner..




SENATOR CHAMBERS:  I'm talking about the....  Well, I'll turn my light on again.


PRESIDENT ROBAK:  Thank you, Senator Chambers.  Senator Will.


SENATOR WILL:  Thank you, Madam President, members of the body.  I rise in support obviously of the bracket motion that I filed and I would urge the body to take a careful look at LB 271.  I understand exactly what the Revenue Committee and my fellow Revenue Committee members are trying to do with 271, but the fact is that I think that the way it shakes out in the end is probably unfair to those vehicle owners primarily in the




midrange and somewhat in the lower range of values of those that are out there.  The six- to ten-year-old cars, I think , :probably get an increase, as has been indicated by Senator Chambers.  I do understand the concern of the new car dealers and people who are buying new cars of the cost there is to register and pay the initial property taxes on cars in the state of Nebraska.  It is not proportionate to surrounding states.  It, in fact, is much larger.  But the fact is that to Adjust it in the way that 271 would do I believe would put an inordinate burden on those that own mid- and lower-range valued vehicles.  There may be a way to fix that within the current system, I'm not sure.  Currently, I will admit we don't base this expressly on actual valuation, but I am ...  remain unconvinced that LB 271 addresses this in a way that is fair.  on top of that, we have registration fees that are imposed upon every vehicle no matter what the age, no matter what the value.  In our major cities we have a wheel tax that is imposed on every vehicle no matter what the age, no matter what the value, and I think that drivers at this point are ...  are at a position where they are probably paying in proportion to the relative value of the vehicle, although I acknowledge the arguments of the proponents of 271.  But the fact is I don't think we need to revamp the system and put the price for that revamping on the backs of those owners of mid-range vehicles with respect to age.  And I would also like to address the same topic Senator Chambers did, and that is the topic of the, unconstitutionality or potential unconstitutionality of our current system.  The fact of the matter is that we currently specifically authorize that the Legislature may provide for a different method of taxing motor vehicles and establish a separate class.  It's exactly the same thing we do for agricultural land, for personal property, for homesteads, and I see no way that this could be declared unconstitutional without those other classes also being declared unconstitutional.  If we want to ...  if those were declared unconstitutional that'd be fine by me, but I don't think that that's going to happen and I don't think that's a legitimate concern with respect to this piece of legislation.  Thank you.


PRESIDENT ROBAK:  Thank you, Senator Will.  Senator Bromm.


SENATOR BROMM:  Madam President, Senator Will, if you would yield to a question.










SENATOR BROMM:  Senator Will, you got into just a little bit of one of the concerns that I've been trying to wrestle with and I've heard that, and Senator Kristensen has certainly indicated, that this whole thing may be constitutionally suspect and is it your view that it's not or that it's not a substantial risk as indicated by Senator Kristensen?  And if so, just tell me a little bit more of your thinking on that.


SENATOR WILL:  Senator Bromm, I'd like a little clarification as to your question.  Do you mean the current system?


SENATOR BROMM:  The current system.


SENATOR WILL:  I don't think it's constitutionally suspect, Senator Bromm, because we have laid out exactly as we have in other cases such as personal property and agricultural property a separate class that we have specifically given to the voters, the voters have approved and has been put in there much as the other classifications that have been established in the...




SENATOR WILL:  ....constitution.  So even though we do have the uniformity clause, these are specific exemptions to the uniformity clause and I would think if this is suspect all those other exemptions are suspect as well.


SENATOR BROMM:  Okay.  Thank you.  When I spoke last, I said this was a tax shift and I'd like to explain that.  In those areas...  in those areas that have a particularly high mill levy, and a lot of timed that will be an area where you're subject to the city levy, school levy, community college levy and various other levies to tallying up to a substantial levy.  Right outside of that taxing district, perhaps in the same school district, you may have a much lower levy because they aren't subject to




some.  of the levies such as the town and perhaps an-SID and that kind of thing.  Okay, so both of those ...  both of those people live in those two districts buy the same car.  Right now the one that lives in the higher mill levy district would pay more tax.  After this legislation they will pay the same tax.  Now that money goes to support the governmental entities in the same proportion that the tax would have been divided.  So if I am a member of the same school district and I live outside the high taxing district, I live right outside the city limits, a higher percentage, a higher percentage of my tax dollars for the vehicle is going to go to support the school than if I live inside the city limits, because inside the city limits my tax will be divided with the school getting a lower proportion of the total levy, of the total dollars.  Okay, that's one example of a shift.  Another example of a shift is, just generally speaking, if I am in an area of the state that has a lower levy than in another area of the state and we're looking at this on a statewide basis, we're going to raise the same number of dollars.  I am going to wind up paying more dollars after the enactment of this legislation because I happen to have a low levy now but after the enactment of the legislation I will have the same, let's call it a levy, the same levy as everyone else.  So there ...  there is...




SENATOR BROMM:  ....you know, I don't care what you call it, it's a shift.  Now a shift isn't always bad if it isn't fair to begin with, but I'm not so sure that...  I'm not so sure that it is unfair the way it is now.  The levies right now are subject to all the political subdivision's budgets and how much money they want to raise in property tax.  They have their recourse through their local boards to try to hold that levy down and so I think that's relatively fair.  So for those reasons and because I agree with Senator Will, I don't buy in to the constitutional argument nearly as strongly as some others, I can't support the bill.  So I would urge the body to continue to look at it and perhaps support the bracket motion.  Thank you.


PRESIDENT ROBAK:  Thank you, Senator Bromm.  Senator Kristensen.


SENATOR KRISTENSEN:  Thank you, Madam President, members of the




Legislature.  I'm glad you called on me.  (Laughter) Gained some breathing room over here.  I assume that the policy choice you're going to make on the bracket motion is do you want to do 271 this year.  There's a number of reasons, there's a lot of unfairness that's out there in the current system.' Senator Cudaback examined that.  He said, look, I bought a car and got a good deal.  I went in to have my car valued-for tax purposes and it's far above what I paid.  for it.  He paid more tax than probably he should.  That's under the current system.  There is going to be a shift.  I'm not telling you there's not going to be a shift, but I'm telling you that the current System needs to change and you ought to recognize what we do is based on the age of the vehicle and the only sound way to do this is make the shift over.  Now the fee, the fee portion is what ties at the property tax.  If you don't want to put it in the allocation formula that's a choice.  Senator Chambers has got that amendment.  You can take the fee out.  But I think if you keep the present system you're going to have a lot of inequities out of this.  You're going to have, depending on where you're at in the counties or on a border, you're going to begin to have people who want to go register it somewhere else, pay the tax, and it's going to happen and happen and happen.  And I know that there's I a farm group out there who's telling the rural senators, look, this is going to hurt you., They just plain don't know what they're talking about, because that system of the highway allocation formula is going to come back and might well probably benefit them more than it hurts them.  But Maybe that's the case, that they do it with school finance, they'll do it here again' and just repeat their system.  I don't know.  But I do know that at some point in time we probably do need to take a vote on the bracket motion and I, Senator Chambers, I assume that if you want to do this for a test that's probably what this vote's all about.  I think, you know, Senator Will, even though he was a Revenue Committee member, probably in good faith put this motion up to give us a test vote of whether we're going to continue on or not today.  I'd hope that you can continue on.  There's some other amendments that you can do to the system.  Senator Chambers has a couple of amendments, a couple of them I kind of like, at least one of them, but that's not a reason just to have the bill hang around so Senator Chambers can attach an amendment.  But if you believe that the current system isn't fair you need to change it.  And this is the best change that I




think we've found.  It's one that we've looked at for a number of years in doing and it does help those cities and counties live with under the levy limitations by using that fee.  Is it unconstitutional?  The reason that we put it out, and that's what we were just having the conversations here about, it wasn't the new car dealers that came to us this year.  They have in the past, there's no doubt about that.  They've introduced bills in the past and supported that concept in the past, but it's never come out.  The reason it came out was that the property tax administrator, she came to us and said I can't defend the system any longer.  And so what do we do as a committee?  Do we sit there and say, well, keep doing it, wait for somebody to win and beat you?  Or do you try to fix the system ahead of time?  We chose to try to fix the system ahead of time.  That's the reason we have 271 in its current form.




SENATOR KRISTENSEN:  I would hope that you'd not bracket it and I guess that it's a good choice here.  Take this as a test vote 'cause I assume that if you bracket it that you won't see 271 any more this year out of the bracketing because of the other issues that are ahead of it.  So it probably is a test case at this point.  I'd hope that you'd not bracket it and see.  the value in trying to fix the system instead of letting the system collapse.


PRESIDENT ROBAK:  Thank you, Senator Kristensen.  Senator Schellpeper.


SENATOR SCHELLPEPER:  Madam Chairman and members, I rise to oppose the bracket.  As Senator Kristensen has stated, this issue has been around in the Revenue Committee for it seems like forever.  Each year we've had a bill in there that does a little bit different issue and after a lot of serious consideration this year I've always opposed it.  This is the first year I have decided to support it and mainly-because I think the time is probably right.  Our current system is very unfair when you look at surrounding states.  We have a lot of people in my area that.  are going across into South Dakota, to Iowa, who own property over there.  They register their cars there because our system is so unfair.  When you have to pay twice in this state what you




do in the other states that just doesn't seem right.  We should get in more in line with all of the surrounding states.  And, even though you may call it a tax shift, it's really not a.  tax shift.  It's a shift of the way that we put the fee on our motor vehicles, because our current system is unfair.  We need to get it more in line with all surrounding states.  Now you can say, well, it's a tax shift if you want to if you're opposed to the bill..  I don't look at it that.  way.  I look at it as a way...  it's a shift of some dollars and a shift to a more fair system, 'cause I think that's what we need to look at.  The only reason these people go across these here state lines is because it's cheaper.  And they don't own a lot of property in the other states, but it's enough that they can actually do that.  Now if, Senator Kristensen stated, if you want to bracket the bill, if you don't like the bill, then I suppose we just as well move on, but I think the time has come for this issue to be debated by this body, and eventually this will happen.  If you don't do it this year it will be back again next year because the time has to come.  We have to move to this type system.  Whether you purchase a Chevy or a Cadillac or a Porsche, it's still unfair the amount of tax that you're paying currently.  So I would urge the body not to bracket the bill at this time.  Let's discuss it.  Let's take up the amendments.  The bill isn't that bad.  It needs to be passed this year.  Thank you.


PRESIDENT ROBAK:  Thank you, Senator.  Senator Hartnett.


SENATOR HARTNETT:  Madam President, members of the body, I also rise to oppose the bracket motion.  And I'm looking at our former member of the Revenue Committee, Senator Will.  I checked on the records, he did not vote against the bill, he actually was absent.  Senator Will is still a student and so forth so he has ...  sometimes misses that.  But I think we're trying to make the playing field level across the state, whether you live in Senator Jones' district, live in my district and so forth it's based upon a number that has some realistic...what's the market value of the car.  And there is, I suppose, a shift, but that happens all the time, but I simply think...  I think we need to move at this time, as Senator Schellpeper says, I think we need to move to a different system of valuating our motor vehicles.  And I think there's some concern of the counties, but I think we put the money from the fees, and the fee was higher, it was $25




starting out rather than the 15, but I think that money goes into the road fund which should help the counties and the cities.  So that's not ...  that's not shared with other political subdivision.  We do take out the NRDs and the ESUs and so forth.  It only goes to the three big three with the tax.  It goes.  to the school district, goes to the counties and the cities.  So there will actually be more money going into that, especially into the counties and to the city, even though they have some concern because it is ...  we're moving to a different system.  So I simply rise to oppose the bracket motion.  Thank you.


PRESIDENT ROBAK:  Thank you, Senator Hartnett.  Senator Chambers.


SENATOR CHAMBERS:  Madam President, I have to ask Senator Kristensen a question or two and while he makes it to his mike I want to mention something about Senator Schellpeper's comment.  He had said that in surrounding states they don't pay the same amount to...  in taxes on their vehicles than they do in Nebraska.  Maybe they don't pay the same amount of tax on anything, but what Senator Schellpeper failed to point out is that those people with older cars are going to pay more in Nebraska than they pay now.  Senator Schellpeper has missed that, and yet he is a member of the Revenue Committee.  The people who keep their cars are going to pay more for keeping their car than they, pay now.  How is that just and how is that fair?  It's not.  But now that Senator Kristensen is at his mike, Senator Kristensen, you said that this person who is going to set the value of these vehicles said she can no longer defend the system, and you said she said that to the committee.




SENATOR CHAMBERS:  What does she mean she can't defend the system?  It hasn't been challenged in court, so what does she mean?


PRESIDENT ROBAK:  Senator Kristensen.


SENATOR KRISTENSEN:  She means that the system of assigning values is not defensible because it's ...  the system is portrayed to be an ad valorem tax.  In other words, the value assigned to




the vehicle is supposed to represent its fair market value, and there's *no way that our system can do that because she, given the system that she's got to work with, she Just arbitrarily puts a Value each year on those classes of vehicles.


SENATOR CHAMBERS:  So we're going to be just as arbitrary but we're calling it by a different name.


SENATOR KRISTENSEN:  Can I take a minute, or would you prefer me just to do yes and nos?


SENATOR CHAMBERS:  Take a minute, but not all of them,


SENATOR KRISTENSEN:  Okay.  Our ...  we're changing the system so we recognize that as the age goes on the value goes down and we're ...  we've got a defensible place to start.


SENATOR CHAMBERS:  Let me ask you a question right there.




SENATOR CHAMBERS:  When they assess houses for value, do they assess them based on a class of houses or the individual dwelling?


SENATOR KRISTENSEN:  Well, it's designed to be on the individual dwelling, but they have what's called mass appraisal techniques, but in many places you do have house-to-house valuation reviews.


SENATOR CHAMBERS:  That will never be the case with these vehicles under the current system or this new one, under 271.  No individual vehicle will ever be assessed, will it, based on what...




SENATOR CHAMBERS:  ...  its intrinsic value, resale value or anything else is?


SENATOR KRISTENSEN:  Absolutely correct.  Right.


SENATOR CHAMBERS:  So we're being arbitrary.






SENATOR CHAMBERS:  There is' no relationship between what we're starting with as a base amount, no relationship between that and the actual value of the car in terms of what it would sell for or what a person would have to pay to get a car like that.


SENATOR KRISTENSEN:  The big difference is, though, that under the system we propose we're not holding up that that's what we're doing.  Under the new system we recognize as the car gets older it's worth less.


SENATOR CHAMBERS:  Then why don't we just rename what we're presently doing, just give what we're doing right now a different name?  Why don't we just do that since all we're dealing with is semantics anyway?


SENATOR KRISTENSEN:  Well, but we don't...


SENATOR CHAMBERS:  You wouldn't get as much money, for one thing, would you, when LB 1114 goes into effect?


SENATOR KRISTENSEN:  Senator, 1114 is not going to have the impact on this that everybody keeps throwing up that it's going to have, but...


SENATOR CHAMBERS:  If there's a levy rate in some areas that will be higher than the cap, those people with vehicles in those areas are not going to pay as much vehicle tax under the current system, are they?


SENATOR KRISTENSEN:  No, that's right.  That's true.


SENATOR CHAMBERS:  But under this 271 it doesn't make any difference actually what the levy cap is...




SENATOR CHAMBERS:  ...in terms of all these vehicles, wherever they are in the state, starting with a certain amount that they're going to have to be judged on, a certain base amount.




SENATOR KRISTENSEN:  But remember they're still going to have the tax base or the tax rate of their individual county.


SENATOR CHAMBERS:  But in some counties that is going to lower.


SENATOR KRISTENSEN:  Yes, that's true.  Yes.


SENATOR CHAMBERS:  But with 271 the vehicle owners are not going to get the same benefit from that that real property owners will get.  Isn't that true?


SENATOR KRISTENSEN:  I don't think that's true.


SENATOR CHAMBERS:  If we were to say that every house is going to, instead of our saying we're taxing it, we're going to say you start at this basic figure and no matter what 1114 says every house is going to start with this basic figure, and then we levy on top of that, like we're doing vehicles, we don't do that with real property, do we?


SENATOR KRISTENSEN:  No, absolutely not.






SENATOR CHAMBERS:  ...  how the real property owners get a break that these owners don't.


PRESIDENT ROBAK:  Thank you, Senator.  Senator Robinson.  Question's been called.  Do I see five hands?  Are there five hands?  I see five hands.  The question before you is, shall debate cease?  All those in favor vote aye; all those opposed vote nay.  Have you all voted?  Please record.


CLERK:  25 ayes, 1 nay to cease debate.


PRESIDENT ROBAK:  Debate ceases.  The Chair recognizes Senator Will to close on the bracket motion.


SENATOR WILL:  Thank you, Madam President, members of the body.




I rise in support of the bracket motion I filed to this bill.  I oppose LB 271.  Obviously, that is one of the reasons that I filed the bracket motion.  The other ...  among the other reasons was that I thought that we needed to have some-more debate on this bill.  I appreciate the debate that has occurred.  I personally think that the impact of this bill not only on political subdivisions but on individual taxpayers is at best uncertain and at most probably hitting some taxpayers that I believe should not be subject to a tax increase.  I don't think our current system is perfect.  I do think it is constitutional, as I have indicated.  I think that combined with the current schedules for registration fees and wheel tax that individuals that purchase new cars that tend to be expensive and are valued as such probably can afford the tax that is placed on those cars and that those that own six- to ten-year-old cars which tend to be the ones, as my reading of the bill at least is at this point, should not be penalized as they would be under the bill, and for that reason I would encourage the vote to bracket this I is bill.  Primarily, I think this is a good test vote.  It's a vote that can be taken to see what kind of support is there for 271.  Should this vote fail, I will not actively oppose the bill, although I will continue to oppose it, but I think this is a ...  we can decide right now if 271 is something we want to talk about this session or if there are other matters we would like to get on to, and that is the primary purpose, frankly, for the bracket motion.  So I would urge your support for this and I would give the remainder of my closing to Senator Chambers.


PRESIDENT ROBAK:  Senator Chambers, there's two and a half minutes remaining.


SENATOR CHAMBERS:  Thank you, Madam President.  Thank you.  Senator Will.  I hope that when we take this vote it will be I in favor of bracketing the bill.  We can come back, Senator Jones, next year, after we have an opportunity to see how other things are going to shake out under 1114.  You know that since action was taken on LB 806, different figures have come in.  That's just been a matter of days.  We here are changing entirely a system.  I don't think that a compelling reason has been given for the system, and for an individual to say, well, this is unconstitutional the way things are being done how does not carry water with me or weight because nobody has challenged the




system in all these years.  Nobody on the horizon is going to challenge it.  I-know that these new car dealers are not going to challenge it, and yet they are the ones who ought to if they think it's such a bad thing and 271 is going to help them because under 271 they can sell more cars to these high rollers' because they will pay less in taxes than they are paying now.  So let the used ...  the new car dealers and those who have an interest in 271 challenge the current system, but they haven't challenged it.  Who else has an interest in doing so?  Those who pay a lesser amount in taxes now than they will pay under 271.  That's idiotic.  No, they are not going to do it.  That argument is totally off the mark.  What needs to be looked at is the fact that people who keep...




SENATOR CHAMBERS:  ...  their cars for a period of years are going to pay now more in taxes under 271 than they do now, in some cases twice as much, and that's supposed to be good for the public?  When these high tax bills hit them and they ask why, which ones are going to stand up and raise their hand and say I did it.  I'm glad and I'm proud.  Senator Schellpeper is not going to run out there and say I did it.  I don't know how the people in his district feel about this.  Maybe they like to pay that extra money, but I know it's an unfair system.  So I hope this vote will be to bracket the bill, and we can deal with it next year.  Thank you, Senator Will, for your time, and Madam President.


PRESIDENT ROBAK:  Thank you, Senator Chambers.  Senator Will, you wanted a call of the house?  There has been a request for a call of the house.  All those in favor vote aye; all those opposed vote nay.  Please record.


CLERK:  31 ayes, 0 nays to place the house under call.


PRESIDENT ROBAK:  The house is under call.  Will senators please return to their seats.  Will all unauthorized personnel please leave the floor.  The house is under call.  Senators, please check in.  Senator Wickersham, Senator Raikes, Senator Coordsen, Senator Don Pederson, Senator Engel, Senator Witek, Senator Bruning, Senator Wesely.  We are waiting for Senator Wesely.




The question before the body is the motion to bracket LB 271.  All those in favor vote aye; all those opposed vote nay.  Please record.  Senator Will requested a record vote.


CLERK:  (Read record vote.  See pages 2137-38 of the Legislative Journal.) 17 ayes, 24 nays, Madam President.


PRESIDENT ROBAK:  The motion to bracket fails.  I raise the call.  Items for the record, Mr. Clerk.


CLERK:  Madam President, a study resolution by Senator Wickersham, (LR 169), and Senator Raikes, (LR 170).  Both will be referred to the Executive Board.  Amendments to be printed, Senator Pederson, (LB) 873, Senator Bromm to (LB) 590.  (See pages 2138-43 of the Legislative Journal.)


Back to Senator Chambers' amendment, Madam President, AM2004.


PRESIDENT ROBAK:  The Chair recognizes Senator Chambers to open.  We are back on the Chambers amendment.  Is there any discussion?  Seeing no further discussion, Senator Chambers to close on the amendment.


SENATOR CHAMBERS:  Madam President, members of the Legislature, the reason I didn't turn my light on again to discuss this, even if I'd had an opportunity, this amendment was designed to generate some discussion, and it did, but I am going to vote for the amendment because I am opposed to these exemptions.  Senator Vrtiska, are you aware that certain governmental subdivisions or political subdivisions pay money in lieu of taxes?


PRESIDENT ROBAK:  Senator Vrtiska.


SENATOR VRTISKA:  Yes.  Yes, I am, Senator.


SENATOR CHAMBERS:  And that money that they get, they get from their ratepayers of by levying some kind of tax on people...


SENATOR VRTISKA:  That's right.


SENATOR CHAMBERS:  ...  in order to pay a tax.




SENATOR VRTISKA:  That's right.


SENATOR CHAMBERS:  So that idea is not unheard of.


SENATOR VRTISKA:  No, that's right.


SENATOR CHAMBERS:  And if this amendment that I'm adopting would require these political subdivisions to pay taxes on their vehicles as everybody else does, that money that they pay in taxes is not going to go away from them entirely, is it?


SENATOR VRTISKA:  No, you're right.


SENATOR CHAMBERS:  So rather than robbing Peter and paying Paul, Paul takes the money out of his right-hand pocket and puts it in his left-hand pocket.


SENATOR VRTISKA:  That's the way they tell me.


SENATOR CHAMBERS:  Thank you.  Members of the Legislature, I just wanted it clear that this is not going to gouge any political subdivision, but I want to find a way, if I can, to focus our attention on what it is this bill is doing.  But at the same time, I am not in favor of All of the exemptions that exist in the taxing laws.  Nobody wants to pay taxes, and those who are willing to pay taxes don't want to pay as much in taxes as they pay.  And those who are willing to pay as much as they pay, don't want to pay them as often as they do.  So everybody has some objection to taxes.  There is only one way legitimately that a government can raise money.  I said legitimately; that's through taxing.  A bill like 271 is going to change the name of what it is that the government does.  But whenever revenue is raised by a government, I don't care if you put ad valorem; I don't care if you say surcharge; I don't care if you say fee, or whatever it is, whenever the government through its power extracts money from the citizens, the government is taxing.  There is no other way around it, and under 271 people are going to be paying more in taxes for their older vehicles than they pay now.  So if that is going to be done and we're changing the system, this is the perfect juncture at which to make those pay some of the tax that everybody else has always paid.  Senator Hilgert, I know there are some groups that you are interested in




seeing not pay taxes in the way-that I would have them do under my amendment.  There are others with an interest in seeing certain groups not pay the taxes.  I fault nobody for that position, and I know this amendment probably is going to meet a terrible fate, but because I am serious in offering it, I will take a vote.  And unlike Senator Will, I am going to ask for a roll call vote, and as we proceed,, I do have one or two other amendments.  When Senator Kristensen was talking before, he said Senator Chambers has a couple of amendments, which I like.  Well, one of them, and if he'd have talked Much longer, held say, well,...




SENATOR CHAMBERS:  I like it more than I dislike it.  Then pretty soon he'd say, and if I dislike it, I don't dislike it too much.  By the time he got through, he would be more opposed to it, than somebody who'd start out saying I don't like it.  Senator Kristensen is a very cagey individual, but on this particular amendment, I think there should be support for it, and I hope that we will get enough votes to adopt it.  And I am.  going to ask for a call of the house, and I'm not going to let Senator Cudaback get excused, if that's what he wants.  I am just kidding.  I don't have that authority, Senator Cudaback.  Carry on.


PRESIDENT ROBAK:  Thank you, Senator Chambers.  There has been a request for a call of the house.  All those in favor vote aye; all those opposed vote nay.  Please record.


CLERK:  8 ayes, O nays to place the house under call.


PRESIDENT ROBAK:  The house is under call.  Will senators please return to their seats.  Will all unauthorized personnel please leave the floor.  The house if under call.  Would senators please check in.  Senator Bohlke, Senator Schellpeper, Senator Coordsen, Senator Bromm, Senator Kristensen, Senator Schrock, Senator Withem, Senator Schimek, Senator Janssen,.  Senator Landis, Senator Witek, Senator Maurstad, Senator Brown, Senator Tyson, Senator Hartnett, Senator Robinson, Senator Brashear, Senator Elmer, Senator McKenzie, Senator Wesely, Senator Beutler, Senator Preister, and Senator Lynch.  Senator Lynch,




will you check in, please.  Senator Janssen, will you check in, please.  We're waiting for Senators Brashear.  Robinson, Preister, and Brown, and Senator Landis.  We're waiting for Senator Robinson and Senator Landis.  Weirs waiting for ...  waiting for Senator Robinson.  Senator Chambers requested a roll call vote.  The question before you is the adoption of the Chambers amendment to LB 271.  Mr. Clerk, please proceed.  I hear a request for reverse order.  I don't know which senator requested it.  Senator Bruning.


CLERK:  (Roll call vote taken in reverse order.  See page 2143 of the Legislative Journal.) I aye, 40 nays, Madam President.


PRESIDENT ROBAK:  The Chambers amendment fails.  I raise the call.  Mr. Clerk, next amendment.


CLERK:  Madam President, Senator Chambers would move to amend.  (See AM2005 found on page 1980 of the Legislative Journal.)


PRESIDENT ROBAK:  The Chair recognizes Senator Chambers to open on his amendment.


SENATOR CHAMBERS:  Madam President and members of the Legislature, this is AM2005, oh, yes, I see it up on the board.  This is an amendment which would do away with that fee, not that underlying fee, which causes people to pay more on their older, cars than they currently would, but that $15 ...  whatever that fee is, and I don't know if they reduced it from 25 to 15.  But what I did, as I listened to the discussion yester ...  the last time we were on the bill, the only real wiggle room that I saw available to try to give some relief to the people with these older cars is in this fee.  It is a flat amount, even though it diminishes as the years go by, and it is an area of the bill where some relief can be given.  So my amendment would strike all references to that particular fee wherever it appears, and I was unable to figure out, in the short time I had when we were on the bill the last time, every place that it would be found, and I didn't have time to read it, so I requested the bill drafter to do it, and, as usual, they did a very good job.  Even though this is not a revenue bill, a part of the revenue package, I neglected to mention, and I don't want to forget it, the appreciation I have for the way the Appropriations Committee




staff have worked with me.  And I don't Bay that they were showing me any favoritism.  The same high quality work that they ,did in my behalf, in terms of getting these amendments in a timely manner and professionally drafted, would be available to every member.  But never have I had the occasion to call on them so many times and under such severe time constraints in certain instances, so I want to express my appreciation.  And I have another reason for wanting to express it.  Despite the fact that I talk about how long I'm going to live, I really don't know how long I'm going to live.  I really don't, Senator Hilgert.  Senator Hilgert said, forever, and that's a long ...  no, twelfth of never is a long, long time.  Forever is probably longer than that.  But I think when we have something worthwhile to say about the person, we ought to say it while the person is alive and can understand it, and not go to someplace where you have all of these long-faced people and the individual, what's left of him or her, is lying in a box, and then you lean over them and say, oh, I should have said this.  In other words, people .who talk to corpses, that's no good.  Whatever I have to say of a complimentary nature to anybody, I want to say it while they can hear it.  Now back to this amendment.  It was very well drafted.  It will take care of removing all references to that fee, and this fee that I'm talking about is the tack-on.  I am hoping that you will agree to this amendment.  Everything else in the bill will be left intact.  I am not doing anything with the registration fees, the motor vehicle tax, but whatever they call this 25-dollar fee, or $15, whatever it is, that they are going to add on to all of the rest of this.  The amendment that I'm offering is not unreasonable.  There might be some members even of the Revenue Committee who will see it as a reasonable,.  everybody uses that term, compromise.  And the only reason it doesn't actually apply here is because they have been winning everything.  The Revenue Committee has functioned in a solid phalanx save one member as the Appropriations Committee generally does.  One of their members had the wisdom to break rank on some of the amendments that we have offered.  In this instance, I hope that you will agree that this fee should be taken off every vehicle.  We still have what I consider to be an unjust, inequitable system as it pertains to the people with older cars, and it does give an unfair break to those who buy these newer cars and will trade them off on a regular basis.  Now there's my friend, Senator Tyson, sitting there just




munching away and contented because he knows, probably, that when he buys his next luxury car, he will save enough in taxes alone to purchase the kind I of car I drive brand new.  Oh, he said in the condition that I (laughing) mine.  But at any rate, he will save, others will.  If this amendment is adopted and if one is adopted that relates to a restriction on the use of dealer plates, and I don't see how anybody can disagree with that amendment as it is drafted, this bill will then be in a form that I will not have to fight against as ferociously as it may seem that I've been fighting against it.  It takes awhile, on occasion, to draw together those people and the votes we need to achieve a meaningful result.  But if we can adopt this amendment, we are doing a service for every vehicle owner whose car will require him or her to pay these taxes.  I don't really know where they came up with this fee, in the first place.  I know they say that the committee did it, so that's not what I'm talking about, but why this would have to be added.  And considering what we've been told, the interest in the committee is to keep a certain total amount of money undisturbed.  There is not any great concern with what individual owners are going to pay.  The way we tax these vehicles is different from the way we tax real property.  If somebody objected to what the assessed value of their house is, they could have a ...  file a complaint and have that particular assessment looked at.  Under this bill, with 271, the owner of an individual car cannot do that.  There should not be the pretense given that this method of taxing cars is analogous to the way real property is taxed in this state.  It is not., They are taking vehicles, regardless of what their actual value is, regardless of what method is used to determine that value, and placing an arbitrary value on a car based on its age.  And then you might say, well, that's what they're doing now.  But we're told that by doing it now, it's unconstitutional, but if you do it the way they want to do it on 271, it's not unconstitutional, and it also gives a break to those at the upper end of the scale when it comes to purchasing these cars and trading them off.  So there is going to be a shift, as a result of 271, in terms of who is going to pay more.




SENATOR CHAMBERS:  Those with the older cars will pay more.  Nobody has denied that.  Nobody can deny it because their




figures make it clear.  Those who buy these expensive cars are going to pay less.  Everybody knows that.  Nobody can deny it.  Their figures show it.  How can a bill, which is going to make ,those with older cars pay more, and allow those who have the expensive cars to pay, less, be said to be revenue neutral?  Neutral means you are right in the middle, you're not going to the left or the right., right in the middle.  But when some pay more than what they are paying, others pay less, that is not revenue neutral..  They have to manipulate words, as often is done in a political setting.  You look at how much is in the pot and Bay the same amount is going to be in when some pay more and some pay less.  We know that.  But this is not a revenue neutral bill in terms of those who actually have to pay the taxes.


PRESIDENT ROBAK:  Senator Chambers, you may continue.,


SENATOR CHAMBERS:  I hadn't even got my light on quite, but I think the Chair knew what was going to happen.  Senator Witek, you're just over there smiling.  I don't know what you're smiling about, but I like to see that.  That's a very pleasant, look on your face.  When you're smiling, you're not talking.  When you're not talking, you're not making mistakes, and I really appreciate that, and I see that Senator Brown has something to do with it.  But at any rate, we know we're going to be here a long time today.  There are some bills that are contentious and we probably will reach no accord on them.  Others will be changed as a result of the amount of time we're spending, so I don't mind taking time on LB 271, and those who support it don't mind the time being taken.  We are making one of, those approaches toward a solution, and a solution is always to be desired.  I was going to offer some additional amendments to this bill, just to take a certain amount of time, but we have enough other bad bills following this one to take more than the time we have left in this day.  So if the focus can be on amendments that, in my opinion, not only are of substance that will improve the bill, those are the amendments the time should be spent on and this is one of those.  There are people who watch our discussion and there may not be a cleat grasp of what this that I am offering would do.  There is created, under LB 271, a motor vehicle fee, which I deem to be a tax.  This amendment that I am offering would strike that fee, and every owner of a vehicle will thereby receive a tax break before the




tax is even imposed.  They will not have to bear that burden for any period of time.  The city, the state, the county, no governmental subdivision will be unjustly enriched at the expense of the taxpayers to the extent that will happen without my amendment.  So I am hoping that some progress is being made.  I would like to ask Senator Kristensen a question.


PRESIDENT ROBAK:  Senator Kristensen, will you yield?


SENATOR CHAMBERS:  Senator Kristensen, the question I want to ask is whether any progress is being made.


SENATOR KRISTENSEN:  Senator, My father has probably got the corn planted.  I think he's making progress at home, so, in general, yes, I think progress is being made.


SENATOR CHA14BERS:  Is any progress in the Legislature-being made in the area that we discussed as a possible area where there could be some progress?




SENATOR CHAMBERS:  Okay, and about how much time will we need because I am going to run out of opportunities.  to speak, and somebody will have to put a light on.


SENATOR KRISTENSEN:  Well, I'll put...  I'll put my light on, and the situ ...  what we've done, Senator, just so that the rest of the body, knows, we've talked about what are some of the things we can do to make this system More palatable to people at this point in time.  I ...  we're running some numbers right now, Senator Chambers, so it's not one of those where I can do it with drafting.  The actual wording is easy to do.  We're trying to figure out some numbers and how this may work.  It's a little ...  well, I'll talk to you when we get off the mike, but it's a little different, but it's very close to what we...




SENATOR KRISTENSEN:  ...  talked about.


SENATOR CHAMBERS:  Okay, and the main reason I asked you that




was so that I could let you know that if more time is needed, I'm going to need time, and I think that may have been taken .care of., Members of the Legislature, whenever we are going to completely change a system, we should do it with the full knowledge and awareness of what it is that we're doing.  Sometimes when we stay on the floor of the Legislature for extended periods of time, as we're doing now, there's a tendency to feel that what happens here is 'all that there is to the world, that we are talking to each other, sometimes hearing, sometimes not hearing, but there is a populace out there, some of whom are watching and listening to us, and they are interested in what it is that we have in store for them, as far as taking money from them.  And when they hear all the people talking about this bill admitting that those with older cars are going to pay more in taxes than they pay now.  That's...


PRESIDENT ROBAK:  Time.  Senator Chambers, you may continue'.


SENATOR CHAMBERS:  ...  distressing.  Thank you, Madam President.  It is distressing to be told that in these days when the Governor is talking about an income tax cut, and the business community says we want a bigger income tax cut, so that those-at the top end of the income scale can have more money.  They say, hmmm, there must be plenty of money available.  Then we hear all this talk about property tax cuts, and the state is awash in so much money that they are going to give millions, tens of millions of dollars back to political subdivisions to hold them harmless, and are, going to put an additional $100 million, $110 million in the kitty for the schools.  There must be plenty of money available.  So then we come to another bill, a new way to tax vehicles, and those who buy the very expensive cars are going to pay less in taxes, and those who buy these cars and trade them off are going to spend 'Less in taxes.  So you know that the people in the middle and the lower end are going to say, this is very good.  For once everybody is going to benefit; those, who pay property taxes, those rich people who buy these expensive cars the auto dealers who make these sales of expensive cars.  The schools are going to get a 100 million, $110 million.  Political subdivisions are going to get money.  The state has all of this cushion, and the people who make a lot of, money are going to get a big income tax break, so I am just waiting now to open the package that Santa Claus is going to




bring to me.  And, Senator Schellpeper, when they open that package that Santa Claus gives to them, you know what a clinker is, don't you.  That's when you burn coal and what is left is a .very hard rock-like substance.  They open their package and out falls a clinker, And they say, wait a minute, something has gone wrong here.  Everybody is benefiting.  Everybody is getting something back.  But then not only do I not stay even with where ,I was, I've got to pay more.  I am paying more.  I tried to be thrifty.  I have taken care of my vehicle, got all of the inspections I was supposed to, changed the oil regularly, got the tune-ups, even knew enough to have my timing belt checked and changed when necessary.  Some people don't know (laughing) that.  New tires, struts, everything, Bo now I'm tooling along, Senator Schellpeper, one arm out the window, one hand-on the wheel, listening to my favorite music, or one of those books on records, and for the youngsters, watching all the girls go by.  And then you hear somebody come in with one of those little news snatches, and they say, you, there, you driving a car six years old.  You've taken care of it, you think you were smart, don't you?  You say, by God, I know I was smart and at last I am going to get some recognition.  Well, you're going to pay more taxes, thanks to the Legislature than you have been paying.  And then, as though the person can read your mind, you're going to be asking, well, why am I going to pay More taxes?  So that the ones buying these luxury cars can pay less, and you say, well, who do I have to blame for this?  Senator Stan Schellpeper, he's for it.  Senator Doug Kristensen is for it.  All of the members, save Senator Will,...




SENATOR CHAMBERS:  ...  on the Revenue Committee are for it, and a, majority of the senators are for it.  Then you ask, is there something that can be done to mitigate this damage, and all of the people owning these old cars, middle-aged cars will think the same thought at the same time, and it will filter its way into the Legislature, and we begin to get a sensing that something about what we're doing is not really fair and just, and start to feel that there should be movement towards equity.  And that leaves us to consider what part of the bill allows us some movement, and that is that motor vehicle fee.  That's what we're looking at now.  And if things go right, Senator Tyson, we




will be able to grant some relief in that area.


PRESIDENT ROBAK:  Thank you., Senator Chambers.  Senator Schrock announces.  that the following guests are visiting the Legislature..  There are 37 junior high students here from Hildreth Public Schools in Hildreth, Nebraska, and their teachers.  (Introduces teachers.) They are seated in-the north balcony.  Will you all stand and be recognized, please.  Welcome to the Nebraska Legislature.  Senator Kristensen.


SENATOR KRISTENSEN:  Thank you, Madam President and members of the Legislature, and, obviously, we're trying to- run some numbers now, and I don't know if we'll be successful or not, but I wanted to talk about some of the other aspects of when you' do changes to the motor vehicle.  There's a number of people who, at the county level, are concerned about loss of base, loss ...  what's this going to do tome.  Things are occurring, and I am ...  Senator Chambers and I had had a discussion about levy limitations and what impact they are going to have, and it's hard, and I think, Senator Chambers, I didn't answer your one question entirely accurately, not intentionally, but because I misunderstood what you had asked.  But any time that we've got these levy limitations out there, they are going to reduce the amount of property tax people can collect for the various political subdivisions.  So there will be a reduction if you're in, for example, just because you've got a high county tax, maybe your school district is lowest.  Maybe it is below 1.10.  So one portion may come up because they are going to lose some state aid, so they may raise their property tax up to that 1.10 level, but their city may be over, so it's going to go down.  So you have various competing levy limitations, and I keep remembering that you can't just look in this...  look at this in isolation.  You've got to take all, those factors into consideration.  The fee portion is probably the portion that the Revenue Committee viewed as the funding mechanism, quite frankly, toward assisting cities and counties in dealing with levy limitations.  So for those counties and cities that have trouble with it, this was a mechanism to assist them.  So that's the reason the fee came in.  Now the issue I think Senator Chambers is raising is saying, well, that fee, maybe we should make some differential of that fee, and if you're going to buy more expensive cars, you would pay a higher fee.  Maybe you'd go




the converse, if you buy a lower valued car, maybe that fee ought to be lower.  Now his amendment takes them completely out.  But if you listen carefully to what he's saying, that's ...  that's where the mitigation is going to occur.  So maybe that's an area that we can explore.  Maybe you do a little of both.  Maybe you'd take that fee down and lower it for the lower value care and you'll raise it up on the higher value cars.  That's a possibility to do, too.  And then right now, we have it, it's the same for everybody, and it goes down at a rate.  If you lower that for some people and you break that on value of car, then you do mitigate that fee, and so that's ...  that was one of the discussion points that we were having is never before had we looked at making a difference on value of cars.  Hearing the discussion on the floor the last two rounds of debate, maybe there is some rationale for doing that and so that, Senator Chambers, we...  since we're probably the only two on the microphone, it's difficult for us to talk without it, so we talk at each other instead of to each other, but one of the things that, as a result of our discussions, were let's lower that, make the break, make the recognition that the lower valued cars shouldn't pay so much of that fee, and make the recognition that the higher end should pay more, so you raise that..  And that's what the numbers are being run right now, just to see what that will do to it because we don't want to inadvertently raise a whole lot more money or lose a whole lot more, but we've got some room...




SENATOR KRISTENSEN:  ...  to play in there.  So as soon as they come back, I'll take a look at it, and then I'll come over, and if you have colleagues who would give us an opportunity for you and Ito talk, or we could stand at ease for a moment, that might be the best use of the legislative time.  So with that, I know my time is short.  I see staff here and let me see if we've got some of those things run.  So with that, I'll yield back my time.  Senator Chambers, do you need some time to talk?  Okay, if that's...if that's the case, I'll yield my time.  Thank you, Madam President.


PRESIDENT ROBAK:  Thank you, Senator.  Senator Hartnett.  Senator Hartnett.




SENATOR HARTNETT:  Madam Chairman, I give my time to Senator Chambers.


PRESIDENT ROBAK:  Senator Chambers.


SENATOR CHAMBERS:  Thank you, Senator Hartnett.  Madam President, and members of the Legislature, what Senator Kristensen proposed is fine with, me.  That was one of the reasons I wanted to use the term "wiggle" room, because that is an area where we can do some maneuvering.  And the idea that he expressed I have no objection to, and it would kind of mollify people who see this bill, in its current form, as giving the break to those who buy the luxury cars.  They definitely will pay less.  There is no question about that, Senator Tyson.  They are guaranteed to pay less than what they pay now.  Those starting at six years, for sure, when their car is that old, are going to pay more.  They are guaranteed to pay more.  Some as much as double what they pay now.  Modifying this fee is not going to undo all of the harm, but it will, at least, show that in one area of this new system, a recognition will be made of the fact that those who are buying the luxury vehicles, as I've named them for ease of reference, are going to have to pay more than those who buy these moderate priced, or as you would say, cheap cars.  And I don't see anything unjust about that.  Nobody likes to pay taxes.  :Nobody likes to pay fees.  Some are better able to pay them than others.  We all know that when we're talking about extracting money from citizens, the term "regressive" means that people, regardless of their ability to pay, are going to pay the same flat amount.  So if the amount is $25, it is far more difficult for somebody with an income of $100 to pay it, than somebody with an income of $100,000.  It's a much greater percentage of the total income of the one making the small -amount than it is of the one making a large amount.  So although, Senator Tyson, it's possible for a person to have too much money, those same people feel they can never have enough.  It's possible to have too much but never enough, and, Senator Tyson is holding his mouth and laughing behind his hand.  If this fee is handled correctly, a nominal fee could be placed on these cheap cars, and I'm using the language that Senator Tyson feels comfortable with, a nominal fee of, say, 15 or 20 cents, maybe a dollar; those who buy the luxury vehicles could




easily, easily pay a fee of $160, and do you know why...  let me ask Senator Hartnett a question.


PRESIDENT ROBAK:  Senator Hartnett.


SENATOR CHAMBERS:  Senator Hartnett, since some of these people who buy these luxury cars are going to pay as much as ...  well, we didn't go all the way up to these really high-priced cars,.  they can pay as much as $200 less, under 271, than they're paying now.  If their car cost $40,000, and that's not a luxury car, they can pay as much as $200 less than what they are paying now, isn't that true?


SENATOR HARTNETT:  In this one, that was, Senator Chambers?


SENATOR CHAMBERS:  Yes, I'm asking...




SENATOR CHAMBERS:  I'm asking Senator Hartnett a question.


SENATOR HARTNETT:  Yeah, and that page, I think was passed out the last time this bill was debated, Senator Chambers, it was less than...  it was less than $40,000, and I don't have the bill right in front of me, you know, whether if you're above that classification now, but the value of this Lincoln car was 37,950 and they would pay, yeah, less than the particular tax right now, in Omaha, Nebraska.  But it may be that if this same car was in a lower...  in a Class I school district, maybe, where they have a low.  levy, they may pay much-less than this fee because it's based upon, you know, the tax rate, and the tax rate in Omaha is $2.58, and so forth, so...


SENATOR CHAMBERS:  Okay, and when somebody else gives me time, I will comment on what you just said to make my point about why the fee can be higher.


PRESIDENT ROBAK:  Thank you, Senator.  Senator Hilgert.


SENATOR HILGERT:  Madam President, I yield my time to Senator Chambers.




PRESIDENT ROBAK:  Senator Chambers.


SENATOR CHAMBERS:  Madam President and members of the Legislature, thank you, Senator Hilgert.  They are getting a little exercise today.  Here's the point that I'm getting to on the fee.  Under 271, those who buy these luxury cars will get a break of over $200 in some cases, and even more in others.  So if they had to pay a fee of $100, a motor vehicle fee of $100, they're still paying less with that fee than they're paying right now.  The person with the six-year-old car, if you take away the $25 fee, from that or whatever the amount it, 15, or whatever it turns out to be, they still will be paying more than they are paying now.  So even if you raise the fee on the luxury car and take it away altogether on these cars that people have had for some period of time, take it away altogether for those who buy the cheap cars, they still are going to be paying more than what these people with the luxury cars are paying if you.  add to what they pay a hundred dollar fee.  They still are getting the break.  So they're not being hurt at all, and they cannot complain.  If we're looking at equity, this is a way that maybe Senator Kristensen and his cohorts or ilks can give the counties and cities more than what they're getting now.  But I'd like to ask a question of Senator Kristensen, and it won't take long, and I don't want to take you from what you're doing.


PRESIDENT ROBAK:  Senator Kristensen.




SENATOR CHAMBERS:  Senator Kristensen, is it conceivable, since we're not fortune-tellers, that under this system some of these counties will derive more revenues from these ...  from taxing these vehicles than they do right now?


SENATOR KRISTENSEN:  Yeah, I think that is possible.


SENATOR CHAMBERS And what will they do with that money?  Will they have to give that back?




SENATOR CHAMBERS:  It's a windfall.






SENATOR CHAMBERS:  Or a "breezefall."


SENATOR KRISTENSEN:  ...  but, remember, they, if it's in a school, they are under spending limitations, so they can't spend it ail.




SENATOR KRISTENSEN:  And we've got...


SENATOR CHAMBERS:  And that would then go to these other areas where the person who owns the car does not live?  Isn't that true?


SENATOR KRISTENSEN:  Well, it goes to...  it is going to the school district in where the car was licensed at, right.  I mean that...


SENATOR CHAMBERS:  Yeah, but if they are already over their limit, what's going to become of that money?  I mean if they are getting more...


SENATOR KRISTENSEN:  If they are getting more, they can't spend it, they can get it, yeah.


SENATOR CHAMBERS:  And just hold it.


SENATOR KRISTENSEN:  Yeah, ultimately, Senator, you know what's going to happen and so do I.  It'll get spent.


SENATOR CHAMBERS:  Well, I know.  But they can conceivably bring in more than they're bringing in now.


SENATOR KRISTENSEN:  That is conceivably possible.


SENATOR CHAMBERS:  And that would keep it from being revenue neutral,...






SENATOR CHAMBERS:  ...in the actual application of it.


SENATOR KRISTENSEN:  Oh, I've never...exactly said it's revenue neutral for any one specific county or one subdivision, absolutely right.


SENATOR CHAMBERS:  So conceivably, it could not be revenue...  it may not be revenue neutral for any of the 93 counties, but in the abstract, the intent is to have it be revenue neutral overall.




SENATOR CHAMBERS:  Okay, thank you, Senator Kristensen.  Members of the Legislature, the more you look at this, and analyze it, the more you see that it's not really cut and dried it's not a pat, perfect system, and it's not going to work necessarily the way it's represented.  And I don't mean by that that we're being tricked.  It's just difficult when you're going to totally change a system to make it come out right.  So I would rather see us proceed in an incremental fashion, and let us see how some aspects of changing the system is...




SENATOR CHAMBERS:  ...  going to work, What amount of money is going to be produced, and look at the ramifications of LB 1114 taking effect, then all these other things we've been doing.  Senator Janssen, I've listened to talk about LB 806.  Believe it or not, I'm tired of listening to discussion of that bill.  LB 269 didn't take as long, but those numbers suddenly started ringing in my head like rocks in a barrel.  See what I'm saying about myself even.  What other, (LB) 401, you know, they just go on and on and on.  But the fact is that were dealing in an area where there is a bountiful harvest that can be reaped, and that's from automobile owners because they are not organized.  They have no voice and it is easy to get them, and we're trying to placate counties, cities, and other political subdivisions who say...






SENATOR CHAMBERS:  ...  that when...


PRESIDENT ROBAK:  Thank you, Senator Chambers.  Senator Bromm.


SENATOR BROMM:  Thank you, Madam President.  I guess I have some questions or points that I want to try to deal with yet while we're still dealing with the bill.  And one of the questions, I guess, Senator Chambers, if you would mind ...  if you would have a minute to ...  if you would yield to a question or two..  Senator Chambers, you were speaking about maybe adjusting the fee somewhat and I guess where that fee is going to be used to primarily support highway or roads, highways, no matter what kind of car you buy driving down the road, except the weight differences, everybody wears out the road.  And I.  see some rationale for distributing those fees in the way they are, and for having similar fees for any car, and we're talking about in most cases relatively nominal fees; not with trucks, necessarily, but ...  well, yeah, primarily we're talking about fairly nominal fees throughout.  I guess my question is this.  When I look at page 4 and the ...  of the bill, AM7153, in the way the taxes are calculated, first year, second year, third year, what strikes me as being an area that I'm puzzled about is we start off with a fraction of one, and we reduce by 10 percentage points for a little while, and then we start squeezing those increments of decline together to nine points and eight points,, and then seven percentage points and so on.  I guess I would feel a little better if people who brought these brand new cars, especially expensive cars, would have a little bit higher fraction and it didn't tail off quite so fast and then the percentages were more proportionate, as you went down through the years.  I mean that's an area, I don't know if you've thought about that, or if you have some thoughts on that, I would certainly let you respond.


SENATOR CHAMBERS:  Senator Bromm, I have talked about that to show that the benefit is for those with these newer cars because they do get that break in those .10 increments.  And then I pointed out that when you get to the sixth year, you see the difference, that instead of 8 point, I meant, instead of it being .50, it's .51, then instead of .40, it's .42, you know, where you get less and less of a break.






SENATOR CHAMBERS:  So that's what led me to say that we're looking only at those with the newer cars, and in the instances where the car is expensive, it amounts to an even greater number of actual dollars that they will gain.  Since no change is going to be made in that area, and I don't have the votes really to.  change it, I called attention to it, I determined that the fee, that motor vehicle fee is probably the only area where there could be some give.  And as Senator Kristensen picked up, we can raise that motor vehicle fee on these more expensive cars and ,lower it for the less expensive and the older they get.


SENATOR BROMM:  Now I understand that and maybe that is the only place.  It just seems to me that it's more logical to make adjustments in the other schedule than it is the fee schedule.  but...


SENATOR CHAMBERS:  If we have the Votes.


SENATOR BROMM:  any anything that makes the bill better, certainly I will support,; I will still have some concerns and problems with it I am sure.




SENATOR BROMM:  I don't understand...  I guess I haven't heard anybody talk about the effect on leased cars.  Maybe somebody has, but certainly there are a lot more leased-cars being driven these days, with the price of cars.  I'll try and ask that when there is a little bit more time because I don't understand for sure the implication there.  I think it's probably the same.  I think the tax is probably computed the same proportionately and there will be a break for the newer ...  most leased cars are new Cars, so there will be an additional incentive there, perhaps, to lease a car.  I think my time is about up.  I'll continue to listen and look for improvements in the bill.  Thank you, Madam President.


PRESIDENT ROBAK:  Thank you, Senator Bromm.  Senator Preister.




SENATOR PREISTER:  Thank you, Honorable President, and friends all.  I particularly appreciate the comments earlier of Senator Bromm and those of Senator Chambers as he has been working to make the bill a little more friendly, and, certainly in my estimation, equitable for those folks who can't afford new cars.  There area lot of elderly in my district who may have at one time had a new car, but right now on a fixed income, they can't afford a new car and they're keeping their same car, -many of them, seven, eight, nine, and ten years old.  They haven't reached that 14-year level yet, in many cases, and many of them are in very good condition.  They seldom drive them, so even though the argument has been demonstrated on the floor that whether you have an expensive vehicle, a less expensive vehicle pay a lot of tax, or less-tax, you're still using the roads.  Well, a lot of-elderly don't use the road that much.  They put very few miles on, and it's those folks, as the original bill was drafted, would be impacted the most.  Fortunately, the committee amendment has made it a little more palatable.  In my eyes, I think more needs to be done yet, and that's why I appreciate the efforts that are underway currently to adjust those brackets and to allow for a little less taxation on those vehicles that are in that medium range, both in terms of age and in terms of cost.  So as the discussions are going on to adjust and to come up with an amendment that I think will create more fairness, I am going to look at that and will certainly be supportive of anything that I think addresses the issue of fairness, particularly to those middle range vehicles.  if senator Chambers would like, I would, at this time, yield the remainder of my time to him.


PRESIDENT ROBAK:  Senator Chambers, there is two and a half minutes remaining.


SENATOR CHAMBERS:  Thank you, Madam President.  Thank you, .Senator Preister.  This bill is never going to be satisfactory to me.  If I could garner the votes to kill it, that's what I would be aiming for.  We took a test vote on the bracket motion and the votes were not there to bracket it, but, on the other hand, there were only 24 votes against it.  So I don't know if there will be enough votes to advance this bill.  I am not going to offer a kill motion.  I am not going to offer a bracket motion.  I had told Senator Kristensen that if something could




be done with the fee and then some restrictions on the use of these dealer plates, I would leave the bill along.  He showed me something which is ...  it's (laughing), Senator Hudkins, have you ever watched these people who cook on television and they have all of these brightly colored vegetables and other ingredients that never look that colorful in your kitchen?  Then they cut up this meat, if they're going to use that in these nice cubed portions, all of the knives are shining like new money, the table top is spotless, and then when they put it into whatever the cooking utensil is, and they show it from above, it, again, is like a picture.  And then somebody, you know, when they cook that food is going to have the opportunity to eat it, but the cook, the chef, if the person is that capable, will place his or her nose over the pot and take their hand and just kind of make a circular motion, as though they are pulling...




SENATOR CHAMBERS:  ...  the aroma up into their nostrils.  Well, what Senator Kristensen is offering me is an opportunity to put my nose over the stew and kind of bring a little of the aroma into my nostrils, but we are not going to get anything of substance on the fee, but there is something in the way of a mitigation with what's being offered, and I know that he cannot completely undue what the Revenue Committee has done because he doesn't want to kill the bill, as I do.  I will agree to what they're coming up with on the fee, if they will agree also to restricting the use of these dealer plates, and I don't know why anybody would be against that.  Then, as I've stated, even though all I got was a whiff of what could be and will never have a chance to taste what could be, I will leave the bill alone.


PRESIDENT ROBAK:  Thank you, Senator Chambers.  Senator Schmitt.


SENATOR SCHMITT:  Yes, Madam President, I guess I agree with Senator Chambers.  I think something does need to be, done with the restriction on dealer plates, and also on these fees, and with that, I will yield the remainder of my time to Senator Chambers, if he would like to have it.


PRESIDENT ROBAK:  Senator Chambers, there is four and a half




minutes remaining.


SENATOR CHAMBERS:  Thank you, Senator Schmitt and Madam President.  What Senator Kristensen is doing now, I think, is trying to work out a drafting of the amendment, and when you hear it, it's not going to sound like a great deal, but without that, we had nothing.  And I am not going to state what the actual amounts will be.  As he offers the amendment, when he does, he will explain the actual dollar amounts, the cost of the vehicles involved in each of the differing amounts of the fee, and tell how they will operate.  For my part, I'm just now trying to give them time to work that out.  Nobody should be too concerned about what we're doing because we're not going anywhere today, and we are not going anywhere tomorrow, but we're not exactly spinning our wheels on this bill, as we're going to be on another bill, Senator Beutler, that may come up later.  And Senator Maurstad is not here, but ...  oh, he doesn't even know what bill it is.  Maybe he's decided to pull it off the agenda, which, if he does, I think will have really facilitated the process.  Maybe Senator Beutler is more collegial and more of a team player then I thought, and as I look down in front, I can see Senator Brown with kind of a saintly smile on her face.  Maybe she has agreed to pull that bill, too, and I'll tell you what.  It will help our process.  He's going to define certificates of election as licenses, and those can be lifted, but if they do that, we're going to pronounce the certificate differently.  Listen carefully.  We will then pronounce them as "sustificates", not certificates, "sustificates", and you have to get it right, and if you can't pronounce "sustificate", Senator Brown, you forfeit yours immediately- Uh-huh, Senator Stuhr, you got it wrong, you're out of here.  But, anyway, after we get through with those two amendments, I still will have opposition to the bill, but I recognize there is only so much we can get out of this bill.  I regret that after we've spent a lot of time on a measure such as this, people just kind of get tired and, (laughing) wait a minute, that's my goal.  That's my tactic, Senator Schellpeper, to wear people down.  But, see, I can't wear them down to the point where they accept something affirmative.  I wear them down so we can mitigate the negative.  But at any rate, they feel that we've got to keep this bill now because we've spent so much time on it.  That's not necessarily so.  The time spent could




have achieved the effect of pointing out that the bill is not good.  I'd be prepared to continue battling on this bill if I thought that minds could be changed and we could get enough votes to kill it.  I don't think that's going to happen.  I think in the minds of most of the senators, this is an accomplished fact now.  LB 271 is going to become law.  If it does, it is bad law, and when the chickens come home to roost, .and people, who are...




SENATOR CHAMBERS:  ...  paying a certain amount pay double that and they are going to know.  Most people know, at least in a general way what they pay in vehicle taxes, and if maybe it was a change of a dollar or something, they may not ...  might not pay that attention, that much attention, but if you paid $55 last year and you are paying $112 now, they are going to notice that.  And when some of my rural colleagues have those chickens coming home to roost in the form of rocks thrown at them, that's a mixed metaphor, then they are going to come back here next year and want to do something about it.  This is one of those bills that we can do something about now, but I'm convinced that you don't want to.  I don't know anything different or other to say than what I have already, so I'm prepared to accept what I can get, and then say that I fought the good fight, I kept the faith, the course finished me.  I didn't finish the course.  To do that, we would have killed the bill.  That's not likely to happen.


PRESIDENT ROBAK:  Thank you, Senator Chambers.  Senator Beutler.


SENATOR BEUTLER:  Madam President, members of the Legislature, Senator Chambers, maybe the phone bills will go up at the same time as they get their motor vehicle notice and then Senator Kristensen will be doubly popular.  In any event, Senator Schellpeper, if I could, I wanted...oh, Senator Kristensen, you're here.  I will ask you my question,...


PRESIDENT ROBAK:  Senator Kristensen.


SENATOR BEUTLER:  ....at the same time that I apologize...




SENATOR KRISTENSEN:  I want to know what you said when I walked in..


SENATOR BEUTLER:  ...  at the same time...


SENATOR KRISTENSEN:  That my have a direct bearing on my answer.


SENATOR BEUTLER:  ...  at the same time t hat I apologize...


SENATOR KRISTENSEN:  He thinks I'm kidding.


SENATOR BEUTLER:  ...  for being out of the debate.  Maybe I shouldn't apologize, but I haven't had a chance to review this again since General File, and I wanted to be sure that I understood one part of this, and I am...  I was interested in the rationale for a distinction that seems to be made.  But going back to the system that exists today, we have one tax today, right?




SENATOR BEUTLER:  And that's allocated on what basis?


SENATOR KRISTENSEN:  That's based on a constitutional requirement that you have to distribute the tax in proportion to the amount of levy that exists within that taxing district.


SENATOR BEUTLER:  In that particular year?




SENATOR BEUTLER:  Okay.  And the uses to which that fund, that money can be put are not at all limited now, is that correct?


SENATOR KRISTENSEN:  Well, other than general statutory limitations.


SENATOR BEUTLER:  Right, the limitations that would apply to the particular political subdivision that receive the money would continue to apply, but, otherwise, it would be in the general fund.




SENATOR KRISTENSEN:  From the, taxing point -of view, that's correct.


SENATOR BEUTLER:  okay, now we're dividing up into two funds, and you can call them what you want, but the first one, which we're calling a tax, again it follows the present system that allocates according to levies,...




SENATOR BEUTLER:  ...  and they can use it for any purpose.




SENATOR BEUTLER:  But the second portion is allocated under the Highway Trust Fund, or Allocation Fund.


SENATOR KRISTENSEN:  The highway allocation formula.


SENATOR BEUTLER:  The highway allocation formula, but it cannot be used for any purpose.


SENATOR KRISTENSEN:  That's correct.


SENATOR BEUTLER:  It has to be used for roads, highways, and ...  roads and highways, basically.


SENATOR KRISTENSEN:  That's correct.


SENATOR BEUTLER:  So what we're moving from is a system where you have this same size pot of money and could use it for any purpose, to a system that has two pots, and one pot can be used for any purpose, but the other pot, even though together they're the same size, are limited to roads and highways, and recreational trails?




SENATOR BEUTLER:  No.  So that makes it even worse.


SENATOR KRISTENSEN:  Yeah, you're right.




SENATOR BEUTLER:  No, but it is part of the point.  I mean the point isn't ...  the point isn't about recreational trails, but the; point is why are we restricting their use of the money under the fee portion?


SENATOR KRISTENSEN:  It's...it wasn't the desire to restrict the fee use.  The desire was to find an allocation formula that would assist ...  this all goes back to the 1114.  It was intended to give assistance to those people who are under the 1114 lid or levy limitation, it was a desire to assist them in meeting those problems.  Now, you got to carry your example one step further, is that if they get those funds for the roads or the streets, that's less money from their General Fund that's going to do that.  So you just can't say that it's money taken away from them, because it frees up other money that they have for other purposes.




SENATOR BEUTLER:  Is there a reason...  I understand that, but is there a reason why we have to restrict it to roads and highways?  I mean if it's just a matter of freeing up, why not give them maximum flexibility and just let them use that fee money as well as the tax money, as they could previously, for any purpose?


SENATOR KRISTENSEN:  We chose the highway allocation formula because it tended to be the...  it was an existing formula that we had out there that tended to meet the needs and tended, as we ran and looked at some of the numbers, the cities and counties, that needed the assistance under the levy limitation, were also the ones that tended to benefit from the highway allocation formula, and that was the easiest system, plus we were...


SENATOR BEUTLER:  So you chose that rather than the state aid formula for it....


SENATOR KRISTENSEN:  Right; exactly.  We did do that, yes.


SENATOR BEUTLER:  And is there any reason legally or technically that even though you used the Highway Allocation Fund to determine the amount of the allocation that you would have to continue to restrict the use of it to particular uses?








SENATOR BEUTLER:  I mean I understand, generally speaking, the highway allo...


PRESIDENT ROBAK:  Thank you, Senator.  Senator Bromm.


SENATOR BROMM:  Senator Beutler, if you want to take a minute or so of the beginning of my time to finish your question, I'll sure would allow you to do that.


PRESIDENT ROBAK:  Senator Beutler.




PRESIDENT ROBAK:  Senator Kristensen.


SENATOR BEUTLER:  Let me restate that question.  I don't know if I got to the end of it, but, And, Senator Bromm, this is the only question I will ask on your time, but to allow Senator Kristensen to respond, even though with the fee portion on of this, we are using the Highway Allocation Fund for allocation ...  for amount of allocation purposes, is there any reason why we would necessarily have to limit the application of the money to roads and highways, and are those traditional purposes of the highway allocation monies?


SENATOR KRISTENSEN:  Well, other than we've got an existing ...  we didn't want to recreate a whole new formula with this and wanted to stay within the bounds of what we had, most of the cities and counties that came to us said...


SENATOR BEUTLER:  They don't care.


SENATOR KRISTENSEN:  ...  a lot of our ...  well, a lot of our needs are and what we've put off in times when we have budget problems is we tend to let infrastructure like roads and streets go because they are long-term sorts of things and we ...  when we're short of money.  So this seemed to satisfy the desire to help on




the infrastructure side, plus it tended to help address the shortfalls of those communities that were suffering under 1114.  So it seemed to be a convenient match, and it seemed to be a good policy, and it's one that we've not had a whole lot of problem with.  Your question is., could you do it another way?  You can, I am just telling you that's ...  that's the reason we did what we did.


SENATOR BEUTLER:  Okay, thank you.  Thank you, Senator Bromm.


PRESIDENT ROBAK;.  Senator Bromm, there's three minutes remaining.


SENATOR BROMM:  Okay, thank you, Madam President.  I guess the underlying problem, other than the fact that this gives a tax break to people that I don't think really need it as badly.  as others, is that the timing of this thing, we still don't know how 1114 is going to shake out, you know, in all parts of the state, or how the educational formula is going to shake out.  And I don't...  I guess I don't know that we need to make this change to provide the additional revenue that, obviously, it is going to generate, until we see how everything else develops here.  And it is an effort to maintain the revenue stream in terms of the quantity of revenue we have coming in at its present level, despite the lowering of the mill levies in a year or so.  And so I would rather, and I'm not going to stand in the way of the compromise that's occurring, and appreciate any change that I think improves the bill, and certainly commend the parties for being willing to do that, but I'm not...  I'm still not going to be on the bill in terms of thinking that we need to pass it.  I would rather have waited till we see how everything else works out.  I don't think we'd have a constitutional challenge in the meantime.  One other question, if Senator Kristensen is near his microphone, and maybe this has been described, but, Senator Kristensen, does this have any impact on the tax paid on leased cars?  How does this impact the leasing of cars, which is becoming much more popular, especially with new higher-priced cars?


PRESIDENT ROBAK:  Senator Kristensen.


SENATOR KRISTENSEN:  Well, the leased vehicles are still 11 going




to...I mean you still got a tax paid You still are going to have a fee paid.  But the difference between the lease cars is whatever the contractual relationship is between the lessor and the lessee..  Some of those require the lessee...




SENATOR KRISTENSEN:  ...  to actually pay the tax,, license, and would pay the fee; others, the lessor, that it doesn't affect that relationship because it is still the vehicle that pays.


SENATOR BROMM:  Okay.  Thank you, Senator Kristensen.  I think, at least, in the ones that I' have looked at, and I haven't leased a car, but they've spread that out over ...  over the ...  over the term of the lease, I believe, do they not?  Okay, Senator Janssen, if you would yield to a question.




SENATOR BROMM:  Yes.  Would you explain that, Senator Janssen.


PRESIDENT ROBAK:  Senator Janssen.


SENATOR JANSSEN:  The sales tax is spread out over the lease.  The ...  when you go in, on a leased vehicle, you go in and you pay the tax when you get your license.


SENATOR BROMM:  Generally, the buyer that pays.  The lessee.


SENATOR JANSSEN:  Right.  In my instance, me.  When I go to the court house, I pay that...




SENATOR JANSSEN:  ...  and that's ...  and that's over a two-year lease, you are paying that higher amount.  You never do get down to...


PRESIDENT ROBAK:  Thank you, Senator.  Senator Schmitt.


SENATOR SCHMITT:  Yes.  Senator Janssen, were you finished with your explanation?




PRESIDENT ROBAK:  Senator Janssen.  Senator Janssen.


SENATOR SCHMITT:  Senator Janssen, were you finished with your explanation or you need a little time?


SENATOR JANSSEN:  Well, yeah, thank you.  Thank you, Senator Schmitt.  When you pay, when you come in and you get your license, you pay the cost of the tax.  When you go to relicense .it the next year, it' s a little less, but you're still paying the higher amount.  In my instance, when I lease a vehicle, I lease for two years.  So I am always paying the higher amount.  Am I making that clear, Senator Bromm?




SENATOR JANSSEN:  But the sales tax is built into the payment of the car.  You don't pay that sales tax.  You, theoretically, you do, but it is built into the payments.  Thank you, Senator Schmitt.


PRESIDENT ROBAK:  Senator Schmitt, there are four minutes remaining.


SENATOR SCHMITT:  I would yield the rest of my time to Senator Chambers, Madam President.


PRESIDENT ROBAK:  Senator Chambers, you have four minutes.


SENATOR CHAMBERS:  Madam President, members of the Legislature, this is a difficult thing that we're trying to deal with, and I've had some of my rural colleagues talk to me about the problems they had with the bill, but they're very quiet today.  So maybe all their problems are solved, and maybe they've talked...  I don't mean all of them, Senator Bromm, but, see, you're from the big...you're from Wahoo, aren't you?  That's big city.  So I don't mean you.  You've been talking.  We urban senators have been carrying the ball, more or less.  But, in reality, what will senators do when people start asking them, if you're the senator, you know, the kind of senator where people will ask you questions about this, what answer will you give, Senator Janssen, if somebody says I kept this car, I've




maintained it, my tax that I paid was $55, now it's $112?  If one of your constituents came to you and asked you that, what kind of answer would you give?


SENATOR JANSSEN:  First I would...


SENATOR CHAMBERS:  Senator Janssen.


SENATOR JANSSEN:  Oh, Senator Chambers, I don't ...  where do 'you see in here where that would be the scenario right now?


SENATOR CHAMBERS:  Well, see, in Omaha that was ...  that was an example, that it was laid out based on Omaha, so maybe it would be, the way you all levy, it will be somewhat different.


SENATOR JANSSEN:  Well, we're...


SENATOR CHAMBERS:  But let's say it wouldn't be doubled, but it would be, instead of $50, it is $75.




SENATOR CHAMBERS:  A substantial amount higher because, remember, they are going to set this flat rate now for all of these vehicles as they've got it in this schedule, and it's going to throw some above what they pay now anyway.  What would you tell them, if they're paying more?


SENATOR JANSSEN:  Oh, I would tell them that, if I vote for this piece of legislation, that they are going to have to pay it because that's what the law is now, and if I voted for it, then they would probably be a little unhappy with me.


SENATOR CHAMBERS:  Oh, are you for it, LB 271?


SENATOR JANSSEN:  I have been supporting it.


SENATOR CHAMBERS:  And you're going to continue?


SENATOR JANSSEN:  I would...  I think so.  It all depends on what happens with the next amendment.




SENATOR CHAMBERS:  So then you don't care what your con...how your constituents feel about what you do?  You want to make your constituents unhappy.  That's what you're telling all of your constituents who are watching you, that I'm going to make you unhappy


SENATOR JANSSEN:  No, because there are some that I will make happy.


SENATOR CHAMBERS:  Well, yeah, the big...the high rollers, the ones who buy these expensive cars and get this break.  So you're telling your constituents your aim is to make those who buy the luxury cars happy and to make those...




SENATOR CHAMBERS:  ....poor peop ...  what we, you know, make.  the others unhappy, that's what you want to do?


SENATOR JANSSEN:  No, because there are a lot of familie's that lease cars right now, a lot of young people, it's the only way they can drive a pretty decent car, and it's going to make it a little better for them.


SENATOR CHAMBERS:  So they are leasing Jaguars,


SENATOR JANSSEN:  No, most of them are leasing Ford Tauruses.


SENATOR CHAMBERS:  ...  Lamborginis, and ...  huh?


SENATOR JANSSEN:  older ...  cars under $20,000.


SENATOR CHAMBERS:  Are you telling me that the majority of your constituents, who drive cars, are leasing cars?


SENATOR JANSSEN:  No, I'm not saying that.  I said a lot of them, a lot of young people lease vehicles.


SENATOR CHAMBERS:  Well, I don't know what, "a lot" means; 10 percent, or 20 percent, or more than 20 percent?


SENATOR JANSSEN:  I'd say around, I'm just guessing now,




7 1/2 percent.


SENATOR CHAMBERS:  How many people live in your area?


SENATOR JANSSEN:  In my district, 32,000.




SENATOR CHAMBERS:  So you're talking about the whole district.


PRESIDENT ROBAK:  Thank you, Senator.  Senator Wehrbein.


SENATOR WEHRBEIN:  Madam Speaker, and members, I'm going to put a motion in.  I'm struggling with this.  I want to send ...  Senator Chambers, I'm not responding to your concerns when I put in what I am going to do., I just want the body to be clear, I've been supporting LB 271.  1 do think we have -something needs to be done, but I'm uncomfortable, probably most of all, with the distribution formula, and maybe I don't understand it all in its entirety, but I do think that there's quite a few uncertainties ahead.  I can't put another bracket motion in because of the rules, but I am going to put...  I filed a motion and I assume it can be taken up soon to refer it back to committee.  I don't know whether that's the right way, but I wanted to bracket till January 198 so there's some time to study it, to have some ramifications.  Perhaps there are or there are not computer runs available for this..  Perhaps we should or shouldn't have computer runs and do the distribution once again, I am very concerned, more about the distribution formula than I am on the taxing of the vehicles, although I sense that that is a concern and I acknowledge that.  But I am uncomfortable making this decision without knowing perhaps all the ramifications that there are, and I sense there's several in the body, I am not adverse to some workout from the decisions that tome are trying to do.  It still doesn't speak to the distribution formula, as I understand it, and so I'm going to be filing that.  If that is to come up next, I will accept that.  I just want to alert the body to what I'm doing because I've struggled with this for about 15 minutes., I don't want to slow up something that probably needs to be done, although I'm not certain it needs to be done in 1997.  We are changing a lot of things in (LB) 806, (LB) 806A.  We're changing




a lot of things to (LB) 269, a lot of other things that we're doing.  This changes that on top of that, and I'm just not sure all of these, we can understand exactly how they are all going to fit in, and I think it might be well to delay this, even though I know there's been a lot of hard work put on this.  I was going to ask someone how much time was put on this the last few months.  1 won't do that, but I think that in....for the sake of moving too fast on this comprehensive a bill, we ought maybe .to sit back and look at it.  It has nothing to do with my opposition to the bill, per se.  I want that to be clear.  I do not necessarily share Senator Chambers concern on this, although I understand what he's driving at.  I think it's time we do value our vehicles differently.  I'm not quite convinced we're 100 percent fair on that, point, but, once again, it's the distribution.


PRESIDENT ROBAK:  Thank you, Senator.  Mr. Clerk.


CLERK:  Madam President, before a priority motion, some items, if I may.  Enrollment and Review reports (LB) 389 correctly engrossed.  Hearing notice from Natural Resources.  A study resolution by Senator Wehrbein, (LR) 171.  And a confirmation hearing report by Health Committee.  (See pages 2144-45 of the Legislative Journal.)


Madam President, Senator Wehrbein would move to rerefer or refer, excuse me, LB 271 back to the Revenue Committee.


PRESIDENT ROBAK:  The Chair recognizes Senator Wehrbein to open on this motion.


SENATOR WEHRBEIN:  I don't have much more to say than what I already said five minutes ago, but once again I think we ought to sit back and take a look at it.  Perhaps we all ought to better understand it, as well as the Revenue Committee because I know the Revenue Committee has put a lot of hard work into this, and it bothers me to delay what work they've done, but I simply feel I need to understand the distribution side of it once again, even as much as the valuation of the vehicle side.  And so this is one way to do it.  As I mentioned earlier, I can't do a bracket again because we've had a bracket, which failed, and by the way which I supported.  This is another way to do that,




which is send it back to committee for further study or however they may Propose it.  It is my intention and hope that it would come up again next January.


PRESIDENT ROBAK:  Thank you, Senator.  Senator Beutler, do you wish to speak to the motion to refer to committee?  Senator Bromm, do you wish to speak to the motion to refer to committee?


SENATOR BROMM:  Thank you, Madam President.  Trying to reflect on what Senator Wehrbein, has said, I ...  I can't disagree with anything that he has said.  I think there continue to be some questions and concerns about how this is going to workout, and we...we don't Want any unforeseen circumstances or pressures put to bear on political subdivisions that we didn't anticipate.  I am going to talk about it and I'm not going to say exactly how I'm going to vote on it until I see how things develop here a little bit.  But I do share the philosophy of wanting to know what we're doing to people before we do it.  And if you think that that's the problem here, Senator Wehrbein, you should have been in the pressure cooker on (LB) 806 trying to figure out what we were doing to schools.  This is mild compared to that, but it is still a legitimate concern, and I surely hope that we can have a little better idea of how this will affect political subdivisions before we finally enact it.  I am sure there will be resistance referring it to committee because that seems like no progress is being made and I know there are a number of people who want to make some progress with this bill..  So it may run into some difficulties.  If there could be maybe a representation by the Revenue Committee that we will have a better idea of exactly how this is going to play out before the vote on Final Reading, I would feel a little bit better about advancing the bill, not saying I would support the bill because of some of the philosophical problems I have with it, but I'd at least like to know what we're doing when we vote for the bill.  So from that standpoint, I do appreciate the motion:  It is an unusual motion to some extent.  It is not an unwise thing to do.  It is not killing the bill., It's certainly preventing it from passage this year, but I don't know if that's of any great consequence.  I guess I don't want to disrupt any existing,* conversation.  Senator Kristensen, could I ask a question, or.  would you rather not yield to a question?




PRESIDENT ROBAK:  Senator Kristensen.


SENATOR BROMM:  Would...could you yield to a question, or would you, I guess?


SENATOR KRISTENSEN:  No, sure.  I'm just...


SENATOR BROMM:  I'm sorry to disrupt your conversation 'there.  Senator Wehrbein's efforts here, if it delays.  it and the committee studies it till next session.  will that.  have any.  ramifications of any great consequence on 1114 and the other things that we're doing?


SENATOR KRISTENSEN:  It would delay for a year the money that would roll in to the highway allocation formula so those...


.SENATOR BROMM:  It would delay that from...


SENATOR KRISTENSEN:  ...  communities...


SENATOR BROMM:  ...  excuse Me, from ninety....that would delay that from '98 to '99.  Is that what we're saying?


SENATOR KRISTENSEN:  I believe those would be the years because you'd ...  you'd...  let's see, yes, those would be the years, right.,


SENATOR BROMM:  And let's see, the levy limits that we're talking about in 1114 become effective July...well, actually for the '98...




SENATOR BROMM:  ...  year, is that correct?.






SENATOR KRISTENSEN:  You'll have a year gap in there.  I mean, this is ...  if you're.  going to do it, this is the year to start that.  Otherwise, you have a year gap...






SENATOR KRISTENSEN:  ...  for those communities.


SENATOR BROMM:  Okay.  And at least with the school levies that ...  the property levy limitations go down further, I guess, a couple years down the line.


SENATOR KRISTENSEN:  Yes, you go down to a dollar.


SENATOR BROMM:  Yeah.  Okay.  Well, I would be interested in a little discussion on this motion.  I am glad it's put up.  I'm not...  I haven't decided how I will vote on it yet, but I think it's certainly worth discussing because I think we need to know the ramifications to people when we do things.  Our intentions are generally very goo& Some times results are not identical with what our intentions are.  Thank you, Madam President.


PRESIDENT ROBAK:  Thank you, Senator Bromm.  Senator Kristensen.


SENATOR KRISTENSEN:  Thank you, Madam President, members of the, Legislature.  It's going to come to that time in the session where people are going to begin to try to make priority decisions and they're going to try to make difficult decisions and the first response is going to be, let's put it off, and* that's a very natural., normal response when you try to make those priorities.  And it's ...  and I understand and Senator Wehrbein has good intentions, but that's the first response.  if you're going to do that to all the difficult decisions we've got to make we'll do that for almost all of your spending processes, we're going to do that for state aid to schools, we're going to do that in a number of areas.  I'm doing to resist, and I would hope you'd not refer it back to committee.  What I think that you're better off doing is what Senator Hilgert had suggested, and I think his suggestion is fine, is that you have some interim study to look at the progressivity of this, to look at what.  the impacts are and how you're going to better adjust this system.  If you don't, if you put it off a year, you're going to have that year gap in the aid and with that, I mean maybe that's okay, but if you've got those communities out there who are going to need some of this assistance it's very, very difficult to tell them that you're going to wait another year.  And we




resisted a bracket motion for two days.  I would suggest and I know that we've clot ...  Senator Chambers has worked with us, that Revenue Committee's sort of had a couple of informal meetings here and we came to some tentative agreements how to change that fee to make it a little easier to deal with it on some of the lower valued cars, I think that that's a reasonable approach to it.  I would hope that you'd not want to refer this back to committee for the purposes of, what else are we going to *look at?  We've, looked at it for six years.  We've made some tinkering with it here, but the concept is still out there.  The concept really has not changed.  The highway allocation formula is one we've been doing for a number of years.  That's been a system that's been debated several times on the floor of the Legislature.  It's been in committee a number of times.  I know I've seen it at least two or three times in Transportation to make changes.  We've always reaffirmed that distribution formula.  It's going to help those people with their infrastructure.  ...It's going to help them live with that levy limitation that they're going to put in place.  To send it back to committee is ...  the same way as effectively putting an IPP motion and reintroducing it next year and having a hearing our attitude is we've taken it this far, we've made the accommodations to a number of people and we think it's time to begin to vote on the policy.  And I would hop e that you would not, at the first sign of I don't know what this does, there are some Johnny-come-latelies, those people are...  I can't think of a nice name for them at this point so I just won't, say it, but there are people out there in the lobby who all of a sudden have woken up because they haven't had a plan the entire year.  They haven't had a plan in the last two years.  They've been the chief complainers.  They're the ones that come in here on a variety of other issues at the last minute and their solution to everything...




SENATOR KRISTENSEN:  ...is no, no, no.  And that's unfortunate and maybe that's the reflection of those...the leadership of those groups.  I don't know.  I hope not.  But I think that at this point in time it would be a mistake to move it back to committee.  I think ...  why don't you see the agreement.  In fact, Senator Chambers, can I interrupt you for just a moment?




PRESIDENT ROBAK:  Senator Chambers, will you yield?


SENATOR KRISTENSEN:  Senator Chambers, basically...




SENATOR KRISTENSEN:  ...  the agreement that I think we've reached, and I've got it drafted here, I'm kind of waiting for some signatures and things to do, would be that for vehicles of $20,000 or less that there would be a $5 fee and then the same ...  the same tax system that we'd have before.  There'd be a $5 fee that would be perpetual for those...




SENATOR KRISTENSEN:  ...$20,000 or under.  If they are from 20,000 to $40,000, we'd jump that from $5 to $20.




SENATOR KRISTENSEN:  And then if the value of the vehicle was 40,000 or better they'd pay a fee of $30.






PRESIDENT ROBAK:  Thank you, Senator Kristensen.  Senator Wehrbein.


SENATOR WEHRBEIN:  I yield my time for awhile to Senator Kristensen, if he wants to continue that.


PRESIDENT ROBAK:  Senator Kristensen, do you wish to continue?


SENATOR KRISTENSEN:  I do and, Senator Wehrbein, thank you, and I know that you want to speak and I'll not take all this time.  Those last two fees that I quoted, those would then remain in the same basic formula that we've had in the past where they go down as the years go on, but the $5 is low, it stays there and that's a fee in recognition that those lower valued cars are




going to get some break; that the higher ends are going to pay more.  Is that the sum and substance of our general discussion.?


SENATPR CHAMBERS:  Yes, and you come out the better, but that is what we agreed to.


SENATOR KRISTENSEN:  Okay.  No, I thank you, Senator Chambers.  I was just so shocked you said something nice to me that I was speechless.  But, Senator Wehrbein, I'd yield back my time.  That's, in effect, the compromise that we'd been working on.  Revenue Committee is comfortable with that and the reason that works is that when you move to that fee system it becomes easier to tinker with that system and make changes and form it to the system.  And I know the allocation formula is scary to you and that there are people out there in the back who are concerned about that allocation formula.  We're dealing with, in this fee area, probably now $10 million or less, so the impact of that over the state is not that tremendous and it's going to have very little impact I think on state aid to schools.  But I'll yield back my time and let you continue.


SENATOR WEHRBEIN:  That would have been my question, Madam Speaker and members, if ...  what the impact would on state aid be, 'cause I assume the $10 million amounts to local resources and that if this allocation, as I understand, does change the mix of a given $400 paid in total tax by a vehicle, including fees, that rural areas would in proportion, because of the mill levy, end up paying a little more because ...  and also would show more resources, would that impact on the...  ?  You're saying, tell me, that that would not impact on the state aid formula very significantly.  Is that, true?  Am I ...  did I state that accurately?


SENATOR KRISTENSEN:  Senator, that...our initial indications, once you raised that we started looking at that, we don't think that's got a huge impact statewide on that because of the lower volume.  If we were going 85 percent fee and 15 percent tax, then you got more discussion.  I mean then you're talking significant more amounts of millions of dollars.  We've got a total of $150 million, is roughly what we collect now.  If the fees are going to become in that neighborhood of 10 and including value, you know, the amount of value that's affected




by, that is not going to be ...  hardly negligible at all, least that's my understanding and ...  but we'll look into that.  I ...


SENATOR WEHRBEIN:  Could I ask, based on what the comments you told Senator Chambers about the change in fee schedule, what does that do to the total amount of dollars raised by fee?


SENATOR KRISTENSEN:  I'm running ...  we've got those numbers and that's going to take me about an hour to an hour and a half to get those run through.


SENATOR WEHRBEIN:  Will it raise or lower it do-you think?


SENATOR KRISTENSEN:  It's going to lower it.  It's going to...




SENATOR KRISTENSEN:  ...  it's going to lower the amount collected.


SENATOR WEHRBEIN:  So that will alleviate some of the dilemma that I am facing.


SENATOR KRISTENSEN:  Yes, it will lessen that, because most of the vehicles are going to be in-that $20,000 and under range.






SENATOR WEHRBEIN:  That's where the Preponderance of vehicles are in this state, is...  ?


SENATOR KRISTENSEN:  Yeah, remember, we're talking about the initial price of...




SENATOR KRISTENSEN:  ...  $20,000.  Now as time goes along, you're going to have to adjust that 'cause I.  assume that inflation takes over and the cost of a new car goes up and as that goes up you're going to have a creep into those other




May 20, 1907


brackets.  You know, and we don't have an inflation factor put in.  That's one of the modifications you'd probably look at in.  the future.


SENATOR WEHRBEIN:  Well, I thought you had a CPI.


SENATOR KRISTENSEN:  There is a CPI, although I don't know if I've got it into the fee or not.  I've got it...




SENATOR KRISTENSEN:  ...  and so that's what I've got to look at.


SENATOR WEHRBEIN:  I saw that starting December of '98 or something like that.




SENATOR WEHRBEIN:  Okay.  I'm going to leave the motion up there .a little bit.  I am not hung on this.  If I sense that the will of the body is not to do it I'm perfectly willing to withdraw it, but I want to perhaps have a broader understanding in what the body's understanding of the bill is.  I simply wanted to have it discussed.  Perhaps it gets us back on point, especially in terms of a probable compromise.  I'm willing to hear it discussed further.  Thank you.


PRESIDENT ROBAK:  Thank you, Senator Wehrbein.  Senator Beutler.


SENATOR BEUTLER:  Members of the Legislature, Senator Kristensen, could I ask a couple of additional questions?


PRESIDENT ROBAK:  Senator Kristensen, will you yield?




SENATOR KRISTENSEN:  Yes, Senator Beutler, I'm sorry.


SENATOR BEUTLER:  Senator, I probably am asking you to repeat yourself, but I suppose on an item like this it doesn't hurt once in awhile.  But I received, just yesterday, a letter from one of my local political subdivisions indicating that with




respect to LB 271, with the AM994 amendment, that they Ire anticipating that the amount of taxes that they will collect will decrease by roughly 23 percent or right in.  that neighborhood, and that when you add on the fees that would be collected under the new system it doesn't nearly make up for the amount of taxes, total, that was collected under the current system, and that when you add them together they're still losing roughly 15, percent, 15 or 16 percent.  My...  I'm trying to identify where that....  This is the county.  I'm trying to identify where that loss ...  what that loss represents.  And I assume that it represents ...  that the increase in fees does not make up for the decrease in taxes and that under the fee allocation system that money is essentially being redistributed to other local political subdivisions outside of Lancaster County.  Is that fair or hot fair?  I mean is that accurate or not accurate?  I don't...


SENATOR KRISTENSEN:  In general terms that's accurate.  There are certainly going to be...


SENATOR BEUTLER:  ...let's not even get into the question of whether it's fair or not, but....


SENATOR KRISTENSEN:  ...  there's certainly going to be portions of Lancaster County that are going to benefit because of the way the allocation formula works for them, too.  So I mean even within the county.  Let me...


SENATOR BEUTLER:  So you can't...


SENATOR KRISTENSEN:  ...  let me go back to your county numbers because, remember, we deal with what is actually budgeted, which is different.  Lancaster County operates in a different manner than a lot of other counties do, particularly the way that they budget, and that they basically, and I've got to make sure I get this correct, they basically budget low and then when they have the actual expenditures, and I'm going to have to get this straight because I just had an explanation of the letter to me, that we deal with the way they budget and what they actually budget, not what they anticipate that they may have to do.  And it's a different system.  Let me...let me get that straightened out so I can address that a little bit better, 'cause that's




what I was just talking about before I got on to the microphone, so....


SENATOR BEUTLER:  Well, let me ask you this just as a general proposition then, understanding that you need a little more information to address the specific perhaps, but...


SENATOR KRISTENSEN:  I need to be able to articulate it better than I know it, yeah.


SENATOR BEUTLER:  If under the current system all of the money collected in a county would stay within the county, divided up among various political subdivisions....






SENATOR BEUTLER:  ...  with respect to the fee under the highway allocation system that wouldn't necessarily be so.  Is that correct?




SENATOR BEUTLER:  And that being the case we have to assume some redistributions one way or another inside and outside the counties.  Did the Revenue Committee have or do you have now any spreadsheets like we commonly have in the Education Committee showing us currently what's happening and, under this system, how money would be redistributed based I guess on the Highway Allocation Fund...




SENATOR BEUTLER:  ...  formula?


SENATOR KRISTENSEN:  ...  we can show you currently where the Highway Allocation Funds go.  Our trouble is that we don't have as many numbers for cities and counties as we do for schools, and that's why I was talking to Senator Vrtiska, I think it was earlier.  The schools over the years have just had a mound of reporting things that we don't do with cities and counties,




PRESIDENT ROBAK:  Time.  Thank you, Senator.  Senator Schellp6per.


SENATOR SCHELLPEPER:  Doug, do you want time?  Do you want time?  Yes, thank you, Madam Chairman and members.  I rise to oppose the referring to the committee.  We've had it in there for.  I seems like forever, but it...  I think it's been five or six years and each year we fine tune it just a little bit.  more and we try to get something out.  Then this year with LB 1114 we finally came out I think with a bill that the committee as a whole could support.  Think Senator Will still had some concerns, but the rest of the members supported it.  But it's a...  it...  I think there's a compromise ready to be worked out now, Senator Chambers has agreed to it, and rather than to move back to committee we'd probably come back with the same compromise that's been worked out.  We just as well act on it.  We still have an hour and five minutes.  I think that's enough time that we can get this bill moved over yet this evening.  So would ask, the body to just bear with us.  There's amendment coming up that will be the compromise and I think that will really help the bill.  So I would urge the committee or this body not to refer it back to committee.  Thank you.


PRESIDENT ROBAK:  Thank you, Senator Schellpeper.  Senator ,Schellpeper also announces that there are guests visiting the Legislature.  There are 25 K through 8th grade students from Trinity Lutheran School in Hoskins, Nebraska, and teachers.  They are seated in the north balcony.  Will you stand and.  be recognized, please.  Welcome, to the Nebraska Legislature.  Senator Hilgert, your light is next,, followed by Senators Vrtiska, Withem, and Beutler.


SENATOR HILGERT:  Thank you, Madam President, members.  You know, I ...  if we send...  if we vote to send this bill back to committee, I kind of agree with some of the Revenue Committee members, I'm not sure what good that would do unless, of course, that they take into account the concerns that the opponents of 7...or of 271 have about this bill.  I've got nine amendments here that I can drop in.  We can take this to six o'clock tonight before we even get to the "compromise amendment", but I certainly don't want to do that.  I'd rather learn a little bit




more about the compromise that....  Senator Schellpeper, can you speak about the compromise, or what exactly is this compromise?


PRESIDENT ROBAK:  Senator Schellpeper.


SENATOR SCHELLPEPER:  I think Senator Kristensen and Senator Chambers worked out the compromise.  Sooner let them explain it if they...


SENATOR HILGERT:  Oh, is Senator Chambers in the...


SENATOR SCHELLPEPER:  Well, Senator Kristensen is back here.


SENATOR HI I LGERT:  Okay.  I think Senator Kristensen or...


PRESIDENT ROBAK:  Senator Kristensen, will you yield?


SENATOR HILGERT:  ...  about the compromise.  What exactly is the compromise again in and what exactly did Senator Chambers...  is he going to vote for the bill now once this amendment gets proposed...




SENATOR HILGERT:  ...  and/or adopted?


SENATOR KRISTENSEN:  ...I assume not.


SENATOR HILGERT:  Okay.  So what is it ...  what wan compromised?  I mean...


SENATOR KRISTENSEN:  Well, I think what ...  what Senator Chambers has been the one who's certainly had the concerns.  I've always been of the opinion that if you come down and you have people on .both sides and that a majority of those that are opposing you if .you're running a bill are satisfied with some changes that you make, I never bind them that they've got to vote for the bill.




SENATOR KRISTENSEN:  I just don't.  I mean...






SENATOR KRISTENSEN:  ...  if they're comfortable, they may not like it, but that the bill's in better shape than it was beforehand.  If they can live with that, I never require that somebody's got to vote for the...  I mean I don't punish them and make them do something that overall they don't want to do.


SENATOR HILGERT:  Well, you're quite a punisher so that's good to hear.  Thank you.  What ...  you know, when we went through the marathon (LB) 806 discussion and Senator McKenzie and others worked together to work out a compromise, at the end of that compromise or agreement there was enough votes to advance the bill, in fact, with a healthy majority, almost a veto-proof majority I might say.  But., you know, I ...  when members talk about an agreement being reached I don't think it should be assumed that there's an amendment that will make those who have grave concerns with increasing taxes on those people who own older cars in the state of Nebraska, at least in those districts such as mine.  You know, I'm certainly not going to support the bill and I'd frankly be surprised if Senator Chambers does.  I certainly will let him speak for himself.  But when you have a reduction overall in taxes, and I said this first off and I was corrected by one of our friends that, well, we 're not talking about taxes, we're talking about fees, but I agree with Senator Chambers that when you take...when the government takes money out of a taxpayer's pocket, you know it's a tax whether it's called a fee, a surcharge, an excise or whatever nomenclature you want to use.  And to keep a bill revenue neutral, meaning that the government is going to get the same amount of money that it had received earlier, and you're lowering the amount of taxes paid by people who own new cars, someone has to take up the slack and that's my basic problem with the bill.




SENATOR CROSBY:  One minute.


SENATOR HILGERT:  I certainly don't have a problem with the fact that the state of Nebraska is trying to get some direction a as far as our values or valuation system on cars.  I think our' property tax administrator needs some direction regarding that.




I don't have a problem with different schedules and so forth regarding this.  My basic problem is the people that I represent and many others across the state who own older cars are going to have to pay more money to the government, and that's a very simple objection.  And I'm certainly not going to support LB 271 but certainly not in this form, so I think Senator Wehrbein was wise to put this motion up.  I don't know if he's going to pull it or not, but I might support it because I think that we can devise a system that will not increase taxes on those people who can't afford to buy a new car.  Thank you.


SENATOR CROSBY:.  Thank you, Senator Hilgert.  Senator Wehrbein, you wish to give a ...  do something here?


SENATOR WEHRBEIN:  Yes, Madam ...  Madam...


SENATOR CROSBY:  I'll recognize you to...


SENATOR WEHRBEIN:  ...  President, I'd like to withdraw the amendment.


SENATOR CROSBY:  Okay.  Thank you.  No objections?  The amendment is withdrawn, the motion is withdrawn.


CLERK:  Back to Senator Chambers' amendment, Madam President, AM1980 (sic).  I'm sorry, AM2005 on page 1980.


SENATOR CROSBY:  We're on, the Chambers amendment.  senator Vrtiska, did you wish to speak on the Chambers amendment?  Senator Withem, did you like ...  would you like to?


SPEAKER WITHEM:  Yes., I would and, candidly, I don't know what the Chambers amendment is,:  but I do have a question about this whole approach and I know Senator Kristensen's involved in some .discussions here, but I would have a question for Senator Kristensen if he could respond.


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


SPEAKER WITHEM:  I've had a concern about this bill and a different way of looking at the whole thing perhaps than others




and I just want to ...  and I don't know as any amendment is going to fix up that concern as I sit here thinking and maybe can articulate it, maybe I can't.  Senator Kristensen, do you know roughly, how many dollars are currently collected in automobile taxes that would be impacted by this bill in the state?


SENATOR KRISTENSEN:  Roughly $151 million.


SPEAKER WITHEM:  Hundred and fifty-one million dollars.  And if the current bill passes or if the ...  whatever this compromise amendment coming up, how much roughly would be collected in automobile taxes?


SENATOR KRISTENSEN:  Well, now we're going to have a little trouble because the amendment that's just going to take place here changes the fee a little and reduces it.  I've told the body I think it's within 6 percent more or less.  That's our definition.


SPEAKER WITHEM:  More or less?  I mean it could be 6 percent more?


SENATOR KRISTENSEN:  Of collections....




SENATOR KRISTENSEN:  ...  but tax and tax in total.


SPEAKER WITHEM:  Okay, if we don't pass a bill and automobiles stay on the property tax rolls and they take advan ...  and how much of ...  how much of a cut are taxpayers in the aggregate going to be expecting to take when LB 1114 finally goes into effect?


SENATOR KRISTENSEN:  Well, that's a little-that's difficult to determine because it depends on where the vehicles are at.  See, we don't have...


SPEAKER WITHEM:  No, I'm not talking about vehicles.  What will...  I'm a homeowner in Papillion, Nebraska.






SPEAKER WITHEM:  My...  I'm expected, if I'm an average Nebraska homeowner, what are my property taxes likely to go down?


SENATOR KRISTENSEN:  Well, it ...  not to be argumentative, it depends on what your levy is currently.


SPEAKER WITHEM:  I understand that.  I'm asking for an average.  Okay, 15 percent reduction is what George said off the mike, and' that's enough, I think.  This is my concern with the bill, and I thought maybe would have been articulated but it hadn't, that when I go to town hall meetings the things I hear from are people that are angry about how much they have to pay in automobile taxes in Nebraska.  If we don't do anything at the very least the people that own automobiles are going to experience this average 15 percent reduction because property tax rates are going to go down.  If we pass this bill we're locking in the same general level.  We're going to collect the 151 million.  The whole debate appears to be over how do you shift that existing $151 million.  I understand the arguments about the shift.  What I don't want to do is pass a bill that locks in the existing collections of $151 million, give or take 16 percent, it could conceivably go up 6 percent or down 6 percent, when we do nothing there will at least be this 15 percent reduction.  So my concern with this is not how we restructure the $151 million and how we give it from one person to another person to pay.  I would like to see a lowering and, at the very least, automobile owners who feel like they've been ripped off because they've been on this property tax system forever, they ought to get at least the same reduction.  So any sort of compromise that I see come up I think is going to have to have this 15 percent reduction...


SENATOR CROSBY:  One minute.


SPEAKER WITHEM:  ...  built into it, and that's the concern.  I don't know if that's been part of the discussion or not.  I will listen to a description of the compromise to see what the reaction is.


SENATOR CROSBY:  Thank you, Senator Withem.  Senator Beutler on the Chambers amendment.  He waives off., Senator Wehrbein.  Senator Kristensen.




SENATOR KRISTENSEN:  Madam President, members of the Legislature, Senator Chambers, I think that we've got the amendment sitting up there now.  Mr. Clerk, is that amendment ...  the handwritten one?


ASSISTANT CLERK:  Are you referring to the two-page handwritten amendment?






SENATOR KRISTENSEN:  That's there, Senator Chambers, if you want to do a substitution at this point, or I don't know how we want to move so we can get to that amendment and then take up your second amendment, which would be the second phase of this, and then we can also address Senator Withem's concerns.  But procedurally, I'd yield my time to Senator Chambers to make some decision on how he...


SENATOR CROSBY:  Senator Chamber s, you have about...


SENATOR KRISTENSEN:  ...  wants to handle it procedurally.


SENATOR CROSBY:  ...  four minutes.


SENATOR CHAMBERS:  Madam President and members of the Legislature, before I do anything with the amendment pending, I want to say something here.  Senator Withem, I wish others had been talking on this bill the last time we were on it and today..  I've been trying...  I wanted to kill the bill.  We couldn't bracket it.  The votes are not here to kill it.  Nobody was talking on the bill to speak of.  Nobody was offering amendments.  I did what I could do 'cause I really wanted to do something about the bill.  What you're talking about is what I was trying to get to, that under 1114 all these other people are going to experience some benefit from that.  When it comes to the auto owners they're not.  So this, and I pointed out that what we're calling a compromise is like the person who gets to sniff what the cook is cooking but does not get to taste any of the meat or the ...  whatever's in the pot.  Now we're at a point




where others are discussing it but having told.  Senator .Kristensen that I would agree to this and he told me he would agree to it, I'm bound by that I am.  If I had thought that there was any wriggle room, I kept using that term, I mentioned .the only place I see it is in the fee.  Nobody offered anything else.  I still would like to see the bill killed, but I don't have any additional amendments to offer.  I stopped trying to fashion amendments.  I couldn't get votes.  It wouldn't have been anything to just carry the bill till six o'clock.  But seeing that there apparently was not going to be any activity on this bill to speak of by other senators, I decided that I was going to try to get out of the bill what I could; that was to reduce that vehicle fee to the extent that I could and get an amendment that would restrict the utilization of dealer plates.  Beyond that, I would have just talked us till six o'clock, the bill would still be in its present form, it would come up again unchanged and people would probably be telling me, I wish we could stop it.  Then, when time comes for the battle, here I am.  So what I'm going to do, Madam President, is withdraw the amendment that is pending now.


SENATOR CROSBY:  No objections?  The amendment is withdrawn.  Mr. Clerk.


ASSISTANT CLERK:  Madam President, the next amendment I have is offered by Senators Kristensen and Coordsen.  Senator, I have before me AM2292 with a note that you want to withdraw this amendment and substitute 2313?


SENATOR KRISTENSEN:  Mr. Clerk, I just want to make sure, is .that the amendment that was the handwritten amendment?


ASSISTANT CLERK:  No, it is not.  It's the one that was filed earlier this afternoon.




ASSISTANT CLERK:  Do you want the handwritten amendment, Senator?


SENATOR KRISTENSEN:  No, I think that...  I'm looking at Senator Chambers right now.  I may withdraw that.  Why don't I withdraw




that and get to Senator Chambers' next amendment.  I'll withdraw both.


SENATOR CROSBY:  No objections?  They are withdrawn,


ASSISTANT CLERK:  Senator Kristensen, the next amendment with a.  note to withdraw is AM2305.




SENATOR CROSBY-.  No objections?  It is withdrawn.


ASSISTANT CLERK:.  The next amendment, Madam President, is offered by Senator Chambers.  Senator, this is AM23,06 found in .the Journal on page 2110.  (See pages 2110-16 of the Legislative Journal.)


SENATOR CROSBY:  Senator Chambers.


SENATOR CHAMBERS:  Thank you, Mr. Clerk, and, Madam President, that page number, Mr. Clerk, I's 2110?


ASSISTANT CLERK:  (Page) 2110.


SENATOR CHAMBERS:  Thank you.  What this amendment would do is to restrict the use of these dealer plates.  I have been of a mind that these plates are used to circumvent licensing vehicles which are going to be used for every purpose imaginable, not just in connection with the business of this dealer or for a limited restricted use that most of us would believe that these plates should allow.  But I've seen, because of the number on the plate, vehicles with these plates on the other side of the state being driven by one youngster and it's full of other youngsters.  So dealers, use these plates as a way to avoid paying what they ought to license these cars.  So what this amendment would do is to restrict the use of those plates and, although the amendment begins on page 2110 of the journal, the substance of it is found on page 2111.  The person using these plates would have to be a full-time or part-time employee or agent of the dealer if the plates are to be used.  And in order to qualify, this person would have to be verified to be on the payroll, and you do this by payroll records maintained by the


May 20, 1097


dealership as one who ordinarily works more than 30 hours per week or 1,500 per year at the dealership.  This is to prevent arbitrarily saying that this individual is an employee when all you want to do is put them in the car and let them drive it wherever they want to with these plates.  It would have to be a, bona fide employee.  And if you look on page 2112 you'll see this new language:  "This section shall not be construed to allow a dealer to operate a motor vehicle or trailer with, dealer number plates for the delivery of, parts inventory.  A dealer may use such motor vehicle or trailer to pick up parts to be used for the motor vehicle or trailer inventory of the dealer." Then you will see a goodly amount of new language on page 2113.  Since we got to this amendment a little quicker than I thought we would I'm not going to read all that language, but if you want to you can see the restrictions that are being placed on the use of these plates.  The restrictions are not unreasonable, but they will cut down on the types of things that I see and deem to be abuses and which others have seen and consider them the same way.  Senator Kristensen has reviewed this amendment.  As a matter of fact, giving credit where it is due, I had asked him had he drafted any legislation along this line, because my original approach in amending this bill was to just do away with dealer, plates altogether.  Any time one of their vehicles was being driven off the lot by the dealer or an employee it would have to be licensed as any other vehicle.  If they had one that was going to be used for test drives and those types of things you could put the plates on, but there would have been a much narrower utilization.  Because I did not have the time to determine what all of the ramifications of.- a bill or an amendment of that kind would be, I asked Senator Kristensen could I use something that he had drafted before, because although it does not go as far as I wanted to go, it was based on having considered the issue, determined the impact of the amendment, it is appropriately drafted and will be a coherent policy determination that we're making.  So if you have questions of a technical nature about the amendment, ask Senator Kristensen.  And I'm going to have the opportunity to read through it again so that if you have questions of me I can answer them.  But to be frank, I didn't expect us to get to this point this soon.


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




did you wish to speak on the Chambers amendment?  Senator Beutler.




SENATOR CROSBY:  Senator Schmitt, did you wish to speak on the Chambers amendment?  Senator Beutler, did I cut you off?  Oh, you looked kind of quizzical.  Senator Schmitt.


SENATOR SCHMITT:  Yes, Madam President, members.  I guess I rise in support of Senator Chambers' amendment.  I'm not sure he's got it restrictive enough and the reason I say that is because if you go across the state, you go to recreation areas, there's recreational vehicles at these parks with dealer plates on them.  You can go out into my district., you can see them being used for farm operations.  To me, there is a terrible amount of abuse by dealers with the, use of these dealer plates, and I don't know whether it would be a good idea or a good suggestion but a thought has always been maybe we ought to limit their distance from the home dealership of 10 or maybe 25 miles.  But I think Senator Chambers is right in putting restrictions on these but I'm just not sure that maybe he's restrictive enough.  But with that, I will yield-my time to Senator-Chambers, if he would like to talk on this issue some more.  Thank you.


SENATOR CROSBY:  Senator.  Chambers.  All right, thank you.  Before continuing, Senator Janssen announce that at five-thirty this afternoon in the Rotunda a strings group, who are 56 fifth and sixth graders from Fremont, will be playing.  They call themselves the Rosin Dusters, so if any of you want to be entertained a little they will start playing at five-thirty.  On the Chambers amendment, Senator Withem.


SPEAKER WITHEM:  Yeah, I have a number of questions about this.  First of all, Senator Chambers, if I could ask you to respond to...


SENATOR CROSBY:  Senator Chambers,...


SPEAKER WITHEM:  ....a question or two.


SENATOR CROSBY:  ...  will you yield for a question?






SPEAKER WITHEM:  This is a restriction on the use of dealer 'plates.  It's a new issue that hasn't been on this bill before and I know this time of year we do that.  Has this been A bill that has been brought to the committee, had a public hearing and is just one that we're adding on, or is this entirely a new piece of subject matter?


 SENATOR CHAMBERS:  I would have to direct that question to Senator Kristensen, because it's not a bill that I had offered.  I was drafting an amendment and.


SPEAKER WITHEM:  Senator Kristensen, is this a bill.


SENATOR CROSBY:  Senator Kristensen.


SPEAKER WITHEM:  ...  that had been introduced before?


SENATOR CROSBY:  ...  will you yield?


SENATOR KRISTENSEN:  Yes.  Senator Withem, this is the exact language of LB 714 that was introduced in 1995, heard by the committee -as a restriction.  There was some discussion at that point in time over what to do with dealer plates.  That was a bill that I introduced.  I gave it, when Senator Chambers talked to me, I gave him the...


SPEAKER WITHEM:  Okay.  What was the...


SENATOR KRISTENSEN:  ...  (inaudible) of the bill.


SPEAKER WITHEM:  Obviously, LB 714 didn't pass.




SPEAKER WITHEM:  Was it advanced from the committee?


SENATOR KRISTENSEN:  Now you're going to test the limits of my remembrance from two years ago.




SPEAKER WITHEM:  No, I ...no, I ...  what I'm doing is taking an idea which is a new restriction that is being brought to a bill as it sits on Select File on the almost ninetieth day of the session and this is the time of year where we pass these ideas that come to us as last minute compromises and find out in the middle of September that they're causing great problems back home, and I just want to know if this ...  what the fate of 714 was when it was introduced.


SENATOR KRISTENSEN:  We did not advance it out of committee in 1995.  1, if I remember correctly., there were ...  the only concern that I remember from the hearing was the used car dealers had...




SENATOR KRISTENSEN:  ...a concern about the $250.  That's my memory of the only concern and then given what we're doing here with this bill ...  I mean, if you want me to I can go into how that dovetails into it, but that's my best recollection.


SPEAKER WITHEM:  Okay.  No, I have no problem tying issues together, that we all tend to do that.  The other question I'd have, can you just very succinctly tell me, as I understand right now basically a dealer could get a dealer plate on the car and then they...  it's one of the little perks that people that work for car dealerships get, is they get to drive the car and in essence don't have to pay for a personal license plate for it and...




SPEAKER WITHEM:  ...  there are little or no restrictions.  What will they be restricted to if this amendment passes?


SENATOR KRISTENSEN:  Do you want me to do what the current law is and what the change would be?


SPEAKER WITHEM:  Whatever it takes.








SENATOR KRISTENSEN:  ...  and, if not, I got my light on and I'll give it back to you if you need more time.  Current ...  on current law, if you are a dealer you're allowed a set of dealer plates or "D" plates that cost you $30.  Okay?  You're allowed an additional set for every 30 vehicles sold at retail for a fee of $15 each.  So the larger the dealership, the more "D" plates that you're allowed to do that.  What this amendment does is it says that if you're in the ordinary course of business and you're doing this, you're an employee, and then we have some definition of what employees and how you verify that, that you're allowed to continue on and do those things.  If you are going to use it for personal use, in other words children, your spouse who are not employees, then you can, for a fee, for $250, you can purchase that and then it depends on what...then you've got to go to what kind of vehicle you're getting as to whether that's roughly the fee that you'd normally pay...


SENATOR CROSBY:  One minute.


SENATOR KRISTENSEN:  ...and that still gives them the flexibility of having that additional "D" plate but it tries to strike the balance of personal use...




SENATOR KRISTENSEN:  ...  without paying for it.


SPEAKER WITHEM:  Okay, that's the current law.


SENATOR KRISTENSEN:  The current law, except that the $250 if the restriction of Senator Chambers'.  The end is what the *new change would be.


SPEAKER WITHEM:  Okay, current law there are basically no restrictions on how they use it.


SENATOR KRISTENSEN:  Well, you're supposed to use it for business, course of business, but as a practical matter that's rather unenforceable.


SPEAKER WITHEM:  How does this make it more enforceable then?






SPEAKER WITHEM:  Or is it just get more money from them?  Is that the only impact that we're having?


SENATOR KRISTENSEN:  It does that, but it's also ...  there's a system of being able to verify that through the payroll records, and that's part of this, so you can tell who's employees and who's not.  Before, you'd come up and they'd say, well, my kid works, he's out there washing cars.  You know, he'd wash cars on .a weekend or so and then justify that.  This is...there's specific provision in here to verify that through payroll records and that's, the enforcement mechanism.




SPEAKER WITHEM:  Okay, thank you.


SENATOR CROSBY:  Senator Kristensen, your light is next.


SENATOR KRISTENSEN:  Senator Withem, did you want more out of that?  You certainly may.  Okay.  And part of what I was going to do with my time was to explain the dealer plate.  The reason this ties in is that Senator Chambers has raised issues that this bill somehow dealt with car dealers and that they ...  his terms, not mine, that they were gaining a benefit..  What this does is I think close a traditional abuse that has been out there that many members of the public perceive are with "D" plates, and so this is part of the balance to address that problem.  It's a bill I'd introduced.  It's one that, quite frankly, I had always had out there, was going to use, because there is ...  there's a good use for "D" plates.  Without "D" plates car dealerships can't operate because that's how you let people go for a test drive.  So I know there are people out there who want to ban "D" plates entirely.  I put this bill out there just in case there are people who want to ban them this was always going to be the compromise or this was the fail-safe, because you've got to protect the system of "D" plates and, thus, that's the reason for the bill.  Senator Chambers happened to be the one that came up and had that idea.  I gave this to him.  I certainly think it's a good proposal.  It certainly




curbs some of those abuses.  If they want to continue to use the "D" plate for personal usage, they're going to pay for it and that way you avoid the problem of saying that they're out there abusing the system..  So I'd be happy to answer any other questions about how the system works and would urge the adoption of the amendment.


SENATOR CROSBY:  Thank you, Senator Kristensen.  On the Chambers amendment, Senator Bromm.


SENATOR BROMM:  Thank you, Madam President.  Senator Kristensen, I'd like to continue the discussion on this amendment if I could.  Would you yield to A question?




SENATOR CROSBY:  Senator Kristensen.




SENATOR BROMM:  As I read the language, and I think I've gotten through it briefly, what is the ...  why would any dealer buy a personal use dealer plate after we pass this amendment?


SENATOR KRISTENSEN:  I think the policy behind that would be, particularly if you've got a community where you want to drive a car and show it off so you let a family member drive it.  If it's...  let's say it's a nice car, you let your spouse drive that around town, people see that and they always say, gee, that's a nice car.  As opposed to sitting out on the cat let, more people will see it being driven around town.  She or he, depending on who the owner is, the spouse isn't an employee, but that's one way to show the car off.  It's a marketing technique.


SENATOR BROMM:  Okay, now if an employee drives the car it's not personal use and it's ...  you pay the lesser fee, is that correct, if it's for an employee?


SENATOR KRISTENSEN:  Well, that's ...  yes, that's right, if they're an employee or an agent and part of this is the balance between enforcement as well.  You know, how do you tell when they're actually out there doing the work and it's been a




longstanding problem..  If they're an employee you know part of their job is that they're going to get a vehicle to drive.  I mean that's one of the forms of additional compensation if you're working there and so on,


SENATOR BROMM:  What's the penalty if a family member is picked up driving a car with a plate which has the lesser fee paid ,rather than the $250 fee.


SENATOR KRISTENSEN:  Yeah, you lose those plates.  Mean they're ,forfeited.


SENATOR BROMM:  Okay.  Okay.  I assume that enforcement, as always, will be a challenge here.


SENATOR KRISTENSEN:  Senator, I'm not going to make any ...  you know, and the same way with Senator Withem, the dealer plate patrol, I don't think we've got enough money to fund that, but I'll tell you what happens is all of us know that there is a form of abuse out there.  By this system you try to rein it in and I think it's, you know, I think it's a step forward in curbing the abuse.  It's not the magic wand and I don't want to hold that out to you that it will solve all the problems, but it does take a good step in that direction.


SENATOR BROMM:  Thank you, Senator Kristensen.


SENATOR CROSBY:  Thank you, Senator Bromm.  Senator Janssen, on the Chambers amendment.


SENATOR JANSSEN:  Thank you, Madam President and members of the Legislature.  You know, I sit here and wonder if we don't pass legislation for a few people, the abusers of license dealer plates I don't think is as great as we're hearing here this evening.  You have...  I don't care if you make that, the license, fee $250, $50, $10, whatever it is.  I think you're going to have abuse by certain dealers.  Most of the dealers in this state don't abuse them.  They don't abuse them.  I ...  why do, we always have to sit back and put legislation out for a few abusers?  I' just...  I don't understand that.  I don't know why we'd do that.  Senator Kristensen, would you ask a couple answer a couple questions for me please?






SENATOR JANSSEN:  Now I am assuming that this is going to cost, $250 per license plate.  Is that right?




SENATOR CROSBY:  Senator Kristensen.




SENATOR JANSSEN:  So if you sell...if you sell...  it would still be based ...  the licenses you can have, the dealer plates you can have will still be based on the amount of cars you sell, is that right?


SENATOR KRISTENSEN:  Right, in terms of the employees and those things, yes.


SENATOR JANSSEN:  All right.  Say what would a dealer that sells, let's say, 3,000 cars a year, what ...  how many plates could he have?  Well, (inaudible) ...


SENATOR KRISTENSEN:  Oh, now you're going to make me do math.


SENATOR JANSSEN:  ...  no, I ...  I don't want to ...  that ...  that...  irrelevant.  But if ...  all right, say he could have 30 plates.  Is that going to cost him $250 a plate?










SENATOR KRISTENSEN:  Those are going to be $15 each after his initial set of 30.  If they're for himself or for employees, we're still going to keep in place that $15 each.  Two hundred and fifty is only if the dealer wants it for personal use,




somebody who's not an employee of the business.  That's the difference.


SENATOR JANSSEN:  So if...all right, what if the owner wants to use it for his personal use?


SENATOR KRISTENSEN:  Basically, he can do that.


SENATOR JANSSEN:  He can do it with the other plate?  He doesn't have to buy the $250 plate.


SENATOR KRISTENSEN:  That's correct.


SENATOR JANSSEN:  But if he wants other members, say he's got two or three kids and his wife and he wants them all to have one, then that is going to cost him.


SENATOR KRISTENSEN:  That's when they're going to have to pay ay the $250.


SENATOR JANSSEN:  That's when they're going to have to pay the 250 bucks.




SENATOR JANSSEN:  But the other ones are ...  will still be, the ones he puts...slaps on the car and lets the guy go home with it and test it for a day and decide whether he wants the car., that's still only going to cost him $30 then.


SENATOR KRISTENSEN:  Fifteen dollars.






SENATOR JANSSEN:  That clears a few things up for me.  Thank you, Senator Kristensen.


SENATOR KRISTENSEN:  You're very welcome.


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




SENATOR CHAMBERS:  Madam President, I think that Senator Kristensen has explained the bill, he has answered the questions.  And I would make it clear that Senator Kristensen did not ask me to bring this.  amendment I wanted to do something about dealer plates.  We were talking about how much others are going to have to pay and, in some cases, more than they currently do in order to drive a vehicle and the thing that jumped in my mind immediately was the way we give the dealers these breaks.  As for there not being widespread abuse, I don't think Senator Janssen heard the examples given by Senator Schmitt and I'm sure all of us can give them.  These vehicles with dealer plates are found all over the state in situations where it seems pretty evident, giving them the benefit of the doubt and not saying it's obvious and ironclad, but it's pretty evident that they're not using those plates in accord with what the law envisioned.  So instead of just drafting an amendment that would do away with the use of these plates altogether except within a very short distance of the dealership and when the car is being driven on a test run, I went to Senator Kristensen to see if he had drafted anything into which more thought had been placed.  I feel like Senator Schmitt, that this amendment is not nearly restrictive enough, but it's a step toward what ought to be done, and again I'm trying to salvage what I can from the bill and I still wish that it would be killed, but in case it is not I would ask that this amendment be adopted.


SENATOR CROSBY:  Thank you, Senator Chambers.  Any further discussion on the Chambers amendment?  Senator Chambers, there are no further lights.  Would you like...  I'd recognize you to close.  You use that as your closing.  Thank you.  The question is the adoption of the Chambers amendment to LB 271.  All in favor vote aye, opposed no we're voting on the Chambers amendment.  Have you all voted?




SENATOR CROSBY:  Senator Chambers.


SENATOR CHAMBERS:  ...  Madam President, I need a call of the house and I will accept call-in votes.




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


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


SENATOR CROSBY:  The house is under call.  Would all senators please record your presence.  Would those senators who are not unexcused...who are not excused please return to the Chamber and record your presence.  We're voting on the Chambers amendment and Senator Chambers has authorized call-in votes.


CLERK:  Senator Bromm voting yes.  Senator Suttle voting yes.  Senator Hilgert voting yes.  Senator Chris Peterson voting yes.  Senator Janssen voting no.


SENATOR CROSBY:  Senator Beutler, Senator Bohlke, Senator Bromm, please check in.  We're under call.  Senator Robinson, Senator Tyson, Senator Hillman, Senator Wesely, Senator Wickersham, Senator Witek, please.  Senator Matzke.  We are voting on the Chambers amendment and Senator Chambers will accept call-in votes.


CLERK:  Senator Maurstad voting yes.  Senator Landis voting yes.  Senator Withem voting no.  Senator Witek voting yes.  Senator Coordsen voting yes.  Senator Crosby voting no.


SENATOR CROSBY:  Please record.


CLERK:  25 ayes, 3 nays on the amendment.


SENATOR CROSBY:  The amendment is adopt ...  record vote has been requested.


CLERK:  (Record vote read.  See page 2146 of the Legislative Journal.) 26 ayes, 3 nays.


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




CLERK:- Senator Kristensen, I now have AM2313, Senator.  (See pages 2,147-51 of the Legislative Journal.)


SENATOR CROSBY:  Senator Kristensen.


SENATOR KRISTENSEN:  Okay.  Thank you, Madam President, members of the Legislature.  I've got to apologize, I think, that the body's been more than patient.  This has been a tough issue to walk our way through and we're to the point now, and just so you know, I think that thereto not that many amendments left.  And I've not looked at the list here.  There are a few amendments.  A couple of these are pretty much clean-up sorts of things and I want to run through them quickly and if we want to discuss policy we certainly may.  Senator Vrtiska, you had had a question earlier.  This is the amendment I made reference to a few hours ago about how are they going to budget for this first year, and so what we're telling them through this amendment is that we're placing a floor under the amount of motor vehicles taxes which they can estimate while they're doing their budget preparations for the '97-'98 year only.  Because they're going to receive ...  part of this is going to be under the current system, part's going to be under 271 because of the fiscal years being different than what we do.  So what we're saying Is for them as a guide to place clarity that we're going to tell them to do it at 85 percent of what they're getting today as a guide.  Now they can go higher if they want to, but if they want some place to be in the ball park we're statutorily telling them that their ...  a good cushion would be SS percent and that's what we're giving them state direction to do for the Purposes of budgeting.  We add the emergency clause to do that.  We also transfer the responsibility of administrating this from the property tax administrator to DMV, because we're now not going to be as much concerned about doing property tax things as we are this is going to be a tax on motor vehicles, thus, it should go to the Motor -Vehicle Department.  And it's going to become more of a mechanical system after we get through the first year, year and a half.  We also clarify the tax situs, in other words the subdivisions that are located where the address of the vehicle, where it sleeps at night, is the subdivisions.  They're going to receive the proceeds.  That's a clarification.  That's what we've talked about.  The amendment also does a cleanup on some things that we had inadvertently struck and we clarify salvage




title to do that We also make some wording changes in here.  regarding "tax exempt" and make the reference to merely "exempt" and that ...  that's part of Senator Hilgert's amendment.  I was looking to see whose amendment that was.  Those are primarily the changes.  I have an amendment to this amendment.  They way I had originally worded it, it was 90 percent.  After discussions with people, we felt 85 percent was probably a safer number to put in there so you'll see an amendment to this amendment.  All that does is change it from 90 to 85 percent.  That would be my opening, Madam President, and would like to take up the amendment to the amendment to clarify that.


SENATOR CROSBY:  Thank you, Senator.  Mr. Clerk, you have an amendment to the amendment.


CLERK:  Senators Kristensen, Schellpeper per, and Hartnett would move to amend the amendment.  (See EA356 on page 2151 of the Legislative Journal.)


SENATOR CROSBY:  Senator Kristensen.


SENATOR KRISTENSEN:  Thank you, Madam President, members of the Legislature.  This merely is the change from 90 percent to 85.  percent which gives a little more cushion for counties to have when-they begin to budget, and I think it's a safer haven for them and I'd urge the adoption of this amendment.  If we do, it 'will then conform the original amendment to my opening.


SENATOR CROSBY:  Thank you, Senator Kristensen.  Discussion on the amendment to the amendment?  Senator Vrtiska.


SENATOR VRTISKA:  Thank you, Senator Crosby.  I've had my light on a couple of times and I've passed because I didn't want to mess with those others, but I do have a question I think I need to pose to Senator Kristensen, if he'd respond.


SENATOR CROSBY:  Senator Kristensen, will you yield?




SENATOR VRTISKA:  I've been waiting for a long time to talk to you about this and it won't take very long, but I'm really,




concerned yet, have some concerns I should say, yet about the distribution formula.




SENATOR VRTISKA:  And I wish you would give me some indication, because what I'm looking at is in fact with the distribution the way it is there will be a difference in the way the funds are ,distributed to, for example, cities and rural areas, and it appear to me that, based on the fact that there will be less funds to the urban areas than there is the rural areas, then that in turn will probably, in fact, change the distribution formula as far as state aid is concerned.  Is that correct?


SENATOR KRISTENSEN:  Well, Senator, that's what we discussed earlier...


SENATOR VRTISKA:  I know, but we...


SENATOR KRISTENSEN:  ...  with ...  well, no, I'm...  I just want to reinforce that when we talk about the impact of the fee I-think the numbers are somewhere around $10-11 million.  Okay?  The impact of that into the state aid formula is fairly negligible.  I mean you're not going to see huge swings because of that.


SENATOR VRTISKA:  I recognize and I remember you saying that, but I still have a concern because...




SENATOR VRTISKA:  ...it depends on ...  it's like all these formulas depend on where you're at, how....  You know, $10 million to some areas may not be very much ...  that the distribution may not be very much.  In other areas it may be a great deal more and that's...  I'd just like some clarification.  I don't...


SENATOR KRISTENSEN:  Okay.  I can show you where re the Highway Allocation Funds go today.  You know, if you want to see what the current amount of money that we have and who gets that current amount of money, I've got those printouts that I can show you.  As to who gets the 10 or 11 million dollars, you're




going to run it through that formula so, you know, I'd take the formula that we have today with the current distribution and give that as a guide as to who's going to get that.


SENATOR VRTISKA:  Well, as you well recognize, I've been supportive of this bill...


SENATOR KRISTENSEN:  And I appreciate that.


SENATOR VRTISKA:  ...  basically from the outset simply because I felt like it's a fairer way to tax vehicles if for no other reason than states around us, all around us, as we've talked before, are already doing it and the ...  where I live so many cars going outstate and getting their licenses and saving money and all that business.  But the only problem that I've had, and I've not got it completely resolved, is how ...  and you say $10 million.  Well, $10 million may not seem much, but I'm trying to determine how the effect of particular some rural areas might be in maybe more local dollars having to be used rather than state aid because of the way the distribution is going to be altered in that regard.


SENATOR KRISTENSEN:  Can we just examine that for a second?


SENATOR VRTISKA:  Yeah, I like...


SENATOR KRISTENSEN:  I'm having trouble with what that exact problem is.  Because we're...  is your concern that there's going to be less valuation in a district because of using this formula, and if there's less valuation what happens?


SENATOR VRTISKA:  No, I'm saying that...  I'm saying there will be more ...  there will be more of the money the; Is distributed ...  or the money that's collected.




SENATOR VRTISKA:  The fees that are collected, it's going to be more in the rural ...  in the....


SENATOR CROSBY:  One minute.




SENATOR VRTISKA:  ...  rural ...  the rural areas will be getting more simply because they don't have to divide with the city, the tax that the city gets, and therefore they will get more and that raises the amount of local taxes so then they get less distribution under the state aid formula, the way I understand it, and if I'm wrong then tell me.


SENATOR KRISTENSEN:  Well,...okay, let's I back up a second.  You're going to take the fee....  The fee's going to be paid by everybody, right?


SENATOR VRTISKA:  I'm talking about the total amount of tax on the vehicle.


SENATOR KRISTENSEN:  Okay, 'Cause now you're shifting gears.


SENATOR VRTISKA:  Well, I meant tax.


SENATOR KRISTENSEN:  Okay.  If you're talking about the tax, the tax doesn't change, right?




SENATOR KRISTENSEN:  Because what we're doing...


SENATOR VRTISKA:  No., but ...  it doesn't change but the distribution changes.


SENATOR KRISTENSEN:  No, no, no, Senator, it doesn't.  It doesn't.  The tax remains distributed the same as it always has been.  There's no change on the distribution of the tax.  You can't, because constitutionally...




SENATOR KRISTENSEN:  ...  the constitution requires you to do that.


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


SENATOR KRISTENSEN:  Senator Vrtiska, I don't want...you're




going to think that I'm messing with you, but I Just 'want to accurate with you.  Remember, 85 percent of what we're going to collect, and now maybe a little bit more, is tax, okay, based on the value and, as the bill is done, it's based on what the starting manufacturer's suggested retail price is, and then discounted for age.  The other 15 percent is the fee that's based on, one, the value of the car but, two, how old it is.  Okay.  The fee is the one that goes to the highway allocation formula.  The tax stays and goes to the cities and counties and school districts, NRDs, fire districts, whoever, as it always has.  Okay?  Okay, and then it's the fee that I think that you are after and the fee is roughly $11 million that is collected.  That fed gets divided in half.  Half goes to all the cities, half goes to all the counties.  Then the allocation formula in each of those is a little bit differently, but based on factors under that highway allocation formula that's where that money gets distributed to.  Okay?  So if...  I'm trying to figure out what the exact problem is.  If the problem is that you're in a rural area and you think that the town in your county is going to get more of the fee than your county's going to get, is that...  is that the...?


SENATOR VRTISKA:  No, I'm saying that the town is going to get more, the town is going to ...  the urban area will get less tax dollars because, the county will, because they have to divide with the city and...


SENATOR KRISTENSEN:  Your definition of urban, I'm talking about towns within your county and I have a feeling you're talking about the larger towns in Nebraska versus the rural areas.




SENATOR KRISTENSEN:  Is that right?  The reason is that the fee tends to move, as Senator Beutler has pointed out, the fee tends to move from the larger areas out to the rural areas because it's factored that way.








SENATOR VRTISKA:  I'm not sure


SENATOR KRISTENSEN:  I'm struggling.  I ...  Madam President, I'll yield the rest of my time to Senator Vrtiska to, ask questions and I'll...  I'll try.


SENATOR CROSBY:  You have about two and a half minutes, Senator Vrtiska.


SENATOR VRTISKA:  Well, the way I ...  the way.  I view the distribution, way I view...


SENATOR KRISTENSEN:  I'm sorry, Senator Vrtiska.


SENATOR VRTISKA:  ...  the distribution is that when you distribute, say, $1,000 to the rural, that they will get all of that money along with the school, the NRD, or whatever else ...  what entities there are out there.  When you distribute to the city then you have to take another 45 cents or what out and distribute to them.  That correct?  Of that amount of money that you collect.


SENATOR KRISTENSEN:  Okay, the fee that we collect...


SENATOR VRTISKA:  Certain amount has to go to the cities along with the counties, the schools and everybody else.


SENATOR KRISTENSEN:  The tax goes proportionate to their levy, okay?  Your argument, believe me, your argument's not with the tax, okay?  You're okay with the tax end, I think.


SENATOR VRTISKA:  No, the tax is what I'm talking about.




SENATOR VRTISKA:  Well, we're out of time.  I'll come over a minute and talk to you...




SENATOR VRTISKA:  ...  off the...off the...




SENATOR KRISTENSEN:  'Cause I'm struggling with how to explain it any differently...




SENATOR KRISTENSEN:  ...  to you and I'm sorry I can't do that.  I'd yield back my time, Madam President.


SENATOR CROSBY:  Thank you.  There are no further lights.  Senator Kristensen, would you like to close on your amendment to the amendment?


SENATOR KRISTENSEN:  I would, Madam President, and, Senator Vrtiska, I want to spend some time with you but it's probably easier because it will take me longer to learn and ...  no, I'm serious, it will take me longer to try to figure out how I can explain it better and that's something I need to do, so I want to spend some time with you so I can try to articulate that.  The amendment, again, basically is a budgeting issue.  I know that there's not been a tremendous amount of discussion about it, but it gives some directions to the subdivisions on how to budget, what figures they should plug in for their budget.  It's at 85 percent.  That's the amendment to the amendment.  I'd hope you'd adopt that portion, then we'll go on to the substantive amendment.


SENATOR CROSBY:  Thank you.  You've heard the closing.  The question is the adoption of the amendment to the amendment to LB 7 ...  271.  All in favor vote aye, opposed no.  We're voting on the amendment to the amendment.  Have you all voted?  Senator Kristensen.


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


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


CLERK:  9 ayes, 0 nays to place the house under call.


SENATOR CROSBY:  The house is under call.  Would all senators please record your presence.  Would all unexcused senators




please return to the Chamber and record your presence.  Senator Kristensen.


SENATOR KRISTENSEN:  Thank you, Madam President.  I'd accept call-in votes as they came.


SENATOR CROSBY:  We are voting on the amendment to the amendment and Senator Kristensen will accept call-in votes.


CLERK:  Senator Dwite Pedersen voting yes.  Senator Schellpeper voting yes.  Senator Wehrbein voting yes.  Senator Schmitt voting yes.


SENATOR C90SBY:  We're voting on the amendment to the amendment.  Senator Kristensen will accept call-in votes.


CLERK:  Senator Coordsen voting yes.  Senator Dierks voting yes.  Senator Stuhr voting yes.  Senator Witek voting yes.


SENATOR CROSBY:  We're voting on the amendment to the amendment.  Senator Kristensen will accept call-in votes.


CLERK:  Senator Landis voting yes.  Senator Hillman voting yes.  Senator Robinson voting yes.  Senator Wickersham voting yes.


SENATOR CROSBY:  Record, please.


CLERK:  25 ayes, 0 nays on adoption of the amendment.


SENATOR CROSBY:  The amendment to the amendment is adopted.  Senator, now we are back to the original.  I raise the call.  We're back to the Kristensen amendment.  (AM2313) Any further discussion on the Kristensen amendment?  Seeing none, Senator Kristensen, would you like to close on your amendment?


SENATOR KRISTENSEN:  I'd move the amendment.  Thank you, Madam President.  That's the extent of my closing.  Thank you.


SENATOR CROSBY:  The question is the adoption of the Kristensen amendment to 271.  All in favor vote aye, opposed no.  We're voting on the Kristensen amendment.  Have you all voted?  Record.




CLERK:  28 ayes, 0 nays on the adoption of Senator Kristensen's amendment.


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


CLERK:  Senator Beutler would move to amend.  (See FA355 on page 2151 of the Legislative Journal.)


SENATOR CROSBY:  Senator Beutler.


SENATOR BEUTLER:  Madam President, members of the Legislature, this amendment is not a dramatic amendment, but is ...  simply addresses the fee side of the distribution formula.  -Under the current system you have, when the funds are finally allocated to whomever they're allocated to, you have unrestricted use of, those funds.  In other words, you can use them for whatever legal purpose the particular political subdivision could use funds, and that was true with respect to all $151 million that we currently are taxing under this system.  Under the new system the money's put into two piles.  That $151 million is put into two piles, as I understand it, and with regard to what we call the tax portion, the political subdivisions can use this as before for any legal purpose., However, for that portion that you call a fee and which is distributed through the Highway Allocation Fund, that portion is restricted to the use for roads and bridges and highways.  So what this amendment would do would be to say, with respect to that fee portion, you can use that portion also for any legal purpose, so that in other words, in terms of the uses to which this money-can be put we restore it to the current situation.  With respect to the whole $151 million, it can be used by the political subdivisions as they get that money for whatever purpose if ...  they may wish to spend it.  It does not change the distribution of the formula with respect to the fee, the distribution of the revenues with respect to the fee as far as using the highway allocation fund mechanism.  You would continue to do that, but simply say once you had gone through that process there would be no restriction on the use of the funds.  And I think, if I'm understanding the, purposes that the Revenue Committee had, there ought not to be any objection to that additional measure of flexibility in the




bill.  Thank you.


SENATOR CROSBY:  Thank you, Senator Beutler.  Discussion on the Beutler amendment?  Seeing none....  Oh, Senator Kristensen.


SENATOR KRISTENSEN:  Thank you, Madam President.  Senator Beutler smiles.  I assumed if I couldn't get here that this might just roll over.  Senator Beutler, I just want to make sure what your amendment does.  Your amendment is similar to what you had discussed with me earlier?  I've not had a chance to read it, but your amendment is similar, that says that the money that's given to the highway allocation formula ...  you still keep the factorings into the highway allocation formula but those in effect become unrestricted funds for nonhighway purposes or, in the case of a city, some of the purposes that they're allowed for expenditures.  Is that roughly correct?


SENATOR BEUTLER:  That's exactly correct.  It could be used for nonhighway purposes or it could be used for highway purposes, whatever your legal purposes are.


SENATOR KRISTENSEN:  Thank you.  And I don't think it's probably a surprise I'm probably going to ...  well not probably, I'm going to oppose it simply because I want to keep the integrity of the highway allocation system there.  The reason that you do those things is so that people are forced to spend that money on infrastructure and roads and streets and so on, and I understand that the freedom that that would afford.  I think the flip side would-be obviously if you're going to...  if that money comes to you for those purposes that's other General Fund monies that you wouldn't have to spend for that roads and so on and you, effect, do free it up on the other side and I understand the desire that ...  to make it unrestricted funds.  We also had as a purpose that we wanted.  to make sure that infrastructure was addressed and that you didn't just let that go when the levy limits came through and when monies got tight that you'll ignore the infrastructure heeds.  So with that, Madam President, I know that there's not a tremendous amount of people here at the moment, but I would oppose the amendment.  Thank you.  I'd yield back my time.


SENATOR CROSBY:  Thank you, Senator Kristensen.  There are no




further lights, Senator Beutler.  You may close.


SENATOR BEUTLER:  Senator Crosby, members of the Legislature, as modest as this amendment is, I think it's really important to keeping to the purposes of what we're doing with this bill.  This bill is not designed to help the highway lobby to put more money into roads and highways.  That's not what this is all about.  The use of the Highway Allocation Fund as an allocation mechanism has nothing to do with roads or highways should have nothing to do with roads and highways.  The municipalities and the counties out there who may or may not need money because of the 1114 cap, those who need it most and those who need it least are not necessarily the same ones who would benefit most and least under the Highway Allocation Fund., That mechanism may, in the Revenue Committee's mind, bear some rough resemblance to who needs the money, but even in making that determination there is absolutely no justification for taking monies that were previously and currently available to these political subdivisions for any legal purpose and now restricting them to highway and road funds.  And if this is a power grab by the Highway Fund people, then let's start talking about some other things in this bill.  But if we're trying to make 1114 corrections then we should go back to what we have always done.  These are unrestricted funds, not funds restricted to highway and road uses.  And why is it, if we believe in local control, that we want to dictate, to each and every county and municipality, why are we dictating to them that you in any particular year must use these funds for roads?  What if in a particular year they have other needs?  I see absolutely no purpose in doing this that accords in any way with the articulated purposes of this bill.  And maybe we need to take a further look at the highway allocation formula and what's happening with this bill if, in fact, mechanisms like this are going to be allowed to stay in place in the bill.  I would urge you to keep the philosophy of the bill straight and to take out of the bill the illogical and unnecessary and "antilocal" control device of requiring the fee funds to be used only for roads and highways.  Thank you.


SENATOR CROSBY:  Senator Beutler, I assume that was your closing.  I recognized you to close.  All right?  Wanted to be sure...  I wanted to be sure that no ...  that there was no




misunderstanding.  You've heard the closing.  The question is the adoption of the Beutler amendment to LB 271.  All those in favor vote aye, opposed no.  I'm sorry.  He asked for a call' of the house.  There is a request for a call of the house.  All in favor vote aye, opposed no.  Record, please.


CLERK:  9 ayes, 0 nays to place the house under call.


SENATOR CROSBY:  The house is under call.  Would all senators please record your presence.  Would all unexcused senators please return to the Chamber and record your presence.  Senator Bohlke, Senator Wickersham, the house is under call.  Senator Dierks.  Senator Bromm, Senator Robinson.  Senator Schrock, Senator Stuhr, Senator Schimek, Senator Wickersham, Senator Hillman.  The question is the adoption of the Beutler amendment to LB 271.  All in favor vote aye, opposed no.  We're voting on the Beutler amendment, have you all voted?  Record, please.


CLERK:  8 ayes, 21 nays on the adoption of the amendment.


SENATOR CROSBY:  The amendment fails.  Raise the Call.  Mr. Clerk.


CLERK:  Senator Kristensen, AM2340, Senator.  (See page 2152 of the Legislative Journal.)


SENATOR CROSBY:  Senator Kristensen.


SENATOR KRISTENSEN:  Thank you, Madam President and members of the Legislature.  This is the last amendment that I know of.  This is the second half of the agreement that we had reached earlier about the reduction in the fee.  Mr. Clerk, I, could I ask, is that...  I don't, I've got....is that the handwritten copy that was then redrafted?


CLERK:  It's the redrafted handwritten copy, yes, sir.


SENATOR KRISTENSEN:  Thank you, thank you.  What this does is relationship to the agreement that we had talked about earlier, as you remember before, we had a fee, it's a $15 fee.  What we've done is vehicles with the value of, the new value of $20,000 or less, will have a $5 fee now, not $15.  That will be




perpetual.  That will, that will go on, they'll pay $5 flat across I the board.  If it's from $20,000 to $46,000, the fee is going to be increased to $20.  If it's a vehicle over 40,000, then that fee will be $30.  And the $20 and the $30 will decrease by the proportions that were already in the bill.  So it's a reduction on the lower end value of vehicles; it's an increase of the fee on the higher end values.  It reduces, now, as near as I can tell, it reduces the amount of money that's raised by this, so it's down around $11 million.  And that's at least the preliminary figures, so it draws it even closer.  If Senator Withem was concerned about adding additional monies and taxes, this, this you should go for because this reduces it more and makes it even closer to a revenue neutral bill.- This is the one that we discussed earlier.  I would urge its adoption.


SENATOR CROSBY:  Thank you, Senator Kristensen.  Discussion.  Senator Chambers.


SENATOR CHAMBERS:  Madam President, as Senator Kristensen pointed out, this is what we did agree to and there was a huddle ,of the members of the Revenue Committee, so I'm not going to extend the discussion on this particular one.  I do agree with it and I hope we will adopt it.


SENATOR CROSBY:  Thank you, Senator Chambers.  There are no further lights.  Senator Kristensen, to close on the amendment.


SENATOR KRISTENSEN:  I would waive my closing, Madam President.


SENATOR CROSBY:  Closing is waived.  The question is the adoption of the Kristensen amendment to LB 271.  All in favor vote aye, opposed no.  Record, please.


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


SENATOR CROSBY:  The amendment is adopted.  Anything further, Mr. Clerk?


CLERK:  Senator Beutler would move to amend.  (See FA357 on page 2152 of the Legislative Journal.)




SENATOR CROSBY:  Senator Beutler.


SENATOR BEUTLER:  Senator Crosby, members of the Legislature, I don't know how long we're going on this, on this bill tonight.  I thought it ended at six o'clock and there was going to be an opportunity to look at some other things this evening.  But' in any event, this particular amendment goes back to the question just raised with respect to the funds being available and flexible for a broad, broad variety of purposes and would allow the funds to be used for any infrastructure need.  Perhaps I'm not perceiving this correctly, but I would be interested in why it is or what would be the purpose to restricting a local political subdivision when you're changing their tax system.  What we're doing, and I'm not sure if this is understood or not, I just want to be sure that the decision of the body is based on a, on an understanding of what's happening.  But what we're doing here is taking a different path in terms not only of who gets this money, and we're doing that part of it blind because nobody has seen any printouts at all from the Revenue Committee with respect to where this is money...to where this money is going.  It's kind of interesting, the Education Committee was pressed time and again on and every stage for a variety of printouts as to where allocated money would be going when we changed the system.  In this particular instance, we're changing the system and nobody has asked for a printout.  So I...let me stop just for a minute, I think the Speaker is conferring with the Clerk.


SENATOR CROSBY:  The Speaker has ordered that we will leave this bill and go on to LB 23, which was scheduled at six o'clock.  Mr. Clerk, do you have anything that you need to...


CLERK:  I do, Madam President.  Study resolutions, thank you.  (LR 172-176 read.) Senator Beutler has amendments to (LB) 658 and to (LB) 752 to be printed.  (See pages 2153-57 of the Legislative Journal.) Madam President, Legislative Bill 23.  E & Rs were considered and adopted.  When the Legislature left the bill on May 14, Senator Kiel had an amendment pending.  I have a note, Madam President, that Senators Brown and Maurstad have had a conversation with Senator Kiel and she wishes to withdraw and allow substitution, by Senator Maurstad, of AM2325.