Omaha daily bee., 1918-06-09
ASSESSMENTS UP
10 COUNTY BOARDS
! FOR ADJUSTMENT
Secretary Bernecker Rules on
Case Involving Property Mort.
gagged to Federal Land
Bank Of Omaha.
tFrom a staff Correspondent J

(From StaIL CoFIcspohueH|t
Lincoln, June 8.-(Special.)-1t is
s up to the County Board Of Equaliza.
tion to adjust matters relative to the
assessment Of real estate which has
BEEN mortgaged to the federal land
bank of Omaha.
This is the ruling of Secretary 0. A.
Bernecker Of the State Board Of As
sessments on the following PROPOSE
tion put up to him by NJ. D. Corey.
general attorney for the bank. in the
following letter:
~ have your letter OF the Sth inst.
relative to the assessment of real ,es-
tate which has been mortgaged to the
federal land bank OF Omaha.
sYou ask, is the mortgage deducted
from the realty, and what is left, the
equity, assessed to the owner OF the
Iandy 1t is clear that mortgages to
The federal land bank Of Omaha can
nor under any circumstances be as
seesed because as q government
agency the assets Of this institution,
including the mortgages made to
this bank. are specifically exempted
from al taxation.
"You are familiar with the Smith
mortgage tax law. and, of course,
under this law where . mortgagor to
the federal land bank of Omaha owns
land assessed Al $4,000, while he has
niyen this bank q mortgage OF 1000.
should BE assessed only with the $l0,-
go equity over and above the equity
w this bank. In the case you cite,
where w have taken the land at an
appfaisaI Of 10000. while the real
estate assessment Is only $4,000, and
there il a mortgage to this bank for
$4,000, the principle involved is not
leeally affected BY this situation. The
land Iowner is entitled to have the
nort3aec deducted from the assessed
valusl whatever that value may be,
and. II, as in the case you cite, the as
aesscd value IS exactly the same as
The amount Of the mortgage to the
federal land bank of Omaha, there
will then be no equity with which the
landowner might be assessed.
Cannot Change Assessment.
ssYou asked II you should raise the
assessed valuation to the appraised
valuation as placed upon the land by
the appraiser of the federal land bank
of Omaha in order to find the equity
of fhe owner OF said land.
This you could not, Of course. do
arbitrarily; that is, you could not
adopt our appraiseinent values as the
exact basis for your assessment values
and you could not alter the assess
ments of lands which are nlortgaged
ia. the federal land bank OF Omaha
without equalizing ali other lands in
the county ITO the valuations made
upon the lands mortgaged to this
bank If the lands nortgagcd to this
bank have been valued too low by
THE assessors, the Board of Equa1iza-
tion may under the provisions of Sec
fion 6437 OF t,e P~v;-ed S.ntutes OF
Nebraska. 1918, correct such evident
errors either in overvaluation or
undcrvaluation Of real property.
Cites Smith Mortgage law.
As view it, the same principles
snust be applied by the taxing author
ities Is have always been the rule with
reference to the Smith mortgage tax
1nW. For example, il an owner OF land
assessed at $4,000 borrows $1,000
from farm mortgage company, the
mortgage company doubtless made
this loan upon valuation Of $4,000.
but you would assess the mortgage
with the 5000 mortgage and the land
owner with only his 5000 equity. Or,
pping the case which you put in your
letter, II the farm owner is assessed
~ $4,000 and farm mortgage COM
pany lends $4,000 upon mortgage
on this land, you assess the mortgage
company with the $4,000 and there Is
no equity for assessment against the
land owner. The mere fact that there
h difference in the appraised values
and the assessed values cannot alter
the rule which requires the applica-
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