SENATE SPECIAL SESSION COMMITTEE ON REVENUE

June 19, 2002 Hearing Room A

6:00 p.m. Tapes 17

MEMBERS PRESENT: Sen. Ted Ferrioli, Chair

Sen. Joan Dukes

Sen. Bill Fisher

Sen. John Minnis

Sen. Cliff Trow

STAFF PRESENT: Paul Warner, Administrator

Patsy Wood, Administrative Support

MEASURE/ISSUES HEARD: HB 4050A Work Session

HB 4054A Work Session

These minutes are in compliance with Senate and House Rules. Only text enclosed in quotation marks reports a speaker’s exact words. For complete contents, please refer to the tapes.

TAPE/#	Speaker	Comments
TAPE 17, A
002	Chair Ferrioli	Calls the meeting to order at 6:36 p.m. and opens a work session on HB 4050A which extends period during which 9-1-1 emergency communications tax is imposed on telephone service subscribers.
WORK SESSION HB 4050A
	Sen. Dukes	Asks how this is back in committee when the bill had been previously passed out of committee.
	Chair Ferrioli	Responds that the bill was put back in committee from the Senate floor.
	Dick Yates	Legislative Revenue Economist. Explains the A2 amends which delete “2007” on page 1, line 13, and insert “2008” (EXHIBIT A).
	Sen. Minnis	Moves the A2 amendments.
	Sen. Trow	Points out this is a substantive change to the bill.
	Chair Ferrioli	A2 amendments adopted with Sen. Fisher a “no”.
	Sen. Minnis	Moves HB 4050A to the floor DO PASS AS AMENDED.
	Chair Ferrioli	No objection. Sen. Minnis will carry.
	Chair Ferrioli	Closes the work session on HB 4050A and recesses the committee at 6:40 p.m. until 7:30 p.m.
	Chair Ferrioli	Reconvenes the committee at 7:41 p.m. and opens a work session on HB 4054A appropriating money by raising cigarette taxes.
HB 4054A WORK SESSION
	Dick Yates	Introduces the A2 amendments to HB 4054A (EXHIBIT B). Explains the amendments section by section.
	Sen. Dukes	Asks if tax is retroactive to July 1, 2002.
	Yates.	The bill takes effect 30 days after the election, but sections of the bill are retroactive to …
	Sen. Minnis	Moves the A2 amendments.
	Sen. Dukes	Asks if this is going to conference committee to move the bill along
	Chair Ferrioli
	Sen. Fisher	Section 5, Subsection 3
	Yates	Says the tax is 27.5 mils per cigarette
	Sen. Fisher	So there is a different stamp for different pack sizes
	Yates	Yes.
	Sen. Fisher
	Chair Ferrioli
	Sen. Fisher
	Yates	Bill changes the payment made to purchase cigarette stamps and will involve processing in Jan 2003. Department says it is minimal and will absorb that cost.
	Chair Ferrioli	Section 11 – who is actual taxpayer
	Mark Gardner	Philip Morris. Urges committee to maintain…___ is the ultimate payer of the tax. Important accountability…says Section 11 and 12 delete an important consumer protection which is a disclosure of the amount of tax as part of the purchase price.
	Sen. Trow	What is the origin of amendment
	Yates	DOJ made comments to counsel.
	Gardner	Says this disclosure has not been deleted when the tax has been raised.
	Sen. Dukes	Asks when applies
	Yates	From July 2002 on
	Dexter Johnson	Legislature counsel. Says DOJ was concerned about language in lines 16 thru 18 on page ___ relating to ORS ____. Says the tax has to be retroactive on the distributor b/c you cannot retroactively tax consumers.
	Chair Ferrioli
	Sen. Minnis
	Johnson	Earliest bill could go into effect is October 18.
	Minnis	Asks why there is language
	Johnson	Says there is not … ORS 323.030
	Sen. Minnis	Says the inconsistent language makes him uncomfortable to move this.
	Sen. Fisher	Asks about the retroactivity of distributor paying taxes from July 1 to October 18, but cannot charge the consumer.
	Johnson	Says there is a period of uncertainty where distributor does not know the tax imposed. Distributors tell Revenue the number of packs distributed and the tax will be retroactively imposed on those.
	Chair Ferrioli
	Johnson	Describes retroactive taxes
	Chair Ferrioli	Asks for case law
	Johnson	Relates 1993 Atlantic Richfield court case where a tax was retroactively imposed.
	Chair Ferrioli	…asks who is responsible for the tax and how much/.
	Johnson	Says distributor is responsible, but price is unknown until voters vote.
	Sen. Fisher	Feels this overcharges individuals
TAPE 18, A
	Sen. Trow
	Johnson	Doesn’t believe so . . . lines 24 thru 26
	Sen. Trow	So if it came out, it wouldn’t change the bill.
	Johnson	No.
	Sen. Trow	Asks if not essential, why fight over it.
	Sen. Minnis	Calls for the motion. Says this bill needs to get into a conference committee to fix the flaws.
	Chair Ferrioli	Passes A2 amendments 4-1 Fisher no.
	Sen. Trow	Moves 4054A as amended DO PASS.
	Sen. Fisher	Voices objections to this legislation
	Sen. Minnis	Courtesy vote in committee, vote no on floor
	Chair Ferrioli	Has problems with this bill also. DOJ could have made this a stand alone bill (sections 11 & 12). Tax is hard on rural communities where tobacco use is high.
	Chair Ferrioli	Moves to floor DO PASS AS AMENDED. 4-1 Fisher no. Sen. Trow will carry.
	Chair Ferrioli	Closes the work session and recesses the meeting at 8:15 p.m.

Submitted By, Reviewed By,

Patsy Wood, PAUL WARNER,

Administrative Support Administrator

EXHIBIT SUMMARY

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