PUBLIC HEARING:  HB 2023, HB 2185,

BILL INTRODUCTION:  LC 1708, LC 2243

TAPE 21-22, A

 

HOUSE REVENUE COMMITTEE

JANUARY 29, 2003   8:30 AM   STATE CAPITOL BUILDING

 

Members Present:                        Representative Lane Shetterly, Chair

                                                Representative Wayne Scott, Vice Chair

                                                Representative Joanne Verger, Vice Chair

                                                Representative Phil Barnhart

                                                Representative Vicki Berger

                                                Representative Pat Farr

                                                Representative Mark Hass

                                                Representative Elaine Hopson

                                                Representative Max Williams                                               

 

Invited Testimony:                    Debra Buchanan, Department of Revenue

 

Witness Present:                        Tom Linhares, Columbia County Assessor,

                                                            representing The Oregon State Association of County Assessors.

                                                J.L. Wilson, NFIB

                                                Gil Riddell, Association of Oregon Counties

                                                John Phillips, Department of Revenue

 

Staff Present:                            Paul Warner, Legislative Revenue Officer

                                                Lizbeth Martin-Mahar

                                                Kathy Tooley, Committee Assistant

 

TAPE 21, SIDE A

004

Chair Shetterly

Calls meeting to order at 8:30 a.m.

 

023

Lizbeth Mahar

Presented and summarized “Measure 28 Unofficial Vote Count” preliminary statewide county results. (Exhibit 1, Page 1)

 

Questions and discussion interspersed.

 

083

 

 

98

 

 

 

110

 

Martin-Mahar

 

 

Martin-Mahar

 

 

 

Martin-Mahar

Presented a fiscal survey of 24 states and their actions, “NASBO (National Association of State Budget Offices) Fiscal Survey of States: November 2002”, Exhibit 2,

 

Discussed Table 7 “Enacted Fiscal 2003 Revenue Actions by Type of Revenue and Net Increase or Decrease”, (Page 2, Exhibit 2);

 

Discussed Table A-11, “Enacted Revenue Changes by Type of Revenue Fiscal 2003”, (Pages 3-8, Exhibit 2).  Both reports are useful as a tool for different ways to look at budget shortfalls.

 

Questions and discussion interspersed.

 

205

Debra Buchanan

Discussed “Important Notice About the State Employee Withholding Tax Tables”, Exhibit 3. This notice went to employers last week in the event Measure 28 passed or failed.  New tables will be going out reflecting the phase in of Measure 88, employers should have and be ready to implement new tables with March 1, 2003 payrolls.

 

 

PUBLIC HEARING ON HB 2023

 

250

Chair Shetterly

Opened hearing on HB 2023.

 

264

Martin-Mahar

Provided a description of HB 2023 and discussed its background.  Discussed the (-1) amendment (Exhibit 4), including revenue impact and staff measure summary (Exhibit 5).  The (-1) amendment allows the county board of property tax appeals to waive the penalty that is associated with a failure to file, or late filing late of personal property taxes if the taxpayer can show that this was the first year the taxpayer had not filed taxes in a timely manner.  Applies to appeals after the effective date of this act.  Minimum negative impact on local property tax revenues and no fiscal impact.

 

330

 

 

 

359

Tom Linhares

 

 

 

Chair Shetterly

Gave testimony in favor of HB 2023. The bill is meant to streamline the property tax system and make it easier for owners and assessors to administrate the tax system.

 

Asked Linhares how he felt about the -1 amendments?

 

365

Linhares

Would have no problem with it, pointed out that a new business owner should know that business licenses and building permits, personal property returned to the county assessor, but some are not aware.  The business owner would still have to file appeal with the Board of Property Tax Appeals to waive the penalty, but the bill adds additional criteria for the board when making its determination.

 

380

Chair Shetterly

Does it have anything to do with canceling the tax liability?

 

381

Linhares

No, assuming the filer had $12,500 in personal property.

 

390

Rep. Barnhart

This would require a waiver for a taxpayer who had filed returns in a timely fashion over a period of time and then missed one, in addition for first time taxpayers that had never filed a return before.  Is that correct?

 

399

Linhares

Cited law for waiving a late filing penalty requires showing “good and sufficient cause” and Revenue Department Administrative Rules define “good and sufficient cause.”

420

Rep. Barnhart

Applies only to a first time return?

 

422

Linhares

Did not know.

 

427

Rep. Barnhart

Should a person who has been filing returns and then misses filing, without good cause, be allowed a waiver?

 

431

Linhares

Current taxpayers are held to “good and sufficient cause” standard under current law, and the penalty would not be waived.

 

TAPE 22, SIDE A

 

000

J.L. Wilson

Spoke in favor of HB 2023.  The intention of this bill is to alleviate the penalties for first-time filers who may not be aware of their obligation to keep inventory of personal property and pay taxes on it.  The waiver is important now because of the large amount of start up businesses expected during a recession.

 

031

Chair Shetterly

Requested staff work with LC to change the language to “shall waive liability for the penalty on a showing that the year for which the return was due was the first year for which a return was due and was not timely”.  The current bill indicates that the penalty applies if this is the first time taxes have not been filed on time.  Your intent is that this should be for first time filers?

 

043

Wilson

Agreed with revised language from the Chair.

 

050

Gil Riddell

Expressed concern, because he has not seen data on the affect of this bill.  Urged Committee to keep in mind that business owners must keep inventory for state and federal income tax purposes.  Pointed out that some new business owners would not understand that they have property tax liability on personal property. Asked the Committee to consider alternative language rather than “shall waive”, suggests directing the Board of Property Tax Appeals to exercise their discretion to give particular consideration to mistakes of first time filers.

 

060

Chair Shetterly

Suggested bill needed further discussion to avoid automatically waiving the penalty for those who miss filing for the first time.

 

070

Rep. Williams

Asked Gil Riddell if he would be the person supplying the Committee with the information about possible impact.

 

075

Riddell

Replied that he could do a survey of other County Assessors and find out, but that he was not familiar with the new language.

 

079

Rep. Williams

“I think that data would have to come from you, because we would not have it short of you surveying your counties and in providing it.”

 

080

Chair Shetterly

Directed staff to work with J.L Wilson and the Counties on language and concept on HB 2023.

 

086

John Phillips

Asked the Committee to consider a possible scenario of a first time filer, who missed the first five years of filing, when the return is filed, it could include the four missing years.  Should there be a late filing penalty on the first year missed or is there culpability with five years in a row?

 

109

Chair Shetterly

Closed the public hearing on HB 2023

 

PUBLIC HEARING ON HB 2185

 

108

Martin-Mahar

Provided a description of HB 2185 and discussed its background. Provided fiscal and revenue impact statements, (Exhibit 8), and staff summary (Exhibit 9).

 

150

Chair Shetterly

Inquired if there was an error in the staff summary in the section entitled “What the bill does” estimates a date, should it be “establishes?”

 

153

Martin-Mahar

Affirmed that there was.

 

153

Buchanan

Provided a problem/solution statement from the Revenue Department “House Revenue Committee HB 2185 Summary”.

 

164

Chair Shetterly

Was this something in advertently overlooked in 1999 changes?

 

168

Buchanan

Replied affirmatively. The provision in 1999 was retroactive, there was a special time period for filing the refund claim which overrode the general rule establishing a three year time period, the result is a person could, in 10-20 years, file a refund claim.

 

170

Chair Shetterly

Clarified, residents are currently limited to three years, this bill makes the time limitation also applicable to foreign non-residents.

 

174

Rep. Barnhart

Asked if the Revenue Department would like to close its books on whole years?

 

175

Buchanan

Yes.

 

172

Chair Shetterly

Closed public hearing on HB 2185.

 

 

OPENED WORK SESSION ON HB 2185

 

106

Rep. Williams

MOTION:  MOVED HB 2185 TO THE HOUSE FLOOR WITH A DO PASS RECOMMENDATION.

 

188

 

 

 

 

 

200

 

 

 

 

 

 

Chair Shetterly

ROLL CALL VOTE:  MOTION PASSED 9-0-0.  REPRESENTATIVES VOTING AYE:  Barnhart, Berger, Farr, Hass, Hopson, Scott, Verger, Williams, Chair Shetterly.

 

Rep. Farr will carry the bill.

 

Closed the work session on HB 2185.

 

207

 

 

 

214

Chair Shetterly

 

 

 

Chair Shetterly

 

 

 

 

Chair Shetterly

Directed Members’ attention to LC 1708 requested by the Association of Oregon Community Development Organizations, and LC 2243 requested by Chair Shetterly for Committee Bill introduction.

 

MOTION:  MOVES INTRODUCTION OF LC 1708 (Exhibit 11) AT THE REQUEST OF THE ASSOCIATION OF OREGON COMMUNITY DEVELOPMENT ORGANIZATIONS, AND THE INTRODUCTION OF LC 2243 AS A COMMITTEE BILL (Exhibit 12).

 

ORDER:  THERE BEING NO OBJECTION, THE CHAIR SO ORDERS.  Members present:  Representatives Barnhart, Berger, Farr, Hass, Hopson, Scott, Verger, Williams, Chair Shetterly.

 

236

Chair Shetterly

Meeting adjourned at 9:15 a.m.

 

 

 

Tape Log Submitted by,

 

 

 

Kathy Tooley, Committee Assistant Reviewed by Kim Taylor James

 

Exhibit Summary:

1.       Martin-Mahar, “Measure 28 Unofficial Vote Count”, 1 page.

2.       Martin-Mahar, “NASBO Fiscal Survey of Sates:  November 2002, Fiscal 2003 Revenue Actions by Type of Revenue”, 8 pages.

3.       Buchanan, “Important Notice About the State Employer Withholding Tax Tables”, 1 page.

4.       Martin-Mahar, HB 2023-1, 2 pages.

5.       Martin-Mahar, “Revenue Impact of Proposed Legislation”, HB 2023, 1 page.

6.       Martin-Mahar, “Staff Measure Summary”, HB 2023”, 1 page.

7.       Wilson, Testimony, “HB 2023”, 1 page

8.       Martin-Mahar, “Staff Measure Summary, HB 2185”, 1 page.

9.       Martin-Mahar, “Revenue Impact of Proposed Legislation”, HB 2185, 1 page.

10.   Buchanan, “House Revenue Committee HB 2185 Summary”, 1 page.

11.   Chair Shetterly, LC 1708, 1 page.

12.   Chair Shetterly, LC 2243, 1 page.