|
|
PUBLIC HEARING HB 2186 INTRODUCTION
LC 99, LC 145, LC 146, LC 2278, LC 2833 |
|
|
TAPE 48 |
FEBRUARY 18,
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
Witnesses Present: Debra Buchanan
Joe
Schweinhart, Associated Oregon Industries
Rob
Douglas, Oregon Society of Certified Public Accountants
Staff Present: Paul
Warner, Legislative Revenue Officer
Lizbeth
Martin-Mahar, Legislative Revenue Office
Kathy
Tooley, Committee Assistant
TAPE 48, SIDE A
|
004 |
Chair Shetterly |
Calls meeting to order at 8:36 a.m. |
OPENED WORK SESSION ON HB 2186
|
017 036 044 122 |
Lizbeth Martin-Mahar Martin-Mahar Martin-Mahar |
Presented and described the -1 amendment and elimination of the
rolling reconnect to federal law changes pertaining to taxable income. Establishes a date certain for all federal
tax changes, (Exhibit 1). The amendment does not have a revenue impact because there were no
law changes effective December 31, 2002, that changes taxable income,
(Exhibit 2). There is a minimal
fiscal impact, (Exhibit 3). Discussed “Preliminary Revenue Impact from Connecting to the 2003
Proposed Bush Economic Plan”, (Exhibit 4). Discussion regarding the rolling reconnect and the preliminary nature
of the proposed plan. |
|
127 140 171 |
Martin-Mahar Martin-Mahar |
Discussed “Federation of Tax administrator’s bulletin”, (Exhibit 5),
a tool used in the development of a preliminary revenue impact. Provided survey “Table 3. State Relationships to the Federal Tax Code
Starting Points and Automatic or Date-Certain Conformity”, (Exhibit 6), as
frame of reference for where Oregon in relationship to other states. Discussion regarding “date-certain” conformity, and instances where
3/5 majority vote is required. |
|
190 |
Hass |
Would it be your intent to have different legislation after this to
disconnect from some provisions passed by the federal government? |
|
194 |
Chair Shetterly |
My intent would not be to disconnect from anything in current law,
but to make this disconnect as we go forward. This session probably would not deal with elements of the
federal plan. This bill would lock
Oregon into December 31, 2002.
Committee members may want to have bills later that address elements
of connection points to federal law. |
|
200 |
Hass |
Does -1 amendment disconnect? |
|
205 |
Chair Shetterly |
Answered affirmatively. |
|
207 |
Lizbeth |
The -1 amendment disconnects you from future changes. Next session, if the Bush plan passed, decisions
will be made whether to disconnect with each component of the plan. |
|
220 |
Hass |
Next session it would require simple majority to vote on the
components? |
|
223 |
Chair Shetterly |
Answered affirmatively.
Concern arises when Congress goes into deficit spending strategies,
vs. management of Oregon’s priorities within biennial budget. |
|
243 |
Hass |
Where does this put the estate tax issue? |
|
245 252 |
Lizbeth |
This does not address the estate tax issue at all. That would be a different bill, we do not
automatically connect with federal law changes pertaining to estate taxes. Questions and discussion regarding estate taxation. |
|
266 |
Debra Buchanan |
Spoke to the administrative aspect of -1 amendment, does increase workload
for the Revenue Department, but won’t be asking for money or more positions. |
|
280 |
Joe Schweinhart |
Would not like to see disconnection from potential economic
incentives, but understands situation the legislature is in. |
|
295 |
Rob Douglas |
This changes things, but would go back to the prior commitment and
describe changes in federal tax code through hearings process to help make
future policy choices. |
|
320 |
|
Discussion regarding uncertainty of federal tax law changes and
affect on Oregon revenues. |
|
310 |
Chair |
No intent to move amendment today, purpose to introduce and invite
discussion. |
|
345 |
Berger |
Is there indication of timing on federal issues? |
|
350 |
Lizbeth |
Discussed with Joint Committee on Taxation, timing uncertain. |
|
355 |
Scott |
Regarding estimates, how do they come to these numbers which may or
not be factual? Are there scenarios
of reduction from where the federal government is? |
|
368 |
Martin-Mahar |
Dynamic analysis done through OTIM on bonus depreciation and feedback affects. Have not done analysis with this proposal.
When estimates are firmer, will be able to look at capturing some of the
feedback affects. |
|
383 |
|
Discussion regarding affects of tax law changes on state of Oregon. |
|
407 425 |
Paul Warner |
Important to keep in mind, the forecast is done through a national
forecast service which evaluates how tax policy, approved by Congress, will
affect the national economy. Oregon will
pick it up through forecast process.
OTIM tells what kinds of changes would change Oregon’s relative
position. Questions and discussion regarding disconnection and Oregon’s
position relative to other states and nature of biennial sessions. |
TAPE 49, SIDE A
|
033 |
|
Questions and discussion regarding economic stimulus and affects on
national and state economies. |
|
075 |
Warner |
Discussed history of federal disconnect and reconnect situations in
1980s, and 1990s. Questions and discussion interspersed. |
|
114 |
Chair |
Federal government can stimulate economy using deficit spending, and
state cannot. Discussion on length of time required for economic stimulus to take
effect. |
|
135 |
Warner |
Even under date specific policy in -1 amendment, Oregon will still be
affected by federal policy. Changes
in tax rates have a significant impact, federal investment tax credits help
economic growth without reducing tax base.
In the 1990s federal decision to reduce capital gains increased Oregon
general fund revenue by over $100 million. |
|
153 |
Barnhart |
A fixed date in the -1 amendment makes sense, it reduces the
complexity in the Oregon’s forecasting. |
|
172 |
Chair |
If Federal government doesn’t take action before sine die, the
forecast which is based on current law, wouldn’t be included in these revenue
impacts? |
|
179 |
Warner |
Explained national forecast process and links between Oregon and
national tax policy. |
|
208 |
Chair Shetterly |
Would be curious to know group of states in the group with Oregon
(Exhibit 6), are they in session, and what action is pending or are they
taking. |
|
223 |
Chair Shetterly |
Close the work session on 2186. |
|
224 |
Chair |
MOTION: MOVES INTRODUCTION OF LC 99, 145, 146,
2278, 2833. AS COMMITTEE BILLS (Exhibits 7-11). Clarifies the bill is
entered as Committee Bills, but does not signify support or opposition by the
members of the Committee. ORDER: THERE BEING NO OBJECTION, THE CHAIR SO
ORDERS. Members present: Chair Shetterly, Barnhart, Berger, Farr,
Hass, Hopson, Scott, Verger, Williams. |
|
|
Chair Shetterly |
Meeting adjourned at 9:25 a.m. |
Tape Log Submitted by,
Kathy Tooley, Committee
Assistant Reviewed by Kim Taylor James
Exhibit Summary:
1.
Martin-Mahar,
“HB 2186-1”, 1 page
2.
Martin-Mahar,
“Staff Measure Summary HB 2186-1”, 1 page
3.
Martin-Mahar,
“Fiscal Impact HB 2186-1”, 1 page
4.
Martin-Mahar,
“Preliminary Revenue Impact from Connecting to the 2003 Proposed Bush Economic
Plan”, 1 page
5.
Martin-Mahar,
FTA Bulletin, February 12, 2003, 8 pages
6.
Martin-Mahar,
“Table 3. State Relationships to the Federal Tax Code Starting Points and
Automatic or Date-Certain Conformity”, 1 page
7.
Chair
Shetterly, “LC 99”, 4 pages
8.
Chair
Shetterly, “LC 145”, 2 pages
9.
Chair
Shetterly, “LC 146”, 4 pages
10.
Chair
Shetterly, “LC 2278”, 5 pages
11.
Chair
Shetterly, “LC 2833”, 3 pages