PUBLIC HEARING AND WORK SESSION

 SB 222, SB 224, HB 2187

 

TAPE 69, 70 A

 

HOUSE REVENUE COMMITTEE

MARCH 6, 2003   8:30 AM   STATE CAPITOL BUILDING

 

Members Present:                        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                                               

 

Members Excused:                      Representative Lane Shetterly, Chair

 

Witness Present:                        John Phillips, Oregon Revenue

                                                Doug Ebner, Marion County Assessor

 

Staff Present:                            Paul Warner, Legislative Revenue Office

                                                Mazen Malik, Legislative Revenue Office

                                                Kathy Tooley, Committee Assistant

 

TAPE 69, SIDE A

 

021

Vice Chair Scott

Calls meeting to order at 8:35 a.m.

 

PUBLIC HEARING ON SB 222

 

030

Mazen Malik

Provided a description and background of SB 222, (Exhibit 1).

 

044

John Phillips

Provided background of SB 222, including Measure 50, ordering of exceptions, (Exhibit 2).

 

080

Vice Chair Scott

Closed Public Hearing on SB 222

 

WORK SESSION ON SB 222

 

074

 

 

089

 

 

 

100

Rep. Hass

MOTION:  MOVED SB 222 TO THE HOUSE FLOOR WITH A DO PASS RECOMMENDATION

 

ROLL CALL:  MOTION PASSED 8-0-1

REPRESENTATIVES VOTING AYE:  Barnhart, Berger, Farr, Hass, Hopson, Scott, Verger, Williams.  EXCUSED:  Chair Shetterly.

 

Discussion regarding consent calendar candidacy.

 

 

 

Rep. Farr will carry the bill.

 

 

PUBLIC HEARING ON SB 224

 

111

Malik

Provided a description and background of SB 224, (Exhibit 3).

 

130

Phillips

Provided background and scope of the measure; discussed Director of Revenue authority to add omitted property, 5 year limitations, (Exhibit 4).

 

160

Rep. Hass

Define “centrally assessed properties”.

 

178

Phillips

Defined centrally assessed properties.

 

186

Rep. Hass

What is the relationship of “omitted property”.

 

188

Phillips

Described “omitted property”.

 

203

Rep. Verger

That seems very lenient to only assess 5 years taxes.  What about non-profit property that might fall into the category and goes to court?  If a non-profit prevails, and then a later time another does not prevail, does this bill go back 5 years and assess taxes on the first property?

 

212

Phillips

That is a known situation.  This bill deals with omitted property, not known to the assessor.

 

230

Rep. Barnhart

Why 5 years?  Why not 10 or 3?

 

242

Phillips

Don’t know the history of 5 years.  Not in the bill to determine intent of the omission.  Policy decision is to find a balance; could be the taxpayer or the assessor’s mistake. Five years is closely related to 5 year foreclosure process.

 

280

 

Question and discussion regarding frequency of large omissions?

 

339

Rep. Barnhart

Five years conforms to the other statute and a number of convenience.

 

342

Phillips

Five years puts taxpayers on an equal playing field, it’s our interpretation and what we have been doing.

 

349

Malik

Five years is part of a court case.

 

358

Hopson

If makes no difference if it was purposeful or accidental?

 

345

Phillips

Answered affirmatively.  Discussed situations of omissions that were purposeful and those where taxpayer was unaware of discrepancy.

 

378

Rep. Hopson

They are treated exactly the same?

 

380

Phillips

Answered affirmatively.

 

362

Rep. Verger

It’s difficult to do a great deal to a residence when permits are required, it seems 5 years gives the assessor a lot of time to discover omitted property and assess.  Three years seems more reasonable for the taxpayer to be charged.

 

395

Rep. Berger

Five years isn’t on discovery, but how far back you can go to collect omitted taxes?

 

415

Phillips

Answered affirmatively.

 

420

Rep. Barnhart

Expressed opposite view on period of time.  If a business manages to hide construction without a permit for 25 years, they should pay for the 25 years.  The challenge is determining intent of taxpayer, 5 years may be a reasonable compromise without looking at intent.

 

TAPE 70, SIDE A

 

002

Rep. Verger

This would be a deliberate attempt on the part of that business.  Accidental omissions could happen, would not want it to be a witch hunt.

 

011

Rep. Williams

Having bill have no intent and five years seems to be a reasonable balance.  Proof issues to determine intent would probably exceed value of additional tax revenue.  Want property to be freely transferable.  Would support bill as it reads currently.

 

032

Rep. Barnhart

Would concur.

 

033

Rep. Farr

What proof is required that the improvement has been there for 5 years?

 

040

Phillips

Discussed claim and notice process, opportunity for response and appeals.

 

042

Rep. Farr

Would appeals process eat up additional revenue from 5 years of taxes?

 

057

 

 

058

Phillips

Five years starts when notice process starts, value is added to the role, starts at that point, not during appeals process.

 

Questions and discussion regarding process.

 

065

Rep. Scott

SB 224 has to do with central property rather than residential.

 

068

Rep. Verger

Is there cost to the appeals process?

 

069

Phillips

Yes.  Staff time and other.

 

071

Rep. Verger

Who pays the cost?

 

076

Phillips

Depends on the appeal, discusses tax court.

 

087

Rep. Verger

There is no added expense to the person, when property changes hands and omission was made without knowing?

 

092

Phillips

There is a filing fee, defers to County Assessor

 

098

Doug Ebner

Discussed filing with tax magistrate, with protections for new owners.

 

115

Vice Chair Scott

Closed public hearing on HB 224

 

WORK SESSION ON SB 224

 

 

116

Rep. Williams

MOTION:  MOVED SB 224 TO THE HOUSE FLOOR WITH A DO PASS RECOMMENDATION

 

ROLL CALL:  MOTION PASSED 7-1-1

REPRESENTATIVES VOTING AYE:  Barnhart, Berger, Farr, Hass, Hopson, Scott, Williams.  VOTING NO:  Verger.  EXCUSED:  Chair Shetterly.

 

Rep. Williams will carry the bill.

 

 

130

Vice Chair Scott

Closed the work session on SB 224.

 

 

WORK SESSION ON HB 2187

 

131

Vice Chair Scott

Open work session on HB 2187

 

135

Mazen

Provided a description and background of HB 2187, (Exhibit 5), discusses revenue and constitutional impact.

 

172

Rep. Berger

Discussed Shiloh case.  Supportive of this bill.

 

195

Rep. Hass

Revenue shift caused by court decision, not by this legislation, so whether this is done or not, that shift will occur?

 

186

Mazen

Answered affirmatively.  This bill tries to codify into law.

 

204

Rep. Berger

MOTION:  MOVED HB 2187 TO THE HOUSE FLOOR WITH A DO PASS RECOMMENDATION

 

ROLL CALL:  MOTION PASSED 9-0-0

REPRESENTATIVES VOTING AYE:  Barnhart, Berger, Farr, Hass, Hopson, Scott, Verger, Williams.  EXCUSED: Chair Shetterly.

 

Rep. Berger will carry the bill.

 

221

 

223

Vice Chair Scott

 

Vice Chair Scott

Closed work session on HB 2187.

 

Meeting adjourned at 9:15 a.m.

 

 

 

 

 

Tape Log Submitted by,

 

 

 

Kathy Tooley, Committee Assistant Reviewed by Kim Taylor James

 

Exhibit Summary:

1.       Malik, “Staff Measure Summary SB 222”, 2 pages

2.       Phillips, “Testimony SB 222”, 2 pages

3.       Malik, “Staff Measure Summary SB 224, 2 pages

4.       Phillips, “Testimony SB 224”, 1 page

5.       Malik, “Staff Measure Summary HB 2187”, 2 pages