WORK SESSION HB 2168, HB 3033, HB 3183,

 HB 2043

PUBLIC HEARING HB 3184

 

TAPE 122, 123 A

 

HOUSE REVENUE COMMITTEE

APRIL 14, 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                                               

 

Witness Present:                        Matt Blevins, Oregon Environmental Council

                                                Representative Deborah Kafoury, District 43

                                                Rebecca Shine, State Advisory Committee to the Childcare Division

                                                Laura Smith, Enterprise Foundation

                                                Dexter Johnson, Legislative Counsel

 

Staff Present:                            Paul Warner, Legislative Revenue Officer

                                                Lizbeth Martin-Mahar, Legislative Revenue Office

                                                Kathy Tooley, Committee Assistant

 

TAPE 122, SIDE A

 

004

Chair Shetterly

Calls meeting to order at 8:40 a.m.

 

OPENED WORK SESSION ON HB 2168

 

024

Chair Shetterly

Described -1 amendment (Exhibit 1), removes revenue impact for the coming biennium and provides HB 2168 as vehicle for Senate to restructure budget; Senate can return revenue impact.

 

038

Lizbeth Martin-Mahar

Confirmed -1 amendment restores current law cap on the total amount and has no revenue impact.

 

039

Chair Shetterly

Qualified assignee changes are still in place?

 

040

Martin-Mahar

Answered affirmatively.

 

051

 

053

Rep. Verger

 

Chair Shetterly

MOTION:  MOVED ADOPTION OF THE –1 AMENDMENT INTO HB 2168.

 

ORDER:  HEARING NO OBJECTION, THE CHAIR SO ORDERS. (ALL MEMBERS PRESENT EXCEPT REP. HASS AND REP. WILLIAMS, EXCUSED).

 

054

 

 

057

 

 

 

 

059

Rep. Verger

MOTION:  MOVED HB 2168 TO THE HOUSE FLOOR WITH A DO PASS RECOMMENDATION.

 

ROLL CALL:  MOTION PASSED 7-0-2 (*See Tape 122, Meter 102 and 156).

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

 

Rep. Scott will carry the bill. (**See Tape 122, Meter 156.)

 

 

OPENED WORK SESSION ON HB 3033

 

067

Martin-Mahar

Provided description of HB 3033; -1 amendment deletes revenue impact.

 

089

Chair Shetterly

MOTION:  MOVED ADOPTION OF THE –1 AMENDMENT INTO HB 3033.

 

ORDER:  HEARING NO OBJECTION, THE CHAIR SO ORDERS. (ALL MEMBERS PRESENT EXCEPT FOR REP. WILLIAMS, EXCUSED).

 

098

 

 

100

 

 

 

103

Chair Shetterly

 

 

 

 

 

 

Chair Shetterly

MOTION:  MOVED HB 3033 TO THE WAYS AND MEANS COMMITTEE FLOOR WITHOUT RECOMMENDATION AS AMENDED.

 

ROLL CALL:  MOTION PASSED 8-0-1. (***See Tape 122, Meter 268.)

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

 

Closed Work Session on HB 3033.

 

 

102

 

Chair Shetterly

MOTION:  REQUESTS UNANIMOUS CONSENT TO RETURN TO THE WORK SESSION ON HB 2168, TO ALLOW REP. HASS TO VOTE. (*See Tape 122, Meter 057.)

 

ORDER:  THERE BEING NO OBJECTION, THE CHAIR SO ORDERS.  (ALL MEMBERS PRESENT, EXCEPT FOR REP. WILLIAMS, EXCUSED.)

 

 

REOPENED WORK SESSION ON HB 2168

 

106

 

REP. HASS VOTES AYE.

 

107

Chair Shetterly

Closes the Work Session on HB 2168.

 

OPENED WORK SESSION ON HB 3183

 

110

Martin-Mahar

Described bill, changes the corporate apportionment formula, describes no revenue impact for coming biennium.

 

143

 

 

146

 

 

 

155

 

156

Rep. Verger

MOTION:  MOVED HB 3183 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, Chair Shetterly.  EXCUSED:  Rep. Williams (****See Tape 122, Meter 273.)

 

Rep. Scott will carry the HB 3183.

 

Rep. Farr will carry HB 2168. (**See Tape 122, Meter 059.)

 

157

Chair Shetterly

Closed Work Session on HB 3183

 

OPENED WORK SESSION ON HB 2043

 

170

Martin-Mahar

Provided description of HB 2043, (Exhibit 4), -5 amendment, (Exhibit 5), revenue impact for 2005-2009 (Exhibit 6).

 

210

Chair Shetterly

Asked Matt Blevins if he had seen -5 amendments and if they incorporated what was intended.

 

213

Matt Blevins

-5 amendments currently incorporate all amendments asked for in the bill.

 

222

Chair Shetterly

Described individual amendments, -5 amendment incorporates -1 and -5.

 

224

Rep. Hass

MOTION:  MOVED ADOPTION OF THE –5 AMENDMENTS INTO HB 2043.

 

ORDER:  HEARING NO OBJECTION, THE CHAIR SO ORDERS. (ALL MEMBERS PRESENT.)

 

227

Rep. Hass

MOTION:  MOVED HB 2043 TO THE HOUSE FLOOR WITH A DO PASS RECOMMENDATION.

 

233

Rep. Verger

For the record, believes in mileage based insurance; “this bill is a good bill for urban areas and congested areas. I just cannot vote for it for my district, we are a rural area, we do not have alternative public transportation and we have people having to commute to Eugene and many miles just to get employment.”

 

245

 

ROLL CALL:  MOTION PASSED 8-1-0

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

 

Rep. Williams  will carry the bill.

 

 

 

Closed public hearing on HB 2043.

 

 

261

 

 

263

Chair Shetterly

 

 

Chair Shetterly

MOTION:  REQUESTS UNANIMOUS CONSENT TO RETURN TO THE WORK SESSION ON HB 2168, TO ALLOW REP. WILLIAMS TO VOTE.

 

ORDER:  THERE BEING NO OBJECTION, THE CHAIR SO ORDERS.  (ALL MEMBERS PRESENT.)

 

 

 

REOPENED WORK SESSION ON HB 2168

 

264

 

REP. WILLIAMS VOTES AYE.

 

FINAL VOTE:  MOTION PASSED 9-0-0 (*See Tape 122, Meter 057)

 

265

Chair Shetterly

Closed Work Session on HB 2168.

 

 

267

Chair Shetterly

MOTION:  REQUESTS UNANIMOUS CONSENT TO RETURN TO THE WORK SESSION ON HB 3033, TO ALLOW REP. WILLIAMS TO VOTE.

 

ORDER:  THERE BEING NO OBJECTION, THE CHAIR SO ORDERS.  (ALL MEMBERS PRESENT.)

 

 

REOPENED WORK SESSION ON HB 3033

 

268

Rep. Williams

REP WILLIAMS VOTES AYE.

 

FINAL VOTE:  MOTION PASSED 9-0-0. (***Tape 122, Meter 100.)

 

269

Chair Shetterly

Closed Work Session on HB 3033.

 

271

Chair Shetterly

MOTION:  REQUESTS UNANIMOUS CONSENT TO RETURN TO THE WORK SESSION ON HB 3183, TO ALLOW REP. WILLIAMS TO VOTE.

 

ORDER:  THERE BEING NO OBJECTION, THE CHAIR SO ORDERS.  (ALL MEMBERS PRESENT.)

 

 

REOPENED WORK SESSION ON HB 3183

 

273

 

REP WILLIAMS VOTES AYE.

 

FINAL VOTE:  MOTION PASSED 9-0-0. (****Tape 122, Meter 146.)

 

275

Chair Shetterly

Closed the Work Session on HB 3183.

 

OPENED WORK SESSION ON HB 3184

 

245

Martin-Mahar

Provided description, discussed sunset, (Exhibit 7), -1, (Exhibit 8) and -2 (Exhibit 9) amendments for HB 3184.

 

370

Chair Shetterly

Passed last session, due to technical problems was not implemented, the amendments corrected those problems.

 

372

Deborah Kafoury

Spoke in support of HB 3184.  Provided history, idea to make high quality childcare more affordable and accessible for Oregonians.

 

385

Chair Shetterly

No policy changes, just technical changes to a bill that was unanimous in both House and Senate last year? 

 

390

Rep. Kafoury

Answered affirmatively.

 

392

Chair Shetterly

Is there a revenue impact?

 

393

Martin-Mahar

Discussed revenue impact due to extension of sunset (Exhibit 10).

 

395

Chair Shetterly

That’s out, nothing in this biennium?

 

399

Martin-Mahar

Answered affirmatively.

 

402

Rebecca Shine

Spoke in support of HB 3184, private sector resources to benefit child care. Funds would: Increase revenue for childcare businesses, decrease parent costs, and improve the quality of care.  Attorney General’s office recommended technical changes before implementation.

 

423

Laura Smith

Recommends Committee move -2 amendments which combines -1 to allow Child Care Division to have leeway in setting the value of tax credit based on upcoming decision from Internal Revenue Service (IRS).

 

437

Chair Shetterly

What’s the tie-in to the IRS?

 

439

Laura Smith

Asked IRS opinion if a contributor could take a tax credit and in addition take the Federal Charitable Contribution tax credit. Awaiting notification, have had favorable discussions with IRS.  The Childcare Division by rule could lower the tax credit currently at $1.50 return for every $1 spent.

 

475

Debra Buchanan

There is a question with the AG’s office as to whether contributions would be deductible for Oregon purposes if received federal credit.

 

494

Chair Shetterly

May require a further amendment?

 

495

Buchanan

Answered affirmatively.

 

503

Chair

Does it need to be a qualifying contribution for both a credit and deduction?

 

506

Shine

The -2 covers that to allow the Childcare Division to set the ratio appropriately pending IRS decision.

 

 

TAPE 123, SIDE A

 

040

Chair Shetterly

There’s a separate state issue irrespective of what the IRS might rule?

 

043

Buchanan

Believe it’s correct, concerned that contributor could receive both credit and deduction at the state level because do not have charitable intent as money is received back through credit.

 

047

Shine

Clarified, not looking for a deduction at the state level.  Looking for credit at state level and potentially a federal deduction.  Does that help?

 

050

Buchanan

Answered affirmatively.

 

052

Chair

Does it help enough? Or is an amendment necessary to clarify that intent?

 

053

Buchanan

That statement of intent is consistent with the AG’s advice. A contributor would not qualify for a deduction on the Oregon return if claiming a credit for Oregon purposes.

 

055

Chair Shetterly

An amendment is not required?

 

056

 

Buchanan

Answered affirmatively.

055

Dexter Johnson

Discussed drafting concern regarding a double deduction risk at the state level. This would have to be done in the form of an additional subtraction.  If IRS approves, an even larger benefit might be created.

 

072

Rep. Hass

Can the state obligate federal government as to what may or may not be deducted from federal taxes?

 

075

Johnson

No, the IRS will decide if the donation qualifies for a charitable deduction.

 

075

Rep. Barnhart

If the IRS says a contribution is deductible, Oregon by rule will establish a credit so that no one gets more than their money back?

 

087

Johnson

Discussed purpose of grant rule making authority is to adjust credit so there is a financial return.  The intent is to return of more than 100%.

 

102

Chair Shetterly

Question and discussion regarding $500,000.

 

112

Barnhart

Is part of the object to get the federal government to contribute to the process; why not an appropriation?

 

115

Rep. Kafoury

Did not anticipate credit as being a charitable contribution at the state level.   The credit will be more than 1:1.  Why is it not an appropriation?  Goes back to discussion on tax credits vs. appropriations.

 

126

Chair Shetterly

It was not anticipated or intended for this to be taken as a deduction in addition to a credit for state tax purposes?

 

132

Rep. Kafoury

Answered affirmatively.

 

133

Johnson

The bill and law takes the position that state law will follow federal law. It would allow a deduction if allowed for federal purposes. If the Committee did not want that, it would require a specific add-back.

 

141

 

Discussion regarding ad back.

 

 

 

144

Chair Shetterly

Would an additional amendment make that explicit?

 

146

Rep. Kafoury

Answered affirmatively.  Goal to attract money from business and investors that has not been there; it has worked very well in affordable housing arena and could work well in the child care arena as well.

 

162

Chair Shetterly

Closed Public Hearing on HB 3184.

 

170

Chair Shetterly

Meeting adjourned at 9:20 a.m.

 

Tape Log Submitted by,

 

 

 

Kathy Tooley, Committee Assistant Reviewed by Kim Taylor James

 

Exhibit Summary:

1.       Chair Shetterly, “-1 Amendment HB 2168”, 1 page

2.       Martin-Mahar, “Staff Measure Summary HB 2168”, 1 page

3.       Martin-Mahar, “Staff Measure Summary HB 3033-1”, 1 page

4.       Martin-Mahar, “Staff Measure Summary HB 2043-5”, 1 page

5.       Martin-Mahar, “-5 Amendment HB 2043-5”, 1 page

6.       Martin-Mahar, “Revenue Impact HB 2043-5”, 1 page

7.       Martin-Mahar, “Staff Measure Summary HB 3184-1”, 1 page

8.       Martin-Mahar, “-1 Amendment HB 3184”, 2 pages

9.       Martin-Mahar, “-2 Amendment HB 3184”, 4 pages

10.   Martin-Mahar, “Revenue Impact HB 3184-1”, 1 page