Work Session HB 2625, HJR 18, HB 2664

 

TAPE 124, 125, A

 

HOUSE REVENUE COMMITTEE

APRIL 15, 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:                        John Phillips, Oregon Department of Revenue

                                                Inge Deckert, Oregon State Treasury

                                                Chuck Smith, Oregon State Treasury

                                                Brian Reeder, Oregon Department of Education

                                                Michael Parker, Oregon State Treasury

 

Staff Present:                            Paul Warner, Legislative Revenue Officer

                                                Steve Meyer, Legislative Revenue Office

                                                Lizbeth Martin-Mahar, Legislative Revenue Office

                                                Mazen Malik, Legislative Revenue Office

                                                Kathy Tooley, Committee Assistant

 

TAPE 124, SIDE A

004

Chair Shetterly

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

 

OPENED WORK SESSION HB 2625

020

John Phillips

Discussed follow up to questions regarding cargo containers from April 8, 2003 Public Meeting on HB 2625 (Exhibit 1).

 

038

Chair Shetterly

This bill reinstates an exemption that was on the books since 1970’s?

 

040

Phillips

1979.

 

051

Rep. Scott

MOTION:  MOVED HB 2625 TO THE HOUSE FLOOR WITH A DO PASS RECOMMENDATION

 

ROLL CALL:  MOTION PASSED 7-0-2

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

 

Rep. Berger will carry the bill.

 

059

Chair Shetterly

Closed Work Session on HB 2625.

 

 

OPENED PUBLIC HEARING ON HJR 18

069

Steve Meyer

Described and provided background on HJR 18 (Exhibit 4).  Discussed provision for submission to voters for May 2004 primary election.  Discussed -1 and -2 amendments (Exhibit 6).

 

093

Inge Deckert

Discussed -2 amendment to HJR 18 and HB 2663 (Exhibit 7), and summary of the amendments (Exhibit 8). 

 

163

Chair Shetterly

HJR 18 is just authorization; it doesn’t create debt or issue any bonds?

 

164

Deckert

Answered affirmatively.

 

172

Rep. Hass

Why is it a good idea to take away the function of creating the school capital matching fund away from the rainy day fund?  That was one of the selling points of the original plan.

 

178

Chair Shetterly

The concern with HJR 18 is if approved it would have a capital matching fund under HJR 18, and a second within the Education Stability Fund serving the same purpose, but not the same funds.  By putting this together it merges funds into one, and can be coordinated.

 

193

Rep. Hass

That makes sense, why not eliminate that fund?

 

198

Chair Shetterly

Under the Education Stability Fund?

 

199

Rep. Hass

Answered affirmatively.

 

201

Chair Shetterly

That gets into more fundamental amendments to the stability funds.

 

204

Rep. Hass

It is finding something else to do with that money after it reaches the cap, so it doesn’t become redundant?

 

206

Chair Shetterly

It is still going to serve the same purpose as is currently provided in the stability fund.

 

210

Deckert

The amendments leave in tact the original intent of the creation of the sub account within stability fund.  It consolidates two programs into one.

 

216

 

Questions and discussion regarding process by which matching funds are expended.

 

262

 

Question and discussion regarding debt service on general obligation (GO) bonds for capital improvements.

 

290

Chair Shetterly

There is general fund and lottery what other sources are used to pay back GO bonds.

 

294

Chuck Smith

Oregon Health Science University GO bonds will be paid out of Tobacco Revenues.

 

299

Rep. Hass

If this measure gets out and passes before school district trigger hits, before the stability fund gets to the 5% cap what happens to money after that?

 

308

Deckkert

18% of net lottery proceeds flow into rainy day fund, 15% into the school capital matching fund.  Without bill there is no mechanism to use funds.

 

316

Chair Shetterly

Until implementing legislation.

 

318

Brian Reeder

Regarding Rep. Verger’s question “How will the department decide who gets the money?”  Currently HB 2663 leaves that up to the department and the State Board of Education in rule making process.  The bill does not specify criteria for making the grants.  Discussed methods that could be used.  Discussed State of Washington approach looks at district need based on assessed value per student.

 

372

 

Questions and discussion regarding current and historical responsibility for capital projects local vs. state.

 

 

TAPE 125, SIDE A

028

Chair Shetterly

Discussion as to intended Committee action on HJR 18 and HB 2663, plan to rescind subsequent referral to Ways and Means on HJR 18; and deferring action on HB 2663 for a later session.

 

053

Rep. Hass

At issue in last session was a sliding formula that is not in HB 2663. Is the intention to set it up in rules? How will formula work?

 

050

Reeder

The bill states that the State Board will establish rules for administering the program.  Have not had discussion on criteria for a match.

 

063

Chair Shetterly

Discussed three tiers, HJR 18 constitutional authority; HB 2663 implementing legislation; the third tier is rule making authority for the department.  This session, focus is on constitutional authority for a fund and se how voters respond. Next legislature will address implementation and rule making in one piece.  Don’t want to complicate Department of Education budget with referral to Ways and Means.

 

091

Chair Shetterly

Closed work session on HJR 18.

 

 

OPENED WORK SESSION ON HB 2664

099

Lizbeth Martin-Mahar

Provided description and background of HB 2664-2 (Exhibit 9).   Discussed -2 amendment as replacing -1 (Exhibit 10).  Described revenue impact, (Exhibit 11).

 

145

Michael Parker

Biggest change is in the roll-forward tax deduction, capping at 5 year period per contribution, reduces revenue impact.

 

151

Chair Shetterly

So, if donated $10,000 in one year, the carry-forward would be limited to $2000 per year no matter how much was put in.

 

155

Parker

Answered affirmatively.

 

145

Rep. Hass

Spoke in supports of HB 2664, however, as this program gets complicated with carry forward provisions, and requirement for tax assistance, may be catering to level of income earner that misses middle class people that do not have that level of sophistication.  Intent is to provide a program for getting kids to college.

 

183

Parker

The Treasurer shares that concern. Plan easy to participate in with $25 minimum monthly investment.  Push of next biennium is to have investor education, a 24-hour call center, so don’t need an accountant to participate.

 

217

Shetterly

Discussed positive personal experience as consumer of program with Strong as administrator of the program and information available on internet, by phone and by mail.

 

212

Parker

Strong has won awards for customer service and it is staffed 24 hours, 7 days a week.

 

240

Rep. Williams

MOTION:  MOVED ADOPTION OF THE –2 AMENDMENTS INTO HB 2664.

 

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

 

246

Rep. Williams

MOTION:  MOVE TO RESCIND REFERRAL TO WAYS AND MEANS COMMITTEE AND MOVE HB 2664 AS AMENDED TO THE HOUSE FLOOR WITH A DO PASS RECOMMENDATION.

 

255

Rep. Barnhart

Some people put $4000-5000 into the program and only get a $2000 deduction, why would anybody do that?

 

260

Parker

Discussed calculators for parents of older childrem and $2000 would be insufficient to get child to college.  People figure out how much to invest per year and put that in.

 

270

Chair Shetterly

All earnings are tax free; the deduction is only for $2000.

 

272

Parker

All earnings are state and federal tax free.

 

277

 

ROLL CALL:  MOTION PASSED 9-0-0

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

 

Rep. Hass  will carry the bill.

 

286

Chair Shetterly

Closed work session on HB 2664.

 

 

288

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.       Phillips, “Memo: HB 2625:  Cargo Container Questions from Public Hearing on 4-8-03”, 2 pages

2.       Malik, “Staff Measure Summary HB 2625”, 1 page

3.       Malik, “Revenue Impact HB 2625”, 1 page

4.       Meyer, “Staff Measure Summary HJR 18-1”, 1 page

5.       Olsen, “Fiscal Analysis HJR 18”, 1 page

6.       Meyer, “-2 Amendment HJR 18”, 7 pages

7.       Deckert, “HB 2663-2 Amendment”, 3 pages

8.       Deckert, Summary “Amendments to HJR 18 and HB 2663”, 1 page

9.       Martin-Mahar, “Staff Summary HB 2664-2”, 1 page

10.   Martin-Mahar, “HB 2664-2 Amendment”, 2 pages

11.   Martin-Mahar, “Revenue Impact HB 2664-2”, 1 page

12.   Parker, “Testimony HB 2664-2”, 1 page