WORK SESSION, HB 3134, HB 2298-A

 HB 3160

PUBLIC HEARING HB 2747-A HB 2166

 

TAPE 126, 127 A-B; 128 A

 

HOUSE REVENUE COMMITTEE

APRIL 16, 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:                        Patti Milne, Marion County Commissioner

                                                James Balkema, Private Investor

                                                John Phillips, Oregon Department of Revenue (DOR)

                                                Diane Belt, Oregon Association of County Tax Collectors

                                                Bob Vroman, Clackamas County Department of Assessment and Taxation

                                                Gary Bartholomew, Oregon Association of County Tax Collectors,

                                                            Multnomah County employee

                                                Representative Tom Butler, District 60

                                                Representative Greg Smith, District 57

                                                Representative Derrick Kitts, District 30

                                                Senator Charlie Ringo, District 17

                                                Representative Jackie Dingfelder, District 45

                                                Matt Blevins, Oregon Environmental Council

                                                David Williams, Oregon School Employees Association,

                                                            Oregon Revenue Coalition

                                                Lynn Partin, Oregon Housing and Community Services Department

                                                Baltazar Ortiz, Founder of a non-profit housing corporation

                                                John McCulley, Tree Fruit Growers,

                                                            Professional Administrative Services, Inc.

                                                Don Schellenberg, Oregon Farm Bureau

                                                Peter Hainley, Community And Shelter Assistance Corp.

 

Staff Present:                            Paul Warner, Legislative Revenue Officer

                                                Mazen Malik, Legislative Revenue Office

                                                Lizbeth Martin-Mahar, Legislative Revenue Office

                                                Richard Yates, Legislative Revenue Office

                                                Kathy Tooley, Committee Assistant

 

TAPE 1, SIDE A

027

Chair Shetterly

Calls meeting to order at 8:40 a.m.  Will not hear HB 2184 at this time.

 

OPENED WORK SESSION ON HB 3134

 

036

Paul Warner

Described -2 amendments to HB 3134 (Exhibit 1). Discussed change in the foreclosure process. Area of concern regarding proceeds in the amendment, question as to impacts on statewide County Assessments Functions Funding Account (CAFFA).  There will be an additional amendment, as yet undrafted, which reqiures DOR to take this program into account when allocating CAFFA distribution.

 

066

Commissioner Patti

Milne

 

Spoke in support of HB 3134.  At issue is 16% interest counties charge on late taxes.

 

045

 

Questions and discussion regarding distribution formula and lien sale program.

 

190

Milne

Discussion of legal process for delinquent property owners whereby the county takes possession with no flexibility to extend time for payment.  HB 3134 proposes to allow a private investor pursue the foreclosure process, with possible additional flexibility in extending time for payment.

 

229

James Balkema

Discussed benefits to the county by sale of liens to an investor (Exhibit 2).

 

326

 

 

330

John Phillips

 

 

Phillips

Provided testimony regarding CAFFA fund, “HB 3134 Sale of Tax Lien Certificates” (Exhibit 3).

 

Discussed -2 amendments and DOR review process, need for additional research.

 

389

Chair Shetterly

Want to make sure DOR had reviewed and that the bill was technically workable.

 

398

Diane Belt

Spoke in opposition to HB 3134. Bill is modeled on Arizona process and discussed differences and conversations with Arizona treasurers (Exhibit 4).

 

476

 

Questions and discussion regarding participating and non-participating county in DOR grant.

 

 

TAPE 127, SIDE A

 

027

Bob Vroman

Spoke in opposition to HB 3134, citing potential revenue loss, (Exhibit 5).   This new process will require additional programming costs and staff.  Believes current system provides incentives for timely payment.

 

110

Gary Bartholomew

Concerns regarding HB 3134, does not see support from counties, questions why process is being brought forward.  Feels the bill does not include enough statutes to cover the subject adequately.

 

155

Chair Shetterly

Would like to see amendments, sensitive to Assessmenet and Taxation distribution and CAFFA.  Issues regarding workload, programming and process are county concern. Concern for statewide CAFFA fund distribution.

 

180

Chair Shetterly

Closed Work Session on HB 3134

 

OPENED WORK SESSION ON HB 2298-A

 

187

Mazen Malik

Provided description and background of HB 2298-A.

 

212

Rep. Tom Butler

Spoke in support of 2298-A, as an attempt to get jobs.

 

259

Greg Smith

Spoke in support of 2298-A, provides an opportunity to encourage companies from out of state to help rural, economically distressed communities with family wage jobs.  Discussed ports issue.

 

355

Chair Shetterly

For the record, representatives of Office of Economic and Community Development Department (OECDD) are present and nodded affirmatively that the bill works.

 

360

Rep. Butler

HB 2298-A is cost and revenue neutral, and would bring jobs to rural Oregon.

 

377

Rep. Scott

MOTION:  MOVED HB 2298-A TO THE HOUSE FLOOR WITH A DO PASS RECOMMENDATION

 

384

Rep. Barnhart

Will vote for it but bill appears to provide a number of difficult hoops for a small out of state business to jump through.

 

411

Chair Shetterly

The bill will require marketing by OECDD.  Cited the bill as narrow and targeted, rural communities want it and OECDD feels they can make it work.

 

432

 

 

 

 

 

434

 

 

 

 

 

 

Chair Shetterly

ROLL CALL:  MOTION PASSED 9-0-0

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

 

Rep. Butler  will carry the bill.

 

Closed the Work Session on HB 2298-A.

 

 

OPENED WORK SESSION ON HB 3160

TAPE 126, SIDE B

 

016

Lizbeth Martin-Mahar

 

Provided description and background of HB 3160, (Exhibit 8). Bill does not provide specific definition of wood product industry which will depend on OECDD rule.  Provided revenue impact (Exhibit 9).

 

057

Rep Derrick Kitts

Spoke in support of HB 3160, his district does not have mills that would be affected by bill.  Described intent behind the bill is to stimulate the economy, provide diversity and provide stimulus to wood products industries.  Will have amendment with cap at $2 million.

 

097

Chair Shetterly

The House passed a property tax exemption for logging equipment; would the bill apply to this same equipment, so they would receive an income tax credit and a property tax exemption?

 

099

Martin-Mahar

It will depend on how you define wood products; some of the logging equipment may not apply.

 

101

Chair Shetterly

Do you have a definition for wood products?

 

105

Rep. Kitts

It is included in the amendment, will follow up with Legislative Counsel, geared toward production of timber to wood for mills in light of President Bush’s Healthy Forest Initiative.

 

118

Chair Shetterly

For the record, Oregon Revenue Coalition has provided written testimony (Exhibit 10).

 

121

Rep. Verger

It might help to have wood products industry speak on the difference in logging equipment and the process.

 

134

Chair Shetterly

Closed Work Session HB 3160.

 

 

OPENED PUBLIC HEARING ON HB 2747

 

143

Richard Yates

Provided description and background of HB 2747 (Exhibit 11); described -3 amendment (Exhibit 12).  Provided Revenue Impact (Exhibit 13).

 

176

Sen. Charlie Ringo

Spoke in support of HB 2747.  This bill is intended to close a tax loophole in purchase of large SUV’s. Discussed impacts to environment, and increased reliance on foreign oil.

 

205

Sen. Ringo

Discussed Detroit News article, (Exhibit 14), provided examples of business professionals that have taken advantage of incentive to buy SUVs.

 

227

Sen. Ringo

Described -2 and -3 amendments, which allow incentives to purchase an SUV, but reduces the amount.  The differences are explained in “Monster SUV Tax Loophole – Two Options”, (Exhibit 15). Believes Don Schellenberg of the Farm Bureau approves because farm vehicles have been excluded.

 

288

Chair Shetterly

Noted bill came out of House Transportation Committee with a do pass recommendation.

 

279

Rep. Farr

There is a farm exemption on this, how does it affect a lumber yard owner who owns a SUV and uses it make deliveries?

 

303

Sen. Ringo

If someone has a need for a large vehicle, they could buy one with four wheels in the back and this would not apply, or purchase one just under 6000 pounds, it would then depreciate on normal schedule, not accelerated.

 

294

Rep. Barnhart

Question regarding federal tax law.  This deduction replaces normal business deduction for these vehicles, or would the normal business deduction still apply even with this proposed bill.

 

320

Sen. Ringo

Cannot impact the federal return, but would add back on the state level and would lessen the financial incentive.

 

Provided Press Release on HB 2747-A (Exhibit 16)

 

331

Rep. Barnhart

Questions and discussion regarding business depreciation write-offs.

 

405

Rep. Jackie

Dingfelder

Spoke in support of HB 2747-A, (Exhibit 17). Deduction history as intended for agriculture sector to deduct the cost of farm vehicles and has grown to $25,000 includes SUV’s; Congress may raise deduction to $75,000. Discussed New York proposed legislation (Exhibit 18). The exemption should be maintained for agriculture, rather than incentive for SUV owners.  Should save Oregon $1 million for next 2003-05 biennium, also favorable for the environment. 

 

466

Rep. Verger

Spoke in support of the HB 2747-A.

 

480

Chair Shetterly

If Congress increases to $75,000, it would not affect Oregon under the disconnect bill?

 

482

Yates

Answered affirmatively.

 

487

Sen. Ringo

Clarifies the bill does more than disconnect, because it adds it back.

 

497

 

 

513

Debra Buchanan

 

 

 

Clarified reconnect bill amended in this committee provides that depreciation would continue to float.

 

Discussed Federal Code 179 provisions.

 

 

TAPE 127, SIDE B

 

050

Matt Blevins

Spoke in support of the HB 2747-A as it affects air pollution.

 

065

David Williams

Spoke in support, HB 2747A, fits criteria do no further harm to the state.

 

077

Chair Shetterly

Revised opening of Work Session to Public Hearing and closed Public Hearing on 2747-A

 

OPENED PUBLIC HEARING ON HB 2166

 

084

Chair Shetterly

Noted bill came from Business, Labor and Consumer Affairs with do pass recommendation.

 

041

Martin-Mahar

Provided description and background on HB 2166-A (Exhibit 19) and described HB 2166-A -3 amendment (Exhibit 20).  Provided revenue impact (Exhibit 21).

 

180

Chair Shetterly

Assume you have seen the –A3 amendment? (Lynn Partin, Balthazar Ortiz, John McCulley nodded agreement).

 

The –A3s are not in the bill before the Committee?

 

185

 

186

Lynn Partin

 

Partin

Answered affirmatively.

 

Spoke in favor of HB 2166 (Exhibit 22). This bill maximizes value of credits for farm worker housing.  Discussed change in definition of taxpayer. Described and clarified -3 amendments as it defines contributor, owner, operator, investor, and developer.

 

300

Balthazar Ortiz

Spoke in support of HB 2166.  Tax credit helps build affordable on-farm housing.

 

350

John McCulley

Spoke in support of HB 2166, (Exhibit 23) as it provides incentive to improve housing for farm workers.  Grace period important because of variability of income receipt from harvest. 

 

315

Rep. Verger

Questions and discussion regarding transfer of tax credit.

 

439

Partin

Described situation where third party/institution would buy the tax credit.

 

459

Rep. Verger

Why would credit have doubled since 2001?

 

461

Partin

The 2001 Legislature more than doubled the credit from $3.3 to $7 million.  Discussed 1999 Legislature’s Farm Worker Interim Task Force that came up with 18 unanimous recommendations for which the Legislature has implemented a number of recommendations.

 

502

Don Schellenberg

Spoke in support of HB 2166, as it provides support for agriculture.

 

 

TAPE 128, SIDE A

 

050

Peter Hainley

Spoke in support of HB 2166, (Exhibit 24) member of task force and supports credit transfer.

 

074

Rep. Verger

What was the size of the task force?

 

075

Hainley

Believes it was about 11 included Kevin Mannix, Co-Chair Susan Castillo, Sen. Ted Ferrioli, representatives for farm workers, affordable housing, religious, grower, local planning and others.

 

084

Chair Shetterly

Close public hearing HB 2166.

 

 

 

098

Chair Shetterly

Meeting adjourned at 10:34 a.m.

 

 

 

Tape Log Submitted by,

 

 

 

Kathy Tooley, Committee Assistant Reviewed by Kim Taylor James

 

Exhibit Summary:

1.       Warner, “HB 3134 -2 Amendment”, 3 pages

2.       Balkema, “Pinal County Treasurer Tax Bill”, 10 pages

3.       Phillips, “HB 3134 Sale of Tax Lien Certificates”, 6 pages

4.       Belt, “Testimony HB 3134”, 2 pages

5.       Vroman, “Testimony HB 3134”, 1 page

6.       Malik, “Staff Measure Summary HB 2298-A”, 1 page

7.       Malik, “Revenue Impact HB 2298-A”, 1 page

8.       Martin-Mahar, “Staff Measure Summaries HB 3160”, 2 pages

9.       Martin-Mahar, “Revenue Impact HB 3160”, 1 page

10.   Oregon Revenue Coalition “Testimony HB 3160”, 3 pages

11.   Yates, “Staff Measure Summaries HB 2747-A”, 2 pages

12.   Yates, “HB 2747-A3 Amendment”, 3 pages

13.   Yates, “Revenue Impact HB 2747-A”, 1 page

14.   Ringo, The Detroit News article:  “SUV, Truck Owners get a big Tax Break”, 2 pages

15.   Ringo, “Monster SUV Tax Loophole – Two Options”, 1 page

16.   Ringo, “Press Release HB 2747-A”, 6 pages

17.   Dingfelder, “Testimony HB 2747-A”, 1 page

18.   Dingfelder, Times-Union article:  “Pataki Aims to End SUV Tax Break”, 1 page

19.   Martin-Mahar, “Staff Measure Summaries HB 2747-A”, 2 pages

20.   Martin-Mahar, “HB 2166-A3 amendment”, 7 pages

21.   Martin-Mahar, “Revenue Impact HB 2166-A3”, 1 page

22.   Partin, “Testimony HB 2166”, 1 page

23.   McCulley, “Testimony HB 2166”, 1 page

24.   Hainley, “Testimony HB 2166”, 1 page

25.   Oregon Revenue Coalition, “Written Testimony HB 2166”, 3 pages