WORK SESSION HB 3118, HB 3134, HB 3184

NFORMATIONAL MEETING: INVITED TESTIMONY

TAPE 133-134, A-B

HOUSE REVENUE COMMITTEE

April 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

Senator Tony Corcoran

Senator Ryan Deckert

Senator Ted Ferrioli

Senator Charlie Ringo

Witness Present: John Phillips, Department of Revenue

Patti Milne, Marion County Commissioner

Diane Belt, Oregon Association of County Tax Collectors

Hasina Squires, Special Districts Association of Oregon

Laurie Wimmer Whelan, Oregon Revenue Coalition

Tim Nesbitt, Oregon Revenue Coalition

Abby Solomon, SEIU Local 503, OPEU

Ellen Lowe, Human Service Coalition of Oregon Legislative Administration

Patty Whitney-Wise, Oregon Hunger Relief Task Force

Heidi McGowan, Stand for Children

Debra Buchanan, Department of Revenue

Rebecca Shine, State Advisory Committee Child Care Division

Staff Present: Paul Warner, Legislative Revenue Officer

Lizbeth Martin-Mahar, Legislative Revenue Office

Steve Meyer, Legislative Revenue Office

Tara Lantz, Committee Assistant

TAPE 133, SIDE A

005

Chair Shetterly

Calls meeting to order at 8:46 a.m.

OPENS WORK SESSION ON HB 3118

014	Paul Warner	Explains HB 3118, which requires the Department of Revenue to put a place on their tax forms for individuals to list the school district in which they reside.
022	Rep. Verger	MOTION: MOVES HB 3118 TO THE HOUSE FLOOR WITH A DO PASS RECOMMENDATION AND A SUBSEQUENT REFFERAL TO THE WAYS AND MEANS COMMITTEE.
030	Rep. Shetterly	ORDER: ROLL CALL VOTE: MOTION PASSES: 7-0-2. REPRESENTATIVES ANSWERING AYE: BARNHART, BERGER, FARR, HOPSON, SCOTT, VERGER, SHETTERLY. REPRESENTATIVES EXCUSED HASS, WILLIAMS.

CLOSES WORK SESSION ON HB 3118

OPENS WORK SESSION ON HB 3134

036	Warner	Explains the -3 amendments, which direct the Department of Revenue to account for a tax lien certificate program at the County level, giving the County the option to participate.
050	John Phillips	Explains the -3 amendments, which adds a section that says to the extend that the sale of tax lien certificates by any particular county affects other counties, then the Department of Revenue has the authority to adjust the formula.
058	Patti Milne	States that the -3 amendments do what they wanted.
064	Diane Belt	Expresses concern over the -2 amendments in which it states that the sale of tax lien certificates is not subject to limitations.
081	Hasina Squires	Testifies that it seems as if nothing has changed from the -2 amendments and expresses concern for the potential loss of ANT funding to special districts.

CLOSES WORK SESSION ON HB 3134

OPENS WORK SESSION ON HJR 18

RECESSES WORK SESSION ON HJR 18

OPENS INFORMATION MEETING

218	Laurie Wimmer Whelan	Discusses the formation of the Oregon Revenue Coalition and its members. Discusses the focus of the coalition on tax expenditures. Refer to written testimony (Exhibits 2-3).
283	Wimmer Whelan	Explains how the coalition analyzed each tax expenditure (Exhibit 4).
336	Tim Nesbitt	Discusses the findings of the study.
368	Nesbitt	Discusses tax breaks by tax source.
386	Wimmer Whelan	Discusses the criterion for a good tax expenditure.

TAPE 134, SIDE A

024	Nesbitt	Discusses business tax breaks by category.
038	Nesbitt	Gives list of what services $1 million would buy.
079	Nesbitt	Discusses ORC’s approach to closing the 2003-05 revenue gap.
113	Nesbitt	Gives examples of tax expenditures to repeal, to reduce, and to retain. Recommends a formation of a work group to look at tax expenditures in detail.
209	Sen. Ferrioli	Supports the concept of a work group to look at issues and points out that there are some expenditures that are connected to public policy such as land use. Discussion follows.
274	Nesbitt	States that the biggest number in tax breaks came from the income tax side and that there are numerous property tax credits that serve a good purpose, which is why they chose to focus on income. Discussion follows.
321	Rep. Barnhart	States that due to their organizational methods it is difficult to compare the tax expenditures to the budget and that it might be beneficial to get the opinion of the people who work with the budget in the discussion. Discussion follows.
350	Sen. Corcoran	Asks if there has been any research done on how you could apply means testing to income tax credits and second home mortgage credits.
375	Warner	Responds that they have looked at phasing out credits over income levels and that there is precedence at the federal level.

TAPE 113, SIDE B

003	Rep. Hass	States that he supports a work group and that there is a bill that creates a commission to look at that.
013	Wimmer Whelan	Responds that it would be valuable to have people that are unbiased, but there would also be value in having people with expertise and that the situation is so desperate that they need to start working on tax expenditures immediately.
040	Abby Solomon	Discusses the SEIU Local 503, OPEU and why they have joined the Oregon Revenue Coalition. Urges support of proposal to reduce and eliminate tax expenditures.
064	Ellen Lowe	Gives example of one tax expenditure for an additional medical deduction for elderly that could be reduced. Refer to written testimony (Exhibit 5).
163	Patti Whitney-Wise	Testifies in support with the Oregon Revenue Coalition to find new revenue sources through tax expenditures. Refer to written testimony (Exhibit 6).
186	Heidi McGowan	Discusses Stand for Children and why they have joined the Oregon Revenue Coalition.

OPENS WORK SESSION ON HB 3184

278	Lizbeth Martin-Mahar	Explains the -3 amendments (Exhibit 8), which make technical corrections.
337	Debra Buchanan	States that the -3 amendment fixes the problem of double dipping.
345	Rep. Shetterly	Asks who would take advantage of this credit.
352	Rebecca Shine	Responds that it would be a combination of working families and affordable housing providers. Discussion follows.
371	Rep. Williams	MOTION: MOVES HB 3184-3 AMENDMENTS DATED 4/17/03 BE ADOPTED.
376	Chair Shetterly	ORDER: HEARING NO OBJECTION, MOTION PASSES: 9-0-0.
380	Rep. Williams	MOTION: MOVES HB 3184 TO THE HOUSE FLLOR WITH A DO PASS AS AMENDED RECOMMENDATION.
385	Chair Shetterly	ORDER: ROLL CALL VOTE: MOTION PASSES: 9-0-0. REPRESENTATIVES ANSWERING AYE: BARNHART, BERGER, FARR, HASS, HOPSON, SCOTT, VERGER, WILLIAMS, SHETTERLY. Rep. Kafoury will carry the bill on the House Floor.
399	Warner	Discusses the school formula revenue summary for the co-Chair state school fund budget at $4,788.6 million (Exhibit 14).
421	Rep. Hass	Asks if the confusion over the accounting change has been included in the summary.
426	Warner	Responds negatively. Discussion follows.
475	Chair Shetterly	Adjourns meeting at 10:08 am.

Tape Log Submitted by,

Tara Lantz, Committee Assistant

Exhibit Summary:

1. HB 3134, Lizbeth Martin-Mahar, Proposed HB 3134-3 Amendments, 3pp.

2. Laurie Wimmer Whelan, Written Testimony, 1p.

3. Laurie Wimmer Whelan, Oregon Revenue Coalition Members, 1p.

4. Laurie Wimmer Whelan, A Primer on Tax Breaks in Oregon, 34pp.

5. Ellen Lowe, Additional Medical Deduction for Elderly, 4pp.

6. Patti Whitney-Wise, Revenue Coalition Tax Expenditure Recommendations, 1p.

7. Oregon Revenue Coalition, 5pp.

8. HB 3184, Lizbeth Martin-Mahar, Proposed HB 3184-3 Amendments, 4pp.

9. HB 3184, Lizbeth Martin-Mahar, Staff Measure Summary, 1p.

10. HB 3184, Lizbeth Martin-Mahar, Revenue Impact Statement, 1p.

11. HB 3184, Lizbeth Martin-Mahar, Previous Staff Measures Summary, 1p.

12. HJR 18, Steve Meyer, Staff Measure Summary, 1p.

13. HJR 18, Steve Meyer, Revenue Impact Statement, 1p.

14. Steve Meyer, School Formula Revenue Summary for the Co-Chair State School Fund Budget, 7pp.