PUBLIC HEARING, WORK SESSION

 HB 2999-A

PUBLIC HEARING SB 327,

WORK SESSION HB 2747-A

 

TAPE 140, 141, A

 

HOUSE REVENUE COMMITTEE

APRIL 23, 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:                        Paul Romain, OPMA

                                                Cliff Olson, Mark Nelson Oil Products

                                                            Telemarketer’s Association

                                                Representative Joanne Verger, District 9

                                                Doris Penwell, Economic and Community Development Department

                                                Senator Charlie Ringo, District 17

 

Staff Present:                            Paul Warner, Legislative Revenue Officer

                                                Richard Yates, Legislative Revenue Office

                                                Mazen Malik, Legislative Revenue Office

                                                Kathy Tooley, Committee Assistant

 

TAPE 140, SIDE A

004

Chair Shetterly

Calls meeting to order at 8:43 a.m.

 

PUBLIC HEARING HB 2999-A

 

018

Richard Yates

Provided description of HB 2999A (Exhibit 1).

 

034

Paul Romain

Spoke in support of HB 2999A.  Described situation where gas is delivered to a remote area and possible nonpayment of taxes and shipment. Requests state reimbursement for lost taxes only.

 

073

Cliff Olson

Spoke in support of HB 2999A.  Described payment time frame usually load to load or 10 days. Described people that have taken a load of fuel and gone out of business within that time frame.  Described credit approval process and safeguards.

 

081

Rep. Verger

Thought payment was on delivery, you’re buying on credit?

 

089

Romaine

Selling on credit, company buys the fuel and pays the tax, then fuel is sold and delivered and purchaser may have 10 days to a month to pay.

 

101

Rep. Verger

Why do you sell on credit?

 

103

Olson

Described three methods of payment: cash/certified check, load-to-load, COD.

 

108

Romain

Provide service by delivering gas to outlying areas.  Incentive is there to go after payment as entire amount of delivery is defaulted on, not just fuel tax.  Last year tax portion amounted to $50,000.

 

135

Chair Shetterly

Any opposition to this in the Transportation Committee?

 

136

Romain

No testimony in opposition, one no vote was from Rep. Mabrey who had the same question as Rep. Verger.  Rep. Greenlick defended distributors as providing a service to outlying communities.

 

141

Chair Shetterly

Not general fund revenue impact, it is a highway fund revenue impact?

 

148

Yates

Answered affirmatively (Exhibit 2).

 

153

Chair Shetterly

Closed Public Hearing on HB 2999-A.

 

 

OPENED WORK SESSION ON HB 2999-A

 

158

Rep. Farr

MOTION:  MOVED HB 2999-A TO THE HOUSE FLOOR WITH A DO PASS RECOMMENDATION.

 

165

Rep. Verger

Distributors have chosen to do business that way, selling to a retailer who doesn’t pay them.  We’re giving a refund to a business that has chosen to do business that way.

 

173

Rep. Scott

They have chosen to do business that way, but they are trying to provide a service and get the product to remote areas and taking a substantial reduction if they can’t collect their funds for fuel.

 

184

Rep. Farr

Recounted experience as a purchasing agent, buying on credit is standard operating procedure in wholesale to retail industry.

 

199

Rep. Berger

This system serves the state well, in that the taxpayer is the person at the pump, but Oregon gets their payment early in the stream.  Would hate to think of difficulty of collecting tax if dealers not willing to collect tax up front.

 

214

Rep. Verger

What we’re doing is making up for people that don’t want to pay their bills.

 

220

Chair Shetterly

What is the likely cost of a delivery fuel and tax included to Coquille?

 

224

Olson

About $15,000 to $16,000.  Station does not have that cash available at the site; deliveries often at night and there would be a safety issue having to have cash available late at night.

 

246

Rep. Barnhart

The fuel is actually used in vehicles and the expense to the state is actually incurred.

 

259

 

ROLL CALL:  MOTION PASSED 8-0-1

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

 

Rep. Scott will carry the bill.

 

266

Chair Shetterly

Closed Work Session on HB 2999-A.

 

 

 

OPENED PUBLIC HEARING ON SB 327

 

285

Mazen Malik

Described and provided background on SB 327 (Exhibit 3).  Described qualifications for Enterprise Zone and provided matrix of current designated and eligibility if SB 327 does not pass.  Provided revenue impact (Exhibit 4).

 

362

Rep. Verger

Spoke in support of SB 327.  Described enterprise zone as used for economic stimulus; described nexus to jobs. Discussed unemployment issue in her county as well as 18 other counties.

 

415

Rep. Hass

Supported SB 327.  Why is this not included in the enterprise zone update?

 

429

Rep. Verger

This was created in 1997, deferred to Doris Penwell on criteria.

 

432

Chair Shetterly

Do we need conforming amendments to any other bills dealing with enterprise zones to make sure it works together?

 

438

Doris Penwell

Discussed SB 327 is for long term enterprise zone provisions, not 3-5 year enterprise zone program for rural and chronically distressed areas.  Might be helpful to review with amendments in HB 2299.

 

482

Chair Shetterly

Defer action to review with HB 2299.

 

510

Chair Shetterly

Close Public Hearing on SB 327.

 

OPENED WORK SESSION HB 2747

TAPE 141, SIDE A

 

043

Sen. Charlie Ringo

Discussed HB 2747 individually with Committee Members to see what additional changes should be made to the bill. At the request of Rep. Farr, asked for specific exemption relating to the wood products and timber industry; Rep. Scott was concerned with construction trade industry vehicles; both are incorporated in the -4 amendments (Exhibit 6).  Goal of HB 2747 to reduce the financial incentive encouraging people to buy the very largest SUVs, encouraged Committee to adopt the -3 and -4.

 

065

Chair Shetterly

Revenue impact reviewed already relating to -2 or -3?

 

067

Yates

Same as the -2, although don’t believe -2 appeared before the Committee.

 

070

Yates

Discussed revenue impact on original bill as $800,000.  Estimates impact with -3 or -4 amendments as $1.2 million for 2003-05.

 

080

Rep. Barnhart

That’s assuming if we do not adopt the bill; is that assuming there would not be an increase in the sale of vehicles without the bill?

 

085

Yates

Dealing with current law, sales are what they are, large vehicles get a large depreciation allowance and Oregon is tied to that. Discussed disconnect with the bill and addition with Oregon return intended to neutralize incentive granted by federal government.

 

096

Rep. Barnhart

If we don’t pass this bill, if there is an increase in sales the loss to the state could be greater than $1.2 million?

 

100

Yates

Answered affirmatively, but that is current loss.

 

104

Chair Shetterly

The federal depreciation allowance was designed for vehicles used in trade or business, specifically agriculture and by evolution of the market both production and consumer, adoption of -A4 affects doctors and lawyers and engineers for whom the allowance was not intended..

 

118

Rep. Hass

I am very supportive of the -4.  If Committee does not approve, there will be a policy incongruity with credits incenting people to buy hybrids and electric cars vs. SUVs.

 

130

Yates

Trying to determine if you can adopt just the -4 or both the -3 and -4.

 

133

Sen. Ringo

I think you have to do either the -2 or the -3, plus the -4.

 

136

Yates

My feeling is Dexter Johnson could make one set of amendments.

 

152

Chair Shetterly

Asked Don Schellenberg if he was concerned that the agriculture exemption gets in.  (Schellenberg nodded affirmatively.)

 

154

Chair Shetterly

Was there any testimony in opposition to this in the Transportation Committee?

 

156

Sen. Ringo

Responded no.  The only potential opposition was Schellenberg, as it did not have the farm exemption.  It was unanimous from the Transportation Committee.

 

167

Rep. Hass

MOTION:  MOVED THE -3 AMENDMENTS TO HOUSE BILL 2747.

 

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

 

171

Rep. Verger

MOTION:  MOVED THE -4 AMENDMENTS TO HOUSE BILL 2747.

 

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

 

178

Chair Shetterly

Closed the Work Session on HB 2747.

 

 

 

181

Chair Shetterly

Meeting adjourned at 9:22 a.m.

 

Tape Log Submitted by,

 

 

 

Kathy Tooley, Committee Assistant Reviewed by Kim Taylor James

 

Exhibit Summary:

1.       Yates, “Staff Measure Summaries HB 2999”, 2 pages

2.       Yates, “Revenue Impact HB 2999-A”, 1 page

3.       Malik, “Staff Measure Summary HB 327”, 1 page

4.       Malik, “Revenue Impact HB 327”, 1 page

5.       Malik, “Impact of SB 327 for Long-term Rural Enterprise Zone Tax Incentives”, 1 page

6.       Ringo, “HB 2747-A4 amendment”, 1 page