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WORK
SESSIONS ON HB 2299A, HB 3610, HB 3278, HB 3551, HJR 18, SB 327 |
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TAPE 144,
145, A-B |
APRIL 28,
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
Mark Hass
Representative
Elaine Hopson
Representative
Max Williams
Members Excused: Representative Pat Farr
Witness Present: Mike Burton, Economic and Community
Development Department
Tom
Lindhares, Columbia County Assessor,
Oregon State Association of County Assessors
Tony
Hyde, Association of Oregon Counties
Columbia County Commissioner
Paul
Chalmers, Umatilla County Assessment and Taxation
Representative
Betsy Johnson
Casina
Squires, Special Districts Association of Oregon
Senator
Ted Ferrioli, District 30
Bill
Hansell, Umatilla County Commissioner
Pat
Shaw, Gilliam County Tax Assessor
Mike McArthur, Sherman County
Judge
Inge
Deckert, Oregon State Treasury Department
Cynthia
Burns, Oregon Attorney General’s Office
Representative
Jeff Kropf, District 17
Gill
Riddell, Association of Oregon Counties
Dexter
Johnson, Legislative Counsel
Marcia
Kelley
Mark
Kendell, Oregon Office of Energy
Staff Present: Paul
Warner, Legislative Revenue Officer
Mazen
Malik, Legislative Revenue Office
Lizbeth
Martin-Mahar, Legislative Revenue Office
Kathy
Tooley, Committee Assistant
TAPE 144, SIDE A
|
004 |
Chair Shetterly |
Calls meeting to order at 8:35 a.m. |
OPENED WORK SESSION ON HB 2299-A
|
012 |
Mazen Malik |
Described –A8, and –A9 amendments.
Described difference between –A7 and –A9 amendment deals with the
exemption eligibility if requirements not met for the first year. –A7 will
give exemption regardless; -A9 gives exemption year per year; -A8s modify the
–A6. |
|
100 |
Mike Burton |
Spoke in support of HB 2299.
Prior testimony given had not seen -6 amendments, but spoke to it
thinking it was Mr. Pascone’s amendment which it was not. Discussed -7 and -9 amendments reflect Mr.
Pascone’s issues. -6 and -8
amendments are refinements in language OECDD has negotiated with cities,
counties, special districts and others. |
|
082 |
Chair Shetterly |
The Committee has not seen the -7.
|
|
087 |
Burton |
-A6 superseded by –A8. |
|
091 |
Chair Shetterly |
Does the Committee have the –A5? |
|
092 |
Malik |
Answered affirmatively and described. |
|
101 |
Chair Shetterly |
-A9 deals with Albany Millersburg issue, our approach was if not
qualified this year, do not lose the exemption for all future years, just
suspended for the year for which not qualified. |
|
106 |
Burton |
Answered affirmatively. That
creates an annual certification for the enterprise zone for firms that would
qualify under that mechanism, requiring additional work on behalf of the
Assessor. |
|
157 |
Rep. Berger |
Regarding -A9 if not qualified in first year, can qualify in
subsequent of 5 years. What if a
person qualified the first two years, didn’t the third, would that person be
qualified in the 4th? |
|
125 |
Burton |
Current law already allows for that circumstance, where current law
is lacking is in addressing the first year circumstance. |
|
126 |
Chair Shetterly |
There already is an annual certification. |
|
127 |
Burton |
No, described current law. |
|
141 |
Tom Lindhares |
Thought current statutes allow if miss 1st year, and filing
2nd and 3rd year.
Assessors look at companies each year through annual statement of
compliance. HB 2299 institutes a
claim form companies would have to file for each year of exemption, plus year
following exemption. |
|
205 |
Tony Hyde |
Concerned about policy piece of section 34c, HB 2299 as it affects a
delicate funding scheme in Columbia County and puts at risk development of
two power plants. |
|
189 |
Chair Shetterly |
How do you propose to fix it? |
|
190 |
Commissioner Tony Hyde |
Propose elimination of 34c. Estimated affect on Columbia County is $5
million. |
|
195 |
Rep. Verger |
Do you know how many counties would be affected? Coos County also has an urban renewal
district enterprise zone. |
|
198 |
Commissioner Hyde |
Does not know. |
|
200 |
Chair Shetterly |
The specific issue is you have a current agreement that this would
affect? |
|
204 |
Commissioner Hyde |
Answered affirmatively. |
|
234 |
Burton |
Discussed origins of 34c, driven by a company building an electrical
generating facility under construction in Northeastern Oregon. |
|
238 |
Burton |
Suggested a solution for Columbia County is to have this take affect
in two years. |
|
241 |
Rep. Hass |
This issue was troublesome in the previous committee. Why would we
provide an incentive to someone who has made the decision to go there? |
|
251 |
Burton |
This is not the Department’s issue.
Speculation about company’s understanding of construction in progress
law. |
|
259 |
Burton |
Department’s agenda is in regard to enterprise zone businesses not
treated the same. The proposal would treat all enterprise zone businesses similarly. |
|
269 |
Commissioner Hyde |
Provided alternative regarding urban renewal area within the enterprise
zone may address the issue. |
|
281 |
Chair Shetterly |
The affect of 34c, may not have been comprehended beyond specific
project, may be remedied by another amendment. |
|
290 |
Paul Chalmers |
Discussed Cowpine Project in Hermiston issue as project problem, not
problem with the planning process. |
|
304 |
Rep. Johnson |
Here supporting Columbia County Commissioner and Assessor. |
|
365 |
Casina Squires |
Discussed -8 amendments a result of concerns with leading sum
language. |
|
386 |
Rep. Verger |
Who has to agree and on what? |
|
390 |
Squires |
This deals with a reimbursement fee; it is based on a negotiation
that has already taken place. Puts in
statute that negotiated fee among city or county and affected taxing
districts. |
|
396 |
Rep. Verger |
When you pass a bill into state law affects more than single city. |
|
404 |
Rep. Hass |
Washington County had concern over number of people in the negotiating
room, if too many people some agreements might not be reached. |
|
448 |
Squires |
Discussed origination of 75% language on service fee. |
|
444 |
Burton |
Discusses 2 step negotiation. |
|
480 |
Chair Shetterly |
Closed the Work Session on HB 2299. |
OPENED WORK SESSION ON HB 3551
TAPE 145, SIDE A
|
030 |
Malik |
Provided description of HB 3551. |
|
041 |
Rep. Betsy Johnson |
Offered support for Commissioner Hyde and Assessor Linhares, in opposition
to HB 3351. |
|
048 |
Commissioner Hyde |
Spoke in opposition to amendment, discussed delicate urban renewal
plan within enterprise zone for projected power plants which are relying on
current strategy. Suggests either 10
years of 50% or 5 years of 100%, double-dipping is not acceptable. |
|
070 |
Rep. Barnhart |
There are some improvements the URD has to pay for, with this proposal,
you cannot pay for them? |
|
074 |
Commissioner Hyde |
Answered affirmatively. |
|
083 |
Tom Linhares |
Described suggested amendments, allowing 5 year automatic exemption,
second five years up to local jurisdiction. |
|
102 |
Chair Shetterly |
Recess Work Session on HB 3551 |
OPENED WORK SESSION ON HB 3610
|
104 |
Chair Shetterly |
Bill on loan from Rules and Public Affairs Committee. |
|
107 |
Sen Ted Ferriolli |
Concerns with HB 3160 on how to tax and incent windpower development.
Need to raise income for local communities. Discussed possibility of tax
exempt bonds for transmission facilities. HB 3160 exempts wind turbine from
property taxation and that puts a hole in pocket of communities that
attracted industry. Suggests bill
raises question of what the future of taxation should be. Need to hold
harmless communities that have already located companies. Discussed pros and cons to proactive and
retroactive action on HB 3160. |
|
202 |
Bill Hansell |
Spoke in opposition to HB 3160 as it would take away property taxes
from the community. Discussed Umatilla County wind energy facilities. No
problems with incentives, companies are coming based on wind production
capabilities and are not requiring incentives. Florida Power is opposed to this tax, feels property tax gives
them a known figure for their budget. |
|
243 |
Pat Shaw |
Spoke in opposition to HB 3160, if passed taxing districts would
suffer. Discussed comparison of
projected income received in lieu tax vs. ad valorum tax, (Exhibit 3). |
|
291 |
Judge Mike McArthur |
Spoke in opposition to HB 3160.
Discussed biggest obstacle in Sherman County wind power is
transmission, cited high connection costs. Need for larger discussion on wind energy and how to incentivize
it. |
|
344 |
Chair Shetterly |
Discussed protocol for returning bill to the Rules Committee is a
memorandum from Chair representing the sense of the committee. Senses the Committee is concerned regarding
the impact of this bill on local government; suggestion this bill not move
forward unamended addressing impact on local governments. Asked Committee to
forward memoranda and it would be attached to the memorandum. |
|
365 |
Rep. Barnhart |
Another issue is the potential for distortion in the business plan of
the companies generating wind power due to change from flat tax to production
tax. |
|
382 |
Chair Shetterly |
Cited need for further examination of this tax in the context of
other tax incentives and credits at the federal and state level. |
|
385 |
Rep. Hass |
Supported Chair’s memorandum, would like to make it clear to the
Rules Committee that this did not come over and have a thorough hearing given
back with seal of approval from Revenue Committee. |
|
395 |
Chair Shetterly |
That would be the sense of my memorandum expressing these concerns.
Will send memo to Committee for comments. |
|
398 |
Rep. Hass |
Why is it in the Rules Committee and not Revenue Committee? |
|
403 |
Chair Shetterly |
Closed Work Session on HB 3610. |
OPENED WORK SESSION ON SB 327
|
425 |
Malik |
Provided description and background of SB 327 alters qualification
for non-urban enterprise zones, requirements for unemployment. |
|
461 |
Rep. Verger |
Oregon Revenue Coalition does not oppose this bill. ORC recognizes enterprise
zones are tied to jobs and job creation.
Does affect a number of counties and needs to be a policy that stands
on its own. Does not change much
except for counties that have unemployment problem if have 11.5%
unemployment, need to protect the tools counties have. There will be revenue impact because of
enterprise zone offering exemptions. |
TAPE 144, SIDE B
|
040 |
Rep. Hass |
MOTION: MOVED SB 327 TO THE
HOUSE FLOOR WITH A DO PASS RECOMMENDATION ROLL CALL: MOTION PASSED 9-0-0 REPRESENTATIVES VOTING AYE:
Barnhart, Berger, Hass, Hopson, Scott, Verger, Williams, Chair
Shetterly (EXCUSED: Farr. Rep. Verger will carry the bill. |
|
053 |
Chair Shetterly |
Closed the Work Session on SB 327. |
OPENED WORK SESSION ON HJR 18
|
055 |
Steve Meyer |
Provided description of HJR 18 and -2 amendments, (Exhibit 4). |
|
097 |
Chair Shetterly |
Discussed coordination of bill and existing constitution. |
|
099 |
Meyer |
Discussed implementing legislation requirement, submission to voters
in the 2004 primary election. |
|
100 |
Chair Shetterly |
What was the vote on this last session? |
|
107 |
Inge Deckert |
The vote was 51 ayes, one no last year. |
|
107 |
Rep. Barnhart |
Discussed the difference between the -1 and -2 amendments is to
consolidate the definition of capital costs for the various purposes that
funds could be spent in the local schools.
Is that correct? |
|
124 |
Cynthia Burns |
Explained capital costs for purposes of bond proceeds can be used to
make a grant to school districts and other monies that come into education
stability fund. Discussed more
restrictive definition under Measures 5 and 50. |
|
142 |
Rep. Barnhart |
With only -1 amendment, there could be two definitions of capital
costs. |
|
143 |
Chair Shetterly |
Without -2? |
|
144 |
Rep. Barnhart |
Is that a serious or minor problem, how do you clarify for the
purpose of administering funds. |
|
150 |
Burns |
If did not have -2, there is no definition of capital costs for
education stability fund, discussed tracking issue. Issue in getting representations back from the school districts
regarding funds used for allowable purposes.
This reduces the amount of tracking required. |
|
175 |
Rep. Barnhart |
The affect is that construction could get done, just requires more
accounting in the process. |
|
172 |
Burns |
Answered affirmatively. |
|
174 |
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Questions and discussion regarding matching fund. |
|
206 |
Rep. Hass |
MOTION: MOVED ADOPTION OF THE
–2 AMENDMENT INTO HJR 18. |
|
204 |
Rep. Barnhart |
Discussion of opposition to the -2 for the record, based on
requirement for changing the Constitution should be used for big changes. |
|
225 |
Chair Shetterly |
ORDER: THERE BEING NO FURTHER
OBJECTION, THE CHAIR SO ORDERS. (REP. FARR, EXCUSED) |
|
224 |
Rep. Hass |
MOTION: MOVED HJR 18 AS
AMENDED BY THE -2 AMENDMENTS TO THE HOUSE FLOOR WITH A DO PASS
RECOMMENDATION, AND THE SUBSEQUENT REFERRAL TO WAYS AND MEANS COMMITTEE BE
RESCINDED. |
|
242 |
Rep. Verger |
For the record, voiced her opposition to the -2 amendment and the
bill, as historically communities have been responsible for building and
maintaining schools, cited need for funding of actual programs before capital
costs. |
|
268 |
Rep. Scott |
Agreed with Rep Verger, needs to be more a local issue. Until proper funding, opposed to going out
on statewide basis. |
|
270 |
Rep. Hass |
Respectfully disagreed with Rep Verger as to larger districts being
able to build more schools easier. Problem not keeping up with amount of
growth. |
|
295 |
Rep. Barnhart |
Need to do all of the above, need to raise $1 billion for education
not now in the basic school budget. Agreed with Rep. Verger, have to find
more funds for regular operating budget. |
|
323 |
Chair Shetterly |
Agreed with Rep. Scott and Rep. Verger. There are two issues one is funding schools, the other is the
state’s participation in capital funding.
Do not see HJR 18 as opposed to basic funding of schools. On the issue of local participation it is
a matter for implementing legislation and rule making. |
|
350 |
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ROLL CALL: MOTION PASSED 6-2-1 REPRESENTATIVES VOTING AYE:
Barnhart, Berger, Farr, Hass, Hopson, Williams, Chair Shetterly. VOTING NO: Scott, Verger.
EXCUSED: Farr. Chair Shetterly will carry the bill. |
|
359 |
Chair Shetterly |
Closed the Work Session on HJR 18. |
OPENED WORK SESSION ON HB 3278
|
392 |
Lizbeth Martin-Mahar |
Provided description of HB 3278, (Exhibit 5), governor’s letter,
(Exhibit 6) discussed -1, (Exhibit 7) and -2 amendments (Exhibit 8). Discussed revenue impact (Exhibit 9). |
OPENED WORK SESSION ON HB 3551
TAPE 145, SIDE B
|
025 |
Rep. Jeff Kropf |
Asked Committee to ignore HB 3278, the companion to HB 3551, at this
time. Discussed agreement with
Governor’s office to allow inclusion of biofuels, bio-oils language in the
current pollution control tax credit. |
|
071 |
Rep. Kropf |
Discussed major flaw in the relating clause of HB 3551 that is
corrected with -2 (Exhibit 10), biofuels, means biodiesel, bio-oils which
does not fit within the relating clause.
Will be looking for another vehicle for the amendment. |
|
088 105 130 |
Rep. Kropf Rep. Kropf Rep. Kropf |
Discussed work group meeting following initial hearing focused on how
expansion can be allowed within enterprise zone and ethanol statutes. Wants to ensure 10 year program where company could use enterprise
zone statute, expanded ethanol statutes.
Discussed agreements with local governments using enterprise zone and
ethanol statutes together, .negotiation of additional years. |
|
149 |
Rep. Kropf |
Created mechanism for Economic Community Development Department to
extend 5 year period of exemption if a majority of the taxing districts
approved. |
|
170 |
Chair Shetterly |
Intent is for extended period to be a local option. |
|
172 |
Rep. Kropf |
Answered affirmatively. |
|
175 |
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Questions and discussion regarding makeup of local taxing districts. |
|
179 |
Chair Shetterly |
Consensus among a majority is that current language on local
options? It seems awkward. Why not agree with 51%. |
|
164 |
Casina Squires |
May need an amendment to include “The County” and “a majority of the
other taxing districts”. Discussed
real life scenario in Columbia County. |
|
207 |
Gil Riddell |
AOC has not seen -2 amendment, agreed may need amendment to include
“The County plus a majority of other special districts”. Discussed
ambiguities affecting the current agreement with Columbia County. |
|
220 |
Chair Shetterly |
Regarding HB 3278 clarified will amend language into HB 2652, HB 3551
will go into another bill. |
|
202 |
Dexter Johnson |
Regarding consensus language? |
|
235 |
Chair Shetterly |
Is that standard language with other local option, property tax
issues? Why not just a majority? |
|
239 |
Johnson |
Not standard, there isn’t standard language for local option. This is OEDDC decision, not local
government decision. The Department
is not required to grant an extension, think there would be a problem if it
were required, based solely on consensus. |
|
255 |
Johnson |
They have to independently determine it will promote economic
development. Can’t have one local
taxing district tell another, what local taxes should be. |
|
266 |
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Question and discussions regarding the definition of consensus. |
|
300 |
Marcia Kelley |
Provided information that City of Salem, Marion County and the
Transit District, have in the past had property tax plan that they get
together and adopt and may be used as a model, rather than consensus. |
|
313 |
Mark Kendell |
On behalf of Director Michael Grainey, spoke regarding HB 3551,
ethanol and biodiesel markets are merging as principle fuels experiencing
volatility and competition. Discussed
developing need, competition for stocks of biofuels. |
|
356 |
Chair Shetterly |
Closed Work Session HB 3278 and HB 3551 |
|
364 |
Chair Sheterly |
Meeting adjourned at 10:25 a.m. |
Tape Log Submitted by,
Kathy Tooley, Committee
Assistant
Exhibit Summary:
1.
Malik,
“HB 2299-A8 Amendment”, 1 page
2.
Malik,
“HB 2299-A9 Amendment”, 2 pages
3.
Shaw,
“Condon Wind Power, LLC”, 2 pages
4.
Meyer,
“Draft Fiscal Analysis of HJR 18, 1 page
5.
Martin-Mahar,
“Staff Measure Summary HB 3278
6.
Martin-Mahar,
“Letter Governor’s Office Pollution Control Tax Credit: House Bills 3278 and 2652
7.
Martin-Mahar,
“HB 3278-1 Amendment”, 3 pages
8.
Martin-Mahar,
“HB 3278-2 Amendment”, 4 pages
9.
Martin-Mahar,
“Revenue Impact HB 3278”, 1 page
10.
Rep.
Kropf, “HB 3551-2 Amendment”, 4 pages
11.
Oregon
Revenue Coalition, “Testimony HB 2299”, 3 pages
12.
ORC,
“Testimony HB 3551”, 2 pages
13.
ORC,
“Testimony HB 3278”, 2 pages
14.
League
of Women Voters of Oregon, “Testimony HB 3278”, 1 page