WORK SESSION HB 2652

TAPE 189 A

HOUSE REVENUE COMMITTEE

JUNE 16, 2003 9:30 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: John Ledger, Associated Oregon Industries, (AOI)

Staff Present: Paul Warner, Legislative Revenue Officer

Lizbeth Martin-Mahar, Legislative Revenue Office

Kathy Tooley, Committee Assistant

TAPE 189 SIDE A

004

Chair Shetterly

Calls meeting to order at 9:35 a.m.

HB 2652

006	Lizbeth Martin-Mahar	Described -12 (Exhibit 1), and -13 amendments, (Exhibit 2). Provided Staff Measure Summary, (Exhibit 3).
010	Martin-Mahar	The -12 amendments which incorporate the conceptual amendment from the previous meeting, eliminates double-dipping between the pollution control tax credit and the business energy tax credit; retains current law.
024	Martin-Mahar	The -13 amendments restrict double-dipping between the pollution control and business energy tax credits. A choice must be made between the two credits; also a choice must be made between the pollution control credit and the truck engine tax credit in the transportation bill. The Department of Environmental Quality (DEQ) does not think there are many instances in which a truck engine would qualify for both credits.
037	Martin-Mahar	Discussed revenue impact (Exhibit 4).
040		Question and discussion regarding the increase in the business energy tax credit.
043		Question and discussion regarding alternative energy devices, and increases in the residential tax.
040	John Ledger	Discussed tax credits for chippers, which amount to 1-2% of total credits. DEQ developed the program to encourage use of chippers due to pollution issues. This was done by rule and can be changed by rule.
087	Rep. Berger	Discussed pollution control tax credit spreadsheet she had requested from DEQ, and fact sheet developed by her staff on “’01-’03 PCTC Issued Certificates”, (Exhibit 5).
105	Chair Shetterly	For the record, 1% of the total amount of value of the credits for a chipper, 1% for trucks and vehicles and 5% for vending machines.
108		Questions, discussion and acknowledgement of mathematical error regarding total tax liability vs. chippers. Discussed the percentage noted was the same as Ledger had testified.
126	Chair Shetterly	MOTION: MOVED ADOPTION OF THE –12 AMENDMENTS INTO HB 2652. ORDER: HEARING NO OBJECTION, THE CHAIR SO ORDERS. (ALL MEMBERS PRESENT EXCEPT REP. FARR, EXCUSED).
131	Chair Shetterly	MOTION: MOVED ADOPTION OF THE –13 AMENDMENTS INTO HB 2652. ORDER: HEARING NO OBJECTION, THE CHAIR SO ORDERS. (ALL MEMBERS PRESENT EXCEPT REP. FARR, EXCUSED).
135	Chair Shetterly	MOTION: MOVED HB 2652, AS AMENDED, TO THE HOUSE FLOOR WITH A DO PASS RECOMMENDATION
138	Rep. Hass	Supported the bill last session as part of a compromise, would like to honor and uphold. Questioned strategy of giving a major tax credit to Enron, which paid the minimum Oregon tax of $10, when new jobs are not being added, and are instead being eliminated. Cited need to build an Oregon economy that is held together in a thoughtful manner.
171	Rep. Barnhart	Discussed the history of the tax credit as well understood. Concurred with Rep. Hass comments. Said the value and need for this credit has passed. Agreed with need to uphold the compromise and phase out the tax credit.
199	Rep. Williams	Recognized comments made by Reps. Hass and Barnhart. Haven’t addressed the issue of the substantial burden for companies to do business in Oregon, maintain employment and increase revenues. This has been a proven program that has allowed for a cooperative response for companies and he will support the bill.
227	Rep. Berger	The credit has been a useful tool, that has dealt with the pollution problem; also useful in dealing with new technology in preventing pollution. Would support keeping it.
245	Chair Shetterly	Enron does not necessarily indict the pollution control tax credit; there are lots of business tax payers using it fairly and appropriately. Acknowledged the evolution of the bill that carried pollution control forward last time. The revenue impact of this bill comes from the elements in the Governor’s amendments. The Governor suggested that might be a little rich, but did not propose amendments to reduce the level of energy tax credit.
262	Rep. Hass	The “Tax Expenditure Report”* notes that this tax credit has not been effective and may not be achieving its purpose. *NOTE: “2003-2005 Tax Expenditure Report” was received as a Committee Exhibit on February 3, 2003.
281		ROLL CALL: MOTION PASSED 6-2-1 REPRESENTATIVES VOTING AYE: Berger, Farr, Hopson, Scott, Verger, Williams, Chair Shetterly. VOTING NO: Barnhart, Hass. Rep. Chair Shetterly will carry the bill.
291	Chair Shetterly	Closed the Work Session on HB 2652.

293

Chair Shetterly

Meeting adjourned at 10:05 a.m.

Tape Log Submitted by,

Kathy Tooley, Committee Assistant

Exhibit Summary:

1. Martin-Mahar, “HB 2652-12 Amendments”, 41 pages

2. Martin-Mahar, “HB 2652-13 Amendments”, 1 page

3. Martin-Mahar, “Staff Measure Summary HB 2652”, 2 pages

4. Martin-Mahar, “Revenue Impact Statement HB 2652”, 1 page

5. Berger, “’01-’03 PCTC Issued Certificates”, 1 page