WORK SESSION HB 2182

TAPE 227, 228, A

HOUSE REVENUE COMMITTEE

JULY 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 Pat Farr

Representative Mark Hass

Representative Elaine Hopson

Witnesses Present: Jim Carlson, Oregon Health Care Association

Ruth Gulyas, Oregon Alliance of Senior and Health Services

Brett Salmon, Oregon Healthcare Association

Cathy Cooper, Seniors and People with Disabilities

Julia Huddleston, Department of Human Services, (DHS)

Laurie Wimmer-Whelan, Oregon Education Association

Lyn Lundquist, Oregon Business Association, (OBA)

Mike Grainey, Oregon Department of Energy

Staff Present: Paul Warner, Legislative Revenue Officer

LizBeth Martin-Mahar, Legislative Revenue Office

Richard Yates, Legislative Revenue Office

Mazen Malik, Legislative Revenue Office

Kathy Tooley, Committee Assistant

TAPE 227, SIDE A

004

Chair Shetterly

Calls meeting to order at 8:35 a.m.

OPENED WORK SESSION ON HB 2182

010	Chair Shetterly	Discussed -6 amendments, (Exhibit 1).
019	Jim Carlson	Provided overview of major components of -6 amendments HB 2182, (Exhibit 2); and an analysis of states currently using the funding mechanism to fund nursing facility care, “State Medicaid Voluntary Contribution Programs”, (Exhibit 3).
051	Carlson	Discussed Section 13 (5), (Exhibit 2).
080	Carlson	Discussed Section 19 and sunset provisions, (Exhibit 2).
093	Carlson	Discussed Section 31, (Exhibit 2).
109	Carlson	Discussed Sections 21-30, (Exhibit 2).
116	Ruth Gulyas	Underscored the points of agreement on the reimbursement methodology in statute. The provider tax will go along way in helping nursing homes offset the disparity between the Medicaid reimbursement rate and the actual cost to provide quality care. Paraphrased written testimony (Exhibit 4). Supports the nursing facility assessment tax and concurred with points made by Carlson.
150	Chair Shetterly	Including the statutory reimbursement methodology in Section 13(5)?
151	Gulyas	Answered affirmatively.
157	Brett Salmon	Described the revenue impacts to the general fund and the dedicated funds in the Nursing Facility Quality Assurance Fund.
187	Cathy Cooper	For the record, provided comments on the -6 amendments. DHS is undergoing legal review of -6 amendments. Working with the Alliance and OCHA to achieve resolution on one area where the DHS has strong concerns regarding re-basing as identified in Section 13 (5). Said re-basing is part of Administrative Rules and no other area within DHS has a statutorily guaranteed reimbursement methodology.
213	Chair Shetterly	How do you respond to Carlson’s corollary statement that there is no other provider that has come forward and asked to be assessed?
222	Julia Huddleston	At this point the executive branch does have strong concerns.
226	Chair Shetterly	Asked if Cooper or Huddleston knew the legal issues and timing.
230	Huddleston	Legal review involves Department of Justice, (DOJ), and a Washington, D.C.-based law firm who work with Centers for Medicare and Medicaid Services on provider reimbursement issues. Asked DOJ to resolve largest outstanding questions regarding the bill, such as waiver mechanisms and that the law firm is comfortable with the language of the statute.
252		Discussion regarding acronyms, CMS (Center for Medicare and Medicaid Services), and CFR (Code of Federal Regulations).
265	Carlson	Regarding the legal review, felt technical issues would be addressed quickly. The payment methodology portion, is a policy question for the Legislature, discussed desire for guarantee in contract.
302	Rep. Berger	Regarding state programs, how many are statutory and how many are by rule?
307	Carlson	As relates to setting up the funding mechanism, all are statutory, some have payment methodology included in the statute; discussed CMS preferences for inclusion in the statute. Oregon described as historically not a trustworthy partner to do business with.
360	Laurie Wimmer- Whelan	OEA has recommended several of the items found in the -3 amendments, but is less enthusiastic about across the board cuts than targeted cuts or phased out exemptions. OEA believes it is possible to raise another $750 million in revenue. Suggested review of mortgage interest deductions for higher income; property tax deductions for non-primary residents for phase out; property tax exemptions for commercial buildings and pleasure boats. Department of Revenue (DOR) estimates legislation to limit corporate sheltering activity could result in $162 million for the 2003-05 biennium.
429	Lyn Lundquist	Discussed areas of consideration regarding economic impacts. Opposed freezing the standard deduction and personal exemption; supported the corporate minimum and a reduction in corporate credits. OBA believes in an across the board reduction in itemized deductions rather than decreasing individual deductions.

TAPE 228, SIDE A

038	Rep. Hass	Instead of reducing the personal exemption by $15 and freezing it, OBA prefers a phase out at the higher end?
043	Lundquist	Answered affirmatively.
050	Chair Shetterly	You described the personal exemption as surprisingly progressive, is that correct?
054	Paul Warner	Itemized deductions are distributed more toward higher income; personal exemption credits are tilted toward higher income.
065	Rep. Barnhart	Asked Lundquist to elaborate regarding OBA support of the proposal concerning a reduction in corporate excise tax credits.
070	Lundquist	This was included in an earlier package OBA put together. Explained the business community needs to pay its fair share and reduce the credits.
080	Mike Grainey	Addressed the two energy tax credits in Sections 19-22, cited a deferral in the bill for 2003-05 and the opportunity to recapturing those tax credits, as a reasonable approach which would allow support of the programs.

103

Chair Shetterly

Meeting adjourned at 9:15 a.m.

Tape Log Submitted by,

Kathy Tooley, Committee Assistant

Exhibit Summary:

1. Chair Shetterly, “HB 2182-6”, 13 pages

2. Carlson, “Major Components of -6 Amendment HB 2182”, 4 pages

3. Carlson, “State Medicaid Voluntary Contribution Programs”, 3 pages

4. Gulyas, “Testimony on HB 2182”, 2 pages

5. United for Quality Care, “Written Testimony”, 1 page