PUBLIC HEARING AND WORK SESSION

SB 469-A; WORK SESSION SB 362-A   

 

TAPE 248, A

 

HOUSE REVENUE COMMITTEE

AUGUST 25, 2003   3:00 PM   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                                               

 

Witnesses Present:                        Mike Marsh, Oregon Department of Transportation, (ODOT)

                                                Bob Russell, Oregon Trucking Association

                                                John Marks, Portland

                                                Ray Lewis, Portland

 

Staff Present:                            Paul Warner, Legislative Revenue Officer

                                                Richard Yates, Legislative Revenue Office

                                                Lizbeth Martin-Mahar, Legislative Revenue Office

                                                Kathy Tooley, Committee Assistant

 

TAPE 248, SIDE A

 

004

Chair Shetterly

Calls meeting to order at  3:17 p.m.

 

OPENED PUBLIC HEARING ON SB 469-A

 

014

Mike Marsh

Spoke in support of SB 469-A –1 amendments, as it changes truck credentialing fees to align statutes with the passage of HB 2041 (Exhibit 1).  The bill fixes a problem in the fee structure created by HB 2041.  The amendment assures that fees are applied equitably to in state and out of state vehicles, and cost responsibility between trucks and cars.

 

045

Bob Russell

This bill fixes a problem discovered after the passage of HB 2041. Described the amendment as cost responsible.

 

055

Marsh

Discussed additional information on reductions in operating expenditures for ODOT by shifting to cities and counties.  The amendment ensures the funds are consolidated at ODOT and are used on statewide maintenance and preservation projects that can seek limitations on later, deletes portion of bill that sends additional money to cities and counties.

 

066

Chair Shetterly

Will this be distributed through the Area Commission on Transportation Process (ACTP)?

 

067

Marsh

The amount discussed be discussed as part of the.ACTP, but the main thrust is for maintenance and preservation, not through the area commissions.

 

070

Chair Shetterly

Will there be input from cities and counties on expenditures?

 

071

Marsh

It will be used in local areas.

 

075

Chair Shetterly

Closed public hearing on SB 469.

 

 

OPENED WORK SESSION ON SB 469-A

 

076

Chair Shetterly

MOTION:  MOVED ADOPTION OF THE –A4 AMENDMENT (Exhibit 2), INTO SB 469-A.

 

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

 

078

Chair Shetterly

MOTION:  MOVED SB 469-A, AS AMENDED, TO THE HOUSE FLOOR WITH A DO PASS RECOMMENDATION.

 

081

Rep. Verger

This involves the payroll tax?

 

082

Chair Shetterly

No, that amendment is not before the Committee.

 

083

 

ROLL CALL:  MOTION PASSED 9-0-0

REPRESENTATIVES VOTING AYE:  Barnhart, Berger, Farr, Hass, Hopson, Scott, Verger, Williams, Chair Shetterly.

 

Rep. Farr will carry the bill.

 

092

Chair Shetterly

 

Chair Shetterly

Closed the work session on SB 469. 

 

Recessed the meeting for 5 minutes.

 

OPENED WORK SESSION SB 362-A

 

093

Chair Shetterly

Discussed the –A11 amendment.

 

 

 

112

John Marks

This bill would discontinue the estate tax? 

 

115

Chair Shetterly

It does not.  It raises the filing threshold to $2 million over time.

 

119

Marks

Opposed raising the exemption.   Discussed personal experience with estate tax, which he found supportive.  Said the estate tax is a way of ensuring there is not a hereditary plutocracy in this country.  It is also a way of paying back for the privilege of living in Oregon, and a country in where wealth can be accumulated.  Described the estate tax as a way of paying back to the community that has rewarded enterprise.

 

140

Ray Lewis

Concurred with Marks’ comments.  Oregon does not need to lose a source of income.  As a small businessperson, does not mind paying the increase of income taxes recently passed in order to have good schools; but would mind paying the increase if the estate tax was discontinued.  Challenged the level of exemption changing to $2 million as a person able to have an estate of that size would probably have the ability to plan ahead to eliminate or reduce their estate taxes.

 

174

Martin-Mahar

Provided background and description of the –A11 amendments, similar to -A5 amendments.  Clarifies the past and forgives a tax that would have been owed due to the filing threshold being at $600,000 currently.

 

180

Chair Shetterly

Told the Committee that this was the most critical part to be done in this session, forgiving the unintended tax liability accrued since 1997.

 

184

Martin-Mahar

Establishes a date on which the estate tax connects to the Internal Revenue Code for decedents dying on or after December 31, 2002; explained revenue neutrality of bill for 2003 05 biennium (Exhibit 4).  Discussed revenue loss of $27 million for 2005-07 biennium, (Exhibit 5).

 

211

Martin-Mahar

Discussed conceptual amendments needed for –A11 amendments. On page 8, line 18, delete $1,525,800 and replace with $780,800; and on page 8, line 27, delete $3.5 million and replace with $2 million.  –A11 deletes sunset in the –A5 amendments in 2010, keeps the estate tax going beyond 2010 and disconnects from future changes.  Clarified Oregon no longer has a rolling reconnect to federal tax and should there be changes in federal tax law, the legislature would have to decide if it will connect.   Currently connected to $2 million filing threshold.

 

236

Chair Shetterly

What year did we go to $2 million?

 

237

Martin-Mahar

2006.

 

238

Chair Shetterly

That stays in federal law until 2009?

 

239

Martin-Mahar

Answered affirmatively.

 

240

Chair Shetterly

Told the Committee of negotiations with the Governor’s office, the chair had wanted a $3.5 million threshold, the Governor is disinclined to do that.  Want to protect estates from unintended tax liabilities, and is will forego the battle over the 2009 issue as federal law will be change and can be revisited in the next sessions.  Right now the legislature can give estate planners a $2 million threshold.

 

263

Chair Shetterly

Looked to Margaret Hallock of the Governor’s office for affirmation that he described correctly.

 

265

Margaret Hallock

Nodded affirmation.

 

257

Rep. Barnhart

Asked if -10 amendments deals with problem of prior tax returns where the law is ambiguous, and does it go forward with a cap of $1 million?

 

270

Martin-Mahar

The HB 2704-10 amendments, brought forward by Rep. Merkley, is capped at $1 million and disconnected from future estate tax increases with add backs in 2003, and 2004.  In 2005, there are no multipliers with a revenue loss of $10 million which is less due to having a $1 million threshhold.

 

299

Rep. Barnhart

The revenue impact is less in that proposal?

 

300

Chair Shetterly

Yes, because the tax impact is higher.

 

301

Rep. Barnhart

Commented that Congress was precipitous in its action on estate tax and is too high, had hoped for a smaller threshold.

 

313

Chair Shetterly

MOTION:  MOVED ADOPTION OF CONCEPTUAL AMENDMENTS TO THE –A11 AMENDMENTS.  DELETE $1,525,800 ON LINE 18, PAGE 8 AND INSERTING $780,800.  ON LINE 27, PAGE 8, DELETE $3.5 AND INSERT $2.0.

 

327

Rep. Scott

Why conceptually change those, why not leave them where they are?

 

329

Chair Shetterly

Explained the Governor’s office will go to $2 million, but not $3.5 in 2009, this amendment was crafted contemplating increasing that threshold in 2009, that’s something future legislatures can address.

 

 

 

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

 

340

Chair Shetterly

MOTION:  MOVED ADOPTION OF THE –A11 AMENDMENTS, AS CONCEPTUALLY AMENDED, INTO SB 362-A.

 

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

 

346

Chair Shetterly

MOTION:  MOVED SB 362-A TO THE HOUSE FLOOR, AS AMENDED INCLUDING CONCEPTUAL AMENDMENTS, WITH A DO PASS RECOMMENDATION.

 

348

Rep. Barnhart

This deletes the original bill?

 

349

Chair Shetterly

Answered affirmatively.

 

350

 

ROLL CALL:  MOTION PASSED 7-2-0

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

 

Rep. Chair Shetterly will carry the bill.

 

 

367

Chair Shetterly

Meeting adjourned at  4:00 p.m.

 

Tape Log Submitted by,

 

 

 

Kathy Tooley, Committee Assistant

 

Exhibit Summary:

1.       Marsh, testimony “Senate Bill 469 and -1 amendments”, 1 page

2.       Chair Shetterly, “SB 469-A4 amendments”, 1 page

3.       Chair Shetterly, “SB 362-A11 amendments”, 10 pages

4.       Martin-Mahar, “Comparison of Estate Tax Proposals” 1 page

5.       Martin-Mahar, “Revenue Impact SB 362”, 1 page

6.       Chair Shetterly, “SB 362-7”, 9 pages

7.       Chair Shetterly, “SB 362-A9”, 1 page

8.       Yates, “SB 469-A”, 1 page