PUBLIC HEARING: SB 230, SB 231, SB 322

 

TAPES 38-39, A-B

 

SENATE REVENUE COMMITTEE

FEBRUARY 20, 2003   1:00 PM   STATE CAPITOL BUILDING

 

Members Present:                        Senator Ryan Deckert, Chair

                                                Senator Ted Ferrioli, Vice Chair

                                                Senator Tony Corcoran

                                                Senator Lenn Hannon

 

Members Excused:                      Senator Charlie Ringo

                                                Senator Bruce Starr

 

Witnesses Present:                        Inga Deckert, Office of the State Treasurer

                                                Mike McArthur, Sherman County Judge

                                                Dave Stewart-Smith, Office of Energy

                                                Debra Buchanan, Department of Revenue

                                                John Phillips, Department of Revenue

 

Staff Present:                            Paul Warner, Legislative Revenue Office

                                                Mazen Malik, Legislative Revenue Office

                                                Tara Lantz, Committee Assistant

 

TAPE 38, SIDE A

 

004

Chair Deckert

Calls meeting to order at 1:20pm.

 

OPENS PUBLIC HEARING ON SB 322

 

009

Mazen Malik

Explains SB 322 which authorizes the State Treasurer to issue revenue bonds to be paid from income generated by the electric power transmission substation in Sherman County with net proceeds going to Sherman County. Exhibit 1. States that it has no revenue impact or fiscal impact issued yet. Discusses problems with the bill in its current form.

 

 

 

039

Sen. Ferrioli

Discusses the importance of SB 322 in developing alternative energy sources and increasing the capacity to transmit this energy. Discusses the problems with the bill brought to his attention by the State Treasurer and what he’s doing to address these problems.

 

 

 

086

Inga Deckert

Discusses the problems the State Treasurer has with SB 322 and what they are doing to work around those problems.

 

 

 

095

Mike McArthur

Discusses the importance of Sherman County in developing wind power in Oregon and how SB 322 would encourage this to happen. Discusses the problems with the bill in its current form and gives several options to take the bill from here.

 

 

 

175

Sen. Deckert

Asks if McArthur wants the state to back the bonds or finance the project.

 

 

 

179

McArthur

Responds that they only want to use the state’s credit and that the developers would finance the project.

 

 

 

186

Dave Stewart-Smith

Discusses programs the Office of Energy offers that could work for the Sherman County project and discusses the importance of wind energy for Oregon’s future.

 

Discussion follows.

 

 

 

225

Sen. Ferrioli

States that this is an opportunity to remove an obstacle that is slowing the growth of the alternative energy industry and to provide an infrastructure building vehicle.

 

 

 

262

Sen. Hannon

Asks about the Office of Energy’s track record on issuing bonds.

 

 

 

273

Stewart-Smith

Responds that their track record has been fairly strong with the exception of Oregon Museum of Science and Industry (OMSI)

 

 

 

293

Sen. Ferrioli

Discusses the purpose of hearing this bill which is to get the idea out there to build a public infrastructure.

 

Discussion follows.

 

 

 

315

Sen. Ferrioli

Points out that the solution they come up with to help the development of alternative energy will become a mechanism for other counties in the future.

 

Discussion follows.

 

CLOSES PUBLIC HEARING ON SB 322

 

OPENS PUBLIC HEARING ON SB 231

 

339

Malik

Explains SB 231 which eliminates good and sufficient cause standards and the need to make a record of that reason by the Department of Revenue. Exhibit 3. Discusses revenue impact (Exhibit 4) and states that there is no fiscal impact (Exhibit 5).

 

 

 

388

Buchanan

Testifies in support of SB 231 because it would give the Department of Revenue the ability to waive all or portions of penalties they deem as having sufficient cause but that do not currently fall into the category “good and sufficient cause”. Exhibit 6.

 

 

 

424

Sen. Hannon

Asks why he should trust the administrative rules when employees of the Department of Revenue were not elected by his constituents.

 

 

 

441

Buchanan

Responds that the rule making process is open to the public and that with the rule they are allowed to more flexible in waiving penalties when there is good cause.

 

 

 

467

Sen. Hannon

States that he would feel more comfortable if there were CPA’s and tax lawyers testifying their support for the bill.

 

 

 

491

Buchanan

States that she would be happy to come back with information from the Oregon Society of Public Accountants.  

 

TAPE 39, SIDE A

 

034

Sen. Deckert

Gives an example of a constituent who would have benefited from this bill and suggests putting a particular rule in the statute rather than giving the department to adopt rules.

 

 

 

049

Buchanan

Responds that they could certainly put it into statute, but that if there was another situation that came up that wasn’t covered in the statute that wouldn’t allow them the flexibility to waive the penalty.

 

 

 

057

Sen. Deckert

Asks about their current flexibility.

 

 

 

064

Buchanan

Responds that they have no flexibility and that they have to follow the law as it is written.

 

CLOSES PUBLIC HEARING ON SB 231

                       

OPENS PUBLIC HEARING ON SB 230

 

095

Malik

Explains SB 230 which permits the Department of Revenue to reduce penalties for late filing or nonfiling for centrally assessed properties, conforms penalties for industrial properties to those of the centrally assessed properties, and permits the Department of Revenue to set and adopt rules for not imposing penalties. Exhibit 7. Discusses revenue impact (Exhibit 8) and states that there is no fiscal impact (Exhibit 9).

 

 

 

145

John Phillips

Testifies in support of SB 230 because it would give the Department more flexibility in reducing penalties and improve compliance for industrial taxpayers. Exhibit 10. Begins by discussing Section 1.

 

 

 

227

Phillips

Discusses Section 2 and the history of the bill.

 

 

 

276

Phillips

Discusses Section 3.

 

 

 

303

Sen. Hannon

Points out that the percentage of industrial non-filers have actually gone down and asks Phillips if he went back to the archives to see why the statute was created.

 

 

 

346

Phillips

Responds that looking back at additional years would strengthen the data and would look that up.

 

Discussion follows.

 

 

 

375

Sen. Hannon

Repeats question regarding archives and states that new legislators are coming in that have no historical perspective and that he doesn’t agree with eliminating statutes and putting everything under administrative rule.

 

 

 

416

Phillips

Responds that he would be happy to work with the members to put the changes in the statute rather than administrative rule.

 

Discussion follows.

 

 

 

470

Sen. Deckert

States that they have another similar bill and will combine all the bills and form a work group to try and put them into one bill and avoid giving the Department the authority to adopt rules.

 

Discussion follows with everyone in agreement.

 

CLOSES PUBLIC HEARING ON SB 230

 

082

Sen. Deckert

Adjourns meeting at 2:20pm.

 

 

 

 

 

Tape Log Submitted by,

 

 

 

Tara Lantz, Committee Assistant Reviewed by Kim Taylor James

 

Exhibit Summary:

1.      SB 322, Mazen Malik, Staff Measure Summary, 2pp.

2.      SB 322, Inga Deckert, Office of the State Treasurer Letter, 1p.

3.      SB 231, Mazen Malik, Staff Measure Summary, 1p.

4.      SB 231, Mazen Malik, Revenue Impact Statement, 1p.

5.      SB 231, Mazen Malik, Fiscal Impact Statement, 1p.

6.      SB 231, Debra Buchanan, Written Testimony, 1p.

7.      SB 230, Mazen Malik, Staff Measure Summary, 1p.

8.      SB 230, Mazen Malik, Revenue Impact Statement, 1p.

9.      SB 230, Mazen Malik, Fiscal Impact Statement, 1p.

10.  SB 230, John Phillips, Written Testimony, 2pp.