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.