WORK SESSION: SB 549

 

PUBLIC HEARING: SB 556

 

PUBLIC HEARING AND WORK SESSION: SB 229

 

TAPES 62-63, A-B

 

SENATE REVENUE COMMITTEE

March 13, 2003   1:00 PM   STATE CAPITOL BUILDING

 

Members Present:                        Senator Ryan Deckert, Chair

                                                Senator Ted Ferrioli, Vice Chair

                                                Senator Tony Corcoran

                                                Senator Lenn Hannon

                                                Senator Charlie Ringo

                                                Senator Bruce Starr                                                       

 

Witnesses Present:                        Fred Hansen, General Manager, Tri-Met

                                                Senator Vicki Walker, District 7

                                                John Brown, Eugene Real Estate Appraiser

                                                Diane Belt, Oregon Association of County Tax Collectors

                                                Gary Bartholomew, Oregon Association of County Tax Collectors        

 

Staff Present:                            Lizbeth Martin-Mahar, Legislative Revenue Office

                                                Mazen Malik, Legislative Revenue Office

                                                Paul Warner, Legislative Revenue Office

                                                Tara Lantz, Committee Assistant

 

TAPE 62, SIDE A

 

003

Chair Deckert

Calls meeting to order at 1:10pm

 

OPENS WORK SESSION ON SB 549

 

017

Sen. Deckert

Asks if TriMet would have to enact the increase by January 1, 2004 in order to meet the requirements of the phase in process thereby voiding the promise that they would wait until there was an economic recovery before phasing in an increase.

 

 

 

023

Fred Hansen

Responds negatively citing that the language allows them to phase in the increase for 10 years after it is initiated and not 10 years after the passage of the bill.

 

 

 

038

Sen. Starr

MOTION: MOVES LC-5 AMENDMENTS DATED 3/12/03 TO SB 549 BE ADOPTED. Exhibit 3.

 

 

 

044

Martin-Mahar

Explains the LC-5 amendments, which specifies that the district board must adopt an ordinance increasing the tax authority if the economy in the district has recovered from any downturn, reflected in employment and income growth. Exhibit 1.

 

 

 

051

Sen. Starr

Asks if it would make more sense to adopt amendments to section 2, where it relates to timing of the increase, rather than section 1.

 

 

 

064

Hansen

Responds that the advantage of being in section 1 is that when section 2 is repealed by the sunset it would stay in place and would apply across all times.

 

 

 

083

Sen. Starr

Asks if in the situation that the ordinance was passed in 2005 it would be phased in until 2015.

 

 

 

095

Hansen

Responds affirmatively.

 

 

 

112

Sen. Starr

Asks if the board takes one action to set the increase in motion or if there is an ordinance at every point that the increments are phased in.

 

 

 

117

Hansen

Responds that section 2 allows for it to be done either way.

 

 

 

125

Sen. Deckert

ORDER: WITHOUT OBJECTION THE LC-5 AMENDMENTS ARE MOVED INTO SB 549. ALL MEMBERS PRESENT EXCEPT SEN. FERRIOLI.

 

 

 

137

Sen. Ferrioli

Asks about the cost per ride.

 

 

 

145

Hansen

Responds that in FY02 the cost per boarding ride of light rail is about $1.51 and the bus ride $2.04.

 

Discussion follows.

 

 

 

206

Sen. Hannon

MOTION: MOVES SB 549 TO THE SENATE FLOOR WITH A DO PASS AS AMENDED RECOMMENDATION.

 

 

 

213

Sen. Deckert

ORDER:

ROLL CALL VOTE: MOTION PASSES 6-0-0.

Sen. Starr will carry the bill on the Senate Floor.

 

OPENS PUBLIC HEARING ON SB 556

 

223

Mazen Malik

Explains SB 556, which reduces the rate of interest paid on certain property tax refunds. Exhibit 4.

 

 

 

239

Sen. Walker

Testifies in support of SB 556 because counties are losing a lot of money because the interest on property tax appeals is paid out at 12 percent when the current interest rate is extremely low.

 

 

 

256

John Brown

Testifies in support of SB 556 because it provides increased revenues to local taxing districts without a cost to the taxpayers and corrects an inequity. Gives examples from Lane County of large refunds.

 

 

 

319

Sen. Hannon

Asks if this appears to be a persistent problem of refunds.

 

 

 

341

Brown

Responds that there is a problem in that the county tax board is so understaffed that they are not able to adequately contest the appeals in court.

 

 

 

360

Sen. Hannon

Asks about the interest rate for those who underpay.

 

 

 

369

Brown

Responds that he believes a person is able to go back and pay the taxes owed without a penalty within a certain amount of time.

 

 

 

378

Sen. Hannon

Asks if this is a problem because of the size of cases taken to contested hearings.

 

 

 

387

Brown

Responds that he doesn’t believe so and that the problem is because of the number of people who are able to obtain a refund.

 

 

 

400

Sen. Hannon

Asks if he is saying that there is a problem with the county tax assessors.

 

 

 

404

Brown

Responds affirmatively.

 

 

 

413

Sen. Deckert

Asks if the tax assessors need to have some sort of disincentive to not underestimate the tax liability and if the 12 percent rate addresses that.

 

TAPE 63, SIDE A

 

001

Brown

Responds that he doesn’t believe a 12 percent rate is a penalty to the county and that it was put in place historically to reflect the market and lost opportunity and that those markets have changed now.

 

 

 

006

Sen. Deckert

Asks about the history of the 12 percent rate.

 

 

 

007

Brown

Responds that he doesn’t know.

 

 

 

012

Sen. Walker

Responds that she doesn’t believe the assessors are not appropriately assessing property and that the problem lies in that the tax assessors are understaffed and cannot compete against lawyers who are after large refunds. States that she has been told that the bill should be changed to use a simple rate rather than a compounded and that she has no position on that.

 

 

 

034

Malik

States that the Legislative Fiscal Office had difficulties in issuing a fiscal impact statement because of the compounded rate.

 

 

 

038

Sen. Deckert

States that he will hold off on the compounded rate issue until he gets a sense of where the committee is on the concept.

 

 

 

046

Diane Belt

Discusses the history of the 12 percent rate and the problems with compounding rates. Recommends using simple rate. Gives examples of large refunds.

 

 

 

084

Gary Bartholomew

Suggests language that would set the rate at the nearest quarter percent so that counties might not even have to change the rate every year.

 

 

 

095

Sen. Deckert

Asks how Oregon compares to other states.

 

 

 

102

Bartholomew

Discusses Washington’s and California’s rates.

 

 

 

120

Sen. Ferrioli

Asks about the differential between the interest charged and interest paid.

 

 

 

123

Bartholomew

Responds that the interest rate charged is currently 16 percent annually.

 

 

 

135

Sen. Ferrioli

Points out that some people will think about a sense of proportionality when looking at this bill.

 

 

 

146

Belt

Responds that the full 16 percent doesn’t kick in until 12 months have passed.  

 

 

 

159

Sen. Ferrioli

Asks how the counties compound interest.

 

 

 

160

Belt

Responds that they use simple interest.

 

 

 

161

Sen. Ferrioli

States that he still doesn’t have an answer to give his constituents about the fairness of the differential.

164

Belt

Responds that she asks those people where else they can go and not pay but still receive services with the only downfall being that they have to pay interest.

 

 

 

174

Sen. Deckert

States that to him it seems like there should be some consistency between what is paid and what is charged.

 

 

 

180

Sen. Ferrioli

Responds that he agrees but argues that there is proportionality to the symmetry and that there should be a differential, just not 10 points.

 

Discussion follows.

 

 

 

199

Sen. Deckert

Asks what the 12 percent rate would be if there was complete balance.

 

 

 

204

Bartholomew

Responds that it would be about 5.5 percent.

 

Discussion follows.

 

 

 

236

Malik

Explains that 4 percent of the 16 percent charged is dedicated to funding assessment functions within the county.

 

Discussion follows.

 

CLOSES PUBLIC HEARING ON SB 556

 

OPENS PUBLIC HEARING ON SB 229

 

252

Malik

Explains SB 229. Discusses the previous concerns and explains the LC-1 and LC-2 amendments. Exhibits 6-8.

 

341

Sen. Hannon

Asks if this is the same interest rate that was discussed in SB 556.

 

 

 

345

Malik

Responds that it is the same interest rate but on the other side.

 

Discussion follows.

 

CLOSES PUBLIC HEARING ON SB 229

 

OPENS WORK SESSION ON SB 229

 

370

Sen. Corcoran

MOTION: MOVES LC-1 AMENDMENTS DATED 3/7/03 TO SB 229 BE ADOPTED.

 

 

 

373

Sen. Deckert

ORDER: HEARING NO OBJECTION, MOTION PASSES: 4-0-2. SENATORS EXCUSED: RINGO, FERRIOLI.

 

 

 

374

Sen. Corcoran

MOTION: MOVES LC-2 AMENDMENTS DATED 3/12/03 TO SB 229 BE ADOPTED.

 

 

 

377

Sen. Deckert

ORDER: HEARING NO OBJECTION, MOTION PASSES: 4-0-2. SENATORS EXCUSED: RINGO, FERRIOLI.

 

 

 

378

Sen. Corcoran

MOTION: MOVES SB 229 TO SENATE FLOOR WITH A DO PASS AS AMMENDED RECOMMENDATION.

 

 

 

385

Sen. Deckert

ORDER: HEARING NO OBJECTION, MOTION PASSES: 4-0-2. SENATORS EXCUSED: RINGO, FERRIOLI.

Sen. Corcoran will carry the bill on the Senate Floor.

 

 

 

392

Sen. Deckert

Adjourns meeting at 2:02pm

 

 

 

 

Tape Log Submitted by,

 

 

 

Tara Lantz, Committee Assistant Reviewed by Kim Taylor James

 

Exhibit Summary:

1.      SB 549, Lizbeth Martin-Mahar, Staff Measure Summary, 1p.

2.      SB 549, Lizbeth Martin-Mahar, Fiscal Impact Statement, 1p.

3.      SB 549, Lizbeth Martin-Mahar, -5 Amendments to SB 549, 1p.

4.      SB 556, Mazen Malik, Staff Measure Summary, 1p.

5.      SB 556, John Brown, Written Testimony, 1p.

6.      SB 229, Mazen Malik, -1 Amendments to SB 229, 2pp.

7.      SB 229, Mazen Malik, -2 Amendments to SB 229, 1p.

8.      SB 229, Mazen Malik, Staff Measure Summary, 1p.

9.      SB 229, Mazen Malik, Revenue Impact Statement, 1p.

10.  SB 229, Mazen Malik, Correcting Errors or Omissions in Rolls ORS Reference, 5pp.