PUBLIC HEARING: SB 585, SJR 28

 

TAPES 70-71, A-B

 

SENATE REVENUE COMMITTEE

March 25, 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:††††††††††† ††††††††††† Senator Jackie Winters, District 19

††††††††††††††††††††††† ††††††††††† ††††††††††† Art Fish, Economic and Community Development Department

††††††††††††††††††††††† ††††††††††† ††††††††††† Betsy Earls, Harrang, Long, Gary, and Rudnick Law Firm

††††††††††††††††††††††† ††††††††††† ††††††††††† Jack M. Benton, SUMCA USA Corporation

††††††††††††††††††††††† ††††††††††† ††††††††††† Jim Craven, American Electronics Association

††††††††††††††††††††††† ††††††††††† ††††††††††† Patrick Green, Oregon AFL-CIO

††††††††††††††††††††††† ††††††††††† ††††††††††† Larry Glassock, Salem Economic Development Corporation

††††††††††††††††††††††† ††††††††††† ††††††††††† John Pascone, Albany-Millersburg Economic Development Corporation

††††††††††††††††††††††† ††††††††††† ††††††††††† Senator Richard Devlin, District 19†††††††† ††††††††††† ††††††††††† ††††††††††††††††††††††† ††††††††††† ††††††††††† ††††††††††† ††††††††††† †††††††††††

Staff Present:††† ††††††††††† ††††††††††† Mazen Malik, Legislative Revenue Office

††††††††††††††††††††††† ††††††††††† ††††††††††† Paul Warner, Legislative Revenue Office

††††††††††††††††††††††† ††††††††††† ††††††††††† Tara Lantz, Committee Assistant

 

TAPE 70, SIDE A

 

003

Chair Deckert

Calls meeting to order at 1:07pm.

 

OPENS PUBLIC HEARING ON SB 858

 

009

Sen. Winters

Introduces SB 858 and testifies in support because it would assist companies in maintaining jobs during the current economic recession.

 

 

 

040

Art Fish

Explains the enterprise zone program and what SB 858 does to change it.

 

 

 

119

Betsy Earls

Introduces the SB 858-1 amendments. Exhibit 2.

 

 

 

126

Jack Benton

Gives historical background of the SUMCO Corporation. Exhibit 3. Testifies in support of SB 858 because it would help SUMCO maintain jobs in the current economic downturn.

 

 

 

294

Sen. Corcoran

Asks if there is a mechanism now to change the requirements for certification.

 

 

 

299

Benton

Responds negatively.

 

 

 

322

Jim Craven

Testifies in support of SB 858 because it will increase the chances that businesses that contribute greatly to their communities, such as SUMCO, will be able to maintain and expand employment opportunities.

 

 

 

341

Sen. Deckert

Asks why the flexibility wasnít granted when the enterprise zone program was created.

 

 

 

350

Craven

Responds that he doesnít know.

 

 

 

355

Patrick Green

Testifies in neutrality of SB 858 and raises concerns that the legislature should be cautious in making it easier for businesses to break their commitment to creating jobs.Discusses the waiver available for first source hiring agreements.

 

TAPE 71, SIDE A

 

004

Sen. Hannon

Asks why the Oregon Revenue Coalition is neutral on SB 858 when they submitted a statement on Monday against all tax credits.

 

 

 

011

Green

Responds that they are against tax credits but that they cannot testify against SB 858 because they donít know the revenue impact.

 

 

 

024

Sen. Hannon

Asks about the revenue and fiscal impact.

 

 

 

028

Sen. Deckert

Responds that the fiscal impact would be to the city.

 

 

 

030

Sen. Hannon

Asks if SUMCO would take a deduction in income tax.

 

 

 

033

Benton

Responds negatively.

 

 

 

047

Sen. Deckert

Asks if SUMCO is aware of any opportunities already available to get a waiver.

 

 

 

053

Fish

Responds that there are options for waivers on first source hiring agreements but that there is no flexibility for the 10 percent hiring requirement.

 

 

 

080

Larry Glassock

Gives historical background of the Salem enterprise zone. Testifies in support of SB 858 because it is important to retain businesses, such as SUMCO, that invest in the community.

 

 

 

137

John Pascone

Testifies in support of SB 858 and asks that the legislature look at expanding the availability of waivers to help other businesses as well. Gives example of one company in his area that is hurting but wonít be helped by SB 858 because they are too small.

 

 

 

199

Sen. Deckert

Asks for information about the company Pascone is referring to.

 

Discussion follows.

 

 

 

212

Sen. Ringo

States that business tax breaks are difficult because you can only pass ones that are guaranteed to stimulate the economy and cautions against broadening the scope of the bill.

 

 

 

218

Pascone

Agrees with Senator Ringo but points out that he is only suggesting that businesses who donít meet the requirements in the first year are able to apply the following year rather than in five years and is not asking to refund taxes paid.

 

CLOSES PUBLIC HEARING ON SB 858

 

OPENS PUBLIC HEARING ON SJR 28

 

245

Paul Warner

Explains SJR 28 which creates a separate calculation for income derived from capital gains on both personal income and corporate income tax returns in the forecast and then if revenue exceeds the forecast by 2 percent or more, the entire amount of the excess is deposited in the Education Stability Fund. Discusses the history of capital gains revenue. Exhibit 4.

 

 

 

287

Sen. Corcoran

Asks about the capital gains percentages.

 

 

 

292

Warner

Responds that they are percentage changes from the prior year.

 

Discussion follows.

 

 

 

345

Sen. Devlin

Explains reasoning for drafting SJR 28 and discusses SB 813 which was written in conjunction with the resolution.

 

TAPE 70, SIDE B

 

018

Sen. Hannon

Expresses doubts about the economy making such a swift recovery.

 

 

 

031

Sen. Devlin

Responds that even in 2009 they are not projected to be back to the 1999 level of capital gains.

 

 

 

039

Sen. Hannon

States that he has never voted for the kicker and points out that Measure 28 would have raised the same amount of money the state gave back to the public the year before in the kicker.

 

 

 

047

Sen. Devlin

Responds that the point of this bill is to make the forecast much more stable so that the chances of the kicker actually kicking would be decreased dramatically.

 

 

 

067

Sen. Ringo

Expresses support for SJR 28 because it would even out the volatility in the forecast.

 

 

 

070

Sen. Devlin

Responds by saying that one of the reasons for this bill was to create the Education Stability Fund.

 

 

 

087

Sen. Deckert

Asks if the fact that it had to go to the public for a vote was considered.

 

 

 

091

Sen. Devlin

Responds that he did not ask counsel whether the change was constitutional.

 

 

 

104

Sen. Deckert

Asks what the voter receptivity is.

 

 

 

106

Sen. Devlin

Responds that he believes peopleís perceptions have changed since they last talked about the kicker and that people recognize that funding for schools is needed.

 

CLOSES PUBLIC HEARING ON SJR 28

 

132

Sen. Deckert

Adjourns meeting at 2:09pm.

 

 

 

Tape Log Submitted by,

 

 

 

Tara Lantz, Committee Assistant Reviewed by Kim Taylor James

 

Exhibit Summary:

1.      SB 585, Mazen Malik, Staff Measure Summary, 1p.

2.      SB 585, Betsy Earl, Proposed SB 858-1 amendments, 1p.

3.      SB 585, Jack Benton, Written Testimony, 7pp.

4.      SJR 28, Paul Warner, Staff Measure Summary, 2pp.

5.      SJR 28, Paul Warner, Fiscal Impact Statement, 1p.