PUBLIC HEARING AND WORK SESSION: SB 331

 

TAPES 74-75, A-B

 

SENATE REVENUE COMMITTEE

March 27, 2003†† 1:00 PM†† STATE CAPITOL BUILDING

 

Members Present:††††††††††† ††††††††††† Senator Ryan Deckert, Chair

††††††††††††††††††††††† ††††††††††† ††††††††††† Senator Ted Ferrioli, Vice Chair

††††††††††††††††††††††† ††††††††††† ††††††††††† Senator Tony Corcoran

††††††††††††††††††††††† ††††††††††† ††††††††††† Senator Charlie Ringo

††††††††††††††††††††††† ††††††††††† ††††††††††† Senator Bruce Starr

 

Members Excused:††††††††† ††††††††††† Senator Lenn Hannon

 

Witnesses Present:††††††††††† ††††††††††† Pamela Leavitt, Credit Union Association of Oregon

††††††††††††††††††††††† ††††††††††† ††††††††††† Hal Scoggins, Farleigh, Wada & Witt, P.C.

††††††††††††††††††††††† ††††††††††† ††††††††††† Ralph Goodwin, Grant-Baker Federal Credit Union

††††††††††††††††††††††† ††††††††††† ††††††††††† Ava Milosevich, Selco Credit Union

††††††††††††††††††††††† ††††††††††† ††††††††††† Tim Martinez, Oregon Bankerís Association

††††††††††††††††††††††† ††††††††††† ††††††††††† Ken Sherman, Oregon Bankerís Association Counsel

††††††††††††††††††††††† ††††††††††† ††††††††††† Brady Adams, Evergreen Federal Savings Bank

††††††††††††††††††††††† ††††††††††† ††††††††††† Roger Christensen, Columbia River Bank

††††††††††††††††††††††† ††††††††††† ††††††††††† Brigid OíCallahan, US Bank

††††††††††† ††††††††††† ††††††††††† ††††††††††† Senator Rick Metsger, District 26†††††††† †††††††††††

 

Staff Present:††† ††††††††††† ††††††††††† Paul Warner, Legislative Revenue Office

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

 

TAPE 74, SIDE A

 

003

Chair Deckert

Calls meeting to order at 1:07pm.

 

OPENS PUBLIC HEARING ON SB 331

 

016

Sen. Ferrioli

Introduces SB 331, which adds credit unions to the list of financial institutions in which public entities may deposit and invest funds. Discusses SB 331-4 amendments. Testifies in support of the bill because it allows credit unions to serve public entities in their communities.

 

 

 

064

Pamela Leavitt

Gives background on credit unions and public funds. Testifies in support of SB 331 because it would increase competition for public dollars, creating better interest rates. Refer to written testimony. Exhibit 3.

 

 

 

167

Sen. Starr

Asks why the witnesses are talking about taxes and other aspects of credit unions when the relating clause to the bill is public funds and advises the chair to limit testimony.

 

 

 

191

Sen. Deckert

Agrees with Sen. Starr and asks if the -4 amendments mollify the treasurerís office.

 

 

 

197

Leavitt

Responds affirmatively.

 

 

 

201

Sen. Ringo

Asks if there is a difference in credit unions and banks in their executive compensation.

 

 

 

208

Leavitt

Responds that the compensation of a financial institution is usually related to the financial assets of the institution, but that credit unions are lower on average.

 

 

 

221

Harold Scoggins

Responds that credit unions have no opportunity to give stock options to their employees like stock institutions do.

 

 

 

228

Leavitt

Refers members to written testimony from the Special Districts Association of Oregon. Exhibit 7.

 

 

 

236

Scoggins

Testifies in support of SB 331 and discusses the limits put on credit unions to ensure their safety and security. Refer to written testimony. Exhibit 4.

 

 

 

317

Sen. Ringo

Asks how many communities in Oregon have an issue with keeping funds locally because there isnít a local community bank.

 

 

 

321

Scoggins

Responds that he isnít sure because there are so many small communities in Oregon.

 

 

 

336

Sen. Deckert

Asks if they have an estimate over the next five years of the amount of money that would flow in with the passage of SB 331.

 

 

 

347

Scoggins

Responds that nobody can guess that because it is an open market place.

 

 

 

360

Leavitt

Responds that she surveyed states that have passed this legislation and they all said there wasnít a significant amount of change from anybodyís perspective.

 

Discussion follows.

 

 

 

390

Ralph Goodwin

Testifies in support of SB 331 because taxing districts desire a change in the market to provide an alternative to their present choices. Discusses taxes paid by credit unions. Refer to written testimony. Exhibit 5.

 

TAPE 75, SIDE A

 

023

Sen. Deckert

Asks how Goodwin would respond to community banks that pay income taxes and argue that credit unions are at a competitive advantage.

 

 

 

028

Goodwin

Responds that all financial institutions are competing every day for deposits from individuals and businesses and that this one narrow segment of the market being included would not make a significant difference.

 

 

 

056

Leavitt

Challenges the banks that think credit unions are so great because they donít pay income tax to become one and restrict services and return profits to their customers.

 

 

 

071

Ava Milosevich

Testifies in support of SB 331. Discusses Selco Credit Union and the differences between credit unions and banks. Refer to written testimony. Exhibit 6.

 

 

 

209

Sen. Ringo

Asks if credit unions have reduced the rules for membership.

 

 

 

213

Leavitt

Responds affirmatively and discusses field of membership legislation.

 

Discussion follows.

 

 

 

251

Sen. Deckert

Asks what percentage of people cannot be placed in credit unions.

 

 

 

252

Leavitt

Responds that she doesnít know but will look into it.

 

 

 

276

Tim Martinez

Responds to earlier question regarding credit union membership. Testifies in opposition to SB 331 because there needs to be a line drawn somewhere in what credit unions are allowed to do if they are going to be treated differently than banks.

 

 

 

368

Sen. Ringo

Asks if there is any way to get a concrete number on the amount of tax revenue that would be lost.

 

 

 

373

Martinez

Responds negatively.

 

 

 

387

Brady Adams

Testifies that he is supportive of credit unions, but that he is opposed to SB 331 because it is an issue about fairness. Discusses his own financial institution, which is chartered similarly to credit unions and yet is still taxed.

 

TAPE 74, SIDE B

 

087

Sen. Starr

Asks how many financial institutions there are in the state chartered like Evergreen Federal Savings Bank.

 

 

 

089

Adams

Responds that there are two and discusses why there needs to be a line drawn.

 

 

 

110

Sen. Ringo

Asks if Adams could change to a credit union and still fulfill its mission.

 

 

 

113

Adams

Responds that he could become a credit union or a bank but that he doesnít have any intentions of doing so because he feels strongly about the charter he has.

 

 

 

139

Sen. Ringo

States that Adams seems to be asking the committee to apply the arguments for his bank to the banking community in general.

 

 

 

142

Adams

Responds that he cannot speak for other banks, but if they are talking about the issue of fairness, this is not fair for his bank.

 

 

 

183

Sen. Ringo

States that a compelling reason for him to pass SB 331 is that credit unions are membership owned and most banks are not.

 

 

 

190

Adams

Responds that if one institution that is membership owned, such as own, and pays taxes when credit unions do not, then the system is unfair.

 

Discussion follows.

 

 

 

212

Sen. Deckert

Asks why this bill is where the line should be drawn.

 

 

 

214

Adams

Responds that the public entities are dependent on tax dollars to make their programs work.

 

 

 

227

Martinez

Responds that Oregon has a good mix of large and small banks to serve Oregonians and that they do things for the community as well.

 

 

 

251

Roger Christensen

Testifies in opposition to SB 331 because it is unfair to banks that pay income taxes. Discusses his own bankís contributions to the community.

 

 

 

330

Sen. Starr

Asks if the -4 amendments change his opinion at all.

 

 

 

334

Christensen

Responds negatively.

 

 

 

358

Sen. Ringo

Asks how many towns have a credit union and no community bank.

 

 

 

364

Christensen

Responds that he doesnít know.

 

Discussion follows.

 

 

 

382

Brigid OíCallahan

Testifies in opposition to SB 331 because public entities in Oregon are well served by banks in Oregon. Refer to written testimony. Exhibit 8.

 

TAPE 75, SIDE B

 

101

Sen. Ringo

Asks about limitations of deposits.

 

Discussion follows.

 

 

 

136

Sen. Metsger

Testifies in support of SB 331 because public entities should have the option of using credit unions.

 

CLOSES PUBLIC HEARING ON SB 331

 

OPENS WORK SESSION ON SB 331

 

249

Sen. Ringo

MOTION: MOVES SB 331-4 AMENDMENTS DATES 3/27/03 BE ADOPTED.

 

 

 

251

Sen. Deckert

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

 

 

 

252

Sen. Ringo

MOTION: MOVES SB 331 TO THE SENATE FLOOR WITH A DO PASS AS AMENDED RECOMMENDATION.

 

 

 

255

Sen. Deckert

ORDER: ROLL CALL VOTE:

SENATORS ANSWERING AYE: CORCORAN, RINGO, STARR, DECKERT. SENATORS EXCUSED: HANNON, FERRIOLI.

Sen. Ferrioli and Sen. Metsger will carry the bill on the Senate Floor.

 

 

 

257

Sen. Deckert

Adjourns meeting at 2:49pm.

 

 

 

 

Tape Log Submitted by,

 

 

 

Tara Lantz, Committee Assistant

Exhibit Summary:

1.      SB 331, Paul Warner, Staff Measure Summary, 1p.

2.      SB 331, Paul Warner, Proposed SB 331-4 Amendments, 1p.

3.      SB 331, Pamela Leavitt, Written Testimony, 4pp.

4.      SB 331, Harold Scoggins, Written Testimony, 2pp.

5.      SB 331, Ralph Goodwin, Written Testimony, 2pp.

6.      SB 331, Ava Milosevich, Written Testimony, 4pp.

7.      SB 331, Hasina Squires, Written Testimony 1p.

8.      SB 331, Brigid OíCallaghan, Written Testimony, 3pp.