PUBLIC HEARING: SB 362, SB 778

 

TAPES 84-85, A-B

 

SENATE REVENUE COMMITTEE

April 8, 2003   1:00 PM   STATE CAPITOL BUILDING

 

Members Present:                        Senator Ryan Deckert, Chair

                                                Senator Ted Ferrioli, Vice Chair

                                                Senator Charlie Ringo

                                                Senator Bruce Starr

 

Members Excused:                      Senator Tony Corcoran

                                                Senator Lenn Hannon

 

Witnesses Present:                        Allen Ally, Oregon Council on Knowledge and Economic Development

                                                Scott Gibson, Oregon Council on Knowledge and Economic Development     

                                                Keith Barnes, Former Venture Capitalist

                                                Jim Johnson, Former Plant Manager, Intel

                                                Michael Slater, Revenue Coalition

                                                Patrick Green, Revenue Coalition           

                                                James Hamrick, Parks and Recreation Department

                                                Kevin Montgomery Smith, Portland Business Alliance

 

Staff Present:                            Paul Warner, Legislative Revenue Office

                                                Lizbeth Martin-Mahar, Legislative Revenue Office

                                                Tara Lantz, Committee Assistant

 

TAPE 84, SIDE A

 

004

Chair Deckert

Calls meeting to order at 1:07pm

 

OPENS PUBLIC HEARING ON SB 362

 

010

Lizbeth Martin-Mahar

Explains SB 362 which provides an income tax exemption for 7 years for venture capitalists and senior research faculty. Exhibit 2. Discusses proposed SB 362-1 amendment (Exhibit 1) and issues that add to the uncertainty of a revenue impact. Exhibit 3.

 

 

 

090

Allen Ally

Discusses his own venture capital company and his experiences with tax incentives. Testifies in support of SB 362 because surrounding states already have the tax expenditures in place, putting Oregon at a disadvantage.

 

 

 

124

Scott Gibson

Stresses that SB 362 has such high standards that it would only benefit top venture capitalists who move to Oregon and points out that a person must invest $2 million each year. Points out that it is revenue neutral because the two people in Oregon who could qualify have agreed not to apply.

 

 

 

202

Keith Barnes

Discusses his own venture capital experience. Testifies in support of SB 362 because it would draw companies from outside the state to invest in the companies in Oregon.

 

 

 

268

Sen. Ringo

Asks about the ambiguity of the bill.  

 

 

 

270

Sen. Deckert

Asks Gibson to meet with revenue staff to discuss any amendments that need to be drawn up.

 

 

 

287

Gibson

Responds that they can tighten the language to ensure that people must apply every year and must have primary residence in Oregon.

 

Discussion follows.

 

 

 

330

Jim Johnson

Discusses the difference between venture capitalists and other companies and testifies in support of SB 362 because providing incentives will make Oregon a world leader in technology research.

 

TAPE 85, SIDE A

 

015

Sen. Deckert

States that it seems to him that this bill is revenue positive.

 

 

 

020

Gibson

Discusses new jobs and new revenues that would be created from SB 362.

 

Discussion follows.

 

 

 

044

Michael Slater

Testifies in opposition to SB 362 because it creates a new tax expenditure but fails to remove a tax expenditure in its place, is taxes workers but does not tax investors, and it gives investors breaks when state agencies are suffering.

 

 

 

080

Patrick Green

Adds that an OTIM analysis needs to be done before the bill should be passed in order to see how many jobs would be created and that they should be looking at providing incentives for industries already in Oregon that has suffered from the recession.

 

 

 

108

Sen. Deckert

Asks how SB 362 could have a negative revenue impact.

 

 

 

120

Green

Responds that it could be an oversight in reading the bill, but that he needs to know how many jobs would be created from it.

 

 

 

131

Sen. Deckert

Declares that one job is better than none.

 

Discussion follows.

 

 

 

145

Sen. Ferrioli

Points out that they are trying to move towards accountability with tax expenditures by weighing the expenses against the benefits and that industrial jobs take much more investment to get the same benefit.

 

 

 

177

Sen. Ringo

States that he is persuaded that SB 362 would not take money away from the general fund and that it would only bring people and their money to Oregon.

 

 

 

196

Green

Responds that they won’t know if it would take away money until the revenue impact is issued.

 

 

 

214

Sen. Starr

States that the bill is about adding value to the general fund and not reallocating them.

 

 

 

247

Sen. Deckert

Discusses intent of bill to provide for economic growth.

 

 

 

248

Slater

Responds that they have a difference in philosophy.

 

CLOSES PUBLIC HEARING ON SB 362

 

OPENS PUBLIC HEARING ON SB 778

 

300

Sen. Starr

Introduces SB 778 and discusses the intent of using the relating clause to look at using historical rehabilitation as an economic development tool.

 

 

 

333

James Hamrick

Discusses long time support of the historic property tax credit concept but expresses opposition to SB 778 because it would benefit large commercial interests and not small commercial interests and residential historic properties.

 

 

 

419

Sen. Deckert

Asks if Parks and Recreation should administer this bill.

 

 

 

421

Hamrick

Responds that the Parks department has been managing all of the state and federal historic programs for over thirty years and that they have all the resources to run it.

 

Discussion follows.

 

TAPE 84, SIDE B

 

028

Kevin Montgomery

Smith

Testifies against SB 788, giving several ideas on how the program could be improved. Discusses programs in other states.

 

CLOSES PUBLIC HEARING ON SB 788

 

119

Sen. Deckert

Adjourns meeting at 2:12pm.

 

 

Tape Log Submitted by,

 

 

 

Tara Lantz, Committee Assistant

 

Exhibit Summary:

1.      SB 362, Lizbeth Martin-Mahar, Proposed SB 362-1 Amendments, 1p.

2.      SB 362, Lizbeth Martin-Mahar, Staff Measure Summary, 1p.

3.      SB 362, Lizbeth Martin-Mahar, Issues Which Add to Uncertainty of Revenue Impact, 1p.

4.      SB 778, Lizbeth Martin-Mahar, Staff Measure Summary, 1p.

5.      SB 778, James Hamrick, Written Testimony, 1p.