WORK SESSION: SB 391, SB 556, SB 807

 

TAPES 93-94, A-B

 

SENATE REVENUE COMMITTEE

April 15, 2003   1:30 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 Frank Shields, District 24

                                                Carl Meyers, Oregon Justice of the Peace Association      

                                                Senator Vicki Walker, District 7

                                                Gary Bartholomew, Oregon Association of Tax Collectors

                                                Dave Canary, Garvey, Schubert, and Barer Law Firm

                                                Dave Carmichael, Attorney

                                                Todd Lebo, Real Estate Appraiser

                                               

Staff Present:                            Paul Warner, Legislative Revenue Office

                                                Mazen Malik, Legislative Revenue Office

                                                Steve Meyer, Legislative Revenue Office

                                                Tara Lantz, Committee Assistant

 

TAPE 93, SIDE A

 

004

Chair Deckert

Calls meeting to order at 1:36pm.

 

OPENS WORK SESSION ON SB 391

 

035

Sen. Shields

Explains SB 391, which establishes a $25 fee for a marriage solemnized by a judicial officer of the state, county judge, justice of the peace, city official, or county clerk to be placed in the General Fund or with county and city treasurers. Discusses problems with the original bill and the -1 amendment. Discusses further problems that need to be addressed. 

 

 

 

069

Carl Meyers

Discusses problems remaining with the bill regarding justices of the peace and municipal courts. States that he would be happy to clean up the bill on the house side.

 

 

 

096

Sen. Shields

States that he would make sure the changes are made in the house and that the amendment proposed by Meyers makes sense.

 

 

 

111

Sen. Ferrioli

MOTION: MOVES SB 391-1 AMENDMENTS DATED 4/3/03 BE ADOPTED.

 

 

 

131

Sen. Hannon

Expresses concern that the money goes to the general fund rather than the courts.

 

 

 

157

Sen. Shields

Responds that had he known about that issue before he would have written an amendment and that if the committee chooses he would make that change in the house at the same time as fixing the other problems.

 

Discussion follows.

 

 

 

182

Sen. Deckert

ORDER: HEARING NO OBJECTION, MOTION PASSES: 6-0-0.

 

 

 

191

Sen. Ferrioli

MOTION: MOVES SB 391 TO THE SENATE FLOOR WITH A DO PASS AS AMENDED RECOMMENDATION.

 

 

 

187

Sen. Starr

Asks for clarification on the bill.

 

Discussion follows.

 

 

 

209

Sen. Deckert

ORDER: HEARING NO OBJECTION, MOTION PASSES: 6-0-0.

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

 

CLOSES WORK SESSION ON SB 391

 

OPENS WORK SESSION ON SB 556

 

221

Mazen Malik

Explains SB 556, which reduces the rate of interest paid on certain property tax refunds and indexes interest rate to changes in the commercial bank prime rate.

 

 

 

243

Sen. Walker

Testifies in support of SB 556. Discusses opposition to the bill and compares Oregon’s interest rates to surrounding states. Explains the -1 amendment, which takes out the daily compounding.

 

 

 

300

Sen. Deckert

Asks about the intent of the bill

 

 

 

306

Sen. Walker

Responds that the intent of the bill is to lower the rate of interest paid on tax refunds, because the rate of interest in the market is so low. Discusses lack of funding for assessors.

 

 

 

353

Gary Bartholomew

Explains the -1 amendment.

 

TAPE 94, SIDE A

 

006

Sen. Ferrioli

Expresses concern with adjusting the rate paid without proportionally adjusting the rate charged for delinquent taxpayers.

 

 

 

019

Sen. Walker

Responds that there should be no correlation between the two because the interest paid is to make up for lost money and the interest charged is a penalty for not paying taxes on time. States that the interest charged needs to be high to prevent delinquent taxpayers.

 

 

 

055

Sen. Ferrioli

Responds that the argument doesn’t make any sense because a proportional spread would be providing the same four percent to the jurisdiction regardless of what the rates would be.

 

 

 

070

Sen. Ringo

Asks if in talking about proportional reduction he means reducing the interest rate for delinquent taxpayers the same amount as reducing the interest rate for tax refunds. 

 

 

 

073

Sen. Ferrioli

Responds affirmatively.

 

 

 

083

Sen. Ringo

States that he is not sure the connection is so clear.

 

 

 

094

Sen. Ferrioli

States that a discount is a bigger motivator than a big penalty.

 

 

 

114

Sen. Walker

Responds that the total interest rate paid to the state is 12 percent which is not unreasonable considering that many states charge interest and a penalty on top.

 

 

 

150

Sen. Deckert

Asks why there are a disproportionate number of tax appeals in Lane County.

 

 

 

156

Sen. Walker

Responds that Lane County is understaffed and has had a large number of industrial tax appeals.

 

 

 

166

Bartholomew

Discusses the discount referred to by Sen. Ferrioli.

 

Discussion follows.

 

 

 

194

Malik

Asks if the amendment addresses the problem of changing the interest rate every year.

 

 

 

200

Bartholomew

Responds that by rounding it to the nearest tenth, it reduces the chance of changing every year.

 

 

 

219

Dave Canary

Testifies in opposition to SB 556 because it is unfair to charge a higher rate than is being paid, and because it penalizes everyone regardless of the reason.

 

 

 

282

Sen. Ringo

Asks about the Department of Revenue’s policy for charging income tax penalties.

 

 

 

290

Canary

Responds that they have the flexibility to look at each penalty case by case.

 

 

 

298

Sen. Ringo

Asks about payroll taxes.

 

 

 

312

Canary

Responds that he doesn’t know.

 

 

 

315

Sen. Ringo

States that there is a place for penalties to encourage people to comply with deadlines.

 

 

 

325

Canary

Agrees but thinks that the situation should be analyzed before a penalty is charged to see if there is a good reason for being late.

 

 

 

340

Sen. Ringo

Asks if he would object to reducing both the interest paid and interest charged and then put a penalty on top of interest charged.

 

 

 

350

Canary

Responds negatively. States that he believes the interest paid should be lower, but the interest charged should also be reduced. Discusses figures which show that counties are collecting more than they are paying out and costs to taxpayers in pursuing refunds.

 

TAPE 93, SIDE B

 

030

Sen. Ringo

Asks the typical reasons for being delinquent on property taxes.

 

 

 

033

Canary

Responds that he typically represents large utility and industrial companies that are not delinquent.

 

 

 

043

Dave Carmichael

Discusses cases where a penalty should not be charged.

 

 

 

065

Sen. Ringo

Asks if Carmichael sees value in seeing some penalty applying to delinquency. 

 

 

 

067

Carmichael

Responds affirmatively and discusses historical link of delinquent and refund interest.

 

Discussion follows.

 

 

 

124

Carmichael

Testifies that looking at other states is only used when the state has no guidance. Discusses the history of the statute. Refer to written testimony. Exhibit 7.

 

 

 

175

Sen. Ringo

Asks if the same group of people that are seeking refunds are the ones that are delinquent.

 

 

 

177

Carmichael

Responds that the people that are delinquent aren’t able to file for refunds.

 

 

 

187

Sen. Ringo

States that it seems that people who seek refunds are not in financial distress and that people who are delinquent are.

 

Discussion follows.

 

 

 

210

Sen. Ringo

Asks why the two rates are linked.

 

 

 

216

Carmichael

Responds that they have historically been linked. Discusses statements made in the public hearing that he believes to be false.

 

 

 

325

Todd Lebo

Testifies against SB 556 because it enhances distrust of taxpayers.

 

 

 

385

Sen. Deckert

States that they will not be moving the bill this afternoon.

 

CLOSES WORK SESSION ON SB 556

 

OPENS WORK SESSION ON SB 807

 

375

Sen. Ferrioli

MOTION: MOVES SB 807-1 AMENDMENTS DATED 3/18/03 BE ADOPTED.

 

 

 

379

Sen. Deckert

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

 

 

 

383

Sen. Ferrioli

MOTION: MOVES SB 807 TO THE SENATE FLOOR WITH A DO PASS AS AMENDED RECOMMENDATION.

 

 

 

388

Sen. Deckert

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

 

 

 

395

Sen. Deckert

Adjourns meeting at 2:56pm.

 

 

Tape Log Submitted by,

 

 

 

Tara Lantz, Committee Assistant

 

Exhibit Summary:

1.      SB 391, Paul Warner, Proposed SB 391-1 Amendments, 1p.

2.      SB 391, Paul Warner, Staff Measure Summary, 1p.

3.      SB 391, Paul Warner, Fiscal Impact Statement, 1p.

4.      SB 556, Mazen Malik, Proposed SB 556-1 Amendments, 1p.

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

6.      SB 556, Mazen Malik, Revenue Impact Statement, 1p.

7.      SB 556, David Carmichael, Written Testimony, 7pp.

8.      SB 807, Steve Meyer, Proposed SB 807-1 Amendments, 1p.

9.      SB 807, Steve Meyer, Revenue Impact Statement, 1p.