PUBLIC HEARING: HB 2043 A

 

WORK SESSION: HB 2671 A, SB 415

 

TAPES 122-123, A-B

 

SENATE REVENUE COMMITTEE

May 14, 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:††††††††††† ††††††††††† Art Keil, Oregon Association of Naturopathic Physicians

††††††††††††††††††††††† ††††††††††† ††††††††††† Mike Burton, Economic and Community Development Department

††††††††††††††††††††††† ††††††††††† ††††††††††† Chris Hagerbaumer, Oregon Environmental Council

††††††††††††††††††††††† ††††††††††† ††††††††††† Jeff Lang, Gales Creek Insurance

††††††††††††††††††††††† ††††††††††† ††††††††††† Lynn Lundquist, Oregon Business Association†††††† †††††††††††

 

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

††††††††††††††††††††††† ††††††††††† ††††††††††† Richard Yates, Legislative Revenue Office

††††††††††††††††††††††† ††††††††††† ††††††††††† Mazen Malik, Legislative Revenue Office

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

 

TAPE 122, SIDE A

 

004

Chair Deckert

Calls meeting to order at 1:12 pm.

 

OPENS WORK SESSION ON SB 415

 

014

Art Keil

Testifies in support of SB 415 and the -1 amendment because it would apply a credit for naturopathic physicians to practice in rural areas of less than 5,000 people. Estimates that there would never be more than one or two qualifiers.

 

 

 

027

Sen. Ferrioli

MOTION: MOVES SB 415-1 AMENDMENTS DATED 4/16/03 BE ADOPTED.

 

 

 

035

Sen. Corcoran

States that he is a no because giving away tax credits during the current economic situation are questionable.

 

 

 

039

Sen. Deckert

ORDER: ROLL CALL VOTE: MOTION PASSES: 4-1-1.

SENATORS ANSWERING AYE: RINGO, STARR, FERRIOLI, DECKERT.

SENATORS ANSWERING NO: CORCORAN.

SENATORS EXCUSED: HANNON.

 

 

 

041

Sen. Ferrioli

MOTION: MOVES SB 415 TO THE SENATE FLOOR WITH A DO PASS AS AMENDED RECOMMENDATION.

 

 

 

050

Sen. Deckert

ORDER: ROLL CALL VOTE: MOTION PASSES: 4-1-1.

SENATORS ANSWERING AYE: RINGO, STARR, FERRIOLI, DECKERT.

SENATORS ANSWERING NO: CORCORAN.

SENATORS EXCUSED: HANNON.

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

 

OPENS WORK SESSION ON HB 2671 A

 

055

Lizbeth Martin-Mahar

Explains HB 2671 A, which adds new criteria for businesses to qualify for long-term non-urban enterprise zone tax incentives.

 

 

 

072

Sen. Ferrioli

States that in the current situation it is difficult for companies in enterprise zones to remain eligible for tax credits and that it is important for them to remain in existence to create jobs in Oregon.

 

 

 

085

Sen. Deckert

States that the project in Klamath Falls convinced him that this is a good bill because of their large investment and because it doesnít affect the stateís revenue picture.

 

 

 

090

Sen. Ringo

Asks if there was any persuasive testimony that these programs would not go forward if this bill was not passed.

 

 

 

096

Mike Burton

Responds that the county is certain that these programs will not go on if they do not reduce the requirements, which is why they are willing to make these negotiations. States that the Department does not have strong feelings either way.

 

 

 

108

Sen. Deckert

Points out that it is a new $200 million investment

 

 

 

110

Burton

Responds that the threshold in the bill is $200 million but that expectations are between $700 and $900 million.

 

 

 

114

Sen. Ringo

Asks what the financial impact to the county is if the bill passes.

 

 

 

117

Burton

Responds that the Counties are willing to forgo taxes on the entire $800 million in return for a specified amount to be delivered in the near term, believed to be $500,000.

 

 

 

123

Sen. Ringo

Asks if Burton means that the county is forgiving $500,000 worth of taxes.

 

 

 

125

Burton

Responds that the county will receive $500,000 in lieu of taxes that would be paid on the balance of the investment.

 

 

 

127

Sen. Ringo

Asks for the amount of taxes that would be paid on the balance of the investment.

 

 

 

128

Burton

Responds between $5 and $6 million.

 

Discussion follows.

 

 

 

133

Sen. Ringo

Asks for the amount of the total investment.

 

 

 

135

Burton

Responds that it the first phase is $350 to $400 million and the second phase is approximately the same.

 

 

 

143

Sen. Ringo

Asks if the proponents are saying that even though they are anticipating $900 million in investment, they are going to walk unless the county gives them a $5 million break.

 

 

 

144

Burton

Responds affirmatively.

 

 

 

145

Sen. Ringo

Asks if this company is dependent on the geo-thermal potential of the Klamath basin

 

 

 

146

Burton

Responds that he believes the company is sited where it is because of a gas pipeline.

 

Discussion follows.

 

 

 

153

Sen. Ringo

Points out that this company couldnít go anywhere because of itís dependence on a natural gas pipeline.

 

 

 

157

Burton

Responds that the company would not be able to locate everywhere because its target market is the west coast.

 

 

 

165

Sen. Ringo

States that it is impossible to know for sure what the impact of this bill would be and that he suspects it would not make a difference and is going to vote no.

 

 

 

174

Sen. Ferrioli

Argues that Klamath County has negotiated carefully in order to get this company to locate to Klamath Falls and that this is an opportunity to support a company that would make a large investment in Klamath County and create jobs.

 

 

 

208

Burton

States that a merchant generating facility sells its product on the free market and that the cost structure that goes into that depends on if it is competitive.

 

 

 

225

Sen. Corcoran

Responds that the reasoning given makes him oppose the bill even more because of experiences with private utilities such as Enron.

 

 

 

233

Sen. Deckert

Responds that the state is not giving away tax breaks, but rather giving the option to counties to negotiate with the company. Gives example of chip manufacturers in Washington County.

 

 

 

256

Sen. Ringo

Asks how long the exemption is allowed.

 

 

 

274

Burton

Responds 7-15 years.

 

CLOSES WORK SESSION ON HB 2671 A

 

OPENS PUBLIC HEARING ON HB 2043 A

 

281

Martin-Mahar

Explains HB 2043 A, which allows a corporate excise tax credit for corporations that provide motor vehicle insurance based on the number of miles traveled or time-based rating (Exhibit 4).Discusses revenue impact (Exhibit 5).

 

 

 

316

Chris Hagerbaumer

Refers members to letters of support (Exhibit 6). Testifies in support of HB 2043 because pay-as-you-drive insurance because it links premiums to risk factors and provides incentives to drive less, benefiting the environment. Refer to written testimony (Exhibit 6). Discusses insurance company reactions.

 

TAPE 123, SIDE A

 

050

Sen. Ferrioli

States that low-mileage drivers are already rewarded because how much you drive is a factor in your risk determined by insurance agents.

 

 

 

059

Hagerbaumer

Responds that it is not the same as getting rewarded for every mile you drive less.

 

 

 

073

Sen. Ferrioli

Asks how the companies make up the loss in revenue due to the cheaper rates.

 

 

 

080

Hagerbaumer

Responds that reduced claims cost would balance out the lower rates

 

 

 

097

Sen. Ferrioli

States that he would need to hear that from an insurance agent because he believes it would make insurance companies raise rates across the board. Asks about statistic given.

 

 

 

108

Hagerbaumer

Responds that she got her data from the Department of Transportation.

 

 

 

130

Sen. Ferrioli

States that is unconvinced by the data.

 

 

 

135

Sen. Ringo

States that insurance companies are not going to proceed with these programs if they think they will lose money.

 

 

 

139

Jeff Lang

Testifies in support of HB 2043 because it provides greater choice for citizens. Discusses his background with pay-as-you-go insurance.

 

 

 

196

Sen. Ringo

Asks if the industry would implement a pilot project if this bill passes.

 

 

 

202

Lang

Responds that Travelers Insurance has with projects in other states. Discusses the history of pay-as-you-go insurance.

 

 

 

217

Sen. Ringo

Asks if anyone has talked to insurance representatives.

 

 

 

218

Hagerbaumer

Responds that they have seen some interest from large insurance companies, but points out that data is not available on the programs.

 

 

 

237

Sen. Ringo

States that he supports the bill, but is just curious as to whether the incentive would lead to a pilot.

 

 

 

251

Lang

Responds that its not the incentive given that will lead to projects, but the competition in the market.

 

 

 

260

Sen. Ringo

Asks what the most likely tool to measure the mileage would be.

 

 

 

263

Hagerbaumer

Responds that odometer audits are the easiest way to go, but that many companies are waiting for greater technology to come.

 

Discussion on odometer audits follows.

 

 

 

294

Lang

States that this is not trying to abolish the old system, but rather add more choices.

 

309

Lynn Lundquist

Testifies in support of HB 2043 because it is a pilot program that would determine if this is a good way to go.

 

 

 

375

Sen. Deckert

Announces that the committee will be meeting with the House Revenue Committee for the revenue forecast.

 

 

 

383

Sen. Deckert

Adjourns meeting at 2:05 pm.

 

 

 

Tape Log Submitted by,

 

 

 

Tara Lantz, Committee Assistant

 

Exhibit Summary:

  1. SB 415, Lizbeth Martin-Mahar, Proposed SB 415-1 Amendments, 2pp.
  2. SB 415, Lizbeth Martin-Mahar, Staff Measure Summary, 1p.
  3. SB 415, Lizbeth Martin-Mahar, Revenue Impact Statement, 1p.
  4. HB 2043, Lizbeth Martin-Mahar, Staff Measure Summary, 1p.
  5. HB 2043, Lizbeth Martin-Mahar, Revenue Impact Statement, 1p.
  6. HB 2043, Chris Hagerbaumer, Written Testimony and Letters, 12pp.