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PUBLIC HEARING: HB 3183, HB 2372 A |
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WORK SESSION: SJR 2, SB 5 |
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TAPES 139-140,
A-B |
JUNE 4,
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: Senator Frank Morse, District 8
Representative
Wayne Scott, District 39
Matt
Meador, Representative Nelson’s Office
Erik
Amos, Columbia Sportswear
Mark
Modjeski, Tektronix Inc.
Al
Logan, Nike Inc.
Tim
Nesbitt, Oregon AFL-CIO
Laurie
Wimmer Whelan, Oregon Education Association
Curt
Copenhagen, Longview Fibre
Mark
Nelson, Oregon Metals Industry Council
Jim
Craven, American Electronics Association
Jim
Geisinger, Association of Oregon Loggers
Juan
Yraguen, Basco Logging
Bob
Luoto, Cruss & Crown
Craig
Hanneman, Oregon
Gil
Riddell, Association of Oregon Counties
Hasina
Squires, Special Districts Association of Oregon
Michelle
Deister, League of Oregon Cities
Staff Present: Paul
Warner, Legislative Revenue Office
Lizbeth
Martin-Mahar, Legislative Revenue Office
Mazen
Malik, Legislative Revenue Office
Tara
Lantz, Committee Assistant
TAPE
139, SIDE A
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004 |
Chair Deckert |
Calls meeting to order at 1:16 pm. |
OPENS WORK SESSION ON SJR 2
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022 |
Sen. Morse |
Asks for the adoption of SJR 2-3
amendments, and the SB 5-1 and SB 5-3 amendments. Clarifying questions and answers
follow. |
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056 |
Paul Warner |
Discusses the SJR 2-3 amendments,
which corrects the language to reflect the General Fund and clarifies the 10
percent requirement. (Exhibit 1). Discusses SJR 2-4 amendments, which makes
the same language changes and raises the reserve fund cap to 25 percent
(Exhibit 2). Discusses SJR 2-5 amendments, which corrects the language and
make technical treasurer changes (Exhibit 3). Discusses SB 5-1 amendments,
which makes wording changes (Exhibit 4). Discusses SB 5-2 amendments, follow
the SJR 2-3 amendments (Exhibit 5). Discusses SB 5-3 amendments, which makes
technical changes (Exhibit 6). Discussion follows. |
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112 |
Sen. Deckert |
Asks Sen. Morse if he is asking for
SJR 2-5 amendments and SB 5-1 amendments. |
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114 |
Sen. Morse |
Responds affirmatively. |
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115 |
Warner |
Adds that they need to adopt SB 5-3
amendments as well. |
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118 |
Sen. Ringo |
MOTION: MOVES SJR 2-5 AMENDMENTS
DATED 6/4/03 BE ADOPTED. |
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122 |
Sen. Deckert |
ORDER: ROLL CALL VOTE: MOTION
PASSES: 4-1-1. SENATORS ANSWERING AYE: CORCORAN,
RINGO, STARR, DECKERT. SENATORS ANSWERING NO: FERRIOLI. SENATORS EXCUSED:
HANNON. |
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126 |
Sen. Ringo |
MOTION: MOVES SJR -2 TO THE SENATE
FLOOR WITH A DO PASS AS AMMENDED RECOMMENDATION. |
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130 |
Sen. Corcoran |
Thanks Sen. Morse and Sen. Burdick
for their hard work. |
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132 |
Sen. Deckert |
Agrees with Sen. Corcoran. |
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134 |
Sen. Starr |
States that this is an important
issue to discuss on the Senate Floor. |
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142 |
Sen. Deckert |
ORDER: ROLL CALL VOTE: MOTION
PASSES: 4-1-1. SENATORS ANSWERING AYE: CORCORAN,
RINGO, STARR, DECKERT. SENATORS ANSWERING NO: FERRIOLI. SENATORS EXCUSED:
HANNON. Sen. Morse will carry the bill on
the Senate Floor. |
OPENS WORK SESSION ON SB 5
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151 |
Sen. Ringo |
MOTION: MOVES SB-5 AMENDMENTS DATED 6/2/03
BE ADOPTED. |
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154 |
Sen. Deckert |
ORDER: ROLL CALL VOTE: MOTION
PASSES: 4-1-1. SENATORS ANSWERING AYE: CORCORAN,
RINGO, STARR, DECKERT. SENATORS ANSWERING NO: FERRIOLI. SENATORS EXCUSED:
HANNON. |
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157 |
Sen. Ringo |
MOTION: MOVES SB 5-3 AMENDMENTS
DATED 6/4/03 BE ADOPTED. |
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159 |
Sen. Deckert |
ORDER: ROLL CALL VOTE: MOTION
PASSES: 4-1-1. SENATORS ANSWERING AYE: CORCORAN,
RINGO, STARR, DECKERT. SENATORS ANSWERING NO: FERRIOLI. SENATORS EXCUSED:
HANNON. |
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164 |
Sen. Ringo |
MOTION: MOVES SB 5 TO THE SENATE
FLOOR WITH A DO PASS AS AMMENDED RECOMMENDATION. |
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166 |
Sen. Deckert |
ORDER: ROLL CALL VOTE: MOTION
PASSES: 4-1-1. SENATORS ANSWERING AYE: CORCORAN,
RINGO, STARR, DECKERT. SENATORS ANSWERING NO: FERRIOLI. SENATORS EXCUSED:
HANNON. Sen. Morse will carry the bill on
the Senate Floor. |
OPENS PUBLIC HEARING ON HB
3183
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177 |
Lizbeth Martin-Mahar |
Explains HB 3183 which increases the
sales factor of the corporate apportionment formula from 80% , to 90% and 5%
payroll and property factors beginning in 2005 and phasing in an increase to
100% in 2007 (Exhibit 7). Discusses revenue impact (Exhibit 8) and the
distribution of estimated tax returns with the sales only apportionment
formula (Exhibit 9). |
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316 |
Rep. Scott |
Testifies in support of HB 3183
because it will remove the disincentive for businesses to locate and expand
in Oregon and make Oregon attractive for corporate headquarters. |
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344 |
Matt Meador |
Testifies on behalf of Rep. Nelson
in support of HB 3183 it will give Oregon a competitive edge to recruit
companies. Refer to written testimony (Exhibit 9). |
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384 |
Erik Amos |
Testifies in support of HB 3183
because it would encourage in-state economic development and stabilize
corporate income taxes. Gives personal experience with the current
apportionment formula. Refer to letter (Exhibit 11). |
TAPE 140, SIDE A
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023 |
Sen. Ringo |
Asks why Washington’s tax structure
would be more favorable since Oregon has the lowest business tax burden in
the Western states. |
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029 |
Amos |
Responds that Washington’s tax
structure is fundamentally different and have a business and occupation tax
that would benefit Columbia. |
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034 |
Sen. Ringo |
Asks if he could say it would
benefit all companies. |
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038 |
Amos |
Responds negatively. |
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042 |
Sen. Deckert |
Asks if the class of manufacturers similar
to Columbia would benefit as well. |
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044 |
Amos |
Responds that wholesale distributors
probably would. |
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048 |
Mark Modjeski |
Testifies in support of HB 3183
because it would give businesses a reason to build and expand operations in
Oregon and help the staggering economy. Refer to letter (Exhibit 11). |
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075 |
Sen. Ringo |
Asks whether Oregon’s tax structure
is unfriendly to business. |
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077 |
Modjeski |
Responds that Oregon’s tax structure
is hurtful to large corporations that have predominantly used capital in
business operations to invest in Oregon. Discusses Tektronix operations. |
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089 |
Sen. Deckert |
Asks how significant the change to
the 80% apportionment factor has been and asks if they should wait for more
data and then just make the change to 100%. |
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096 |
Modjeski |
Responds that Tektronix has only one
month of closed data, but that the apportionment factor will be lower. |
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112 |
Sen. Deckert |
Asks if it would be reasonable to
wait off a year to see more data. |
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114 |
Modjeski |
Responds that there probably
wouldn’t be any more to see because it takes longer than a year. States that
he believes they should move forward on this now. |
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120 |
Sen. Starr |
Asks if the timing for this is would
coincide with expansions done in the future and decided on today. |
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131 |
Modjeski |
Responds affirmatively. |
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141 |
Al Logan |
Testifies in support of HB 3183 because
it would encourage businesses to locate and build in the state. Discusses
data from the early 1990’s after the formula was changed from equal weighting
to double weighting. Refer to letter (Exhibit 11). |
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191 |
Sen. Deckert |
Asks if this bill would make Oregon
a favorable state for business or if there would be other changes that would
be contemplated. |
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199 |
Logan |
Responds that it would make Oregon a
favorable state. Discusses taxes paid by Nike. |
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218 |
Amos |
Responds that companies are
continuously updated on tax reform in states. |
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239 |
Modjeski |
States that some companies would not
be happy with this bill, such as businesses that just use Oregon for
marketing and that this might get them to build here. |
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246 |
Sen. Starr |
Asks how this compares the repeal of
the unitary tax in the eighties that the state is open for business. |
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255 |
Logan |
Responds that this would have less
of an effect because of the shift to 80% last session. |
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267 |
Sen. Ringo |
Asks why they are phasing in the
increase to 100 percent. |
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270 |
Logan |
Responds that they are recognizing
the situation that the state is currently in. |
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284 |
Sen. Ringo |
Asks how they would feel about going
to a single sales factor and raising the corporate income tax rate. |
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287 |
Amos |
Responds that it would impact every
single business in Oregon. |
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301 |
Tim Nesbitt |
Testifies in opposition to HB 3183
because Oregon’s corporate income tax system already has the lowest rates and
the lowest tax share. Discusses history of the single sales factor and who
would benefit from the bill and who would not. |
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383 |
Laurie Wimmer Whelan |
Testifies against HB 3183 because it
would decrease revenues. States that there are many reasons why companies
locate in a certain state and tax policy is not among the top ones. |
TAPE 139, SIDE B
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021 |
Sen. Deckert |
States that you can never measure
what causes companies to move or relocate and asks if there is any benefit in
conveying to companies that Oregon is friendly and open to business. |
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026 |
Nesbitt |
Responds that more companies are
probably worried about whether Oregon has fixed their schools than their tax
policies. |
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030 |
Wimmer Whelan |
Adds that there was a study done on
the top reasons for business location and tax policy was not on the list, but
education was. Discussion follows. |
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084 |
Curt Copenhagen |
Testifies in opposition to HB 3183
in its original form because it would cost Longview Fibre between $5 and $6
million over a 10-year period. Proposes HB 3183-1 amendments, which would
exempt Longview Fibre from the bill. Refer to written testimony and amendment
(Exhibit 12). |
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103 |
Mark Nelson |
Testifies in support of HB 3183
because it will help businesses to look forward to coming out of the economy
to expand and invest in Oregon. States that he doesn’t believe Oregon is a
tax friendly or business friendly state. |
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134 |
Sen. Deckert |
Asks what makes Oregon a tax
unfriendly state if this bill is enacted. |
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137 |
Nelson |
Responds that tax policies do not
drive final decisions, but that CEO’s make decisions based on what is going
to affect them and the income tax structure is one of the highest in the
country. |
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155 |
Jim Craven |
Testifies in support of HB 3183
because it would benefit companies that are located here, manufacture here,
and sell their products on a global market. Discusses the success of previous
economic development measures. Points out that there is no revenue impact and
it won’t take away money from schools, and that it won’t affect Oregon grown
companies that don’t operate in other states. |
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255 |
Sen. Ringo |
Asks if Craven believes the OTIM
forecast that twenty jobs will be created from this . |
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257 |
Craven |
Responds that he doesn’t know but
that it seems false to him. |
CLOSES PUBLIC HEARING ON HB
3183
OPENS PUBLIC HEARING ON HB
2372 A
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302 |
Jim Geisinger |
Testifies in support of HB 2372
because the exemption helps small business, contributes to protecting the
environment, and puts the logging industry on equal footing with agriculture.
Refer to written testimony (Exhibit 15). |
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382 |
Juan Yraguen |
Testifies in support of HB 2372
because it would help loggers invest in environmentally sensitive equipment
needed to log the second growth forests they have shifted to. Refer to
written testimony (Exhibit 16). |
TAPE 140, SIDE B
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032 |
Sen. Deckert |
Asks why they should give tax
credits for environmentally sensitive equipment that would have been bought
anyway. |
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038 |
Yraguen |
Responds that there are many
companies in need of assistance because of policies that have negatively
impacted the logging industry in the past decades. |
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055 |
Sen. Ferrioli |
Responds that old style systems
dragged on the ground and caused erosion and that new systems are more
sophisticated and expensive to limit erosion and move towards logging second
growth forests rather than old growth forests. Discusses parameters in the
bill required by the Governor. |
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086 |
Sen. Deckert |
Asks if the Governor required the sunset. |
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087 |
Sen. Ferrioli |
Responds that they put the sunset in
so that it could be a trial to see how successful it would be and that it has
proved to be successful. Discussion follows. |
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116 |
Bob Luoto |
Testifies in support of HB 2372
because logging has shifted to private lands with second growth forests and
this would help loggers acquire the equipment necessary to perform in an
environmentally responsible manner. Refer to written testimony (Exhibit 17). |
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164 |
Craig Hanneman |
Testifies in support of HB 2372
because it would equalize the timber industry with the agriculture industry. |
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190 |
Gil Riddell |
Testifies in opposition to HB 2372
because the sunset clause gives the Legislature a tool for accountability and
there hasn’t been enough time to analyze the effectiveness of the exemption.
Refer to written testimony (Exhibit 18). |
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252 |
Michelle Deister |
Testifies against HB 2372 because
they do not agree with eliminating sunset dates. |
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261 |
Hasina Squires |
Testifies against HB 2372 because the
special districts believe sunset dates are important for evaluation. |
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277 |
Sen. Ferrioli |
Asks if they would oppose extending
the sunset date. |
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279 |
Riddell |
Responds negatively. |
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293 |
Sen. Ferrioli |
Asks if they are suggesting the
removal of the farm equipment exemption. |
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301 |
Riddell |
Responds negatively and states that
there is a distinction between the two because of when they were adopted. Discussion follows. |
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386 |
Sen. Ferrioli |
Adjourns meeting at 3:05 pm. |
Tape Log Submitted by,
Tara Lantz, Committee
Assistant
Exhibit Summary: