WORK SESSION: HB 2188, HB 2041 B

 

PUBLIC HEARING: HB 2747 B

 

TAPES 155-156, A-B

 

SENATE REVENUE COMMITTEE

JUNE 30, 2003†† 1:00 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

 

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

 

Witnesses Present:††††††††††† ††††††††††† Andi Jordan, Oregon PTA

††††††††††††††††††††††† ††††††††††† ††††††††††† Andy Saultz, Oregon Student Association

††††††††††††††††††††††† ††††††††††† ††††††††††† Chris Dudley, Oregon School Board Association

††††††††††††††††††††††† ††††††††††† ††††††††††† Ozzie Rose, Confederation of Oregon School Administrators

††††††††††††††††††††††† ††††††††††† ††††††††††† Carol Robinson, Coalition for School Funding Now

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

††††††††††††††††††††††† ††††††††††† ††††††††††† Michael Slater, SEIU-Local 503

††††††††††††††††††††††† ††††††††††† ††††††††††† Tina Kotek, Children First for Oregon

††††††††††††††††††††††† ††††††††††† ††††††††††† Phillip Kennedy-Wong, Ecumenical Ministries of Oregon

††††††††††††††††††††††† ††††††††††† ††††††††††† Senator Kurt Schrader, District 20

††††††††††††††††††††††† ††††††††††† ††††††††††† Kristina McNitt, Oregon Small Woodlands Association

††††††††††††††††††††††† ††††††††††† ††††††††††† Clint Bentz, Small Woodland Owner

 

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

††††††††††††††††††††††† ††††††††††† ††††††††††† Dick Yates, Legislative Revenue Office

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

 

TAPE 155, SIDE A

 

003

Chair Deckert

Calls meeting to order at 1:16 pm.

 

OPENS WORK SESSION ON HB 2041

 

039

Dick Yates

Gives overview of the major provisions of HB 2041, beginning with bonds and annual taxes and fees. Refer to HB 2041 Overview (Exhibit 1) and staff measure summary (Exhibit 2).

 

 

 

168

Yates

Continues with discussion on income tax capture and the truck engine tax credit.

 

 

 

284

Sen. Deckert

Asks if this bill favors dump trucks.

 

 

 

286

Yates

Responds that they are favoring them, but not by a large amount.

 

 

 

295

Sen. Ferrioli

Asks how many long haul dump trucks there are doing interstate commerce.

 

 

 

297

Yates

Responds that he doesnít know.

 

 

 

299

Sen. Ferrioli

States that there are none because it is assumed that they are locally owned facilities doing short haul projects and that is why dump trucks pay less.

 

 

 

308

Yates

Responds that he doesnít believe that to be the case. Discusses estimates of the income tax capture.

 

 

 

370

Sen. Starr

MOTION: MOVES HB 2041 B TO THE SENATE FLOOR WITH A DO PASS RECOMMENDATION.

 

 

 

375

Sen. Deckert

ORDER: ROLL CALL VOTE: MOTION PASSES: 5-0-1.

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

SENATOR EXCUSED: HANNON.

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

 

CLOSES WORK SESSION ON HB 2041

 

OPENS PUBLIC HEARING ON HB 2747 B

 

420

Andi Jordan

Testifies in support of adequate and stable school funding. Refer to written testimony (Exhibit 5).

 

TAPE 156, SIDE A

 

017

Andy Saultz

Testifies in support of HB 2747ĖB8 amendments because it would stabilize Oregonís tax structure and set up a dedicated source of funding for k-12, in turn allowing other programs in the General Fund to thrive, such as Opportunity Grants. Refer to written testimony (Exhibit 6).

 

 

 

052

Chris Dudley

Testifies in support of HB 2747-B8 amendments because Oregon is over reliant on the volatile income tax and needs tax reform in order to keep Oregon the kind of place people want to live in. Discusses previous achievements of Oregon schools and the downturn they are facing. Refer to Public Education in Oregon (Exhibit 7). Discusses unfunded federal mandates for schools.

 

 

 

089

Sen. Starr

Asks how much federal funds flows into Oregon for education.

 

 

 

093

Dudley

Responds that he doesnít know.

 

 

 

095

Sen. Starr

Suggests that the No Child Left Behind Act might not be completely funded but there are significant federal funds flowing into Oregon for education.

 

 

 

098

Dudley

Responds that he will get information about funds dedicated for certain acts inside the federal agenda describing why the money is not adequate for the outcomes expected. Points out that Oregon is lucky because they set up high standards and requirements early on.

 

 

 

122

Sen. Deckert

Asks if reform should come from the Legislature or from citizens.

 

 

 

128

Jordan

Responds that members of the PTA believe the Legislature should because that is what they were elected to do.

 

 

 

136

Saultz

Responds that they havenít directly talked about this, but that he favors a decision in this building because tuition is being decided right now and they need a decision as soon as possible in order to keep tuition down in the fall.

 

 

 

143

Dudley

Responds that it has to be both because if one group supports tax reform and another opposes it, mixed messages will be sent and the measure will fail.

 

 

 

179

Ozzie Rose

Testifies in support of HB 2747-B8 amendments because a consumption tax of some sort needs to be added to current tax system to balance the system and adequately fund schools. States that the Legislature needs to look at information provided, write a proposal that will help the Oregon economy, and provide information to the public so they will be able to make informed decisions.

 

 

 

297

Carol Robinson

Testifies in support of HB 2747-B8 amendments because Oregon citizens canít wait any longer for stable and adequate school funding and as voters have elected the legislature and the Governor to do the job. Refer to verbatim written testimony (Exhibit 8).

 

 

 

375

Lynn Lundquist

Testifies in support of tax reform and states that the Legislature needs to put forth the best plan possible in order for it to have a chance to succeed. Suggests using the Business Activity Tax as part of the package and that if the Legislature cannot stay here for a significant amount of time, that they come back immediately after the session ends and continue to hold hearings. Discusses the impacts of Measure 5 on the share of taxes paid by businesses.

 

TAPE 155, SIDE B

 

060

Sen. Ringo

Asks if the current tax structure is unfriendly to business.

 

 

 

062

Lundquist

Responds that it is not unfriendly, but there are ways to improve the system to make it friendlier.

 

 

 

066

Sen. Ringo

Asks if the high personal income tax rate is an incentive for owners of business to locate in other states.

 

 

 

072

Lundquist

Responds affirmatively.

 

 

 

075

Sen. Ringo

Asks if OBA has taken a hard look at the business activity tax.

 

 

 

077

Lundquist

Responds negatively, but states that they will when the time is necessary.

 

 

 

082

Sen. Ringo

States that some legislators believe that the question of revenue reform should be addressed after the close of session and that others believe they need the pressure of session on them to do that work and that if OBA believes in the latter they need to submit their position as soon as possible.

 

 

 

088

Lundquist

Responds that they have a hard time believing that the heat comes off once the session ends.

 

 

 

103

Sen. Ringo

Encourages OBA to start working on this and give their opinion as soon as possible so that the Legislature knows where they stand.

 

 

 

105

Lundquist

Responds that OBA will be there in support of whatever the Legislature decides to do.

 

 

 

111

Sen. Corcoran

Asks if OBA is working with anyone outside the building to look at

 

 

 

112

Lundquist

Responds affirmatively.

 

 

 

113

Sen. Corcoran

Asks who they are working with.

 

 

 

115

Lundquist

Responds that he canít say, but they have been working with a group of people for over a year.

 

 

 

131

Michael Slater

Testifies in support of HB 2747-B8 because Oregon needs comprehensive tax reform and that now is the time to do it in the Legislature. Offers support for a broad based consumption tax such as Sen. Schraderís proposal.

 

 

 

164

Tina Kotek

Testifies in support of HB 2747-B8 amendments because Oregon needs tax reform and more stability and adequacy. States that people need short term solutions and long term reform.

 

 

 

204

Phillip Kennedy-

Wong

Testifies in support of HB 2747-B8 amendments because the time for tax reform is now. States that churches have been forced to turn people in need away and that services need to be restored.

 

 

 

267

Paul Warner

Discusses the Oregon Tax Incidence Model and the results of the business activity tax using the model. Refer to OTIM Results (Exhibit 9).

 

 

 

404

Sen. Corcoran

States that it seems like the group that benefits the most is the highest income earners.

 

 

 

406

Warner

Responds affirmatively and continues discussion.

 

TAPE 156, SIDE B

 

020

Sen. Schrader

Expresses appreciation for hearing about the need for tax reform. Requests that a work group be formed to help him refine and move the proposal along.

 

 

 

036

Sen. Deckert

Responds that he would like to form a work group and bring the proposal back in a week.

 

 

 

039

Sen. Corcoran

Asks why they wouldnít combine this with the work of the joint revenue task force.

 

 

 

043

Sen. Schrader

Responds that he is open to that approach.

 

Discussion follows.

 

 

 

058

Sen. Deckert

States that he would prefer an informal work group be formed and that Sen. Ringo and Sen. Starr might be interested in working on the proposal.

 

CLOSES PUBLIC HEARING ON HB 2747 B

 

OPENS WORK SESSION ON HB 2188

 

070

Yates

Explains the -1 amendments (Exhibit 10) which resolve conflicts that arose from the passage of HB 2197 and the -4 amendments (Exhibit 12), which creates a new application process for continuing qualification of the 20-80 deferral program.

 

 

 

121

Kristina McNitt

Explains the policy behind the -4 amendments, which was to prevent gaming of the 20-80 deferral program created in HB 2197.

 

 

 

136

Clint Bentz

Testifies in support of the -4 amendments because it prevents gaming of the 20-80 deferral program, while allowing land owners who do not game the system to benefit.

 

 

 

163

Sen. Ringo

Asks whether this would allow any type of gaming by transferring to shelters.

 

 

 

166

Bentz

Responds negatively.

 

 

 

179

Sen. Ringo

Asks if there is a revenue impact with this amendment.

 

 

 

181

Yates

Responds negatively.

 

 

 

185

Sen. Ringo

Asks what the original bill does.

 

 

 

188

Yates

Responds that it began as cleaning up obsolete language, but once HB 2197 was passed, they had to change the language to resolve conflicts with the -1 amendments and the -4 amendments were proposed to solve the problem of gaming the system.

 

 

 

220

Sen. Starr

MOTION: MOVES HB 2188-1 AMENDMENTS DATED BE ADOPTED.

 

 

 

224

Sen. Deckert

ORDER: HEARING NO OBJECTION, MOTION PASSES: 4-0-2.

SENATORS EXCUSED: CORCORAN, HANNON.

 

 

 

227

Sen. Starr

MOTION: MOVES HB 2188-4 AMENDMENTS DATED 6/30/03 BE ADOPTED.

 

 

 

232

Sen. Deckert

ORDER: HEARING NO OBJECTION, MOTION PASSES: 4-0-2.

SENATORS EXCUSED: CORCORAN, HANNON.

 

 

 

236

Sen. Starr

MOTION: MOVES HB 2188 TO THE SENATE FLOOR WITH A DO PASS RECOMMENDATION.

 

 

 

240

Sen. Deckert

ORDER: HEARING NO OBJECTION, MOTION PASSES: 4-0-2.

SENATORS EXCUSED: CORCORAN, HANNON.

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

 

245

Sen. Deckert

Adjourns meeting at 2:53 pm.

 

 

 

Tape Log Submitted by,

 

 

 

Tara Lantz, Committee Assistant

 

Exhibit Summary:

  1. HB 2041 B, Dick Yates, HB 2041 Overview, 1p.
  2. HB 2041 B, Dick Yates, Staff Measure Summary, 2pp.
  3. HB 2041 B, Dick Yates, Revenue Impact Statement, 2pp.
  4. HB 2041 B, Dick Yates, Fiscal Impact Statement, 3pp.
  5. HB 2747 B, Andi Jordan, Written Testimony, 1p.
  6. HB 2747 B, Andy Saultz, Written Testimony, 1p.
  7. HB 2747 B, Chris Dudley, Public Education in Oregon, 4pp.
  8. HB 2747 B, Carol Robinson, Written Testimony, 2pp.
  9. HB 2747 B, Paul Warner, OTIM Results, 3pp.
  10. HB 2188, Dick Yates, Proposed HB 2188-1 Amendments, 34pp.
  11. HB 2188, Dick Yates, ORS Sections Amended by HB 2188-1, 3pp.
  12. HB 2188, Kristina McNitt, Proposed HB 2188-3 Amendments, 4pp.
  13. HB 2188, Kristina McNitt, Proposed HB 2188-4 Amendments, 4pp.