WORK SESSION: HB 2152

TAPES 169, A

SENATE REVENUE COMMITTEE

August 18, 2003 11:15 AM STATE CAPITOL BUILDING

Members Present: Senator Ryan Deckert, Chair

Senator Ted Ferrioli, Vice Chair

Senator Tony Corcoran

Senator Rick Metsger

Senator David Nelson

Senator Charlie Ringo

Senator Bruce Starr

Members Excused: Senator Lenn Hannon

Witnesses Present: Dexter Johnson, Legislative Counsel

Staff Present: Paul Warner, Legislative Revenue Office

Dick Yates, Legislative Revenue Office

Tara Lantz, Committee Assistant

TAPE 169, SIDE A

003	Chair Deckert	Calls meeting to order at 11:30 am.
005	Sen. Deckert	States that they will come back to a public hearing and work session at 2:00 pm, once the amendments are ready.

OPENS WORK SESSION ON HB 2152

013	Paul Warner	Discusses the major changes made in the -19 amendments which creates a temporary personal income tax increase and increases the corporate income tax. Refer to Revenue Proposal (Exhibit 1). Briefly discusses all of the components.
086	Sen. Corcoran	Asks if they will discuss all of the provisions once they have the bill and not just the ones that are in the -19 amendments.
090	Warner	States that many of the other components will go through the Ways and Means Committee. Continues discussion of the average impacts from the temporary graduated income tax assessment and the estimate from the proposed increase in the corporate minimum tax.
164	Sen. Ferrioli	Asks if the income tax surcharge proposal has been heard in the House.
170	Warner	Responds that the House has heard HB 2152 which is relating to taxation and required 3/5 majority vote but that they have not heard the -19 amendments.
180	Sen. Ferrioli	Asks how this follows with the Legislative rule that revenue raising measures must originate in the House.
189	Sen. Deckert	Responds that the advice given from Counsel is that since HB 2152 passed through the House and has a relating to taxation clause, it is legal for them to add an amendment that is also relating to taxation.
195	Sen. Ferrioli	Asks what a rebuttable conclusion is.
200	Sen. Ringo	Responds that a rebuttable presumption is a presumption that can be rebutted. Discussion follows.
210	Sen. Ferrioli	States that a $21.2 billion revenue raising package is not an amendment that should be added to a House bill that originated as a cigarette tax extension.
219	Sen. Nelson	Asks about a provider tax for hospitals.
221	Warner	Responds that there has been amendments drafted but they are not in the -19 amendments.
225	Sen. Ringo	States that it is his preference that they hear the substance of the bill rather than what may or may not be legal about it.
234	Sen. Ferrioli	States that it is not his intention to stop the proceedings today but that they are at least informed about the logic and legality of the bill.
249	Sen. Starr	Asks if the SUV depreciation portion adds back both the state and federal deduction.
255	Warner	Responds that only the state portion will be added back.
263	Dick Yates	Responds that this bill does not have a 3 times deduction.
282	Sen. Ferrioli	Asks about the mechanism for bringing the bill as an amendment to HB 2152.
297	Dexter Johnson	Responds that HB 2152 originated in the House and was a bill for raising revenue in the House. States that it satisfies the requirements under any other states interpretation.
328	Sen. Ferrioli	Asks if he is absolutely certain this will survive against a legal challenge.
335	Johnson	Responds that it would be a change of a 100 plus year precedent if it did not.
350	Sen. Ferrioli	Asks to what degree of certainty Johnson believes this will withstand a legal challenge.
368	Johnson	Responds that he is convinced that it would survive a legal challenge, and points out that the House chose to relate the bill to taxation and not the extension of a sunset date.
376	Sen. Ferrioli	States that he believes the courts will find that they cannot finesse the Constitution.
379	Sen. Ringo	Asks how long Johnson has been working in Counsel.
380	Johnson	Responds since 1994.
382	Sen. Ringo	Asks if amendments happen like this all the time.
385	Johnson	Responds affirmatively. Discussion follows.
399	Sen. Nelson	Asks if there is a difference between the terms surcharge and assessment.
404	Johnson	Responds that there is not a legal definition between the two and that there are other ways to describe it.
410	Warner	Responds that there is an economic definition of a surcharge that is a percentage of a fixed percentage of tax liability and that this is a variation.

425

Sen. Deckert

Adjourns meeting at 11:58 pm.

Tape Log Submitted by,

Tara Lantz, Committee Assistant

Exhibit Summary:

1. HB 2152, Paul Warner, Revenue Proposal, 3pp.