INFORMATIONAL MEETING

TAPES 15-16, A-B

HOUSE REVENUE COMMITTEE

JANUARY 24, 2005   1:30 PM   STATE CAPITOL BUILDING

 

Members Present:                      Rep. Tom Butler, Chair

                                                Rep. Vicki Berger, Vice-Chair

                                                Rep. Mark Hass, Vice-Chair

                                                Rep. Brian Boquist

                                                Rep. Sal Esquivel

                                                Rep. Larry Galizio

                                                Rep. Betty Komp

                                                Rep. Chuck Riley                

 

Members Excused:                     Rep. Andy Olson

 

Witnesses Present:                      Elizabeth Harchenko, Director, Dept. of Revenue                                                                              Susan Browning, Deputy Director, Dept. of Revenue

 

Staff Present:                          Paul Warner, Legislative Revenue Officer

                                                Kristi Bowman, Committee Assistant

 

TAPE 15, SIDE A

003

Chair Butler

Calls meeting to order at 1:32 p.m. Committee announcement for OLCC meeting on Friday, 1/26.

 

023

Paul Warner

Overview of today’s presentation of compliance and administration from Dept. of Revenue.  Overview of upcoming meetings this week.

 

 

 

050

Chair Butler

Committee business regarding field trip to OLCC on 01/28/05.

 

ORIENTATION

110

Elizabeth Harchenko

Introduces herself and the Deputy Director, Susan Browning.

 

 

 

118

Harchenko

Begins overview (Exhibit 1).

 

 

 

130

Harchenko

Reviews Department of Revenue (DOR) history.

 

 

 

218

Chair Butler

Requests brief background of lodging tax begun in 2003.

 

 

 

220

Harchenko

Responds that the tax has worked well so far for the industry. It was designed to raise $9-10 M a year for tourism. These funds are on target.

 

 

 

236

Harchenko

Reviews department’s organizational structure.

 

 

 

283

Harchenko

Next several pages (pages 9-13) show the major programs the department is involved in and the services paid for by those programs.

 

 

 

310

Harchenko

Largest programs administered by the department are for property taxes and schools (page 11).

332

Rep. Berger

Asks for clarification of mapping (page 10). Is this a function of counties rather than of a state agency?

 

340

Harchenko

Explains that the mapping services are related to the county assessor’s ability to be able to bill the taxes and to track any changes to that property, e.g., improvements or ownership changes. The level of county resources available for mapping expertise varies greatly; some counties contract with the state for cartography assistance. The legislature subsidizes that cost by paying for about half of it out of the general fund, and the county pays for the other half.

 

 

 

400

Chair Butler

Concurs with comments by Director Harchenko regarding counties that contract with the state because of the advanced technology that the department has.

 

 

 

415

Rep. Esquivel

Asks about small counties using the mapping technology done by the department of revenue.

 

 

 

444

Harchenko

Responds that the department is moving toward a digital map base supported by counties and state. At this time some counties cannot receive digital mapping via their computers, but they are being upgraded.

 

 

 

472

Rep. Esquivel

Asks about partnering with title companies who also have the mapping information.

 

 

 

478

Harchenko

Responds that in many counties, especially those that are large in area but small in population, the title companies rely on the county maps developed by the county or the state.

 

 

 

TAPE 16 SIDE A

032

Harchenko

The other large area of administration involves cigarette and other tobacco tax dollars (page 13). Discusses enforcement partnership with OR state police and Dept. of Justice.

 

 

 

060

Chair Butler

Comment: at least one bill is referred to the revenue committee on a cigarette tax; there will be others in the near future. Need to discuss if counties have the ability to impose a tobacco tax. Is it something that can be administered by the department?

 

 

 

071

Harchenko

Responds that if all counties were to impose a 10 cent tax, it would be easier to administer rather than if some counties chose to and some did not.. Explains how the tax is currently distributed.

 

 

 

090

Chair Butler

Asks that if all 36 counties could reach a unanimous decision to impose a 10 cent tax, would there be an additional administrative burden that Harchenko could anticipate?

 

 

 

106

Harchenko

Responds that if the legislature established a distribution formula, the process would be much easier to administer. Enabling legislation would need to be proposed for all counties to have a uniform tax policy.

 

 

 

125

Harchenko

Responds that the department would be willing to work with the committee on this kind of proposal.

 

129

Rep. Boquist

Clarifies that there is no way to track consumption by county at this time.

 

 

 

138

Harchenko

Concurs.

 

 

 

151

Harchenko

Refers to pages 14 and 15 regarding the other taxes collected (projected for 2005-2007) and where the money goes.

 

 

 

160

Rep. Komp

Asks about increases for certain areas in 2005-07 projection (pages 14-15). Are there certain areas going up or down that the committee should be aware of, e.g., forest products and harvest tax.

 

 

 

176

Harchenko

Responds that there are indeed particular areas that fluctuate. Asks John Phillips (Dept. of Revenue) to note this question and get back to the representative with answer.

 

 

 

199

Browning

Discusses department business plan (page 18).

 

 

 

210

Browning

Discusses new features now available to taxpayers, such as growth of electronic filing of income taxes.

 

 

 

255

Chair Butler

Comments that he would like to see statistical reports about other states’ filing programs on-line and impact of savings to DOR.

 

 

 

275

Harchenko

In response, discusses other states’ programs on e-filing.

 

 

 

290

Chair Butler

Comments that there are some opportunities for states to partner with software programs.

 

 

 

328

Browning

Responds that there is information on the department’s web site for other tax preparation software. Discusses a student section on the DOR web site that hopefully will engage young people in the tax process.

 

 

 

330

Browning

Continues with review of new programs initiated.

 

 

 

351

Browning

Discusses partnering with other agencies (page 30).

 

 

 

386

Browning

Reviews income tax programs (page 20-22).

 

 

 

TAPE 15 SIDE B

027

Chair Butler

Asks about amnesty programs in other states and their revenue impact on OR.

 

032

Browning

Responds that information is being shared with the IRS, and that CA’s program is being reviewed by department.

 

 

 

043

Rep. Hass

Further comments about any reports from the Multi-State Tax  Commission on amnesty programs

 

 

 

050

Harchenko

Responds that she expects to report within the next month on the potential enforcement of abusive tax shelters and will discuss amnesty programs.

 

 

 

076

Harchenko

Multi-state Tax Commission overview (page 45).

 

 

 

090

Chair Butler

Asks about penalties on abusive tax shelters and its history. Requests data from department.

 

 

 

105

Harchenko

Responds that the department will be able to report on this within the next month.

 

 

 

114

Browning

Filing compliance information (page 22).

 

 

 

125

Browning

Reviews Code of Conduct information (page 23).

 

 

 

132

Chair Butler

Requests more information about all types of penalties collected and their relationship to amounts collected.

 

 

 

148

Browning

Responds that DOR staff will get that information to the chair.

 

 

 

150

Browning

Taxpayer Assistance in Revenue’s Offices (page 24). How We Work to Improve Compliance (page 25).

 

 

 

170

Browning

Excise and Income Tax Quick Facts (page 26).

 

 

 

179

Browning

Processing Center Quick Facts (page 28).

 

 

 

217

Harchenko

Property Tax overview (pages 30-33).

 

 

 

274

Harchenko

Mapping (pages 33 and 36).

 

 

 

296

Rep. Boquist

Asks how many counties are participating in the OR Map Project.

 

 

 

300

Harchenko

Responds that all counties are participating in that project.

 

 

 

321

Harchenko

Continues discussion of OR Map Project (pages 38-39). Partners in this project are the federal government, state and local governments, and private entities such as utilities, real estate, and escrow companies.

 

 

 

354

Rep. Berger

Asks about time frame for OR Map Project.

 

 

 

363

Harchenko

Responds that target date is October of 2008. Discusses what features will be available on the digital database.

 

 

 

380

Rep. Berger

Asks what state agencies are partnering?

 

 

 

383

Harchenko

Responds that the DOR’s advisory committee includes the Dept. of Forestry, Water Resources, and other state agencies that use geographic maps.

 

 

 

433

Harchenko

In consideration of time, Harchenko requests that any discussion regarding tobacco taxes be deferred until a specific bill has been proposed. The department will respond at that time.

 

TAPE 16 SIDE B

015

Harchenko

Policy Option Packages (page 44).

 

 

 

029

Harchenko

Discusses Multistate Tax Commission (page 46).

 

 

 

054

Chair Butler

Adjourns meeting at 2:59 p.m.

 

Tape Log Submitted by:

Reviewed by:

 

Kristi Bowman, Committee Assistant

Kim Taylor James, Committee Coordinator

 

Exhibit Summary:

1. Overview Handout, Dept. of Revenue, 46 pp., 01/05.