BILL INTRODUCTION

PUBLIC HEARING & WORK SESSION

HB 2448, HB 2451

PUBLIC HEARING HB 2449

 

TAPES 35 A, 36 A

 

HOUSE REVENUE COMMITTEE

FEBRUARY 9, 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. Andy Olson

                                                Rep. Chuck Riley                

 

Witnesses Present:                      Debra Buchanan, Finance Director, Dept. of Revenue

                                                Bob Castagna, Oregon Catholic Conference

                                                Wanda Eickhoff

 

Staff Present:                          Paul Warner, Legislative Revenue Officer

                                                Lizbeth Martin-Mahar, Economist

                                                Kristi Bowman, Committee Assistant

                                               

 

TAPE 35, SIDE A

003

Chair Butler

Calls meeting to order at 1:36 p.m.

 

 

 

004

Rep. Komp

Extends courtesies to students from Parrish Middle School.

 

 

 

010

Chair Butler

Committee business.

 

 

 

OPENS PUBLIC HEARING FOR HOUSE BILLS 2448 AND 2451

 

040

Lizbeth

Martin-Mahar

Gives summary of House Bill 2451 (Exhibit 1). The bill concerns the working family/child care tax credit, and the changes that are going to be made to that requirement. Discusses current law and proposed changes in more detail. Specifically, current law does not specify where that income is derived; the new bill would specify Oregon income only.

 

 

 

067

Chair Butler

Asks whether a revenue analysis has been done for two scenarios: all income sources and only OR income sources.

 

 

 

070

Martin-Mahar

Responds that the Dept. of Revenue did an analysis of tax returns for OR taxpayer, and the information is contained in the staff measure summary (Exhibit 1). However, the Dept. of Revenue cannot track out-of-state income by OR residents.

 

 

 

090

Bob Castagna

Testifies to seek an amendment to the proposed bill. The Catholic Conference was involved in the creation of the working family/child care credit law in 1997. Gives background information on the program. Expresses concern about the unintended consequence of OR residents being taxed for income earned while working in a neighboring state.

 

 

 

110

Debra Buchanan

The bill is designed to match up the earned income provision with the working family/child care tax credit provision. Under current law, for example, a Washington resident not working or living here but having rental income from OR can use their Washington earnings to claim the refundable credit on the OR tax return and could exceed their tax liability. Dept. of Revenue supports an amendment to clarify the language.

 

 

 

133

Chair Butler

Asks the Dept. of Revenue to work with the Revenue Office staff and Mr. Castagna to develop more information for the committee for an eventual amendment.

 

 

 

CLOSES PUBLIC HEARING FOR HOUSE BILL 2451

 

 

 

140

Chair Butler

Continues public hearing for house bill 2448.

 

147

Martin-Mahar

Gives summary (Exhibit 3). The bill clarifies how refunds would be processed after more than 3 years after the due date of the tax return. The rest of the bill is conforming language. No revenue or fiscal impact (Exhibits 4 and 6)

 

 

 

165

Buchanan

Testifies in support of HB 2448. Discusses current law regarding timeliness of filing. There is an anomaly in the current statute because the law does not differentiate between a tax refund claimed and tax owed after the 3 year filing time limit. This bill would allow a refund of amounts paid within the prior 2 years of the original filing. Provides a scenario that describes the current situation.

 

 

 

212

Chair Butler

Asks for discussion of sending this bill to the House consent calendar.

 

 

 

250

Paul Warner

Adds that there would be no floor discussion if a bill is sent to the consent calendar. Any four representatives can file dissent within two days, but then the process has to start over again. If a DO PASS recommendation is made today, the revenue office can start on the bill immediately and the bill can get to the House floor sooner.

 

CLOSES PUBLIC HEARING FOR HOUSE BILL 2448

 

OPENS WORK SESSION FOR HOUSE BILL 2448

 

260

Rep. Berger

MOTION: MOVES HB 2448 WITH A DO PASS RECOMMENDATION AND TO THE CONSENT CALENDAR.

 

 

 

267

Chair Butler

ORDER: THERE BEING NO OBJECTION, THE CHAIR SO ORDERS. MOTION PASSES 9-0-0. VOTING AYE: BERGER, HASS, BOQUIST, ESQUIVEL, GALIZIO, KOMP, OLSON, RILEY, BUTLER.

 

 

 

CLOSES WORK SESSION FOR HOUSE BILL 2448

 

OPENS PUBLIC HEARING FOR HOUSE BILL 2449

 

275

Martin-Mahar

Gives overview of HB 2449 (Exhibit 7). Allows the Dept. of Revenue the flexibility to accept other methods of apportioning personal tax refunds. No revenue or fiscal impact (Exhibit 8).

 

 

 

294

Buchanan

Testifies in support of HB 2449 because it aligns the statute with an estimated tax payment and refundable tax credit. The apportionment language is a clean-up provision. Apportionment would be a 50/50 split unless otherwise stated by the couple.

 

 

 

320

Chair Butler

Asks, is the standard apportionment that has been used for a long time a statutory requirement?

 

 

 

335

Buchanan

Responds that it is statutory.

 

 

 

343

Chair Butler

Questions and further discussion with Ms. Buchanan regarding withholding.

 

 

 

363

Buchanan

Discusses the concept in domestic law regarding marital assets.

 

 

 

398

Rep. Hass

Asks about the child support issue regarding withholding and debt owed to the state. What is the current policy regarding an outstanding judgment against one of the parents?

 

 

 

410

Buchanan

Under current law, Dept. of Revenue would look at who has all of the wages and all of the withholding, and the refund would go to offset the debt. The proposed bill would help sort out refund apportionment in complex family situations.

 

 

 

TAPE 36, SIDE A

010

Buchanan

Continues with discussion.

 

 

 

021

Wanda Eickhoff

Provides informational testimony regarding child support issues pertaining to this bill.

 

038

Chair Butler

Comments about the term “intercepts” in current law. States that on a joint return, whoever had the gross income and withholdings owes the debt.

 

 

 

045

Eickhoff

Explains that there is a process in the Dept. of Justice for handling a joint tax return filing intercept that is disputed by an injured spouse.

 

 

 

065

Chair Butler

Comments about a possible scenario with a non-paying parent who might intentionally attempt to evade a debt by overestimating their tax withholdings and later claim a refund.

 

 

 

096

Chair Butler

Requests Dept. of Revenue to get further assistance from the Dept. of Justice intercept group.

 

 

 

100

Rep. Riley

Asks what takes precedence: this bill or a judgment of the court?

 

 

 

113

Buchanan

Responds that she does not have that information but will meet with the Dept. of Justice representatives to get an answer. Will provide further information to the committee at that time.

 

 

 

CLOSES PUBLIC HEARING FOR HOUSE BILL 2449

 

WORK SESSION – BILL INTRODUCTION

 

 

 

135

Warner

Discusses LC 1955 (Exhibit 11).  It is a major reconnect bill to changes in the IRS code.

 

 

 

152

Rep. Komp

MOTION: MOVES THAT LC 1955 BE INTRODUCED AS A HOUSE REVENUE COMMITTEE BILL AT THE REQUEST OF THE DEPT. OF REVENUE.

 

 

 

156

Chair Butler

ORDER: THERE BEING NO OBJECTION, THE CHAIR SO ORDERS. MOTION PASSES 9-0-0. ANSWERING AYE: BERGER, HASS, BOQUIST, ESQUIVEL, GALIZIO, KOMP, OLSON, RILEY, BUTLER.

 

 

 

164

Warner

Discusses LC 2363 (Exhibit 12). It concerns a major restructuring of the school districts, and changes the percentages of funds going to Education School Districts (ESD) as opposed to going to the schools directly.

 

 

 

170

Rep. Hass

MOTION: MOVES THAT LC 2363 BE INTRODUCED AS A HOUSE REVENUE COMMITTEE BILL.

 

 

 

175

Chair Butler

ORDER: THERE BEING NO OBJECTION, THE CHAIR SO ORDERS. MOTION PASSES 9-0-0. ANSWERING AYE: BERGER, HASS, BOQUIST, ESQUIVEL, GALIZIO, KOMP, OLSON, RILEY, BUTLER.

 

181

Chair Butler

Adjourns meeting at 2:15 p.m.

 

 

Tape Log Submitted by:

Reviewed by:

 

 

Kristi Bowman, Committee Assistant

Kim Taylor James, Committee Coordinator

 

Exhibit Summary:

  1. 1.      HB 2451, Staff Measure Summary, Martin-Mahar, 1 pg., 2/9/05
  2. 2.      HB 2451, Minimal Expenditure Impact Statement, Fiscal Office, 1 pg., 2/9/05
  3. 3.      HB 2448, Staff Measure Summary, Martin-Mahar, 1 pg., 2/9/05
  4. 4.      HB 2448, Minimal Expenditure Impact Statement, Legislative Fiscal Office, 1 pg., 2/9/05
  5. 5.      HB 2448, Written Testimony, Buchanan, 1 pg., 2/9/05
  6. 6.      HB 2448, Revenue Impact, Martin-Mahar, 1 pg., 2/9/05
  7. 7.      HB 2449, Staff Measure Summary, Martin-Mahar, 1 pg., 2/9/05
  8. 8.      HB 2449, Minimal Expenditure Impact Statement, Legislative Fiscal Office, 1 pg., 2/9/05
  9. 9.      HB 2449, Written Testimony, Buchanan, 1 pg., 2/9/05
  10. 10.  LC Summary, LRO Staff, 1 pg., 2/9/05
  11. 11.  LC 1955 Draft, 35 pps., 2/9/05
  12. 12.  LC 2363 Draft, 35 pps., 2/9/05