WORK SESSION

HB 2191 A, 2995, 2340, 2787, 2659, 3460

PUBLIC HEARING

HM 7

 

TAPES 157-158 A-B, 159-160 A

 

HOUSE REVENUE COMMITTEE

MAY 12, 2005   1:15 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:                      Joe Schweinhart, Associate Oregon Industries (AOI)

                                                Gil Riddell, Association of Oregon Counties (AOC)

                                                Chris Robinson, Metro Multiple Family Housing

                                                John Marshall, Oregon School Boards Assn. (OSBA)

                                                Chuck Bennett, Confederation of OR School Administrators (COSA)

                                                Brian Reeder, Dept. of Education

                                                Jody Wiser, Coalition to Preserve the Estate Tax

                                                Don Schellenberg, Oregon Farm Bureau Federation

                                                Don Cersovski, Oregon Farm Bureau Federation

                                                Stuart Olson, Oregon Farm Bureau Federation

                                                Jason Williams, Taxpayer Assn. of Oregon

                                                Wayne Brady, (no affiliation given)                         

 

 

Staff Present:                          Paul Warner, Legislative Revenue Officer                                    

                                                Mary Ayala, Economist                                         

                                                Lizbeth Martin-Mahar, Economist                                         

                                                Kristi Bowman, Committee Assistant

                                               

 

TAPE 157, SIDE A

002

Chair Butler

Calls meeting to order at 1:20 p.m.

 

 

 

OPENS WORK SESSION FOR HOUSE BILL 2995

 

 

 

008

Paul Warner

Discusses HB 2995-4 amendment (Exhibit 1) which clarifies language pertaining to facilitator, tax practitioners and tax consultants. Clarifies what kind of information the taxpayer must receive from the tax provider.  

 

 

 

027

Chair Butler

Asks about status of SB 968 pertaining to Refund Anticipation Loans (RALs).

 

 

 

 

 

030

Warner

Responds that SB 968 has not yet been heard by the Senate Revenue Committee but will provide an update for the Committee.

 

032

Rep. Galizio

Comments that the intent of the bill is to have families make more informed decisions regarding taxpayer loans.

 

 

 

051

Chair Butler

REP. GALIZIO MOVES THE ADOPTION OF THE HB 2995-4 AMENDMENT.

 

 

 

054

Chair Butler

ORDER: THERE BEING NO OBJECTION, THE CHAIR SO ORDERS. MOTION PASSES 8-0-1. VOTING AYE: BOQUIST, GALIZIO, KOMP, OLSON, RILEY, BERGER, HASS, BUTLER.  EXCUSED: ESQUIVEL.

 

 

 

061

Rep. Boquist

MOTION: MOVES HB 2995 AS AMENDED TO THE HOUSE FLOOR WITH A DO PASS RECOMMENDATION.

 

 

 

075

Chair Butler

ORDER: THERE BEING NO OBJECTION, THE CHAIR SO ORDERS. MOTION PASSES 8-0-1. VOTING AYE: BOQUIST, GALIZIO, KOMP, OLSON, RILEY, BERGER, HASS, BUTLER.  EXCUSED: ESQUIVEL.

 

 

 

CLOSES WORK SESSION FOR HOUSE BILL 2995

 

 

 

OPENS WORK SESSION FOR HOUSE BILL 2191 A

 

 

 

080

Lizbeth Martin-Mahar

Gives overview of HB 2191. The bill creates a labor rebate for costs incurred by persons engaged in film production in Oregon if costs exceed the threshold level. Discusses the Greenlight Oregon Labor Rebate Fund that would be created by this bill.

 

 

 

181

Rep. Riley

Comments that this is a good bill. Oregon is losing film production to other states and to Canada because they offer more incentives. The incentives in this bill will be sufficient to bring some film production back to Oregon.

 

 

 

197

Chair Butler

REP. RILEY MOVES THE ADOPTION OF THE HB 2191 A-3 AMENDMENT.

 

 

 

205

Chair Butler

ORDER: THERE BEING NO OBJECTION, THE CHAIR SO ORDERS. MOTION PASSES 8-0-1. VOTING AYE: BOQUIST, ESQUIVEL, GALIZIO, KOMP, RILEY, BERGER, HASS, BUTLER. EXCUSED: OLSON.

 

 

 

207

Chair Butler

REP. RILEY MOVES THE ADOPTION OF THE HB 2191 A-4 AMENDMENT.

 

 

 

211

Chair Butler

ORDER: THERE BEING NO OBJECTION, THE CHAIR SO ORDERS. MOTION PASSES 8-0-1. VOTING AYE: BOQUIST,

 

ESQUIVEL, GALIZIO, KOMP, RILEY, BERGER, HASS, BUTLER. EXCUSED: OLSON.

 

 

 

212

Chair Butler

REP. BERGER MOVES THE ADOPTION OF THE HB 2191 A-5 AMENDMENT.

 

 

 

215

Chair Butler

ORDER: THERE BEING NO OBJECTION, THE CHAIR SO ORDERS. MOTION PASSES 8-0-1. VOTING AYE: BOQUIST, ESQUIVEL, GALIZIO, KOMP, RILEY, BERGER, HASS, BUTLER. EXCUSED: OLSON.

 

 

 

217

Chair Butler

REP. BERGER MOVES HB 2191-A AS AMENDED TO THE HOUSE FLOOR WITH A DO PASS RECOMMENDATION.

 

 

 

220

Rep. Berger

Comments that Oregon has lost its market-edge for film production, and this bill is a step in the right direction because it provides economic development.

 

 

 

238

Rep. Riley

Adds that filming in Oregon is beneficial because movies that promote Oregon cause people to come here.

 

 

 

249

Chair Butler

ORDER: THERE BEING NO OBJECTION, THE CHAIR SO ORDERS. MOTION PASSES 8-0-1. VOTING AYE: BOQUIST, ESQUIVEL, GALIZIO, KOMP, RILEY, BERGER, HASS, BUTLER. EXCUSED: OLSON.

 

 

 

CLOSES WORK SESSION FOR HOUSE BILL 2191 A

 

 

 

OPENS WORK SESSION FOR HOUSE BILL 2340

 

 

 

270

Mary Ayala

Gives overview of HB 2340 (Exhibit 2). The bill allows rural fire protection district boards to adopt an ordinance that creates a fee for any service provided by the district. The bill was previously heard on 04/11/05 and 04/14/05.

 

 

 

301

Rep. Boquist

MOTION: MOVES HB 2340 TO THE HOUSE FLOOR WITH A DO PASS RECOMMENDATION.

 

 

 

316

Chair Butler

ORDER: THERE BEING NO OBJECTION, THE CHAIR SO ORDERS. MOTION PASSES 8-0-1. VOTING AYE: BOQUIST, ESQUIVEL, GALIZIO, KOMP, RILEY, BERGER, HASS, BUTLER. EXCUSED: OLSON.

 

 

 

CLOSES WORK SESSION FOR HOUSE BILL 2340

 

 

 

OPENS WORK SESSION FOR HOUSE BILL 2787

 

 

 

337

Martin-Mahar

Discusses HB 2787-4 amendment changes (Exhibits 4 and 5) pertaining to the rural medical practitioner tax credit:

 

  • ·         Frontier county definition
  • ·         Rural county definition
  • ·         Two-tier medical tax credit
  • ·         Phase-out of tax credit for high-income Oregonians
  • ·         Adds psychologists and pharmacists who practice in frontier counties
  • ·         Caps tax credit for pharmacists to $5000
  • ·         Tax credit for volunteer EMTs only who volunteer 20% of their time (page 5, line 16 of bill)

 

 

 

465

Chair Butler

Discusses EMT volunteer service scenarios with Martin-Mahar.

 

 

 

TAPE 158, SIDE A

031

Martin-Mahar

Discusses revenue impacts (Exhibit 6) for the various medical practitioners.

 

 

 

089

Rep. Boquist

Discusses the process of “means testing” to determine income brackets for eligibility. Discusses the $250 credit for volunteer EMTs.

 

 

 

139

Rep. Hass

Asks why there was a decision to expand the number of frontier counties.

 

 

 

144

Rep. Boquist

Responds that one of the issues is the lack of medical services in frontier and rural counties. Discusses the criteria used to determine frontier and rural counties. Criteria factors include mileage, income level, and number of certified EMTs. Discussion with Chair Butler regarding EMT expenses.

 

 

 

244

Chair Butler

Comments on the deduction of expenses on the tax form.

 

 

 

250

Martin-Mahar

Comments that there is nothing in the bill that says a practitioner  cannot take both a tax credit and deduction.

 

 

 

253

Rep. Galizio

Asks if definitions of rural and frontier are different for other applications.

 

 

 

258

Martin-Mahar

Responds that the Office of Rural Health will only use the statute definition for this tax credit. They can define frontier counties in a different way for their own rules. Further discussion with Rep. Galizio on frontier and rural definitions.

 

 

 

300

Chair Butler

Comments that in the past the state has used the federal definition of frontier counties, which is six people per square mile.

 

 

 

328

Rep. Hass

Asks why certain population numbers were used to define frontier counties.

 

 

 

 

 

330

Rep. Boquist

Responds that it was an attempt to expand the credit to as many counties as possible. Comments on the difficulty in recruiting medical providers in Klamath and Umatilla counties.

 

 

 

CLOSES WORK SESSION FOR HOUSE BILL 2787

 

 

 

OPENS WORK SESSION FOR HOUSE BILL 2659  

 

 

 

415

Ayala

Gives overview of HB 2659 (Exhibit 7). The bill retains the 6 year limit to file for a property tax refund and simplifies the refund process. Refers to revenue impact statements (Exhibit 8).

 

 

 

TAPE 157, SIDE B

043

Ayala

Discusses HB 2659-3 amendment (Exhibits 9 and 10) and HB 2659-4 amendment (Exhibits 11 and 12).

 

 

 

071

Joe Schweinhart

In response to Chair Butler’s question about who sponsored the HB 2659-3 amendment, Schweinhart says that Associated Oregon Industries (AOI) submitted the amendment.

 

 

 

085

Chris Robinson

Discusses the purpose of the HB 2659-4 amendment, which was to address concerns that the Assn. of Oregon Counties (AOC) had. Submits handout: Talking Points (Exhibit 13).

 

 

 

096

Gil Riddell

Comments about the two amendments. Testifies that county governments have no interest in bureaucratic red tape and fully support the amendments.

 

 

 

113

Rep. Berger

MOTION: MOVES THE ADOPTION OF THE HB 2659-3 AMENDMENT.

 

 

 

116

Chair Butler

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

 

 

 

117

Rep. Berger

MOTION: MOVES THE ADOPTION OF THE HB 2659-4 AMENDMENT.

 

 

 

119

Chair Butler

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

 

 

 

121

Rep. Berger

MOTION: MOVES HB 2659 AS AMENDED TO THE HOUSE FLOOR WITH A DO-PASS RECOMMENDATION.

 

 

 

135

Chair Butler

ORDER: THERE BEING NO OBJECTION, THE CHAIR SO ORDERS. MOTION PASSES 9-0-0. VOTING AYE: BOQUIST,

 

ESQUIVEL, GALIZIO, KOMP, OLSON, RILEY, BERGER, HASS, BUTLER.

 

 

 

CLOSES WORK SESSION FOR HOUSE BILL 2659

 

 

 

OPENS WORK SESSION FOR HOUSE BILL 3460

 

 

 

160

Warner

Gives update of work group discussions on HB 3460. Discusses School Revenue Forecast Committee Report (Exhibit 15).  Discusses handout: House Bill 3460 Potential Amendments (Exhibit 16).

 

 

 

203

Chair Butler

Asks about previous bills that have “look-back language.” Expresses concern that if the language is not strong enough, does the whole statute go away?

 

 

 

217

Warner

In response to the “look-back” question, the strongest step would be a sunset date for legislative review. Continues with the handout talking points.

 

 

 

284

Rep. Berger

Discussion with Warner about using a statutory trigger to determine when the revenue stream would stop.

 

 

 

324

Chair Butler

Discussion with Warner regarding the Education Stability Fund.

 

 

 

330

Chuck Bennett

Testifies that while the adequacy issue still needs to be addressed,  HB 3460 only addresses school funding stability and predictability. Discusses percentages that COSA recommends and would also be attractive to statewide school districts. The funding concept proposed in HB 3460 will provide a good basic education.

 

 

 

TAPE 158, SIDE B

046

John Marshall

Discusses the School Capital Matching Account. OSBA believes that growing that fund will help both high-growth districts and those communities without a wealthy tax base with their capital needs.

 

 

 

066

Rep. Hass

Asks about the feasibility of amendments that repealed certain tax credits and expenditures or put sunset dates on them, with the goal of strengthening the stabilization process.

 

 

 

076

Bennett

Responds that amendments concerning those issues would be going beyond the scope of this bill.  

 

 

 

092

Chair Butler

Discussion with Rep. Hass on putting percentage limits in the bill to help direct future legislatures in dealing with future tax credits or expenditures. 

 

 

 

122

Rep. Galizio

Asks why personal income tax is used as the funding mechanism for the bill. Asks about using a percentage of the general fund instead.

 

 

 

133

Marshall

Responds that there are two issues. 1) the definition and components of the general fund. Income tax is used because of its elastic nature. 2) inflationary figures—salaries, medical insurance, PERS retirement rates, and fuel costs for school buses.  

 

 

 

166

Warner

In response to Rep. Galizio, refers to the forecast table in handout that addresses salaries and PERS impacts.

 

 

 

170

Rep. Galizio

Regarding the general fund, asks if the fund could be specifically defined for purpose of calculation for the bill.

 

 

 

174

Bennett

Responds that income tax is the biggest component of the general fund. Using income tax as the basis for school funding is the best available resource.

 

 

 

180

Rep. Komp

Asks Warner if the economic calculations use the weighted or actual student numbers.

 

 

 

200

Warner

Responds that different definitions are used for various applications.

 

 

 

213

Brian Reeder

Testifies that the essential school budget level is based on the “per-weighted” student number.

 

 

 

252

Warner

Comments that the growth trends between weighted students and actual students are different.

 

 

 

CLOSES WORK SESSION FOR HOUSE BILL 3460

 

 

 

OPENS PUBLIC HEARING FOR HOUSE MEMORIAL 7

 

 

 

280

Martin-Mahar

Gives overview of HM 7 (Exhibit 17). The bill expresses support by the Oregon House of Representatives to the Congress and President to permanently abolish the federal estate tax. Under current federal law, the estate tax would be eliminated for one year (2010) and reinstated in 2011. Oregon is not automatically connected to any federal changes to estate taxes.

 

 

 

320

Jody Wiser

Testifies in opposition to HM 7 because estate tax only affects the wealthiest 1% of the population. Discusses polls regarding cutting or eliminating estate taxes. “Estate tax is a surcharge that kicks in only if we’re lucky enough to be one of life’s biggest winners.”

 

 

 

433

Don Schellenberg

Testifies in support of HM 7 and submits written testimony (Exhibit 18).

 

 

 

445

Don Cersovski

Testifies in support of HM 7 and reads verbatim from written testimony (Exhibit 19).

 

 

 

TAPE 159, SIDE A

090

Stuart Olson

Testifies in support of HM 7 because of the impact of the estate tax on small family farms like his.

 

 

 

102

Schellenberg

Testifies in support of HM 7. Comments on handout from Neil Westfall (Exhibit 20). Discusses family farm issues pertaining to estate tax.

 

 

 

135

Rep. Galizio

Discussion with Olson regarding capital gains and estate tax planning.

 

 

 

139

Olson

Responds that because of numerous changes to the estate tax law, it is difficult to constantly update their family estate tax plan.

 

 

 

163

Chair Butler

Comments that federal law goes back to the 2011 level, and there will be capital gains. Discusses taxation of farm corporations with Rep. Galizio.

 

 

 

232

Rep. Riley

Comments that in his management consultant business he only hears about small farms having problems with the estate tax. Expresses concern that the problems of small farms are not being addressed. Instead, there is an effort to repeal a tax that affects many other people besides small farmers.

 

 

 

260

Olson

Responds that no one has taken inflation into account. Millionaires in the 1930’s are now billionaires. Discusses the struggles he and his brother are having in maintaining his small farm. Discussion with Rep. Riley on this issue.

 

 

 

317

Jason Williams

Testifies in support of HM 7 and submits two handouts (Exhibits 21 and 22). The estate tax carries a big bureaucratic cost to it. “It’s not the government’s business to get involved with such [family] inheritances.” Death is not a taxable event. 

 

 

 

360

Wayne Brady

Testifies in support of HM 7 because the estate tax is a counter-productive tax. If small businesses were left intact, the government would receive more revenue from income taxes rather than from estate taxes.

 

 

 

378

Chair Butler

Comments about what the federal government is doing about the estate tax in 2010. Expresses concern that if the state doesn’t do something about the federal tax policy with no step-up in basis, there will be an “absolute mess” regarding the tracking of historical basis information.  

 

 

 

461

Rep. Riley

Agrees that 2011 will be a problem because of the federal drop to the $1 M level. However, this resolution calls for a full repeal, which is an entirely different situation than the change in federal law in 2011.

 

 

 

 

CLOSES PUBLIC HEARING FOR HOUSE MEMORIAL 7

 

 

 

TAPE 160, SIDE A

 

 

 

045

Rep. Boquist

Submits handout for HB 2787 (Exhibit 23) pertaining to cities impacted by the bill.

 

 

 

054

Chair Butler

Adjourns meeting at 3:42 p.m.

 

 

 

 

 

Tape Log Submitted by:

Reviewed by:

 

 

 

Kristi Bowman, Committee Assistant

Kim Taylor James, Committee Coordinator

 

Exhibit Summary:

  • 1.      HB 2995, HB 2995-4 Amendment, Leg. Counsel, 8 pp., 05/11/05
  • 2.      HB 2340, Revenue Impact Statement, Ayala, 1 pg., 04/12/05
  • 3.      HB 2340, Staff Measure Summary, Ayala, 1 pg., 05/11/05
  • 4.      HB 2787, Staff Measure Summary, Martin-Mahar, 2 pp., 05/12/05
  • 5.      HB 2787, HB 2787-4 Amendment, Leg. Counsel, 11 pp., 05/12/05
  • 6.      HB 2787, Revenue Impact Statement, Martin-Mahar, 2 pp., 05/12/05
  • 7.      HB 2659, Staff Measure Summary, Ayala, 1 pg., 05/11/05
  • 8.      HB 2659, Revenue Impact (HB 2659 & HB 2659-3), Ayala, 1 pg., 05/11/05
  • 9.      HB 2659, HB 2659-3 Amendment, Leg. Counsel, 1 pg., 05/12/05
  • 10.  HB 2659, Staff Measure Summary (HB 2659-3), Ayala, 1 pg., 05/11/05
  • 11.  HB 2659, HB 2659-4 Amendment, Leg. Counsel, 1 pg., 05/12/05
  • 12.  HB 2659, Staff Measure Summary (HB 2659-4), Ayala, 1 pg., 05/11/05
  • 13.  HB 2659, Handout: Talking Points, Robinson, 1 pg., 05/12/05
  • 14.  HB 2659, Testimony, Kafoury, 1 pg., 05/11/05
  • 15.  HB 3460, Handout: Castillo Letter, Hill, 10 pp., 12/01/04
  • 16.  HB 3460, Handout: Potential Amendments, Warner, 1 pg., 05/12/05
  • 17.  HM 7, Staff Measure Summary, Martin-Mahar, 1 pg., 05/11/05
  • 18.  HM 7, Testimony, Schellenberg, 1 pg., 05/12/05
  • 19.  HM 7, Testimony, Cersovski, 2 pp., 05/12/05
  • 20.  HM 7, Handout: Oregon-Neil Westfall, Schellenberg, 1 pg., 05/12/05
  • 21.  HM 7, Handout: Yes on HM 7, Williams, 1 pg., 05/12/05
  • 22.  HM 7, Handout, (no title), Williams, 1 pg., 05/12/05
  • 23.  HB 2787, Handout: Cities Impacted, Rep. Boquist, 1 pg., 05/12/05