WORK SESSION

SB 480 A, SB 33, HB 3460

 

TAPES 178  A-B, 179 A

 

HOUSE REVENUE COMMITTEE

MAY 31, 2005   2:00 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, Dept. of Revenue (DOR)

 

 

Staff Present:                          Paul Warner, Legislative Revenue Officer

                                                Lizbeth Martin-Mahar, Economist

                                                Steve Meyer, Economist                                         

                                                Kristi Bowman, Committee Assistant                                            

                                                                                               

                                                                                   

 

TAPE 178, SIDE A

002

Chair Butler

Calls meeting to order at 2:04 p.m.

 

 

 

OPENS WORK SESSION FOR HOUSE BILL 3460

 

 

 

011

Paul Warner

Gives update on HB 3460 and reviews amendments discussed on 05/25/05.

 

 

 

047

Rep. Komp

Discusses amendments HB 3460-6, and HB 3460-8 (Exhibits 1 and 2). Discusses current statute (327.511) regarding the school budget accounting system. Discusses the difficulties of accessing the database that was set up by this statute. The HB 3460-6 amendment would make the database “readily” accessible by the Dept. of Education, school districts, and education service districts, and it puts decision-making into the hands of school board members. The HB 3460-8 amendment requires updating school finance information by Jan. 15 of the odd-numbered years in order for legislators to access the budgetary information. Does not support HB 3460 but does support the amendments.

 

 

 

102

Steve Meyer

Comments on the database access.

 

 

 

117

Chair Butler

Discussion with Rep. Hass regarding the HB 3460-9 amendment (See Exhibit 15 from 05/25/05).

 

 

 

 

 

 

155

Rep. Hass

Discusses the purpose of requesting a referral to the House Budget Committee with Chair Butler. Expresses concern that this request removes the possibility of a minority report. Doing an end-run on the process is “surprising and disappointing.” Discussion with Chair Butler.

 

 

 

179

Rep. Galizio

Asks if the Dept. of Education requested the referral.

 

 

 

180

Chair Butler

Responds no, because the Dept. does not have the means to request a referral. The Dept. of Education was asked to provide additional bill language relating to the guidelines they are developing for Successful Schools.

 

 

 

190

Rep. Berger

MOTION: MOVES THE ADOPTION OF THE HB 3460-4 AMENDMENT.

 

 

 

192

Rep. Berger

Comments that the amendment makes the substantive changes needed to raise the original percentage dedication. It further delineates how the Successful Schools Fund and Education Stability Fund are allocated. The amendment proposes excellent changes to the original concept.

 

 

 

202

Rep. Riley

Comments that he will support the amendment. However, he is planning to vote no on the bill and had planned to file a minority report.

 

 

 

210

Chair Butler

Asks for roll-call vote.

 

 

 

220

Chair Butler

THE MOTION HAVING RECEIVED THE REQUIRED MAJORITY IS DECLARED PASSED. VOTE: 6-3-0. VOTING AYE: BOQUIST, ESQUIVEL, OLSON, RILEY, BERGER, BUTLER. VOTING NO: GALIZIO, KOMP, HASS.

 

 

 

232

Chair Butler

Comments on a motion needed to request a letter regarding a subsequent referral of HB 3460 to the House Budget Committee.

 

 

 

238

Rep. Riley

MOTION:  MOVES THE ADOPTION OF THE HB 3460-5 AMENDMENT.

 

 

 

242

Rep. Riley

Comments that the amendment “makes this a better bill.”

 

 

 

252

Warner

Comments about the change in the percentage amount in the HB 3460-5 amendment.

 

 

 

260

Rep. Riley

Discusses the change to the percentage as it applies to a “conceptual amendment,” and wants to insert the change into the amendment.

 

 

 

 

 

262

Chair Butler

States that he does not currently have the authority to act on a conceptual amendment. Comments to Rep. Riley that there is not a revised percentage in amendment HB 3460-5.

 

 

 

270

Chair Butler

Asks for a roll-call vote.

 

 

 

280

Chair Butler

THE MOTION NOT HAVING RECEIVED THE REQUIRED MAJORITY FAILS. VOTE 3-6-0. VOTING AYE: GALIZIO, RILEY, HASS. VOTING NO: BOQUIST, ESQUIVEL, KOMP, OLSON, BERGER, BUTLER.

 

 

 

285

Chair Butler

Discussion with Rep. Hass regarding the letter for subsequent referral to the House Budget Committee.

 

 

 

304

Rep. Komp

MOTION: MOVES THE ADOPTION OF THE HB 3460-6 AMENDMENT.

 

 

 

307

Rep. Komp

Comments that this amendment will give all future legislators the opportunity to have accurate information to “make timely and very positive decisions for schools.”

 

 

 

320

Chair Butler

Expresses concerns about the amendment.

 

 

 

327

Rep. Boquist

Clarifies that the HB 3460-6 amendment does not change the original bill or existing amendment just adopted. It just clarifies the reporting requirements.

 

 

 

337

Chair Butler

Asks for roll-call vote.

 

 

 

346

Chair Butler

THE MOTION HAVING RECEIVED THE REQUIRED MAJORITY IS DECLARED PASSED. VOTE: 7-2-0. VOTING AYE: BOQUIST, ESQUIVEL, GALIZIO, KOMP, OLSON, RILEY, HASS. VOTING NO: BERGER, BUTLER.

 

 

 

354

Rep. Komp

MOTION: MOVES THE ADOPTION OF THE HB 3460-8 AMENDMENT.

 

 

 

356

Rep. Berger

Comments that she has heard no testimony regarding when the reporting is currently done or what the obstacles are. Expresses concern that this amendment, like the previous one, has been added at the last minute.

 

 

 

366

Chair Butler

Discussion with Rep. Komp regarding adding her amendments to another bill that might be a better “vehicle” for them.

 

 

 

376

Rep. Esquivel

Concurs with Rep. Komp regarding the difficulty in accessing the information needed and comments on the accountability issues that need to be cleared up.

 

 

 

 

 

 

390

Rep. Galizio

General comments about the last-minute amendment additions and subsequent referral to the House Budget Committee.

 

 

 

400

Chair Butler

Responds that the additional amendments adopted today involve a fiscal impact, which is “all the more reason” to refer the bill to House Budget. Discussion with Rep. Galizio.

 

 

 

412

Rep. Berger

Adds that the HB 3460-8 amendment is not “particularly germane to the bill at hand.” The amendment pertains to another issue of transparency of school budgets, and while that discussion is necessary, it has not been discussed as part of HB 3460.

 

 

 

430

Chair Butler

Asks for roll-call vote.

 

 

 

440

Chair Butler

THE MOTION HAVING RECEIVED THE REQUIRED MAJORITY IS DECLARED PASSED. VOTE: 7-2-0. VOTING AYE: BOQUIST, ESQUIVEL, GALIZIO, KOMP, OLSON, RILEY, HASS. VOTING NO: BERGER, BUTLER.

 

 

 

465

Rep. Berger

MOTION: MOVES HB 3460 AS AMENDED TO THE HOUSE FLOOR WITH A DO PASS RECOMMENDATION, AND A LETTER BE REQUESTED TO REFER THE BILL TO THE HOUSE BUDGET COMMITTEE.

TAPE 179, SIDE A

035

Rep. Hass

Expresses concerns about sending the bill to the House Budget Committee without any fiscal information and no testimony from the Dept. of Education regarding a fiscal impact. Emphasizes the need to debate this bill. Sending the bill to the Budget Committee is an “end-run” around the democratic process.

 

 

 

055

Chair Butler

Agrees with Rep. Hass that the bill needs to be debated. General comments about the fiscal process.

 

 

 

073

Chair Butler

Asks for roll-call vote.

 

 

 

079

Chair Butler

THE MOTION HAVING RECEIVED THE REQUIRED MAJORITY IS DECLARED PASSED. VOTE: 5-4-0. VOTING AYE: BOQUIST, ESQUIVEL, OLSON, BERGER, BUTLER. VOTING NO: GALIZIO, KOMP, RILEY, HASS.

 

 

 

CLOSES WORK SESSION FOR HOUSE BILL 3460

 

 

 

OPENS WORK SESSION FOR SENATE BILL 480 A

 

 

 

085

Warner

Discusses the main components of the SB 480 A-11 amendment (Exhibit 4) that pertains to the Voluntary Compliance Initiative (VCI). Refers to the revenue impact statement for the amendment (Exhibit 5).

 

 

 

 

182

Chair Butler

Expresses concern about the costs of developing and maintaining a Dept. of Revenue Web site for the 100 worst offenders.

 

 

 

193

Warner

Discusses his conversations with Director Harchenko regarding the Web site. They did not discuss the specific costs that would be involved. Discussion with Chair Butler.

 

 

 

211

Chair Butler

Comments that some in the banking industry have expressed concerns about Real Estate Investment Trusts (REITs) and SB 480. Asks Buchanan for more information about REITs.

 

 

 

222

Debra Buchanan

Testifies that REITS are used by taxpayers to shelter income. California, as part of their VCI, has identified REITs as a listed transaction. Explains the REIT process. Discussion with Chair Butler.

 

 

 

310

Chair Butler

Discusses with Buchanan on the state connection to the federal tax code pertaining to REITs.

 

 

 

369

Buchanan

Discusses “factor-shifting.”

 

 

 

382

Rep. Boquist

Asks about language in the engrossed bill that gives the DOR broad latitude in defining listed transactions.

 

 

 

416

Warner

Responds that the HB 3460-11 amendment is a different approach. It limits the DOR to listed transactions only, and it allows the DOR to only go forward from 01/01/05. Discussion with Rep. Boquist.

 

 

 

TAPE 178, SIDE B

024

Rep. Berger

Expresses concern about liabilities with Web site information about the worst amnesty offenders. Asks for more information about other states using a Web site.

 

 

 

036

Rep. Riley

Asks if this bill has a subsequent referral to House Budget.

 

 

 

038

Chair Butler

Responds yes, and comments that not all fiscal issues are addressed. Expresses concern about the costs of developing and maintaining a Web site.

 

 

 

049

Chair Butler

Comments that he would like the banking industry to come forward with their concerns pertaining to REITs.

 

 

 

CLOSES WORK SESSION FOR SENATE BILL 480 A

 

 

 

OPENS WORK SESSION FOR SENATE BILL 33

 

 

 

063

Lizbeth Martin-Mahar

Gives background of SB 33 previously heard in House Revenue on 05/11/05. The bill could increase some taxpayers’ penalties, but there is minimal revenue impact, less than $50,000.

 

 

 

082

Chair Butler

Comments on the vote from the Senate floor.

 

 

 

090

Chair Butler

REP. KOMP MOVES SENATE BILL 33 TO THE HOUSE FLOOR WITH A DO PASS RECOMMENDATION.

 

 

 

100

Chair Butler

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

 

 

 

105

Chair Butler

Adjourns meeting at 3:07 p.m.

 

 

Tape Log Submitted by:

Reviewed by:

 

 

 

Kristi Bowman, Committee Assistant

Kim Taylor James, Committee Coordinator

 

Exhibit Summary:

  1. 1.      HB 3460, Amendment HB 3460-6, Leg. Counsel, 2 pp., 05/25/05
  2. 2.      HB 3460, Amendment HB 3460-8, Leg. Counsel, 1 pg., 05/25/05
  3. 3.      HB 3460, Amendment HB 3460-10, Leg. Counsel, 1 pg., 05/25/05
  4. 4.      SB 480, Amendment SB 480 A-11, Leg. Counsel, 27 pp., 05/31/05
  5. 5.      SB 480, Revenue Impact Statement, Warner, 1 pg., 05/31/05