WORK SESSION

SB 480 A, HB 3333 A,

PUBLIC HEARING AND WORK SESSION

SB 944 A

PUBLIC HEARING

SJR 14

 

TAPES 184-185 A-B, 186 A, 187 A

 

HOUSE REVENUE COMMITTEE

JUNE 3, 2005   1:00 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:                      Rep. Jeff Kropf, Dist. 17

                                                Rep. Brad Witt, Dist. 31

                                                Diane Bassett-Pohl, Mortuary and Cemetery Board

                                                David Koach, Mortuary and Cemetery Board

                                                Cheryl Pellegrini, Dept. of Justice

                                                Chuck Roberts, Funeral Consumers Alliance of Oregon

                                                Rep. Phil Barnhart, Dist. 11

                                                Sen. Richard Devlin, Dist. 19

                                                Bob Stewart, Supt., Gladstone School District

                                                Tom Hughes, Mayor, Hillsboro

                                                Ken Strobeck, League of Oregon Cities (LOC)

                                                Marcia Kelley, American Assn. of University Women (AAUW)

                                                Julie Suchanek, Oregon Community College Assn.

                                                David Williams, Oregon School Boards Assn. (OSBA)

                                               

 

Staff Present:                          Paul Warner, Legislative Revenue Officer

                                                Lizbeth Martin-Mahar, Economist

                                                Mazen Malik, Economist

                                                Steve Meyer, Economist

                                                Mary Ayala, Economist                                         

                                                Kristi Bowman, Committee Assistant                                                        

                                               

                                                                                   

 

TAPE 184, SIDE A

002

Chair Butler

Calls meeting to order at 1:08 p.m.

 

 

 

OPENS WORK SESSION FOR SENATE BILL 480

 

 

 

012

Paul Warner

Gives updates on the bill. There are no new amendments at this time. Issues under review are reportable transactions and a Dept. of Revenue Web site. Those issues would likely have no revenue impact.

 

 

 

023

Chair Butler

Discusses an informal work group for this bill that is meeting on the issues discussed by Warner. General comments about the bill.

 

 

 

041

Rep. Galizio

Comments that people who pay their taxes on time perceive that there is no “culture of compliance.” Expresses concern about limitations being put on the Dept. of Revenue’s ability to identify abusive tax shelters.

 

 

 

071

Chair Butler

Responds to Rep. Galizio’s concerns. 

 

 

 

105

Rep. Riley

Expresses concerns about tax evasion schemes that the federal government does not “care about.”

 

 

 

116

Chair Butler

Responds to Rep. Riley’s concerns.

 

 

 

145

Warner

Comments that the Dept. of Revenue (DOR) is very active in using the CA amnesty database for analysis.

 

 

 

CLOSES WORK SESSION FOR SENATE BILL 480

 

 

 

OPENS WORK SESSION FOR HOUSE BILL 3333 A

 

 

 

165

Lizbeth Martin- Mahar

Gives overview of HB 3333 A (Exhibit 1). The bill creates a charitable checkoff on the Oregon tax form for the Wounded Soldier Relief Program. Discusses the placement of the checkoff on the form.

 

 

 

206

Rep. Jeff Kropf

Testifies that this is a companion bill to HB 3334.

 

 

 

231

Rep. Galizio

Asks if the Wounded Soldier Relief Program is only for physical injuries and not for psychological issues.

 

 

 

238

Rep. Kropf

Responds that the program provides grants to reserve soldiers who are physically injured. Discusses psychological help that the Pentagon will make available to soldiers for three years after their return from mobilization.

 

 

 

268

Rep. Esquivel

Expresses concern that a time limit cannot be put on a veteran’s mental health issues.

 

 

 

279

Rep. Kropf

Concurs with Rep. Esquivel’s comments. She discusses a family member who is still being affected by psychological issues after his return from the Vietnam War.

 

 

 

306

Rep. Boquist

Comments that the mental health issue for veterans is something that needs to be worked on in the interim session. There needs to be a comprehensive solution.

 

 

 

323

Rep. Boquist

MOTION: MOVES HB 3333 A TO THE HOUSE FLOOR WITH A DO PASS RECOMMENDATION.

 

 

 

330

Chair Butler

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

 

 

 

CLOSES WORK SESSION FOR HOUSE BILL 3333 A

 

 

 

OPENS PUBLIC HEARING FOR SENATE BILL 944 A

 

 

 

350

Mazen Malik

Gives overview of SB 944 A (Exhibit 2). The bill makes certain sales practices by licensees subject to discipline by the State Mortuary and Cemetery Board (SMCB). The bill also allows the Dept. of Justice to handle issues not in the authority of the SMCB. Refers to the staff measure summary from the Senate Commerce Committee hearing on 03/22/05 (Exhibit 3). Discusses the SB 944 A-4 amendment (Exhibit 4).

 

 

 

TAPE 185, SIDE A

016

Diane Bassett-Pohl

Testifies in opposition to SB 944 A and submits written testimony (Exhibit 5). The Board has worked very hard to develop the strongest “death laws” possible. Discussion with Chair Butler.

 

 

 

062

Rep. Hass

Asks Bassett-Pohl if she agrees with the amendment’s proposal to reduce the numbers on the Board.

 

 

 

070

Bassett-Pohl

Responds that she Is opposed to any reduction to the Board. When an issue is brought before the Board, they have a very broad view because of the wide range of experience on the Board. Discussion with Chair Butler on the amendment.

 

 

 

111

Bassett-Pohl

Testifies in opposition to the amendment because the current make-up of the Board is working.

 

 

 

142

Chair Butler

Comments that the Revenue Committee is not changing the make-up of the Board, but rather is using the change in the number of members as a discussion point during the interim. Explains the intent of the amendment.

 

 

 

151

Rep. Hass

Asks who sponsored the amendment.

 

 

 

153

Chair Butler

Responds that he sponsored the amendment on behalf of constituents who have contacted him.

 

 

 

159

Rep. Boquist

Clarifies with Bassett-Pohl that the Board is opposed to SB 944 A.

 

 

 

176

David Koach

Testifies in opposition to SB 944 A and submits written testimony (Exhibit 6). The bill as originally written required the Board to deal

with anti-trust issues that are beyond the scope of the Board’s authority.

 

 

 

191

Cheryl Pellegrini

Comments that the purpose of the Dept. of Justice’s testimony is to address the fiscal impact of SB 944 A on the Dept.

 

 

 

209

Chair Butler

Comments that it is not his intent to move the A engrossed bill out of the Revenue Committee.

 

 

 

210

Pellegrini

Responds that the Dept. of Justice has no position on the amendment because the amendment concerns a policy issue between the legislature and the Board.

 

 

 

216

Rep. Berger

Asks Chair Butler about the purpose of the bill’s referral to the House Budget Committee.

 

 

 

220

Chair Butler

Explains why there might be a fiscal impact if the amendment is adopted.

 

 

 

236

Rep. Riley

Asks the Board members if the make-up of the Board is an issue that “the Board thinks about now.”

 

 

 

245

Bassett-Pohl

Responds that the make-up of the board is reviewed periodically, and it has been determined that the current number of public and industry members is the right balance. Discusses the issue of minimum professional training standards stated in the amendment. Comments on the confidentiality laws that the Board must consider when making decisions. Discusses a specific case as an example.

 

 

 

289

Rep. Boquist

Asks Pelligrini about anti-trust issues that pertain to the Board.

 

 

 

291

Pellegrini

Discusses complaints received by the Board and the Dept. of Justice (DOJ). Some cemeteries are engaging in conduct that is in violation of anti-trust laws.

 

 

 

325

Koach

Discusses with Chair Butler the anti-trust issues that have been brought to the attention of the Board and the DOJ. Comments on the complex and confusing issues in the original bill.

 

 

 

378

Rep. Boquist

Comments on the Senate votes for the bill on 05/09/05.

 

 

 

391

Koach

Responds that the problems with the Board could not be specifically identified as stated in the original bill. Comments that the amendment virtually eliminates the original bill.

 

 

 

415

Chair Butler

Comments on discussions with Sen. Ringo regarding problems addressed in SB 944 A. Discussion with Koach.

 

 

 

466

Rep. Boquist

Asks Koach about how many complaints the Board has dealt with in the last year and how many are still pending.

470

Koach

Responds that the Board receives 75-100 complaints a biennium, and there is currently a backlog of 130 complaints.

 

TAPE 184, SIDE B

039

Rep. Olson

Asks about the oldest case in the Board’s backlog.

 

 

 

041

Koach

Responds that the oldest case goes back about 5 years. Explains the complex nature of the cases and why they take so long to resolve.

 

 

 

073

Chair Butler

Asks for more information on the case backlogs.

 

 

 

078

Bassett-Pohl

Discusses the case backlog due to staffing issues.

 

 

 

095

Chair Butler

Discusses license fees with Koach.

 

 

 

110

Koach

Comments that the Board has been facing a revenue shortfall since 1999. SB 53 proposes to raise the death certificate fee by $3. The fee has not been raised since 1985.

 

 

 

120

Rep. Hass

Asks about the relationship of fees and consumer complaints.

 

 

 

124

Bassett-Pohl

Agrees with Rep. Hass’ comments. Adds that consumer complaints are handled as quickly as possible. Discusses the Board’s dual responsibility of regulating the industry and helping the consumer.

 

 

 

149

Rep. Boquist

Asks about the level of training and experience of the Board’s investigators.

 

 

 

154

Koach

Describes the process of training an investigator. Discusses the reasons why there has been a problem with retaining investigators in the compliance division.

 

 

 

206

Chair Butler

General comments about investigator training. Reads a letter from a constituent in the funeral home industry regarding the lack of industry experience of the investigators. Expresses concern about the Board membership not reflecting the industry and states that is why the SB 944 A-4 amendment was written. Comments on the nature of the complaints.

 

 

 

380

Rep. Riley

Agrees that the Board needs to examine the issues raised by Chair Butler. Comments that a career path would help resolve the turnover problem.

 

 

 

413

Rep. Hass

Agrees that there should be a balance regarding investigations. However, there is a bigger issue regarding the Board’s insufficient budget resulting in the backlog of cases.

 

 

 

TAPE 185, SIDE B

022

Rep. Boquist

Comments that there needs to be a self-assessment by the Board.

030

Chair Butler

Expresses concern that the Board “controls itself” and that it needs the necessary oversight of the Executive Director of the Board.

 

 

 

051

Bassett-Pohl

If there are issues concerning the Board, they are ready to address them. The Board encourages industry participation. Discusses the confidentiality law and its limitations on Board members in open sessions. Discusses specific examples of investigators helping clients with compliance issues. There was no check-and-balance system in place before the change to the make-up of the Board in 1985.

 

 

 

075

Chuck Roberts

Testifies in opposition to SB 944 A. Comments that the consumer wants regulation of the funeral industry and is willing to pay for it. There are as many complaints about the industry as there are complaints about the Board.

 

 

 

115

Chair Butler

Comments that if the amendment is adopted, the Senate will be able to review the anti-trust issues addressed in the original bill. The Senate will also be able to address consumer issues.

 

 

 

122

Rep. Boquist

Asks how the Board makes a recommendation for a fee increase.

 

 

 

130

Malik

Responds that the process is sometimes regulated in statute and sometimes regulated under administrative rules of the Board.

 

 

 

146

Rep. Brad Witt

Testifies in opposition to the SB 944 A-4 amendment. In its current structure the funeral industry is in the majority and regulates itself. This is a policy mistake for any board. For the public’s interest more public members should be on boards. Discussion with Chair Butler. Comments on the backlog of complaints.

 

 

 

CLOSES PUBLIC HEARING FOR SENATE BILL 944 A

 

 

 

OPENS WORK SESSION FOR SENATE BILL 944 A

 

 

 

227

Chair Butler

REPRESENTATIVE ESQUIVEL MOVES THE ADOPTION OF THE SB 944 A-4 AMENDMENT.

 

 

 

231

Rep. Boquist

Clarifies that the amendment is asking the Board to do a self-study.

 

 

 

236

Rep. Riley

Comments that in addition to a self-study, there should be ideas studied to retain staff.

 

 

 

246

Rep. Hass

Comments that it is a good idea for the Board to do a self-study, but states that he is not sure that they need a law to do that. Expresses concern about the amendment that addresses the make-up of the Board.

 

 

 

 

260

Chair Butler

General comments about issues that need to be addressed by the Board.

 

 

 

273

Rep. Galizio

Comments that he is uncomfortable with the prescriptive nature of Section 1(b) of the amendment. Discussion with Chair Butler.

 

 

 

298

Chair Butler

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

 

 

 

303

Rep. Esquivel

MOTION: TO REQUEST THE SUBSEQUENT REFERRAL TO THE JUDICIARY COMMITTEE BE RESCINDED, AND THE BILL BE REFERRED TO THE HOUSE SPECIAL COMMITTEE ON BUDGET WITH A DO PASS AS AMENDED RECOMMENDATION.  

 

 

 

340

Rep. Komp

Asks why the bill is being referred to the House Budget Committee instead of the Judiciary Committee.

 

 

 

343

Chair Butler

Responds that the amendment may have budgetary considerations.

 

 

 

349

Chair Butler

Asks for roll-call vote.

 

 

 

359

Chair Butler

THE MOTION HAVING RECEIVED THE REQUIRED MAJORITY IS DECLARED PASSED. VOTE: 8-1-0. VOTING AYE: BOQUIST, ESQUIVEL, GALIZIO, KOMP, OLSON, RILEY, BERGER, BUTLER. VOTING NO: HASS.

 

 

 

CLOSES WORK SESSION FOR SENATE BILL 944 A

 

 

 

OPENS PUBLIC HEARING FOR SJR 14

 

 

 

391

Steve Meyer

Gives overview of SJR 14 (Exhibit 7). The bill is an amendment to the State Constitution for voter approval. It would eliminate the double-majority requirement to pass a property tax measure.

 

 

 

446

Sen. Richard Devlin

Testifies in support of SJR 14 and submits written testimony (Exhibit 10). Reviews the history of the double-majority requirement. States that he believes a replacement for the double-majority instead of an outright repeal will meet with voter approval.

 

 

 

TAPE 186, SIDE A

094

Rep. Phil Barnhart

Refers to written testimony submitted (Exhibits 11, 12, 13). Testifies in opposition to the double-majority and supports SJR 14 because the double-majority requirement is anti-democratic.

 

 

 

151

Rep. Galizio

Asks if there has been a court challenge to the proportion issue.

 

 

 

157

Sen. Devlin

Responds that there has not yet been a court challenge, but he has been contacted recently by attorneys who plan to file a challenge.

162

Bob Stewart

Submits written testimony from Gladstone citizens (Exhibit 14). Testifies in support of SJR 14 and submits written testimony (Exhibit 15). Adds that he has also been contacted by an attorney regarding a court challenge.

 

 

 

245

Rep. Galizio

Discusses with Stewart the significance of referring this issue to the voters.

 

 

 

272

Tom Hughes

Testifies in support of SJR 14. Explains why he believes the double-majority is bad public policy to “reward the lack of thoughtful behavior on the part of the voter.’’

 

 

 

363

Ken Strobeck

Testifies in support of SJR 14. Discusses the history of the double-majority requirement. Submits report by the League of Oregon Cities (Exhibit 16). Comments that there is a false assumption with double-majority elections that there are updated and accurate election records.

TAPE 187, SIDE A

030

Marcia Kelley

Testifies in support of SJR 14. Discusses the costs to special districts of holding multiple elections on the same issue.

 

 

 

077

Julie Suchanek

Testifies in support of SJR 14 and submits written testimony (Exhibit 17). Discusses specific examples of failed elections due to the double-majority requirement.

 

 

 

092

David Williams

Testifies in support of SJR 14 because of the substantial cost to school districts to hold multiple elections. It is a voter’s rights bill, and the OSBA membership supports reforming the double-majority requirement.

 

 

 

CLOSES PUBLIC HEARING ON SJR 14

 

 

 

125

Acting Chair Berger

Adjourns meeting at 3:34 p.m.

 

 

Tape Log Submitted by:

Reviewed by:

 

 

 

Kristi Bowman, Committee Assistant

Kim Taylor James, Committee Coordinator

 

Exhibit Summary:

  1. 1.      HB 3333, Staff Measure Summary, Martin-Mahar, 1 pg., 06/03/05
  2. 2.      SB 944, Staff Measure Summary, Malik, 1 pg., 06/03/05
  3. 3.      SB 944, Staff Measure Summary, Braun, 1 pg., 03/22/05
  4. 4.      SB 944, Amendment SB 944 A-4, Leg. Counsel, 1 pg., 06/03/05
  5. 5.      SB 944, Testimony, Bassett-Pohl, 3 pp., 06/03/05
  6. 6.      SB 944, Testimony, Koach, 1 pg., 06/03/05
  7. 7.      SJR 14, Staff Measure Summary, Meyer, 1 pg., 04/05/05
  8. 8.      SJR 14, Fiscal Analysis, Sexton, 1 pg., 04/01/05
  9. 9.      SJR 14, Revenue Impact Statement, Meyer, 1 pg., 04/05/05
  10. 10.  SJR 14, Testimony, Sen. Devlin, 1 pg., 06/03/05
  11. 11.  SJR 14, Handout: Newspaper Articles, Rep. Barnhart, 6 pp., 06/03/05
  12. 12.  SJR 14, Testimony from Rep. Dave Hunt, Rep. Barnhart, 2 pp., 06/03/05
  13. 13.  SJR 14, Testimony, Rep. Barnhart, 2 pp., 06/03/05
  14. 14.  SJR 14, Handout: Letters from Gladstone Citizens, Stewart, 8 pp., 06/03/05
  15. 15.  SJR 14, Testimony, Stewart, 2 pp., 06/03/05
  16. 16.  SJR 14, Booklet: Local Property Tax Election Study, Strobeck, 43 pp., 06/03/05
  17. 17.  SJR 14, Testimony, Suchanek, 1 pg., 06/03/05
  18. 18.  SJR 14, Testimony, Pulliams, 2 pp., 06/03/05
  19. 19.  SJR 14, Testimony, Oregon Education Assn., 1 pg., 06/03/05
  20. 20.  SJR 14, Testimony, League of Women Voters, 1 pg., 06/03/05