WORK SESSION: SB 845

 

TAPE 95 A

 

SENATE REVENUE COMMITTEE

APRIL 13, 2005   9:00 AM   STATE CAPITOL BUILDING

 

Members Present:                  Senator Ryan Deckert, Chair

                                                Senator Gary George

                                                Senator Rick Metsger

                                                Senator Floyd Prozanski

                                                Senator Charles Starr, Vice Chair

                       

Witnesses Present:                Kate Richardson, State Treasury

                                    Laurie Wimmer Whelan, Oregon Education Association

                                    Julie Brandis, Associated Oregon Industries

 

Staff Present:                          Paul Warner, Legislative Revenue Officer

                                                Steve Meyer, Economist

                                                Barbara Guardino, Committee Assistant

 

 

TAPE 95, SIDE A

005

Chair Deckert

Calls meeting to order at 9:10 a.m.

 

WORK SESSION, SB 845

010

Steve Meyer

Begins review of SB 845 and SB845-1 amendments, concerning unused gift card balances as unclaimed property.

 

025

Meyer

Begins explanation of SB 845-2 amendments (EXHIBIT 1). Explains, SB 845-1 amendments are dropped from SB 845-2 other than the definition of a gift card.

 

035

Chair Deckert

Welcomes Marine Corps Capt. Matthew Hicks, son of Committee Assistant Barbara Guardino, back home after a tour of duty in Iraq.

 

055

Kate Richardson

Testifies in support of SB 845-2 amendments on behalf of Oregon State Treasurer. Understands that the SB 845-1 amendments raised some unintended issues, which is why the SB 845-2 amendments were written. A section in SB 845-1 amendments was not consistent with current law in treating gift cards as other unclaimed property. Abandoned property will go to the rightful owner at the owner’s address. If an address is not known, it will go to the state of corporate domicile.

 

097

Richardson

Continues, another part of the SB 845-1 removed is the “75% rule.” This might pose a question of legality.

 

107

Sen. Prozanski

Clarifies, are we trying to incorporate part of SB 845-1 or replacing it with SB 845-2?

 

111

Chair Deckert

No, SB 845-1 has been completely removed.

 

116

Richardson

Continues, SB 845-2 amendments are an expansion of the definition of a gift card, and narrow what a gift card is: electronic with magnetic stripes or processor chips and not paper. They are not gift certificates, and therefore will be treated as unclaimed property.

126

Chair Deckert

It appears SB 845-2 amendments are very similar to the original bill.

 

136

Sen. George

Uses example of a gift card he owns from Harley Davidson and what is written on it. It is redeemable only for merchandise, not cash or credit. Asks how the can state look at such agreements and determine the value of a card if it is unused.

 

141

Richardson

Responds, the effective date of the bill would not impair any existing contracts.

 

 

 

150

Sen. George

Follow-up questions.

 

161

Richardson

This bill ensures the owner would have access to the card even if it became lost.

 

168

Sen. George

Has there been any calculation on how much the state achieves by being able to tax the income when the card is moved into an income category?

 

175

Chair Deckert

Committee can look at that.

 

178

Sen. Prozanski

Explains how this would work. Companies would have disclaimers similar to “except where prohibited by law.”

 

187

Richardson

Gift cards are exploding in popularity and that is why this bill has generated so much interest. The public policy choice before the committee concerns whether unclaimed portions of cards would benefit private industry or public trust.

 

206

Laurie Wimmer Whelan

Asks the committee to adopt the SB 845-2 amendments and the bill. Comments on another way the two amendments differ, concerning exempting nonprofit gift cards. This has been removed. Points out, it is increasingly true that an area code, telephone number or zip code are commonly collected at point of purchase. Reverting back to original language of the bill won’t result in a great loss of unclaimed property.

 

243

Richardson

Clarifies, the address is the state of the purchaser/owner.

 

254

Julie Brandis

Testifies, the SB 845-2 amendments do not address AOI’s concerns. Clarifies questionable comments she made at the last hearing. The disclaimer will include the state, which is good. It is not a requirement to ask for zip, phone and address, so finding the last known owner will be difficult. How will the state track the loading and unloading of these cards? Also the purchase of gift cards over the Internet poses a problem.

 

289

Brandis

AOI members ask that committee be clear on the record that they don’t intend to regulate reward cards. They are not gift cards but they resemble them based on this bill.

 

303

Chair Deckert

It should be clear that this does not reflect reward cards.

 

316

Sen. Prozanski

MOTION: MOVES ADOPTION OF SB 845-2.

 

318

Sen. Prozanski

Comments he has vacillated on this bill. It is clear now that Treasury has looked into the transaction issue and it’s off the table. He also couldn’t accept the distinction in handling of for-profit and nonprofit cards. Now with the determination where the unclaimed property will go, he believes this a reasonable bill.

 

349

Vice Chair C. Starr

Will not oppose SB 845-2 amendments, but continues to oppose the bill. Businesses have less reportable profit and may have to raise prices on merchandise because of extra steps they have to take with unused portions of cards. This is not a great idea for raising revenue for schools.

 

379

Chair Deckert

ORDER: THERE BEING NO OBJECTIONS THE CHAIR SO ORDERS.

VOTE: 5-0-0

MEMBERS VOTING AYE: GEORGE, METSGER, PROZANSKI, C. STARR, DECKERT

 

390

Sen. Prozanski

MOTION: MOVES SB 845 AS AMENDED TO THE SENATE FLOOR WITH A DO PASS RECOMMENDATION.

ORDER:3-2-0

MEMBERS VOTING AYE: METSGER, PROZANSKI, DECKERT

MEMBERS VOTING NO: GEORGE, C. STARR

 

 

 

410

Sen. George

Serves notice of a possible minority report. Contends this bill can be turned into something productive.

 

426

Chair Deckert

Closes work session on SB 845. Adjourns meeting at 9:40 a.m.

 

 

 

Tape Log Submitted by,

 

 

 

Barbara Guardino, Committee Assistant                                                      

 

Exhibit Summary:

1.      SB 845, proposed -2 amendments, 4/12/05, Meyer, 1 pp.