PUBLIC HEARING: SB 171

PUBLIC HEARING & WORK SESSION:

HB 2453, HB 2454

 

TAPE 98-A

 

SENATE REVENUE COMMITTEE

APRIL 18, 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:††††††††††††††† Debra Buchanan, Oregon Dept. of Revenue

 

Staff Present:††††††††††††††††††††††††† Paul Warner, Legislative Revenue Officer

††††††††††††††††††††††††††††††††††††††††††††††† Lizbeth Martin-Mahar, Economist

††††††††††††††††††††††††††††††††††††††††††††††† Barbara Guardino, Committee Assistant

 

TAPE 98, SIDE A

005

Chair Deckert

Calls meeting to order at 9:11 a.m.

 

PUBLIC HEARING, SB 171

015

Chair Deckert

Asks if anyone wants to testify on SB 171-A, which was heard April 14. Asks Paul Warner to comment on the idea of requiring regulated electric utilities to pay no taxes. Would that be legal?

 

031

Paul Warner

Responds, the taxes would be state only so utilities would still file federal income taxes. The key issue on different tax rates, as counsel has told us, is that there has to be some distinct class that can be measured and objectively laid out so thereís not a discriminatory issue. If this is met, there should not be a legal problem. PUCís rate decisions could be adjusted to reflect it.

 

 

 

035

Chair Deckert

Comments, this might be one clean way of resolving this issue. The true-up is perhaps another. Closes public hearing on SB 171-A.

 

PUBLIC HEARING, HB 2453

060

Lizbeth Martin-Mahar

Begins review of HB 2453 (EXHIBIT 1). Extends the current late time period for taxpayers to claim a refund or be given a notice of deficiency for income. Revenue impact is minimal (EXHIBIT 2).

 

081

Debra Buchanan

Explains, HB 2453 was requested by the Dept. of Revenue due to a mismatch between statutes of limitations for individuals who may own an interest in a pass-through entity and the entity itself. See written testimony (EXHIBIT 4). Look at this as matching of statutes of limitations and allowing for adjustments to take place.

 

WORK SESSION, HB 2453

119

Sen. Metsger

MOTION: MOVES HB 2453 TO THE SENATE FLOOR WITH A DO PASS RECOMMENDATION

VOTE: 5-0-0

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

PUBLIC HEARING, HB 2454

127

Martin-Mahar

Gives overview of HB 2454. Codifies into law a Dept. of Revenue rule. It specifies the allocation procedure in statute for pass through entitiesí income, gain, loss, deduction or credit for part-year residents and non-residents. See Staff Measure Summary (EXHIBIT 5). Applies to tax years beginning January 1, 2002. There is no revenue impact.

 

145

Buchanan

See written testimony (EXHIBIT 7). Oregon Tax Court rendered a decision regarding allocation of income for a person who moved into Oregon during the tax year. Gives example of a pass-through entity.

 

185

Chair Deckert

Guesses there would be a sizeable revenue impact.

 

190

Buchanan

Responds yes, but there will be winners and losers. Explains.

 

207

Martin-Mahar

Clarifies, Buchanan has described the revenue impact on the court ruling (see exhibit 7), not from this bill. Without this bill, DORís current law is an administrative rule. Thatís why there is no revenue impact.

 

WORK SESSION, SB 2454

225

Vice Chair C. Starr

MOTION: MOVES HB 2454 TO THE SENATE FLOOR WITH A DO PASS RECOMMENDATION.

 

228

Chair Deckert

ORDER: THERE BEING NO OBJECTION THE CHAIR SO ORDERS.

VOTE: 5-0-0

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

 

239

Chair Deckert

Closes work session for HB 2454. Adjourns meeting at 9:23 a.m.

 

 

Tape Log Submitted by,

 

 

 

Barbara Guardino, Committee Assistant††††††††††††††††††††††††††††††††††††††††††††††††††††††

 

Exhibit Summary:

1.      HB 2453, Staff Measure Summary, Martin-Mahar, 4/18/05, 1 pp.

2.      HB 2453, Revenue Impact of Proposed Legislation, Martin-Mahar, 2/17/05, 1 pp.

3.      HB 2453, Staff Measure Summary for House Revenue Committee on 2/17/05, Martin-Mahar, 1 pp.

4.      HB 2453, testimony of Debra Buchanan, 4/18/05, 1 pp.

5.      HB 2454, Staff Measure Summary, Martin-Mahar, 4/18/05, 1 pp.

6.      HB 2454, Staff Measure Summary for House Revenue Committee on 2/17/05, Martin-Mahar, 1 pp.

7.      HB 2454, testimony of Debra Buchanan, 4/18/05, 6 pp.