PUBLIC HEARING & WORK SESSION:

HB 2031, HB 2032, HB 2041, HB 2033

 

TAPES 115, 116 A

 

SENATE REVENUE COMMITTEE

MAY 9, 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:                Darren Bond, Oregon State Treasury

                                                Laura Lockwood-McCall, Oregon State Treasury

                                                Kate Cooper Richardson, Oregon State Treasury

                                                Cynthia Byrnes, Dept. of Justice

                                                Pamela Leavitt, Credit Union Association of Oregon

 

Staff Present:                          Paul Warner, Legislative Revenue Officer

                                                Mazen Malik, Economist

                                                Barbara Guardino, Committee Assistant

 

 

TAPE 115, SIDE A

005

Chair Deckert

Calls meeting to order at 9:10 a.m. The committee will hear treasury bills today.

 

PUBLIC HEARING, HB 2031  

028

Mazen Malik

Gives overview of bill (EXHIBIT 1). Clarifies provisions related to duties of state officers regarding certain modern financial instruments. The new Check-21 standards allow for electronic images of checks.

 

045

Darren Bond

The current language reflects the electronic age versus the paper age. See written testimony (EXHIBIT 2).

 

WORK SESSION, HB 2031

061

Vice Chair C. Starr

MOTION: MOVES HB 2031 TO THE SENATE FLOOR WITH A DO PASS RECOMMENDATION

 

063

Chair Deckert

ORDER: THERE BEING NO OBJECTION THE CHAIR SO ORDERS. VOTE: 4-0-1

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

EXCUSED: METSGER

 

PUBLIC HEARING, HB 2032

070

Malik

Gives overview of bill (EXHIBIT 3), which has to do with requirements for bonding and showing cash flow projections for various agencies of the treasury. There are no revenue or fiscal impacts.

 

090

Laura Lockwood-McCall

HB 2032 will provide State Treasury more flexibility. In the future, Senate bills 4 and 5 which talk about seismic bonds may also be simple allocation funds too.

098

Chair Deckert

Summarizes, the main concern is whether Treasury loses oversight or accountability.

 

101

McCall

This brings law in line with standard practices.

 

109

Sen. George

Prior concerns about constitutional violations have been satisfied. See lines 12-16.

 

120

McCall

Agrees.

 

WORK SESSION, HB 2032

125

Vice Chair C. Starr

MOTION: MOVES HB 2032 TO THE SENATE FLOOR WITH A DO PASS RECOMMENDATION.

 

127

Chair Deckert

ORDER: THERE BEING NO OBJECTION THE CHAIR SO ORDERS. VOTE: 5-0-0

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

 

 

 

PUBLIC HEARING, HB 2041

137

Malik

HB 2041 modifies definition of “issuers” authorized to issue private activity bonds (EXHIBIT 4). Expands the definition of the user of tax-exempt bonds.

 

168

Kate Richardson

Presents written testimony in favor of HB 2041 (EXHIBIT 5) State Treasury wanted to ensure that any eligible entity could apply for a private activity bond. Notes, a reference to OECC is superfluous, and is being removed.

 

213

Cynthia Byrnes

Offers to answer questions of the committee.

 

217

Chair Deckert

Asks for a hypothetical situation.

 

222

Byrnes

Gives example.

 

241

Chair Deckert

Asks if this opens up an arena that is not intended with other similar organizations.

 

250

Richardson

The statute is being opened more broadly to capture entities that are qualified to apply, but the private activity bond committee’s job is to determine how to allocate it for the greatest public benefit.

 

279

Malik

Requests an example of agencies that operate under these statutes.

 

284

Richardson

Some agencies receive private bonding cap directly, including housing, OECDD, Energy and the Oregon Facilities Authority.

 

WORK SESSION, HB 2041

295

Vice Chair C. Starr

MOTION: MOVES HB 2041 TO THE SENATE FLOOR WITH A DO PASS RECOMMENDATION.

299

Chair Deckert

ORDER: THERE BEING NO OBJECTION THE CHAIR SO ORDERS. VOTE: 5-0-0

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

 

PUBLIC HEARING, HB 2033

316

Malik

Gives overview of HB 2033-A (EXHIBIT 6). Clarifies provisions regarding public funds, pool managers, depository banks and custodian banks. Discussion has been how to fine-tune it so credit unions could take advantage of it. Under current law deposits of public funds into financial institutions need to collateral. Has not determined whether there will be a revenue impact. There is no fiscal impact.

 

356

Sen. George

Comments, there’s no risk (in credit unions), those are secure dollars.

 

360

Malik

Responds, up to $100,000 are already covered by insurance. Above that, they are not allowed to deal with it.

 

395

Bond

Most of HB 2033 is organizational in nature. The primary issue of substance is collateralization agreements for institutions that hold less than $100,000. This provision is a result of legislation that was passed last session. Small banks have had to address this issue as well.

 

421

Bond

See written testimony (EXHIBIT 7). Discusses changes in Section 4, which clear up an inconsistency in ORS concerning time deposits. When those changes were made there was an oversight in language. This clarifies that any time deposits purchased by a local government are subject to protections.

 

454

Bond

Discusses other changes in Section 4.

 

 

 

TAPE 116, SIDE A

025

Pamela Leavitt

Refers to written testimony (EXHIBIT 8). Credit Union Association sees this as a fix to SB 331 passed last session which allowed credit unions to accept public funds. There is a temporary fix in place, but this legislation will make it permanent.

 

035

Chair Deckert

Asks, what is the temporary fix?

 

040

Bond

Responds, is not sure, but a specific agreement for credit unions was drafted. There are currently three or four credit unions holding public funds deposits. Others are considering it.

 

WORK SESSION, HB 2033

060

Sen. Metsger

MOTION: MOVES HB 2033-A TO THE SENATE FLOOR WITH A DO PASS RECOMMENDATION.

Also declares a potential conflict of interest.

 

063

Chair Deckert

ORDER: THERE BEING NO OBJECTION THE CHAIR SO ORDERS. VOTE: 5-0-0

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

 

075

Chair Deckert

Closes work session. Adjourns meeting at 9:45 a.m.

 

 

 

Tape Log Submitted by,

 

 

 

Barbara Guardino, Committee Assistant                                                      

 

Exhibit Summary:

1.      HB 2031, Staff Measure Summary, Malik, 5/9/05, 1 pp.

2.      HB 2031, testimony of Darren Bond, 5/9/05, 1 pp.

3.      HB 2032, Staff Measure Summary, Malik, 5/9/05, 1 pp.

4.      HB 2041, Staff Measure Summary, Malik, 5/9/05, 1 pp.

5.      HB 2041, testimony of Kate Cooper Richardson, 5/9/05, 1 pp.

6.      HB 2033, Staff measure Summary, Malik, 3/26/05, 1 pp.

7.      HB 2033, testimony of Darren Bond, 5/9/05, 2 pp.

8.      HB 2033, testimony of Pamela Leavitt, Credit Union Association, 1 pp.