PUBLIC HEARING: HB 3350-B

PUBLIC HEARING & WORK SESSION:

HB 2868-A

WORK SESSION: SB 171-B, HB 3183,

 HB 2511-A

 

TAPES 133, 134 A

 

SENATE REVENUE COMMITTEE

JUNE 3, 2005   10:00 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:                Rep. Tom Butler, District 60

                                                Rick Willis, Public Utility Comm.

                                                Mike McArthur, Association of Oregon Counties

                                                Art Fish, OECDD

                                                Brad Higbee, Renewable Northwest Project

                                                Dennis Day, Oregon State Assn. of County Assessors

                                                Norm Miller, Dept. of Revenue

                                                Kristina McNitt, Oregon Small Woodlands Assn.

 

Staff Present:                          Paul Warner, Legislative Revenue Officer

                                                Mary Ayala, Economist

                                                Lizbeth Martin-Mahar, Economist

                                                Steve Meyer, Economist

                                                Barbara Guardino, Committee Assistant

 

 

TAPE 133, SIDE A

005

Chair Deckert

Calls meeting to order at 10:07 a.m.

 

WORK SESSION, HB 2511-A

010

Rep. Butler

Reviews HB 2511-A, which adds four service clubs to the list of fraternal organizations whose properties are exempt from property tax. Introduces HB 2511-A4 amendment (EXHIBIT 1).

 

025

Vice Chair C. Starr

MOTION: MOVES ADOPTION OF HB 2511-A4 AMENDMENT.

 

027

Chair Deckert

ORDER: THERE BEING NO OBJECTION THE CHAIR SO ORDERS. VOTE: 3-0-2. VOTING AYE: GEORGE, C. STARR, DECKERT. EXCUSED: METSGER, PROZANSKI

 

031

Vice Chair C. Starr

MOTION: MOVES HB 2511-A AS AMENDED TO THE SENATE FLOOR WITH A DO PASS RECOMMENDATION.

 

037

Chair Deckert

ORDER: THERE BEING NO OBJECTION THE CHAIR SO ORDERS. VOTE: 5-0-0. VOTING AYE: GEORGE, METSTER, PROZANSKI, C. STARR, DECKERT

 

WORK SESSION, SB 171-B           

045

Sen. Metsger

Explains, this bill has gone back to its original form. It was a vehicle to talk about the issue of utility taxes. The direction changed to the rate-setting process, and that bill came out of the Senate Business Committee as SB 408. Now, it conforms to the federal definition for cogeneration facilities and adds in the benefit standard adopted by the Public Utility Commission. Suitors must now show a net benefit with no harm to the public.

 

059

Paul Warner

Notes, SB 171-B11 amendment (EXHIBIT 3) contains the language that Sen. Metsger has referred to.

 

068

Rick Willis

Has not seen the amendment, but based on Sen. Metsger’s comments, PUC supports the bill.

 

081

Sen. Metsger

MOTION: MOVES ADOPTION OF THE SB 171-B11 AMENDMENT.

 

084

Chair Deckert

ORDER: THERE BEING NO OBJECTION THE CHAIR SO ORDERS. VOTE: 5-0-0. VOTING AYE: GEORGE, METSGER, PROZANSKI, C. STARR, DECKERT

 

087

Sen. Metsger

MOTION: MOVES SB 171-B AS AMENDED TO THE SENATE FLOOR WITH A DO PASS RECOMMENDATION.

 

090

Chair Deckert

ORDER: THERE BEING NO OBJECTION THE CHAIR SO ORDERS. VOTE: 5-0-0. VOTING AYE: GEORGE, METSGER, PROZANSKI, C. STARR, DECKERT

 

WORK SESSION, HB 3183

095

Steve Meyer

Reviews, HB 3183 deals with distribution of income from the Common School Fund to school districts. It makes the current process more direct.

 

104

Rep. Butler

“Good bill, do pass.”

 

110

Vice Chair C. Starr

MOTION: MOVES HB 3183 TO THE SENATE FLOOR WITH A DO PASS RECOMMENDATION.

 

112

Chair Deckert

ORDER: THERE BEING NO OBJECTION THE CHAIR SO ORDERS. VOTE: 5-0-0. VOTING AYE: GEORGE, METSGER, PROZANSKI, C. STARR, DECKERT

 

115

Chair Deckert

Announces, SB 427 will not be heard until next week.

 

PUBLIC HEARING, HB 3350-B

120

Rep. Butler

Reads testimony for this bill (EXHIBIT 4), which pertains to the Small City Investment Program (SCIP). It is a state income tax incentive for new-to-Oregon businesses to locate and provide jobs in financially distressed communities.

 

180

Rep. Butler

Explains the 2005 amendment (Section 5) in HB 3350-B.

223

Rep. Butler

Directs members’ attention to LRO list: Cities that are impacted by the small city business development income exemption (EXHIBIT 5).

 

236

Chair Deckert

Thanks Rep. Butler for his hard work to put the SCIP together.

 

240

Rep. Butler

Responds, he worked with the OECDD to make changes. There are four pending applications in the Port of Morrow industrial park.

 

255

Mike McArthur

Testifies in support of HB 3350-B on behalf of AOC and as a former Sherman County judge. Tells why being able to offer this program is important for attracting new businesses to rural Oregon. Discusses Sherman County’s development of wind farms.

 

286

Art Fish

Testifies in favor of HB 3350-B. Is available to answer questions about the program. Tells where it is beginning to be used. The five-year period will give counties a chance to get it going and make it a powerful tool in addition to enterprise zones.

 

325

Sen. George

Comments, people will go to some “remote” places based on positive incentives from the community. Asks, are these types of incentives important in attracting people?

 

336

Fish

Responds yes, incentives have played a role in attracting people.

 

367

Sen. Prozanski

Is there any requirement for these companies to stay in Oregon?

 

375

Fish

To use this exemption they have to assure continued operation for at least 10 years. They don’t get a benefit unless they pay income taxes. These taxes would not otherwise be collected in Oregon.

 

399

Sen. Prozanski

Asks what types of offsets are in play.

 

426

Rep. Butler

Explains two key issues:

1)      current law requires companies to make an investment in equipment

2)      companies must hire five or more full-time employees

 

TAPE 134, SIDE A

025

Brad Higbee

Testifies in support of HB 3350-B. Renewable Northwest Project has worked closely with county officials in creating the Rural Renewable Energy Development (RRED) Zone. Concludes, it is an important tool because it is flexible, unlike an enterprise zone. It will increase the supply of clean energy and give some rural communities a big shot in the arm.

 

057

Acting Chair Metsger

Closes public hearing on HB 3350-B. Opens public hearing on HB 2868-A.

 

PUBLIC HEARING HB 2868-A

060

Mary Ayala

Gives overview of HB 2868-A (EXHIBIT 9). Simplifies the time requirements for filers and clarifies the administrative process for handling a filer’s application for continued qualification of a parcel as a small tract forestland (STF). Creates a $200 late filing fee. Clarifies how additional taxes will be computed if a parcel is disqualified for a STF special assessment.

 

116

Dennis Day

Testifies in favor of HB 2868-A (EXHIBIT 10). County assessors rather than landowners bear the responsibility of identifying sales or transfers of land in the Small Tract Forestland Option. Under the STF program, if new owners opt out, they can’t come back in for five years. This bill gives them one last opportunity.

 

165

Kristina McNitt

Explains, the STF is the option where non-industrial woodland owners pay their property taxes on a 20/80 program rather than paying 100% ad valorem tax every year. This encourages landowners to keep their land in forestland.

 

197

Norm Miller

Notes, this bill is a cleanup of major legislation implemented last session. It strengthens the programs.

 

207

Sen. Prozanski

Asks for a walk-through of the process. Follow-up questions.

 

222

Miller

Responds, the STF option is another way to pay their property taxes. They pay 20% annually and 80% when they harvest timber.

 

266

Acting Chair Metsger

Committee will stand at ease at 10:55 a.m. to await return of Paul Warner. Reopens committee. Opens work session for HB 2868-A.

 

WORK SESSION, HB 2868-A

280

Acting Chair Metsger

MOTION: SEN. DECKERT MOVES HB 2868-A TO THE SENATE FLOOR WITH A DO PASS RECOMMENDATION.

 

284

Acting Chair Metsger

ORDER: THERE BEING NO OBJECTION THE CHAIR SO ORDERS. VOTE: 4-0-1. VOTING AYE: GEORGE, METSGER, PROZANSKI, DECKERT. EXCUSED: C. STARR

 

290

Chair Deckert

Closes work session on HB 2868. Committee will hold HB 3350-B until next week. Adjourns meeting at 11:00 a.m.

 

 

Tape Log Submitted by,

 

 

 

Barbara Guardino, Committee Assistant                                                      

 

Exhibit Summary:

1.      HB 2511-A, Amendment HB 2511-A4, Legislative Counsel, 6/2/05, 1 pp.

2.      HB 2511-A, Staff Measure Summary, Ayala, 6/3/05, 1 pp.

3.      SB 171-B, Amendment SB 171-B11, Legislative Counsel, 6/2/05, 1 pp.

4.      HB 3350-B, Small City Investment Program – HB 3350B, Butler, 1 pp.

5.      HB 3350-B, Cities that are impacted chart, Martin-Mahar, 6/2/05, 4 pp.

6.      HB 3350-B, Staff Measure Summary, Martin-Mahar, 6/3/05, 2 pp.

7.      HB 3350-B, Revenue Impact of Proposed Legislation, Martin-Mahar, 5/9/05, 1 pp.

8.      HB 3350-B, Staff Measure Summary, Martin-Mahar, 5/6/05, 2 pp.

9.      HB 2868-A, Staff Measure Summary, Ayala, 6/3/05, 1 pp.

10.  HB 2868-A, testimony of Dennis Day, 6/3/05, 1 pp.

11.  HB 2868-A, Revenue Impact of Proposed Legislation, Ayala, 6/3/05, 1 pp.

12.  HB 2868-A, Staff Measure Summary, Ayala, 5/4/05, 2 pp.