WORK SESSION: SB 315, SB 593-A

PUBLIC HEARING:

HB 2191-B, HB 2933-B, SB 19, HB 2945-A

 

TAPES 142 A-B, 143 A

 

SENATE REVENUE COMMITTEE

JUNE 16, 2005   9:00 AM   STATE CAPITOL BUILDING

 

Members Present:                  Senator Ryan Deckert, Chair

                                                Senator Gary George

                                                Senator Rick Metsger

                                                Senator Floyd Prozanski

 

Members Excused:                 Senator Charles Starr, Vice Chair

 

Witnesses Present:                Col. Mike Caldwell, Oregon Military Department

                                                Sen. Avel Gordly, District 23

                                                Kevin O’Reilly, Oregon Paralyzed Veterans of America

                                                Rep. Donna Nelson, District 24

                                                Gil Riddell, Associated Oregon Counties

                                                Gerald Kubiak, Washington County

                                                Rep. Dave Hunt, District 40

                                                Rep. Brian Boquist, District 23

                                                Veronica Rinard, Oregon Film and Video Office                                                                                Howard Lavine, Oregon Film and Video Office

 

Staff Present:                          Paul Warner, Legislative Revenue Officer

                                                Lizbeth Martin-Mahar, Economist

                                                Mary Ayala, Economist

                                                Barbara Guardino, Committee Assistant

 

 

TAPE 142, SIDE A

005

Acting Chair Metsger

Calls meeting to order at 9:04 a.m.

 

 

PUBLIC HEARING, HB 2933-B

019

Lizbeth Martin-Mahar

Gives overview of HB 2933-B (EXHIBIT 1), which eliminates the outstanding personal income tax liability for members of the Armed Forces who lose their lives while on active duty. Also, allows Oregon active duty personnel under Title 10 six months after their return to pay income tax and penalties.

 

042

Martin-Mahar

Explains HB 2933-B3 amendment (EXHIBIT 2), which contains the same elements as SB 19. Explains differences between the House and Senate bills. Also, HB 2933-B is total compensation, which connects with federal death benefits. That higher death benefit figure is imbedded in the revenue impact (EXHIBIT 3). HB 2542, the federal reconnect bill, also connects to the death benefits.

 

085

Col. Mike Caldwell

Testifies in support of HB 2933-B and SB 19. Prefers to call this benefit a windfall rather than a revenue impact. Working the two bills into one makes sense. Comments on the situation that occurred in Umatilla where a battalion was mobilized for war under Title 10 but

 

didn’t go. They were taxed while others weren’t. This bill will correct that error.

 

131

Sen. Prozanski

Asks for clarification on what income bracket would receive this credit in regard to a joint return. Also, if HB 2933-B3 is adopted, does SB 19 still have to be moved?

 

142

Martin-Mahar

SB 19 would not have to be moved; that’s the committee’s choice.

 

151

Sen. Prozanski

Does this only apply to the income of the deceased in the case of a joint return?

 

155

Caldwell

That is a reasonable approach.

 

158

Chair Deckert

Explains, he intends to meet with Governor’s Office to combine a number of bills, and to figure out which vehicle (probably HB 2933-B) will become the veterans National Guard package. A work group will meet next week.

 

170

Caldwell

Cautions against including anything in the combined bill that would keep it from passing.

 

185

Sen. Prozanski

Suggests passing HB 2933-B as a single bill and finding another vehicle for the other bills.

 

190

Chair Deckert

Closes public hearing on HB 2933-B. Opens work session on SB 315.

 

WORK SESSION, SB 315

198

Sen. Avel Gordly

Testifies in favor of SB 315-1 amendment (EXHIBIT 5) which replaces the original Internet taxing bill. Discusses page 2, section 3. The measure has no fiscal impact. The amendment lays out the benefits of participation in the Streamlined Sales Tax Agreement.

 

249

Paul Warner

Directs members’ attention to an article (EXHIBIT 6) which reports that Borders book sales over the Internet are taxable. This has significant implications for all states.

 

278

Chair Deckert

States, this is timely for Oregon to be looking at this tax trend.

 

282

Sen. Metsger

MOTION: MOVES ADOPTION OF SB 315-1 AMENDMENT.

 

284

Chair Deckert

Asks for a roll-call vote.

 

 

ORDER: THE MOTION HAVING RECEIVED THE REQUESTED MAJORITY IS DECLARED PASSED. THE VOTE: 4-0-1. VOTING AYE: GEORGE, METSGER, PROZANSKI, DECKERT. EXCUSED: C. STARR.

 

295

Sen. Metsger

MOTION: MOVES SB 315 AS AMENDED TO THE SENATE FLOOR WITH A DO PASS RECOMMENDATION.

298

Chair Deckert

Asks for a roll-call vote.

ORDER: THE MOTION HAVING RECEIVED THE REQUESTED MAJORITY IS DECLARED PASSED. THE VOTE: 4-0-1. VOTING AYE: GEORGE, METSGER, PROZANSKI, DECKERT. EXCUSED: C. STARR.

 

320

Chair Deckert

Closes work session on SB 315. Reopens public hearing on HB 2933-B. Opens public hearings on SB 19 and HB 2945-A.

 

PUBLIC HEARINGS, HB 2933-B, SB 19, HB 2945-A

324

Kevin O’Reilly

Testifies in support of HB 2945-A, which benefits Oregon’s disabled, paralyzed veterans. Medical premiums are rising, and this bill will help these veterans to meet their additional expenses. It gives them about $200 a year in tax relief.

 

363

Chair Deckert

Invites O’Reilly to participate in the work group.

 

382

Rep. Donna Nelson

Testifies in favor of combining the veterans’ bills. Veterans have given us the right to assemble. Expresses sadness that the Legislature has neglected its military in the past. “We can never do too much” for families of veterans who lost their lives. This is the right thing to do.

 

443

Chair Deckert

Thanks Rep. Nelson for her leadership and caring.

 

460

Sen. George

Thanks Rep. Nelson.

 

484

Chair Deckert

Closes three public hearings. Opens work session on SB 593-A.

 

WORK SESSION, SB 593-A

TAPE 143, SIDE A

029

Mary Ayala

Gives overview of SB 593-A3 amendment (EXHIBIT 12). The bill establishes a property tax special assessment program for land subject to a proposed conservation easement.

 

047

Ayala

Summarizes SB 593-A4 amendment (EXHIBITS 13, 14), which adds a $250 application fee.

 

066

Chair Deckert

Closes work session; committee stands at ease at 9:35 a.m. to await a quorum. Reopens work session.

 

 

 

071

Gil Riddell

Testifies in support of SB 593-A4 amendment (EXHIBIT 15). Explains why the one-time application fee is needed. Counties are inadequately funded to absorb any more administrative functions. Requests adding the fee, not with the intention of killing the bill, but to cover costs.

 

107

Gerald Kubiak

Testifies in support of the bill and for the $250 fee.

 

128

Sen. Prozanski

Is not comfortable with the $250 fee because there has been no prior discussion. Would favor moving this bill and allowing SB 593-A4 amendment to be discussed in House Revenue.

 

 144

Chair Deckert

Requests that Riddell move this amendment to House Revenue.

 

151

Sen. Metsger

Asks why this fee has to be written in statute.

 

165

Riddell

Responds, counties are agents of the state and cannot impose fees for assessment and taxation.

 

173

Sen. Prozanski

Wants to be sure that the fee is reasonable for every county.

 

186

Riddell

Agrees.

 

192

Sen. Metsger

MOTION: MOVES SB 593-A TO THE SENATE FLOOR WITH A DO PASS RECOMMENDATION.

 

194

Chair Deckert

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

 

207

Chair Deckert

Closes work session on SB 593. Resumes public hearings on previously discussed bills.

 

 

 

PUBLIC HEARING, HB 2933-B, HB 2945-A

210

Rep. Dave Hunt

Testifies in favor of HB 2945-A. See written testimony, paraphrased (EXHIBIT 16). Discusses the three types of disabled veterans in Oregon who are served by this bill.

 

266

Rep. Brian Boquist

Today Oregon has the largest National Guard mobilization since WWII. Forty five Oregonians have died, and eight times that number have received catastrophic injuries. About 90% of catastrophic injuries in Iraq are lost limbs. Almost 400 young veterans from Oregon fit into this category. On average they will collect less than $1000/month. The federal government is not taking care of them, so the state has to.

 

327

Chair Deckert

Asks Rep. Boquist to take the lead in combining these veteran bills.

 

351

Sen. Prozanski

Asks for more information on overall casualties.

 

360

Rep. Boquist

Generally, it is an 8/1 catastrophic rate. There is a 1/20 rate of combat injuries and 1/20 rate of accidents or illness.

 

390

Chair Deckert

Closes public hearings.

 

PUBLIC HEARING, HB 2191-B

419

Martin-Mahar

Gives overview of HB 2191-B (EXHIBIT 17) which creates a new rebate for people who invest $1 million or more in actual expenses on film, television shows, or commercial productions in Oregon.

TAPE 142, SIDE B

024

Martin-Mahar

Discusses 6.2% average withholding rate. It does not represent the rate if they used tax tables under current law. Explains how she arrived at the 6.2% figure. Discusses page 3, lines 20-25.

 

 

 

085

Martin-Mahar

This bill is a loss to general fund revenue (EXHIBIT 18), it is not revenue neutral. Discussion with Chair Deckert.

 

 

 

132

Sen. Metsger

Likes this bill. A lot of other tax revenues will be generated to offset the initial revenue loss. This industry will have a significant impact on Oregon’s economy.

 

160

Chair Deckert

Wonders whether this industry would exist in Oregon without this bill.

 

161

Veronica Rinard

Responds, so far this year, no filming production has come to Oregon without a rebate. Discusses the ongoing economic impact of film production. Paraphrases written testimony (EXHIBIT 20).

 

230

Rinard

Directs members’ attention to a matrix on film and video incentives offered by competitive states (pages 9-11). Discusses their success. Explains the Greenlight Oregon labor rebate.

 

 

 

313

Rinard

Points out letters of support in the packet.

 

318

Howard Levine

Reads testimony in support of HB 2191-B (EXHIBIT 21), on behalf of Gov. Kulongoski. Oregon has an indigenous film industry, but will lose its crews if there are no films to work on. The Governor believes increasing film production is critical for the economy.

 

380

Sen. George

Comments on one state’s incentive to write that state into the film’s plot.

 

388

Rinard

Responds, this incentive is something for Oregon to think about.

 

437

Chair Deckert

Closes public hearing on HB 2191-B. Senate Revenue will meet Monday at 1:00 p.m. Adjourns meeting at 10:28 a.m.

 

 

 

Tape Log Submitted by,

 

 

 

Barbara Guardino, Committee Assistant                                                      

 

Exhibit Summary:

1.      HB 2933-B, Staff Measure Summary, Martin-Mahar, 6/16/05, 2 pp.

2.      HB 2933-B, Amendment HB 2933-B3, Legislative Counsel, 6/14/05, 2 pp.

3.      HB 2933-B, Revenue Impact of Proposed Legislation, Martin-Mahar, 6/16/05, 1 pp.

4.      HB 2933-B, Revenue Impact of Proposed Legislation, Martin-Mahar, 5/24/05, 1 pp.

5.      SB 315, Amendment SB 315-1, Gordly, 6/15/05, 2 pp.

6.      SB 315, NewsFlash: Borders must pay Calif. Tax on web sales, Warner, 6/14/05, 3 pp.

7.      HB 2945-A, Revenue Impact of Proposed Legislation, Ayala, 6/16/05, 1 pp.

8.      HB 2945-A, Staff Measure Summary, Ayala, 6/16/05, 1 pp.

9.      HB 2945-A, Revenue Impact of Proposed Legislation, Ayala, 5/24/05, 1 pp.

10.  HB 2945-A, Staff Measure Summary, Ayala, 5/24/05, 1 pp.

11.  SB 19, Revenue Impact of Proposed Legislation, Martin-Mahar, 6/16/05, 1 pp.

12.  SB 593-A, Staff Measure Summary for SB 593-A3, Ayala, 6/16/05, 1 pp.

13.  SB 593-A, Revenue Impact of Proposed Legislation for SB 593-A4, Ayala, 5/18/05, 1 pp.

14.  SB 593-A, Staff Measure Summary for SB 593-A4, Ayala, 6/16/05, 1 pp.

15.  SB 593-A, Amendment SB 593-A4, Riddell, 6/15/05, 1 pp.

16.  HB 2945-A, testimony of Dave Hunt, 6/16/05, 1 pp.

17.  HB 2191-B, Staff Measure Summary, Martin-Mahar, 6/16/05, 1 pp.

18.  HB 2191-B, Revenue Impact of Proposed Legislation, Martin-Mahar, 5/13/05, 2 pp.

19.  HB 2191-B, Staff Measure Summary, Martin-Mahar, 5/12/05, 1 pp.

20.  HB 2191-B, testimony of Veronica Rinard, 11 pp.

21.  HB 2191-B, testimony of Howard Lavine, 3 pp.