February 21, 2022 - Week 3
Josie Koehne, Revenue Coordinator
Important Revenue Bills
HB 4055A includes the -4 extending the privilege tax (the Forest Products Harvest tax) on all wood products harvested in Oregon passed unanimously, Feb 15. The amendment to section 5 in the new Private Forest Accord (PFA) provision, adds that that section is revoked once the $250 million cap fund is reached or the incidental take permit has been issued, whichever occurs first.
The Private Forest Accord small woodland owner tax credit passed out of Senate Finance and Revenue and has moved into House Revenue, but no work session has been scheduled yet.
HB 4043 would provide a tax credit intended to maintain low-income housing by giving the credit to multi-unit owners who sell to new owners that pledge to maintain low-income rents for 30 years. It had a public hearing on Feb 10, but a work session has not yet been scheduled.
HB 4054 is the historic property tax credit that had a work group put forward to improve the use of the credit to limit the program for property tax special assessment of historic property to commercial property, and requires a preservation plan to prevent displacement and community disinvestment, and to engage and serve underrepresented histories. The -8 replaces the bill entirely by extending the existing tax break and continues the work study to refine the bill. The -8 was adopted but HB 4054A has not yet been posted.
4115 with the proposed -1 is a bill on the state’s financial investment transparency, which the League supports in this testimony. It directs the State Treasurer and the Oregon Investment Council that oversees the investment and allocation of all State of Oregon trust funds, including the Oregon Public Employees Retirement Fund, the Common School Fund, and the State Accident Insurance Fund, to publish annually a complete list of assets held in these investment funds, including assessments of climate-related financial risk. A possible amendment is expected and another work session may be scheduled on Feb 22.
Senate Finance and Revenue
SB 1501 is the main policy bill for the PFA that directs the State Board of Forestry to adopt a single rule package on or before November 30, 2022 to implement the Private Forest Accord Report. On Feb 11, it passed and was referred directly to the J W&Ms from Senate Natural Resources and Wildfire Recovery.
SB 1502 creates tax credits for small forestland owners who retain the wider riparian margins that large commercial timber owners are required to maintain when they harvest timber. It was referred to the Senate Committee on Finance and Revenue where it had a public hearing on Feb 16. A work session has been scheduled for Feb 23.
SB 1524 is an omnibus tax credit bill that includes a number of diverse components that would have a big impact on revenue, and has 7 proposed amendments. These amendments were discussed on Feb 14. Public testimony was heard Feb 7, 14 and 16, and a work session is scheduled for Feb 21.
One section doubles the existing expense reimbursement percentage allowed to a single film company from the Oregon Production Investment Fund, which can be sold to reduce taxpayer liabilities. We do not support this credit as written as it can be easily misused by wealthy taxpayers to reduce their tax liability. Listen to testimony starting about a minute in by Alan De Boer on this credit here.
Another credit can be claimed by a medical laboratory scientist or medical laboratory technician employed by a rural hospital (at least 50 miles from a major population center).
One of the seven amendments would modify Oregon’s corporate activity tax (CAT) to exempt small rural and high school pharmacies that have small margins due to price limitations imposed by federal pharmacy benefit managers (BPMs). This issue has forced Bi-mart to close, and threatens the survival of many small independent pharmacies around the state, especially in rural Oregon.
And the -1 is an extension of Gain Share that primarily benefits Washington and a few other counties.
These credits bypass the credit review process without analysis as to their benefit, which we do not support.