71st OREGON LEGISLATIVE ASSEMBLY--2001 Regular Session
NOTE: Matter within { + braces and plus signs + } in an
amended section is new. Matter within { - braces and minus
signs - } is existing law to be omitted. New sections are within
{ + braces and plus signs + } .
LC 3530
House Bill 3337
Sponsored by Representative WITT
SUMMARY
The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure as
introduced.
Changes term tax expenditure to tax exception for certain
purposes.
A BILL FOR AN ACT
Relating to tax expenditures; amending ORS 173.820, 176.110,
291.195, 291.201, 291.202, 291.203, 291.210, 291.214, 291.216,
291.218, 291.220 and 291.222.
Be It Enacted by the People of the State of Oregon:
SECTION 1. ORS 291.195 is amended to read:
291.195. (1) The Legislative Assembly hereby declares that the
ability to make fiscally sound and effective spending decisions
has been enhanced by requiring agencies and programs to develop
performance measures and to evaluate all General Fund, State
Lottery Fund and other expenditures in accordance with these
performance measures. Fiscal pressure on this state requires even
greater accountability and necessitates a review of the fairness
and efficiency of all tax deductions, tax exclusions, tax
subtractions, tax exemptions, tax deferrals, preferential tax
rates and tax credits. These types of tax { - expenditures - }
{ + exceptions + } are similar to direct government expenditures
because they provide special benefits to favored individuals or
businesses, and thus result in higher tax rates for all
individuals.
(2) The Legislative Assembly further finds that 76 percent of
property in this state is exempt from property taxation and that
income tax { - expenditures - } { + exceptions + } total
billions of dollars per biennium. An accurate and accountable
state budget should reflect the true costs of tax
{ - expenditures - } { + exceptions + } and should fund only
those tax { - expenditures - } { + exceptions + } that are
effective and efficient uses of limited tax dollars.
(3) The Legislative Assembly declares that it is in the best
interest of this state to have prepared a biennial report of tax
{ - expenditures - } { + exceptions + } that will allow the
public and policy makers to identify and analyze tax
{ - expenditures - } { + exceptions + } and to periodically
make criteria-based decisions on whether the
{ - expenditures - } { + exceptions + } should be continued.
The tax
{ - expenditure - } { + exception + } report will allow tax
{ - expenditures - } { + exceptions + } to be debated in
conjunction with on-line budgets and will result in the
elimination of inefficient and inappropriate tax
{ - expenditures - } { + exceptions + }, resulting in greater
accountability by state government and a lowering of the tax
burden on all taxpayers.
SECTION 2. ORS 291.201 is amended to read:
291.201. As used in ORS 291.201 to 291.222, 'tax
{ - expenditure - } { + exception + } ' means any law of the
federal government or this state that exempts, in whole or in
part, certain persons, income, goods, services or property from
the impact of established taxes, including but not limited to tax
deductions, tax exclusions, tax subtractions, tax exemptions, tax
deferrals, preferential tax rates and tax credits.
SECTION 3. ORS 291.202 is amended to read:
291.202. (1) Except as otherwise provided in ORS 291.222, the
Governor shall prepare in each even-numbered year for the
biennium beginning July 1 of the following year:
(a) A budget report; and
(b) A tax { - expenditure - } { + exception + } report.
(2) The Oregon Department of Administrative Services shall
advise and assist the Governor in the preparation of the budget
report and tax { - expenditure - } { + exception + } report
and shall perform such duties in connection therewith as the
Governor requires.
(3) The Department of Revenue shall advise and assist the
Governor in the preparation of the tax { - expenditure - }
{ + exception + } report.
SECTION 4. ORS 291.203 is amended to read:
291.203. (1) Not later than November 10 of each even-numbered
year, the Governor shall cause the tax { - expenditure - }
{ + exception + } report to be compiled and prepared for
printing.
(2) In the tax { - expenditure - } { + exception + }
report, the Governor shall:
(a) List each tax { - expenditure - } { + exception + };
(b) Identify the statutory authority for each tax
{ - expenditure - } { + exception + };
(c) Describe the purpose of each tax { - expenditure - }
{ + exception + };
(d) Estimate the amount of revenue loss caused by each tax
{ - expenditure - } { + exception + } for the coming
biennium;
(e) List the actual amount of revenue loss in the preceding
biennium for each tax { - expenditure - } { + exception + }
or an estimate if the actual amount cannot be determined;
(f) Determine whether each tax { - expenditure - } { +
exception + } is the most fiscally effective means of achieving
each purpose of the tax
{ - expenditure - } { + exception + };
(g) Determine whether each tax { - expenditure - } { +
exception + } has successfully achieved the purpose for which the
tax { - expenditure - } { + exception + } was enacted and
currently serves, including an analysis of the persons that are
benefited by the { - expenditure - } { + exception + }; and
(h) Categorize each tax { - expenditure - } { +
exception + } according to the programs or functions each tax
{ - expenditure - } { + exception + } supports.
SECTION 5. ORS 291.210 is amended to read:
291.210. (1) The Oregon Department of Administrative Services,
in connection with its direct studies of the operations, plans
and needs of state agencies and of the existing and prospective
sources of income, shall prepare a tentative budget plan and
tentative tax { - expenditure - } { + exception + } report
for the two fiscal years for which a budget report and tax
{ - expenditure - } { + exception + } report are required to
be prepared.
(2) The Department of Revenue shall advise and assist in the
preparation of the tentative tax { - expenditure - } { +
exception + } report.
SECTION 6. ORS 291.214 is amended to read:
291.214. The Governor, during the preparation of the budget
report and before its submission to the Legislative Assembly,
shall:
(1)(a) Examine the budget forms filed by the various agencies
and may make or cause to be made such further investigations by
the Oregon Department of Administrative Services, with such
hearings before the Governor or any state agency, as the Governor
deems advisable, and may make such changes or revisions in policy
and program and in specific details of the tentative budget
report or tentative tax { - expenditure - } { + exception + }
report as the Governor finds warranted; and
(b) Identify each tax { - expenditure - } { + exception + }
that has a full or partial sunset that, if allowed to take
effect, will have a fiscal impact on the state or on school
districts for the next biennium, and shall prepare a
recommendation as to each tax
{ - expenditure - } { + exception + } identified under this
paragraph that indicates the Governor's opinion on whether the
full or partial sunset of the tax { - expenditure - } { +
exception + } should be allowed to take effect as scheduled or
should be revised to a different date.
(2) As used in this section:
(a) 'Full sunset' means any provision that completely
eliminates an existing tax { - expenditure - } { +
exception + } on a specified date.
(b) 'Partial sunset' means any provision that reduces the
amount of an existing tax { - expenditure - } { +
exception + } or that alters the eligibility requirements for the
{ - expenditure - } { + exception + } as of a specified date.
SECTION 7. ORS 291.216 is amended to read:
291.216. (1) Not later than November 10 of each even-numbered
year the Governor shall cause the budget report to be compiled
and prepared for printing.
(2) The budget report shall include a budget message prepared
by the Governor, including recommendations of the Governor with
reference to the fiscal policy of the state government for the
coming biennium, describing the important features of the budget
plan, embracing a general budget summary setting forth the
aggregate figures of the budget report so as to show a balanced
relation between the total proposed expenditures and the total
anticipated income, with the basis and factors on which the
estimates are made, the amount to be borrowed, and other means of
financing the estimated expenditures for the ensuing biennium,
compared with the corresponding figures for at least the last
completed biennium and the current biennium.
(3) The budget plan shall be supported by explanatory schedules
or statements, classifying the expenditures reported therein,
both past and proposed, by organization units, objects and funds,
and the income by organization units, sources and funds, and the
proposed amount of new borrowing as well as proposed new tax or
revenue sources, including a single comprehensive list of all
proposed increases in fees, licenses and assessments assumed in
the budget plan.
(4) The budget plan shall be submitted for all dedicated funds,
as well as the state General Fund, and shall include the
estimated amounts of federal and other aids or grants to state
agencies or activities provided for any purpose whatever,
together with estimated expenditures therefrom.
(5) The budget report shall embrace the detailed estimates of
expenditures and revenues. It shall include statements of the
bonded indebtedness of the state government, showing the actual
amount of the debt service for at least the past biennium, and
the estimated amount for the current biennium and the ensuing
biennium, the debt authorized and unissued, the condition of the
sinking funds and the borrowing capacity. It shall contain the
Governor's recommendations concerning tax { - expenditures - }
{ + exceptions + } identified under ORS 291.214. It shall also
contain any statements relative to the financial plan which the
Governor may deem desirable or which may be required by the
legislature.
(6) The budget plan shall use the estimated revenues under ORS
291.342 for the fiscal year in which the plan is submitted as the
basis for total anticipated income under subsection (2) of this
section, subject to such adjustment as may be necessary to
reflect accurately projections for the next biennium.
(7) As supplemental information to the budget report, the
Governor shall publish an existing level tentative budget plan
for the two fiscal years for which the budget report is required.
This summary budget shall reflect only existing revenues
estimated under subsection (6) of this section; subject to such
adjustment as may be necessary to reflect accurately projections
for the next biennium. The supplemental information to the budget
report shall be submitted at the same time as the budget report.
(8)(a) The budget report shall present information regarding
the expenses of the state in the following categories:
(A) Personnel expenses, including compensation and benefits for
state employees, but excluding costs of services contracted out
and temporary service costs.
(B) Supplies, equipment and the costs of services contracted
out.
(C) Capital construction.
(D) Capital outlay.
(E) Debt service.
(b) For each category described in paragraph (a) of this
subsection, the report shall show actual expenditures to date.
(c) For each category described in paragraph (a) of this
subsection, the report shall show:
(A) The amount of merit increases for the existing workforce.
(B) Increases for the cost of replacement and repair of
supplies and equipment.
(C) Increases for the costs of new construction or major
remodeling.
(D) Increases for the cost of inflation.
(d) The report shall show the total increase in the cost of
salaries and benefits for all state positions.
(9) The budget report shall include:
(a) The total number of positions included in the budget.
(b) The average vacancy rate in the present biennium.
(c) The number of permanent, full-time equivalent vacancies,
excluding academics, as of July 1 of even-numbered years.
(10) The budget report shall include computations showing
budget figures as a percentage of the total General Fund, federal
fund, fee or other source category, as may be appropriate.
(11) The budget report shall include, in a format that provides
side-by-side comparison with the State Debt Policy Advisory
Commission report of net debt capacity, a six-year forecast, by
debt type and repayment source, of:
(a) That portion of the capital construction program required
to be reported by ORS 291.224 that will be financed by debt
issuance.
(b) The acquisition of equipment or technology in excess of
$500,000 that will be financed by debt issuance.
(c) Other state agency debt issuance for grant or loan
purposes.
(12) As supplemental information to the budget report, the
Governor shall prepare an alternative budget plan for the two
fiscal years for which the budget report is required and shall
provide the alternative budget plan to the President of the
Senate, the Speaker of the House of Representatives and the
majority and minority leaders in the Senate and the House of
Representatives. The alternative budget plan shall establish
funding for each state agency's programs and activities at 90
percent of the appropriations requested for the state agency in
the budget report, excluding appropriations that are not made to
fund recurring activities. For each state agency, the Governor
shall describe the 10 percent reduction in appropriated moneys in
terms of the activities or programs that the agency will not
undertake. The activities or programs that are not undertaken as
a result of the reductions in appropriated moneys made in the
alternative budget plan shall be ranked in order of importance
and priority on the basis of lowest cost for benefit obtained.
SECTION 8. ORS 291.218 is amended to read:
291.218. Except when the Governor under whose supervision the
budget report and the tax { - expenditure - } { +
exception + } report have been prepared will be succeeded in
office in January next following:
(1) The Oregon Department of Administrative Services shall have
as many copies of the approved budget report and the tax
{ - expenditure - } { + exception + } report printed as the
Governor directs.
(2) Not later than December 1 of each even-numbered year, the
Governor shall transmit a copy of each report to each member of
the legislature who is to serve during the next session.
(3) Upon request, the Governor shall distribute copies free of
charge, under such regulations as the Governor may establish, to
public libraries, schools and state officials. The Governor shall
make copies available to the general public at a reasonable
charge for each copy.
SECTION 9. ORS 291.220 is amended to read:
291.220. The Governor, upon request, shall furnish the
Legislative Assembly any further information required concerning
the budget report and the tax { - expenditure - } { +
exception + } report. The Oregon Department of Administrative
Services, upon request, shall furnish a representative to assist
the Legislative Assembly, its Joint Committee on Ways and Means,
appointed under ORS 171.555, and the Legislative Revenue Officer
in the consideration of the budget report, the tax
{ - expenditure - } { + exception + } report and any
accompanying measures.
SECTION 10. ORS 291.222 is amended to read:
291.222. If the Governor under whose supervision the budget
report and tax { - expenditure - } { + exception + } report
have been prepared will be succeeded in office in January next
following:
(1) The Oregon Department of Administrative Services shall make
available to the Governor-elect so much as the Governor-elect
requests of the information upon which the tentative budget
report and tentative tax { - expenditure - } { +
exception + } report are based, and upon completion of each
report shall supply the Governor-elect with a copy of each report
but shall not cause the tentative budget report or tentative tax
{ - expenditure - } { + exception + } report to be printed and
distributed. The department shall also make available to the
Governor-elect all facilities of the department reasonably
necessary to permit the Governor-elect to review and become
familiar with the tentative budget report or tentative tax
{ - expenditure - } { + exception + } report.
(2) After a review of the tentative budget report or tentative
tax { - expenditure - } { + exception + } report the
Governor-elect may prepare revisions and additions thereto. The
Oregon Department of Administrative Services and the Department
of Revenue shall assist, upon request, in the preparation of such
revisions or additions.
(3) The Oregon Department of Administrative Services shall have
printed as many copies of the revised budget report and revised
tax { - expenditure - } { + exception + } report as the
Governor-elect requests.
(4)(a) Not later than the convening of the next Legislative
Assembly the Oregon Department of Administrative Services shall
transmit a copy of a summary of the revised budget report
containing the revenue and expenditure recommendations of the
Governor-elect and a summary of the revised tax
{ - expenditure - } { + exception + } report estimating the
amount of revenue loss caused by each tax { - expenditure - }
{ + exception + }.
(b) Not later than February 1, the Oregon Department of
Administrative Services shall transmit a copy of the revised
budget report and revised tax { - expenditure - } { +
exception + } report to each member of the Legislative Assembly.
(5) Upon request, the department shall distribute copies of the
revised budget report and revised tax { - expenditure - } { +
exception + } report free of charge, under such regulations as it
may establish, to public libraries, schools and state officials.
It shall make copies of the revised budget report and revised tax
{ - expenditure - } { + exception + } report available to the
general public at a reasonable charge for each copy.
SECTION 11. ORS 173.820 is amended to read:
173.820. Pursuant to policies and directions of the appointing
authority, the Legislative Revenue Officer shall:
(1) Upon written request of a member of the Legislative
Assembly or any committee thereof, prepare or assist in the
preparation of studies and reports and provide information and
research assistance on matters relating to taxation and to the
revenue of this state and to any other relevant matters.
(2)(a) Ascertain facts concerning revenues and make estimates
concerning state revenues; and
(b) Ascertain facts and make recommendations to the Legislative
Assembly concerning the Governor's tax { - expenditure - }
{ + exception + } report.
(3) Prepare analyses of and recommendations on the fiscal
impact of all revenue measures before the Legislative Assembly
and of all other measures affecting the revenue of this state.
(4) Perform such duties as may be directed by joint or
concurrent resolution of the Legislative Assembly.
(5) Adopt rules relating to the submission, processing and
priorities of requests. Rules adopted under this subsection shall
be in conformance with any applicable rule of the House of
Representatives or the Senate. Requests made by joint or
concurrent resolution of the Legislative Assembly shall be given
priority over other requests received or initiated by the
Legislative Revenue Officer. Rules adopted under this subsection
shall be reviewed and approved by the appointing authority prior
to their adoption.
(6) Seek the advice and assistance of political subdivisions of
this state, governmental agencies and any interested persons,
associations or organizations in the performance of the duties of
the Legislative Revenue Officer.
(7) Enter into contracts to carry out the functions of the
Legislative Revenue Officer.
(8) Perform such other duties as may be prescribed by law.
SECTION 12. ORS 176.110 is amended to read:
176.110. (1) The person elected to the office of Governor may
take any action prior to the date the official term of office
commences that is necessary to enable the Governor to exercise on
such date the powers and duties of the office of Governor.
(2) The Governor-elect shall cause the budget report and the
tax { - expenditure - } { + exception + } report for the
biennium beginning July 1 of the year in which the Governor takes
office to be compiled and prepared for printing as required in
ORS 291.222.
(3) All necessary expenses of the Governor-elect incurred in
carrying out the provisions of this section shall be audited by
the Secretary of State and paid from any funds appropriated for
this purpose in the same manner as other claims against the state
are paid.
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