Meeting Minutes

SLAC Teleconference Meeting – March 30, 2009

Sherry Harrell (TN) opened the teleconference meeting by taking roll of members in attendance. 26 members participated in the teleconference meeting.

Agenda

Replacement Tax - During the SLAC teleconference call on February 24th many members expressed concerns regarding the proposed amendment presented. Several members indicated a desire to go back to AM08014A01 and draft a corresponding rule to go with that amendment. The rule would include the 1 situation that had been determined to be a replacement tax and a list of factors that were relevant in considering based on the totality of facts that the tax was a replacement tax. AM08014 was the amendment voted on once by the Governing Board and then referred to SLAC for a corresponding interpretive rule before a second vote was taken.

Documents to Discuss

AM08014A01 Oklahoma replacement tax amendment

Draft SLAC Minutes 2-24-09 teleconference

Replacement Tax Rule Draft 3-18-09

Motion to approve minutes of February 24, 2009 meeting was made by Cathy Wicks (MN), seconded by Jerry Johnson (OK), Minutes approved.

Sherry Harrell (TN) stated that after the February 24, 2009 meeting many states expressed concern about the amendment and preferred to go back to amendment AM08014A01. The governing board voted to approve the amendment AM08014 and prior to a second vote forwarded to SLAC. SLAC was also asked to prepare a rule to go with the amendment.

Jerry Johnson (OK) Stated the prior to the second vote on this amendment they were to have rules ready that spell out what the amendment means, to clarify what a replacement tax is. The amendment requires a second vote. The rule needs one vote.

The Rule dated 3/18/09 is in very general terms. It describes one situation where replacement tax is prohibited and factors that were considered in this decision. As other situations come up they could be added to the rule.

Sherry Harrell (TN) - The rule lists facts as are currently known. It doesn’t go out and potentially pull in other taxes. If something else comes up it can be added to list and the state in question would have two years to change their law.

Bill Riesenberger (OH) - Expressed concern that general guidelines should be in the amendment. Not just put everything in the rule. This should be guidance for future decisions, not just looking back at decisions already made. Using this, this next issue will need to be reviewed and determined from scratch. Perhaps the factors used in decision can be listed and then add others as they are determined.

Jerry Johnson (OK) - Because of the difficulty in the last 6-7 years in trying to craft general descriptive language he views this approach kind of like case law. Other methods created too much uncertainty. Need to get something passed. The rule leaves open for future to make additional determinations.

Russ Brubaker (WA) - This is an item you need to look at to make a determination. It is very difficult to define ahead of time.

Sherry Harrell (TN) - TN likes this idea. Used example of installation of tangible personal property to real property. They’ve built a list using a case by case analysis. If the definition doesn’t make people comfortable it creates ambiguity. They also need to consider the different tax structures.

Sonny Brasfield (National Assoc. of Counties) - Stated he is okay with this language, however, still has some concern. The next state that is questioned will not have anything specific to rely on. However, if states work to be accountable with agreement this shouldn’t be an issue.

Deborah Bierbaum (AT&T) - Stated BAC has not met to discuss. Said some suggestions were previously sent to Jerry.

--- There is concern that the rule is too static as it only addresses one issue. It needs to be more dynamic. List taxes not allowed and factors that could be looked at.

Jerry Johnson (OK) Intent is to try and pass something and get this amendment and rule behind us. Any attempt to broaden will endanger passing. Working on wording changes suggested from WA. Will make those changes and send new draft on March 31.

Sherry Harrell (TN) - Must send the amendment and rule to the Governing board and to CRIC 35 days ahead of the May Governing Board meeting. And will post it for public comments - that is at least a 20 day period. Any changes made must be to the Governing Board 10 days prior to the May meeting. Anyone can introduce a rule - must be to Governing board 30 days ahead of meeting.

SLAC will have 1-2 teleconference calls during April prior to the 10 day period to finalize amendments, rules and vote if needed.

Fred Nicely (COST) - If BACsubmits a proposal because it needs to be to Governing Board 30 days prior to meeting, it will be available for review by SLAC prior to SLAC’s potential vote.

SLAC has a call scheduled for March 31, 2009 to discuss delivery charges amendment, rule and tax matrix changes and potentially take votes on these issues.

Bill Riesenberger (OH) motion to adjourn; Chair seconded.

Meeting adjourned.

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