HOUSE COMMITTEE ON TRADE AND ECONOMIC DEVELOPMENT

 

 

February 24, 2003   Hearing Room D

1:00 PM Tapes  16 - 17

 

MEMBERS PRESENT:            Rep. Patti Smith, Chair

Rep. Vicki Berger, Vice-Chair

Rep. Mary Gallegos, Vice-Chair

Rep. Mark Hass

Rep. Dave Hunt

Rep. Steve March

Rep. Dennis Richardson

 

STAFF PRESENT:                  Kimberly A.  Medford, Committee Administrator

Linda K. Gatto, Committee Assistant

 

MEASURE HEARD:                     HB 2299 – Public Hearing

 

 

These minutes are in compliance with Senate and House Rules.  Only text enclosed in quotation marks reports a speaker’s exact words.  For complete contents, please refer to the tapes.

 

TAPE/#

Speaker

Comments

TAPE 16, A

004

Chair Smith

Calls the meeting to order at 1:07 p.m. and opens the public hearing on      HB 2299.

HB 2299 – PUBLIC HEARING

010

Medford

Provides an overview of HB 2299.

028

Mike Burton

Assistant Director, Economic and Community Development Department, (OECDD) States that today he will review the Enterprise Zone portion of HB 2299. Explains that the Enterprise Zone statute has been in place for 15 years and has been amended as needed to address changes in the business community. States that the objective of HB 2299 is to re-organize the statute. (EXHIBIT A).

074

Burton

Begins review of the Enterprise Zone portion of HB 2299, page 10. Explains (EXHIBIT B).  Refers to (EXHIBIT C) explains the confusion of the term precertification in current law and proposes to change the term to authorization. 

105

Burton

Explains why OECDD is proposing to incorporate “Reservation Enterprise Zone” with Non Urban Enterprise Zones.

107

Burton

Reviews exemptions that apply to hotels, motels, and destination resorts.

132

Burton

Reviews Management of Enterprise Zones.

153

Rep. Richardson

Asks what is meant by burden and costs.

157

Burton

Responds that the intent is to put the burden and cost with those who volunteer to undertake the Enterprise Zone.

176

Rep. Richardson

Asks how would the applicant be verified.

184

Burton

Answers that an acceptable document is the ES202 Payroll Tax Declaration form which would be provided by the business to the zone sponsor.

196

Rep. Gallegos

Asks who are the job training providers.

200

Burton

Responds that the original intent was to employ people who are residents of the zone. Explains first source agreements.

204

Art Fish

Enterprise Zone Coordinator, OCEDD. Explains that the term is defined on page 12 line 10 of HB 2299.

243

Rep. Richardson

Refers to the Reservation Enterprise Zone and asks if there consequences to dealing with a sovereign nation.

246

Burton

Explains that Enterprise Zone status was created to allow non-tribal businesses located on reservation land to offset property taxes from other taxing entities.

289

Burton

Continues with testimony on E-commerce Zones.

348

Rep. Hass

Asks were the applicants from the 4 designated zones or from across the state.

338

Burton

Responds that there were a number from each part of the state.

341

Rep. Hass

States that the intent was to diversify the locations of  e-commerce zones.

353

Burton

Responds that there are limits on the number of Enterprise Zones in the state as well as the area and geographic dispersion of a zone. Explains that if the target is to offset the cost of doing business in remote areas of the state this would be a reason to be discriminating.

397

Fish

Clarifies that an E-commerce Zone already has an Enterprise Zone designation.

409

Burton

Continues to review proposed amendments, page 22, replacing “assessor’s estimate of the real market value” with “total investment cost”.

429

Burton

Reviews proposed changes regarding renewing authorization, pages 25, 29 and 30.

469

Burton

Reviews proposed changes to page 29, line 29, regarding wage standards.

TAPE 17, A

054

Rep. Richardson

Notes that the language on page 29, lines 30 and 31, state “resubmit” and asks if the entire process is repeated.

055

Fish

Explains that after two years a letter of continuing interest would be submitted to the assessor and zone manager. 

077

Rep Gallegos

Confirms that this is a letter to reconfirm and does not require any additional expense.

088

Burton

Responds affirmatively.

106

Burton

Begins review of proposed amendments (EXHIBIT A) and  (EXHIBIT C), bullet point 11, Amendment D.

117

Burton

Reviews bullet point 12.

139

Burton

Reviews bullet points 13, 14, and 15.

163

Burton

Explains the change from August to June in Amendment I.

172

Rep. Richardson

Refers to page 33, lines 37-39 and asks what are the current qualifications are.

180

Fish

Responds that currently the specification is that a building or structure must cost at least $25,000. Explains how Amendment G is related.

204

Rep. Richardson

Asks what is the reason for the change.

207

Fish

Answers this is mainly designed to simplify the language noting that inflation does play a part.

219

Burton

Explains how this is an example of the effects resulting from simplifying the statute.

234

Fish

States that little impact is expected because it is hard to build a structure for less than $25,000. States that the real effect is that there are two or three investments a year that fall between $25,000 - $50,000.

273

Rep. March

Asks would an improvement that cost over $50,000, such as a settling pond, qualify.

288

Fish

Responds probably because a settling pond is a structure. Explains why.

311

Burton

Adds that it would be considered a building improvement.

318

Chair Smith

Asks if it is the assessors who make the determination.

323

Burton

Responds affirmatively.

328

Burton

Continues with review, bullet point 17 Amendment J. 

350

Burton

Reviews the activity clause.

359

Burton

Reviews long-term rural exceptions noting these are large investments and the intention is to recognize that remoteness could be a characteristic.

384

Burton

Reviews the proposal to extend the sunset on the long-term rural exception from 2004 to 2006.

423

Burton

Refers to Amendments K and L which addresses the Construction in Progress exception. Explains that most non-retail business are not required to pay property taxes until the facility is usable and can generate income. Proposes modifying the exception.

456

Fish

Explains the proposed amendment.

TAPE 16, B

064

Burton

Clarifies that this would be for qualified businesses such as wholesale distributors or call centers that otherwise would not be eligible for this benefit.

064

Rep. Hass

Asks if a study or report has been done to illustrate the result of extending the sunset.

079

Burton

Responds that there has only been one case in which the result was a $70 million collection of investments by Roseburg Forest Products and half a million dollars in exempted taxes.

087

Fish

Explains that this began in 1997 and is known as the NUCOR bill.

112

Rep. Hass

Inquires about the type of jobs the company offers.

113

Fish

Responds it is an engineered wood products facility.

116

Burton

Reiterates that the point is to induce large investments.  

135

Rep. Hass

Asks would the investment be made without the incentive.

142

Burton

Responds that he is aware of an expansion in Milwaukee where there is  a clear connection between the expansion and the Enterprise Zone exemption.

174

Burton

Comments that with the long term exception, both the extended property tax exception and the income tax exception are discretionary and negotiable. 

185

Chair Smith

Asks why not extend the sunset beyond 2006.

186

Burton

Replies favorably to extending or repealing the sunset.

237

Chair Smith

Concludes the presentation on Enterprise Zones stating that this legislation is an effort to simplify the implementation of the statute.

239

Burton

Responds affirmatively.

241

Chair Smith

Asks does this create jobs.

242

Burton

Responds that this provides an incentive to create jobs.

255

Fish

Discusses the proposal for the short term exception that came from the Portland Development Commission, page 27 section 33a,  regarding the local waiver on investment when productivity and worker training is increased.

316

Chair Smith

Closes the public hearing on HB 2299 and announces that on Wednesday the committee will hear the Strategic Investment portion of HB 2299.

330

Chair Smith

Re-opens the public hearing on HB 2299.

HB 2299 PUBLIC HEARING

331

Rep. Richardson

Asks if there is anyone who may be resistant to HB 2299.

338

Burton

Describes who OECDD has discussed this legislation with and states that he is not aware of any resistance.

359

Chair Smith

Closes the public hearing on HB 2299 and adjourns the meeting at   2:23 p.m.

 

 

EXHIBIT SUMMARY

 

A – HB 2299, written testimony, Michael Burton, 5 pp

B – HB 2299, legislative proposals, Art Fish, 10 pp

C – HB 2299, proposed amendments, Michael Burton, 6 pp