HOUSE COMMITTEE ON TRADE AND ECONOMIC DEVELOPMENT

 

 

April 07, 2003 Hearing Room D

1:00 PM Tapes  38 - 39

 

 

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

 

MEASURES HEARD:                     HB 2299 Public Hearing

                                                HJR 33, HB 2890, HB 3071, HB 2296 and HB 2302 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 38, A

003

Chair Smith

Calls the meeting to order at 2:10 p.m. and opens the public hearing on HB 2299.

HB 2299 PUBLIC HEARING

010

Mike Burton

·         Assistant Director, Oregon Economic and Community Development,  (OECDD). States he will provide an overview of the policy issues and how they relate to  the -3 amendments, (EXHIBIT A). Reiterates that the intent of HB 2299 is to reorder the statute and extend the sunset.

034

Burton

Submits (EXHIBIT B). Explains the Rural Strategic Investment Program proposal.

050

Burton

Explains the annual fee for community services, page 3, (EXHBIT A).

074

Rep. Berger

Asks what is meant by “a code area”.

082

Burton

Responds it is based on the taxing authority.

090

Burton

Continues, discusses the maximum of $2 million on community service fees and the proposal for a proportionate reduction on the ceiling for community service fees relative to the proposed $25 million threshold in rural areas.  

107

Burton

Notes that the Strategic Investment Program is a negotiated process.

 

 

Discusses E-commerce zones and states that the line has purposely been left blank for the legislature to fill in.

158

Burton

Continues, discusses Construction-in-Process exemptions. Explains the exception to the exemption.

207

Rep. Hass

Relative to E-commerce zones asks if this is a statewide effort or is it intended to give rural Oregon an advantage.

225

Burton

Responds there is a policy balance. Suggests an incremental change.

235

Rep. Hass

Notes that in 2001 he sponsored the E-commerce bill and the intent was to help rural Oregon achieve an advantage and encourage growth.

242

Burton

Notes that the program does create a distinction between urban and rural zones and it could be clarified that it is to be dedicated for rural zones.

274

Rep. Richardson

Asks about the qualifications for a motel to be considered subject to these benefits, page 11 (EXHIBIT A).

281

Burton

Responds that at one time tourism was specified by law as a key industry. Explains that the proposal allows jurisdictions within an Enterprise Zone to make a one-time election based on the circumstances unique to their community.

324

Rep. Richardson

Asks where this is located in the amendments.

339

Kimberly A. Medford

Committee Administrator. Refers to Section 17, page 14 of HB 2299 approximately line 18.

345

Rep. Richardson

Asks does this wording make a change to the jurisdictions that already made that election.

354

Burton

Responds that those jurisdictions were allowed a period of time to revisit the question.

440

Rep. Hass

Asks if there is a distinction between rural and non-urban.

443

Burton

States he will research and provide the information.

460

Hasina Squires

Special Districts Association of Oregon. States support for HB 2299-3 amendments.

465

Rep. March

Brings the -2 amendments to the attention of the Special Districts,  (EXHIBIT C).

TAPE 39, A

018

Burton

States that on page 12 there is a definition of urban Enterprise Zones. Non-urban Enterprise Zones are defined on line 3. States that the urban zones are those in the metropolitan areas.

036

Jim Anderson

Avista Corp. Describes the Avista Corporation. States support for   HB 2299-3 amendments. Explains that Oregon imports all forms of energy products and is subject to prices set by others. Provides an overview of Section 34 of HB 2299.

075

Bob Hanson

Avista Corp., Corporate Tax Manager, Spokane. Discusses the facility underway in Morrow County; notes that when finished it will be a $250 million plant that operates on natural gas. Comments on the importance of the Enterprise Zone exemption and the Construction in Progress exemption.

094

Rep. Richardson

Asks what benefit is there for Oregon to grant the exemption on a project that has been under development for two years.

107

Hanson

Explains there were delays in the initial construction period that incurred an unanticipated tax bill last year. Explains how these amendments will allow an in-lui-of the five year extension period.

130

Rep. Hass

Asks about rewarding activities that may occur with or without the incentive. Asks would the project continue without this exemption.

146

Hanson

Explains the plant will be completed shortly. Comments on tax responsibility.

205

Tom Linhares

Columbia County Assessor. Testifies in support of the HB 2299-3 amendments and states that HB 2299 has three goals:

  • Reorganize the statutes
  • Simplify the programs
  • Policy changes

230

Rep. Hunt

Asks what is the status for those portions of the state that fall in between the $100 million category and the $25 million category.

268

Linhares

Responds that the Strategic Investment Exemption program of today requires a project in excess of $600-$700 million in property value to make it work. Lowering the threshold to $25 million would require a project of $200 to $300 million to make it pay off.

279

Linhares

Explains that the options would need to be weighed by the company.

350

Doug Riggs

Pac/West Communications. Submits (EXHIBIT D) and explains         HB 2299-2 amendments, (EXHIBIT C).

370

Riggs

Explains how this is one more tool in the tool kit for economic development.

429

Rep. March

Asks does this exempt an existing firm with an existing plant from investing in anything other than hiring.

TAPE 38, B

003

Riggs

Responds that the HB 2299-2 amendments do not change the underlying program. Adds that Special Districts would not have to participate in this section.

025

Rep. Richardson

Asks about the difference in number of hire/rehire between         (EXHIBIT C) and (EXHIBIT D).

020

Riggs

Responds that the change to 150 was not incorporated in the amendment as requested. Adds that the lower number would be reasonable for the rural areas.

033

Greg Baker

Executive Director, Special Districts Association. States that the -2 amendments have been reviewed and there are no issues for Special Districts.

042

Chair Smith

Closes the public hearing on HB 2299 and plans to do a work session on Wednesday. Opens the public hearing on HJR 33.

HJR 33 PUBLIC HEARING

050

Chair Smith

Closes the public hearing on HJR 33 and opens the public hearing on HB 2890.

HB 2890 PUBLIC HEARING

 

Chair Smith

Closes the public hearing on HB 2890 and opens the public hearing on HB 3071.

HB 3071 PUBLIC HEARING

053

Chair Smith

Closes the public hearing on HB 3071 and opens the public hearing on HB 2296.

HB 2296 PUBLIC HEARING

054

Chair Smith

Closes the public hearing on HB 2296 and opens the public hearing on HB 2302.

HB 2302 PUBLIC HEARING

056

Chair Smith

Closes the public hearing on HB 2302 and adjourns the meeting at  3:00 p.m.

 

 

EXHIBIT SUMMARY

 

A – HB 2299-3 amendments dated 4/2/03, staff,  12 pp

B – HB 2299-3 Material Effect Outline, Michael Burton, 2 pp

C – HB 2299-2 amendments dated 3/20/03, staff, 2 pp   

D – HB 2299, Business Revival Incentives, Doug Riggs, 1 p