CONFERENCE COMMITTEE ON HB 3143

 

July 19, 2005 Hearing Room D

8:00 A.M. Tapes 1 - 2

 

MEMBERS PRESENT: Rep. John Lim, Chair

Sen. Betsy Johnson

Sen. Rick Metsger

Rep. Mike Schaufler

Rep. Greg Smith

Sen. Ben Westlund

 

STAFF PRESENT: Janet Adkins, Committee Administrator

Erin Seiler, Committee Assistant

 

MEASURES/ISSUES HEARD:

HB 3143C Work Session

 

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

 

TAPE/#

Speaker

Comments

TAPE 1, A

001

Chair Lim

Opens the meeting at 8:10 a.m. Opens a work session on HB 3143C.

HB 3143C - WORK SESSION

007

Janet Adkins

Committee Administrator. Presents an overview of HB 3143C. Submits and summarizes -C15 amendments (EXHIBIT A). Submits and summarizes - C16 amendments (EXHIBIT B). Submits and summarizes -C17 amendments (EXHIBIT C).

031

Adkins

Submits revenue statement related to C15 amendments (EXHIBIT D).

037

Mary Ayala

Economist, Legislative Revenue Office. Summarizes revenue impact of C17 amendments and C15 amendments.

057

Sen. Floyd Prozanski

Senate District 4. Testifies in support of -C15 amendments. Discusses the situation of Murphy Supply Wood Company. Submits and summarizes written testimony of the Douglas County Board of Commissioners in support of C15 amendments to HB 3143C (EXHIBIT E).

072

Sen. Prozanski

Explains how removing the property tax obligation will enable the company to rebuild the mill that was destroyed by a fire.

093

Steve Vincent

Representative, Avista Utilities Corporation. Explains situation of Murphy Wood and that forgiveness of taxes adds a component of good faith and encourages the company to rebuild.

115

Rep. G. Smith

Praises Steve Vincent for efforts to bring economic development to the state.

121

Chair Lim

Asks how much back taxes are owed by the company.

123

Vincent

States that the company owes $70,000 dollars in property taxes.

140

Chair Lim

Asks if the company has made the decision to rebuild the mill.

145

Vincent

Addresses current negotiations with the company regarding intent to rebuild the mill.

160

Chair Lim`

Questions why the taxes for the company should be forgiven if there is no commitment to rebuild the mill.

165

Vincent

Speaks to the need to trust that the company will rebuild because the economy in Sutherland cannot afford to lose the jobs at the mill.

170

Chair Lim

Verifies that this is the first time that back taxes would be forgiven because of catastrophic loss of business.

175

Chair Lim

Questions whether establishing a precedence of tax forgiveness is a wise policy decision, asking what the repercussions are to the state.

180

Vincent

Points out that C15 amendments are narrowly crafted, yet acknowledges that in the case of another catastrophic event, similar latitude could be asked for again.

185

Rep. Schaufler

Comments on the repercussions if the mill does not rebuild and return the jobs to the community.

195

Rep. Schaufler

MOTION: Moves to ADOPT HB 3143C-C15 amendments dated 07/14/05.

200

 

VOTE: 6-0-0

 

Chair Lim

Hearing no objection, declares the motion CARRIED.

206

Rep. G. Smith

Summarizes the contents of C16 amendments.

234

Sen. Johnson

Citing C16 amendments, questions the amount of flexibility of the Oregon Economic and Community Development Department (OECDD), if the department is required to grant a port an enterprise zone upon completion of the application.

244

Sen. Johnson

States concern regarding the lack of consideration for the financial and administrative capabilities of a port to manage an enterprise zone, questioning whether the proposal is too broad.

257

Rep. G. Smith

Comments on the ability of OECDD to use departmental discretion to determine whether it is appropriate for a port to be an enterprise zone.

270

Arthur Fish

Business Incentives Coordinator, OECDD. Confirms that OECDD would be obligated to allow a port to join an existing enterprise zone. Explains why OECDD does not have a problem allowing a port to become a co-sponsor in a zone.

301

Rep. G. Smith

Clarifies that the intent of C16 amendments is to allow a port, located in part or in whole in an enterprise zone, to be a co-sponsor.

305

Sen. Johnson

States that the intent is to allow a port to act unilaterally.

315

Fish

States that the word shall is appropriate language to allow a port to join as a sponsor of an existing zone.

323

Sen. Johnson

Questions the ability of OECDD to deny an application by a port, if a city or county should not want to include it.

336

Fish

Identifies the language in C16 amendments requiring the establishing body to consent to the inclusion of the port.

343

Fish

Points out language in C16 amendments in conflict with language in HB 2234C.

375

Fish

Comments on the additional conflict language inC16 amendments.

400

Sen. Metsger

Asks what qualifies a port to be designated an enterprise zone and if there will be any port excluded because of geographic location.

415

Fish

Explains why any existing port could seek designation as enterprise zone.

TAPE 2, A

014

Sen. Metsger

In reference to the Port of Portland, asks who receives the property taxes on port property.

019

Fish

Explains the distribution of property taxes on land owned by the Port of Portland.

028

Sen. Metsger

Questions the ability of the Port of Portland to apply for a new enterprise zone without consent of Multnomah County or City of Portland, even though the city and county would be subject to the loss of taxes.

045

Fish

Verifies that it is possible for the Port of Portland to seek a new enterprise zone without consent.

054

Rep. G. Smith

Asks that the qualifications for an enterprise zone be explained.

058

Fish

Addresses the economic hardship criteria that an area must meet prior to applying for an enterprise zone.

067

Sen. Westlund

Asks whether OECDD would be statutorily obligated to approve any completed electronic commerce zone application.

077

Fish

Affirms that OECDD would be obligated to designate the enterprise zone as an e-commerce zone if the area meets the established criteria and the application is complete.

084

Sen. Westlund

Asks a basic explanation of the electronic commerce zone program and rational for limiting the number to six.

088

Fish

Explains the electronic commerce zone program.

112

Sen. Johnson

Comments that limiting the number of electronic commerce zones would help focus business in specific places and that unbridled proliferation of zones would result in a loss of strategic value.

125

Fish

Agrees that the electronic commerce zone would lose value if the number were not restricted, pointing out that allowing an unlimited number of zones would have significant revenue repercussions for the state.

135

Sen. Johnson

Questions if allowing an unlimited number of zones is self-defeating when the state is trying to incent development in certain places and achieve certain economic goals.

145

Fish

Discusses why the enterprise zone program is not oversubscribed or likely to become oversubscribed with the creation of additional zones.

156

Rep. Schaufler

Verifies that to apply for an electronic commerce zone, an area must be within an enterprise zone that has met economic hardship qualifications.

170

Adkins

Asks what language OECDD would like to add to C16 amendments.

178

Fish

Explains that there is additional technical information that OECDD would like to have in C16 amendments for the purpose of clarifying administrative responsibilities.

184

Rep. G. Smith

Addresses concern with the inclusion of the conflict language relating to electronic commerce zones.

200

Sen. Johnson

Points out the need to establish consistency between both bills.

210

Chair Lim

Comments on the limitations that exist on the number of enterprise zones and subsequent number of electronic commerce zones.

220

Ken Armstrong

Representative, Oregon Ports Group. Discusses why the Oregon Ports Group supports C16 amendments and that a port could not unilaterally decide to establish an enterprise zone without the consent and concurrence of the city and county.

235

Sen. Metsger

Citing language from C16 amendments continues to question whether a port would be able to seek a zone without the consent of a city or county.

240

Armstrong

Points out the language that requires consent when there is jurisdictional overlap.

250

Chair Lim

Confirms that only public ports can apply for enterprise zone.

255

Sen. Westlund

Asks for clarification regarding whether the intent is for the ports, not in an incorporated area, to apply for a new enterprise zone without consent of other jurisdictions.

270

Fish

Addresses the ability of a port to apply for co-sponsorship in an existing zone and apply for designation of a new enterprise zone in unincorporated areas.

285

Sen. Johnson

Asks why co-sponsorship is advantageous for to a port.

288

Fish

Explains that co-sponsorship would allow a port to play a larger role in economic development.

302

Sen. Metsger

Suggests eliminating conflict language from C16 amendments and consulting with representatives from the cities and counties.

320

Rep. G. Smith

Agrees with the need to communicate with the cities and counties before moving forward.

325

Chair Lim

Asks how many public ports there are in the state.

326

Armstrong

Identifies 23 public ports in Oregon.

330

Chair Lim

Comments why there needs to be a limit on the number of designation available to ports.

340

Armstrong

Explains why of the 23 public ports very few are going to be interested in pursuing this as a tool. Noting that there should not be any limitations placed on ports that do not exist for cities or counties.

355

Sen. Johnson

Questions, if few ports are likely to utilize this tool, why not limit the number available for designation.

358

Armstrong

States that an arbitrary restriction of one a year does not make sense.

365

Sen. Johnson

Suggests establishing a pilot project in order to determine how many ports are really going to be interested in taking advantage of this program.

375

Armstrong

Suggests that limitation should be three.

385

Sen. Johnson

Asks if the existing criteria established by OECDD, for approving enterprise zones is appropriate to apply to ports.

390

Fish

Speaks to existing statutory criteria and the need for clarity in the language in order to ensure that all governmental entities are working together.

420

Sen. Johnson

Asks if OECDD would provide a statewide map of all the current locations.

TAPE 1, B

005

Chair Lim

Speaks to the need for further discussion on the issue.

014

Chair Lim

Closes the work session on HB 3143C. Adjourns the meeting at 9:10 a.m.

 

 

EXHIBIT SUMMARY

 

  1. HB 3143C, -C15 amendments, staff, 1 p
  2. HB 3143C, -C16 amendments, staff, 15 pp
  3. HB 3143C, -C17 amendments, staff, 3 pp
  4. HB 3143C, revenue statement, staff, 1 p
  5. HB 3143C, written testimony, Sen. Floyd Prozanski, 1 p