WORK SESSION: SB 853-A, HB 2951-A

PUBLIC HEARING & WORK SESSION:

HB 2659-A

PUBLIC HEARING: SB 733-A

 

TAPES 140 A-B, 141 A

 

 

SENATE REVENUE COMMITTEE

JUNE 14, 2005   9:00 AM   STATE CAPITOL BUILDING

 

 

Members Present:                  Senator Ryan Deckert, Chair

                                                Senator Gary George

                                                Senator Rick Metsger

                                                Senator Floyd Prozanski

                                                Senator Charles Starr, Vice Chair

 

Witnesses Present:                Senator Frank Morse, District 8

                                                Stephen Kafoury, Metro Multi-Family Housing Counsel (MMHC)

                                                Chris Robinson, MMHC

                                                Joe Schweinhart, Associated Oregon Industries (AOC)

                                                Senator Ben Westlund, District 27

                                                Jon Miller, Oregon Solar Energy Industries Assn. (OSEIA)

                                                Jeff Bissonette, Citizens Utility Board of Oregon

                                                Mike Grainey, Dept. of Energy

                                                Frank Vignola, Oregon Million Solar Roofs Coalition

 

Staff Present:                          Paul Warner, Legislative Revenue Officer

                                                Mary Ayala, Economist

                                                Lizbeth Martin-Mahar, Economist

                                                Barbara Guardino, Committee Assistant

 

 

TAPE 140, SIDE A

005

Chair Deckert

Calls meeting to order at 9:07 a.m.

 

WORK SESSION, SB 2951-A

025

Lizbeth Martin-Mahar

Explains HB 2951-A2 amendment (EXHIBIT 1). Extends sunset law 10 years instead of 20. Revenue impact has not changed (EXHIBIT 2).

 

039

Vice Chair C. Starr

MOTION: MOVES THE ADOPTION OF THE HB 2951-A2 AMENDMENT.

 

042

Chair Deckert

ORDER: THERE BEING NO OBJECTION THE CHAIR SO ORDERS. VOTE: 3-0-2. VOTING AYE: GEORGE, C. STARR, DECKERT. EXCUSED: METSGER, PROZANSKI

 

045

Vice Chair C. Starr

MOTION: MOVES HB 2951-A AS AMENDED TO THE SENATE FLOOR WITH A DO PASS RECOMMENDATION.

 

048

Chair Deckert

ORDER: THERE BEING NO OBJECTION THE CHAIR SO ORDERS. VOTE: 4-0-1. VOTING AYE: GEORGE, METSGER, C. STARR, DECKERT. EXCUSED: PROZANSKI

 

 

 

WORK SESSION, SB 853-A

073

Sen. Frank Morse

Proposes SB 853-A6 amendment (EXHIBIT 3), which deletes the requirements for Dept. of Revenue to track university venture development funds. Dept. has determined it is not necessary.

 

083

Paul Warner

Gives overview SB 853-A6 amendment, which combines -2, -3 and -5 amendments. It charges universities with tracking responsibilities rather than DOR.

 

090

Warner

Explains the preliminary revenue impact statement (EXHIBIT 4). Estimates are based on speculation in terms of timing, as shown on page 2 of the preliminary impact statement. Bill would have a positive impact in the 2011-2013 biennium.

 

128

Chair Deckert

Gives background context for the bill.

 

163

Sen. Morse

Comments on the $2 million that was in the original bill. Was concerned that this one-time shot of money would not be adequate over time. The recapture component makes it a rolling credit.

 

190

Chair Deckert

Comments, it combines a person’s entrepreneurial interest with a love for his/her alma mater. The research recaptures the investment.

 

 

 

212

Vice Chair C. Starr

MOTION: MOVES ADOPTION OF THE SB 853-A6 AMENDMENT.

 

216

Chair Deckert

ORDER: THERE BEING NO OBJECTION THE CHAIR SO ORDERS. VOTE: 5-0-0. VOTING AYE: GEORGE, METSGER, PROZANSKI, C. STARR, DECKERT

 

220

Vice Chair C. Starr

MOTION: MOVES SB 853-A AS AMENDED TO THE SENATE FLOOR WITH A DO PASS RECOMMENDATION.

 

223

Chair Deckert

ORDER: THERE BEING NO OBJECTION THE CHAIR SO ORDERS. VOTE: 5-0-0. VOTING AYE: GEORGE, METSGER, PROZANSKI, C. STARR, DECKERT

 

 

 

PUBLIC HEARING, HB 2659-A

245

Mary Ayala

Gives overview of HB 2659-A, which retains the 6-year limit for filing a refund claim and simplifies the approval process (EXHIBIT 5). Discusses the revenue impact (EXHIBIT 6).

 

 

 

277

Stephen Kafoury

Testifies in favor of the bill. Explains the purpose of Metro Multi-Family Housing Counsel. This bill does not change current law; it clarifies it and straightens out misinterpretations. There is no opposition.

 

312

Chris Robinson

See written testimony, Talking Points (EXHIBIT 7). In terms of revenue impact, HB 2659-A offers consistency. This bill ensures consistent practice.

 

330

Chair Deckert

Asks if Robinson has ever litigated a case.

 

333

Robinson

Responds, there is no pending litigation on the refund issue. Gives an example where this might be problematic in cases of affordable housing.

 

 

 

 

377

Joe Schweinhart

Testifies in support of HB 2659-A. This is a fairness issue. Current language is obsolete. There should not be discretion to pay a refund.

 

WORK SESSION, HB 2659-A

414

Vice Chair C. Starr

MOTION: MOVES HB 2659-A TO THE SENATE FLOOR WITH A DO PASS RECOMMENDATION.

 

417

Chair Deckert

ORDER: THERE BEING NO OBJECTION THE CHAIR SO ORDERS. VOTE: 5-0-0. VOTING AYE: GEORGE, METSGER, PROZANSKI, C. STARR, DECKERT

 

 

 

PUBLIC HEARING, SB 733-A

430

Martin-Mahar

Gives overview of SB 733-A, which expands the residential energy tax credit to taxpayers who purchase large solar electric systems (EXHIBIT 8). There will be no revenue impact until the 2007-09 biennium (EXHIBIT 9).

 

 

 

TAPE 141, SIDE A

029

Sen. Ben Westlund

Testifies, SB 733-A is about creating jobs in a region that needs it – eastern Oregon – and will help attract global energy manufacturers. Those businesses are seeking a signal that Oregon is going to step up and value renewable energy on par with its neighbors. SB 733-A helps send that signal. World-wide, the solar industry is growing at an astounding rate, and Oregon wants to capture some of it. SB is a significant step in the right direction.

 

065

Sen. Metsger

Asks for more information about the solar manufacturing industry, and how it would encourage more solar system production facilities.

 

070

Sen. Westlund

Responds, installation creates jobs. On the manufacturing side, several world-wide companies are very interested in Oregon. “They like to be where they are appreciated.” They’re holding off in order to see what Oregon’s legislature does.

 

086

Chair Deckert

Comments that appreciation is important to this industry.

 

094

Sen. Westlund

Foreign companies are looking for sites in the United States, partly because of symbolism and partly because of economic incentives.

 

111

Sen. Metsger

Expresses concern with the cost of the system, and asks what would happen to the credit if the price of technology went down. Suggests a cap on the credit to mitigate this possibility.

 

137

Sen. Westlund

Responds, the legislature can revisit this bill. Wouldn’t that be the best of both worlds, if the technology progresses to the point that the state’s investment produces a better return? Installation of these systems removes demand for energy from the grid.

 

160

Sen. Metsger

Suggests building into the bill a way to account for technology changes. This bill is a great idea.

 

181

Sen. Prozanski

Understands there’s already a solar manufacturer in the Bend area. Comments that not only would people being assisted in making the investment, but energy would be turned back to the grid. This bill can be adjusted in two years and would be a wonderful long-term investment to the state. Comments on Pacific Northwest Solar Resource chart (EXHIBIT 10).

 

 

 

250

Jon Miller

Testifies in support of SB 733-A. This is not an increase in the tax credit, it is a revision. See testimony, paraphrased (EXHIBIT 11). “A revolution is coming.” Refers to chart on page 2 of testimony, which details recent growth. California is the third largest solar market in the world. They are 40 times Oregon’s market, and are installing an enormous amount more.

 

315

Chair Deckert

Asks how other states handle the bond measure.

 

324

Miller

Responds, it is public buildings. The bond measure is financed through energy efficiency. Continues, even though SB 733-A is a small program, it makes a big difference. Oregon cannot afford to ignore this industry.

 

336

Frank Vignola

Testifies in support of SB 733-A. Comments on Pacific Northwest Solar Resource chart. Oregon has established networks of experts and is a leader in the nation on training the solar workforce. It is located near major markets, so the potential and interest are there. What is needed is a stable market. This legislation will provide that.

 

422

Sen. Prozanski

Thanks Vignola for his work. Asks about a similar bill in the House.

 

436

Vignola

Responds, HB 3001 would require new public buildings to spend 1% on solar technology. It would help create a stable market and bring down energy costs.

 

TAPE 140, SIDE B

020

Sen. Prozanski

Comments that Oregon was the first state to install solar energy in its capitol building.

 

035

Sen. George

Comments, when hybrid cars came out, the government stepped up and provided an incentive. It was so successful the government backed off. Might that also happen with solar energy?

 

049

Vignola

Yes, costs will come down as the market grows, but there still needs to be an investment up front.

 

057

Miller

Adds, prices will come down, but not that fast.

 

063

Mike Grainey

Testifies in support of bill. The solar industry is growing. Over the past 20 years, 20,000 Oregonians have used it. This legislation will help encourage greater use of solar energy. It is important in terms of the solar manufacturing and development industry. It’s also important that there be a system of distributors. Comments that DOE’s revenue estimates are similar to the LRO impact statement.

 

095

Sen. Metsger

Asks Miller to respond to the idea of a cap.

 

102

Miller

Responds, nobody could afford this today because of the expense. If users decide to increase the size of their system, they can get another tax credit. The current tax credits were not made for this type market.

 

127

Sen. Metsger

Asks Mr. Grainey to remark on the revenue impact going forward six years. This doesn’t grow the industry very much.

 

132

Grainey

Explains, how he came to this rough estimate. It will likely increase with the impact of the incentive. DOE assumed 200-to-250 solar systems per year.

 

154

Martin-Mahar

Adds, the assumption is that there will be good growth.

 

170

Miller

Industry growth is not necessarily the number of installations; it’s the ability to attract a manufacturer by having a local base.

 

207

Jeff Bissonette

Testifies that the Citizens Utility Board of Oregon heartily supports SB 733-A. Underscores the broad base of support within the legislature and the broad range of constituents across the state. The industry is young, and the solar industry in Oregon is looking at bigger and better. Lawmakers will hear more ideas in the coming sessions.

 

236

Chair Deckert

Closes public hearing. Adjourns meeting at 10:20 a.m.

 

 

 

Tape Log Submitted by,

 

 

 

Barbara Guardino, Committee Assistant                                                      

 

Exhibit Summary:

1.      HB 2951-A, Amendment HB 2951-A2, Legislative Counsel, 6/8/05, 1 pp.

2.      HB 2951-A, Staff Measure Summary, Martin-Mahar, 6/14/05, 1 pp.

3.      SB 853-A, Amendment SB 853-A6, Morse, 6/9/05, 5 pp.

4.      SB 853-A, Revenue Impact of Proposed Legislation, Warner, 5/27/05, 2 pp.

5.      HB 2659-A, Staff Measure Summary, Ayala, 6/14/05, 1 pp.

6.      HB 2659-A, Revenue Impact of Proposed Legislation, Ayala, 6/14/05, 1 pp.

7.      HB 2659-A, Talking Points, Robinson, 1 pp.

8.      SB 733-A, Staff Measure Summary, Martin-Mahar, 6/14/05, 1 pp.

9.      SB 733-A, Revenue Impact of Proposed Legislation, Martin-Mahar, 6/14/05, 1 pp.

10.  SB 733-A, Pacific Northwest Solar Resource, Vignola, 1 pp.

11.  SB 733-A, OSEIA, testimony of Jon Miller, 2 pp.