Friday afternoon, Governor Kitzhaber signed HB 2855 into law. The bill re-establishes the Government Efficiency Task Force. Rep. Nancy Nathanson (D-Eugene) is the bill's sponsor and driving force behind the success of the previous GETF. AOC supported the bill and the concept and is looking forward to working with the new GETF. 

Gov. Kitzhaber signs GETF bill with AOC's Mike McArthur, Sen. Jackie Winters, Comm. Linda Modrell, Rep. Nancy Nathanson and DAS' Sarah Miller looking on. Rep. Nathanson chaired the previous GETF. Sen. Winters, Comm. Modrell and Ms. Miller served on the first GETF.

Governor Kitzhaber will have another AOC sponsored bill to sign. SB 960, the recommendations of the AOC Farm Land Use Task Force, passed the House Friday morning on a 53 to 5 vote.  Details of the legislation were in last week's newsletter.  Please contact Art Schlack at AOC for more information. 

The final work on reforming the BETC and RETC into four new downscaled programs passed out of the Joint Tax Credit Committee on Thursday, June 16, headed to both floors. AOC has worked well with the committee to be sure the new programs, particularly in the new Renewable Energy Development program which will now become a grant program out of pre-sold credits, is a structure that is workable. 

The initial program will be limited to $3 million a biennium of grants for no more than $250,000 for any one system. This new program is being termed a "model", expected to be revised to a more valuable resource when the economy shows change that can afford the investments. In the last newsletter details were provided; they are somewhat changed in final form. The Conservation, RETC and Transit programs remain tax credit based programs, with credits for non-profits and public entities to be transferable to a tax paying entity.  

This week we learned the bill (HB 3656) that requires ODFW to consult with affected cities and counties on economic impacts when changing and administering endangered species protection programs is apparently dead. It had passed out of the House Rules Committee and the House floor with unanimous votes, but apparently it got to the Senate too late, according to the Senate President's rules, for the bill to be referred to a committee for Senate consideration. The bill was quite popular and supported by ODFW, so we may need to reintroduce the bill again next year.

A late-session proposal to amend a PERS agency housekeeping bill currently in the Capital Construction subcommittee of Ways and Means. An adjustment to the Individual Account Program (IAP) component of the PERS system continues to be the subject of negotiations. 

Amendments have been drafted to allow employers to enter into agreements with their employees to pay a portion of their 6 percent contribution. Current law allows an employer to "pick-up" either the entire 6 percent or none of it. Over 70 percent of public employers in Oregon do "pick-up" the 6 percent as a determination was made by many employers that paying the 6 percent was less expensive than a salary increase. Outside of a salary increase the IAP contribution did not factor into the employer PERS rate and the employer is not liable for Social Security payroll taxes and other roll-up costs. 

However, AOC contends that counties and other local governments should at least have the right to bargain for reduced contributions to the IAP rather than paying all or none of it. The amendments currently being drafted would also allow employers who do not "pick-up" the 6 percent at all to continue doing so. Please contact your legislator immediately to let them know this additional flexibility would be a helpful bargaining tool for public employers. 

The state-funded Senior Property Tax Deferral Program has been closely attended to this session by the revenue committees. The program is suffering from lack of funds, caused by raids on its reserves in previous recent sessions and a low bar to qualify for the program. 

HB 2543A will narrow the program's doorway to qualify for the state's payments of property taxes in exchange for a lien on the property. However, no source of funding for the $19 million needed to get the program through the 2011-13 biennium has yet been found. One version of the bill proposed using the Common School Fund as collateral, but the State Land Board (Governor, Secretary of State, and State Treasurer) said 'no'. Revenue committee leaders are insistent that there will be funding before sine die. Stay tuned.

After more than three months of negotiations among AOC and the nine federally recognized Indian Tribes of Oregon, HB 2566 seemed ready for legislative action on Wednesday. Under amendments to the bill, tribes would be granted property tax exemption authority for wholly owned property used exclusively to provide a delineated list of essential government services to tribal communities.

AOC, out of respect for and recognition of tribal governments, supported the amendments. Nevertheless, the House Revenue Committee engaged in a lengthy give-and-take about nuances of the tribal-State-federal-county relationships, the result of which was that key members felt some discomfort about moving the bill. The word now is that negotiations will continue among parties in the interim.

HB 2653A, a bill championed by Lane County with support from AOC, appears to be stalled in the full Joint Ways and Means Committee after unanimously passing out of the Capital Construction subcommittee. The bill was also a recommendation of the Government Efficiency Task Force and would give Justice Courts the same access as Circuit Courts to the full suite of collection services from the Department of Revenue. 

While the state collects an average of roughly 80 percent of outstanding fines from violations, Justice Courts currently collect at a considerably lower rate. Giving Justice Courts optional access to the DOR collection services would be another tool to help both the state and local governments collect money rightfully owed. 

While DOR would potentially need to add a minimum of one and maximum of four additional staff (depending on how many justice courts opted in), the program is considered to be self-sustaining as DOR keeps 16 percent of all money collected for administration. No state general fund is estimated to be required for this bill to be implemented. Opposition from private collection agencies appears to be keeping this bill bottled up for the moment.  

During the past week, the Legislature took action on several economic development incentives: 

• SB 219 (Oregon Business Retention and Expansion Program) - With this new program, the Oregon Business Development Department can grant forgivable loans to certified employers using up to $4 million from the Strategic Reserve Fund. The program will be targeted at three to five new or expanding Oregon companies per year. It requires companies to meet and maintain employment and wage targets for three years or face a clawback of the incentive.  Companies selected for the incentive would have to hire 50 or more new employees in Oregon or have 150 or more employees at time of eligibility. In order to qualify, employee wages must be 150 percent above the state or county average, whichever is higher. Companies would need to operate in a traded sector industry, and the program can be used for corporate headquarters.
   
• Oregon Investment Advantage Program -  Rep. Greg Smith (R-Heppner)succeeded in adding an amendment to the large tax credit bill, HB 3672, to help counties like Morrow and Umatilla who would be losing their eligibility.  The Oregon Investment Advantage Program allows for a ten year income tax exemption for out-of-state businesses that locate in rural areas with high unemployment and low per-capita income. The amendment provides an exception so the program can continue to serve as an economic development tool in much of rural Oregon. The amendment also revised current law by requiring that a business could not claim the tax credit until it has been operating for at least two years in Oregon.

• SB 817 - The Joint Tax Credit Committee passed out SB 817 which will create a new complementary state tax credit to leverage the federal New Markets tax credit program. The federal New Markets tax credit was designed to generate capital and encourage investment in businesses located in areas that the U.S. Treasury has identified as low income. Investors wishing to take advantage of the federal tax credit must complete an arduous application process to be authorized to use the 39 percent federal tax credit spread over a period of seven years. The new state program, called the "Oregon Low Income Community Jobs Initiative," includes a 39 percent state tax credit over seven years, however, there is no credit for the first two years. The total amount of tax credits claimed in any tax year is limited to $16 million and there is a nonrefundable application fee of $5,000. A qualified business is limited to no more than $3 million and applies to qualified investments made between July 1, 2012 and June 30, 2016. 

The successful Deschutes Basin Groundwater Mitigation Program was at last given a nod to continue. The Joint Ways and Means Committee on Wednesday reported out HB 3623B, which extends the sunset on the program to 2029. Rumor has it that it was end-of-session trade bait and at risk. It now appears good to go.

The Ways and Means Committee unanimously voted out SB 342 which would implement the Parks and Wildlife Ballot Measure 76 approved by the voters last fall. Earlier this session, there was an attempt with HJR 29 to re-refer the ballot measure as a result of an agreement signed the previous summer by several environmental groups and legislators. HJR 29 would have allowed the Legislature to tap the fund during a state budget crisis, but it did not move forward when concerns arose from several organizations. SB 342 establishes the fund/account structure and specifies the distribution of the lottery money in accordance with Ballot Measure 76.

SB 443 successfully passed the Oregon House of Representatives this week by a 58-2 margin after previously passing the Senate unanimously. The bill extends the sunset until 2016 on a provision allowing U.S. Forest Service road funds in Douglas and Lane County for the sheriff patrol of roads in these counties. 

The bill is an extension of a bill passed in 2007 and had set a sunset date of January 2, 2014 for the use of this money for law enforcement. Ordinarily the U.S. Forest Service dollars are split 25 percent for schools and 75 percent for the county road funds. 

Several other Southern Oregon counties expressed interest during the session in adding their counties to the list of those eligible to use U.S. Forest Service road funds for law enforcement but were unsuccessful. The bill now goes to the Governor for his signature. 

The Early Learning Design Team has two more meetings, June 20^th and June 27^th. The Team is creating a strawperson draft for the Early Learning Council (ELC) which will be legislatively created by the passage of either SB 909 or HB 3086.The strawperson draft is intended to provide a general structure of the function and objectives of the ELC.The appointees to the ELC will provide the details for the structure.

SB 909, an education bill that creates the ELC will receive a work session in the Capital Construction Subcommittee of Ways and Means.SB 909 is silent on the role of the local commissions in the work of the ELC. Rep.Tina Kotek's (D-Portland) HB 3086, which provides an opportunity for the Local Children and Families Commissions to "repurpose" themselves has not yet received a work session in Ways and Means and it is uncertain if it will.

At the federal level, the reauthorization of SAFETEA-LU appears to be making "great progress" according to congressional leadership. Both sides of the aisle have found "common ground in the belief that building highways, bridges, and transportation systems is an important responsibility of the federal government." Some of the highlights of the proposed reauthorization include:

• Funding programs at current levels to maintain and modernize our critical transportation infrastructure;
• Eliminating earmarks;
• Consolidating numerous programs;
• Creating a more focused freight program;
• Strengthening the Transportation Infrastructure Finance and Innovation Act (TIFIA) to provide loan financing for major projects; and
• Expediting project delivery without sacrificing the environment or the rights of people to be heard.

AOC staff have been working closely with ODOT to address Oregon's specific needs in the detailed provisions of specific programs such as the Highway Bridge Program and the Federal Lands Highways Program. If you have any questions contract Ann Hanus or Jon Oshel.

Have you registered for the NACo Annual Conference? If not, then you need to make sure you register by Friday, June 3 to save your county $75 on the registration fee.

Register today, for your association's Annual Conference in Multnomah County, (Portland), Oregon, July 15 -19. More than 1,300 members and your colleagues are already registered!

The conference offers great opportunities to:

• Network with your peers
• Bring solutions home to your county
• Hear from expert speakers that will inspire and educate
• Learn from more than 30 educational workshops, and
• Meet with suppliers that can provide you cost saving opportunities on services and products
• Become familiar with Social Media

Questions? Please contact the NACo Meetings Department at nacomeetings@naco.org.

We hope to see you in Multnomah County (Portland) Oregon!   

Ready to showcase Oregon to the nation? The National Association of Counties Annual Conference will be held in Multnomah County starting July 15th. Volunteers are needed to help guide the estimated 3000 county visitors around Portland and Oregon. Please consider using some of your spare time to help make their visit to our state and region a memorable one.  

Becoming a volunteer is easy. Just register. Volunteers will get training and a t-shirt among other things for their time. If you have questions, please contact Theresa Sullivan at Multnomah County. Her phone number is 503-988-3655. 

This Week's Contributors 

The publisher of Oregon Trails is Mike McArthur. 

Managing Editor and Severe Task Master - Laura Cleland. 

Copy Boy - Eric Schmidt.

Reporters - Gil Riddell, Ann Hanus, Mike Eliason, Mark Nystrom and Doris Penwell. 

The other slackers will be assigned to the overnight desk and will have to write dog and pony stories. Which shouldn't be hard since they cover the Legislature.   

Have a Great Weekend!