News From Association of Oregon Counties

Salem - The blossoms on the fruit trees that line the Capitol Mall in Salem are beginning the annual rite of passage from winter gray to spring color. When the sun shines on Salem, as it does occasionally, the spring foliage gives rise to hopes for a better tomorrow.

The Oregon Legislature this year is, by outward appearances, trying to keep the sun shining on the sometimes not so sunny process of making laws and passing a budget. For some veteran legislators, the expedited pace of now annual sessions is a departure from the somewhat more leisurely pace of the biennial sessions of the not too distant past. Nonetheless, pundits and profits seem to agree that this legislature is in a hurry. There is a lot that remains to be done and not that much time in which to do it. And that is not necessarily a bad thing.

AOC Policy Managers along with several county commissioners and judges, have been working with legislators, committee staff and the governor's office on a number of bills that could potentially impact all Oregon counties. In some cases, there are numerous bills on the same subject that have to be sorted out and the sorting process is well underway adding to the increased pace of this year's session.

And for those you sharp eyed readers who are wondering why Oregon Trails is coming your way on a Monday and not the usual Friday publication, there is a method to the editorial staff's madness. We are going to be sending out the newsletter on Monday's from here on out in order to give our reporters more time to gather information and to give you a head start on the week ahead. As always, we welcome submitted articles and photos. Just contact Laura or Eric at the AOC office.

Tobacco Tax

Should counties be allowed the authority to tax tobacco products was the question. HB 2870 is the bill to allow local governments that option. Over 400 local jurisdictions nationally allow local tobacco taxes. Multnomah County Chair Jeff Cogen, Lane County Chair Sid Leiken, Columbia County Commissioner (and AOC first vice president) Earl Fisher, Benton County Commissioner (and AOC Human Services steering committee chair) Linda Modrell, and AOC Director Mike McArthur testified before the House Revenue Committee on Friday in favor of lifting the pre-emption. The bill directs that at least 20 percent of any local tobacco tax must go to public health. The testimony from Multnomah was that most of the additional revenue would go for public health/mental health services. The Josephine County Board also sent a letter of support.

And in other tobacco tax news, HB 2275 had a hearing on Tuesday morning. The bill calls for a statewide increase in the tobacco tax but leaves the allocation formula for the funds blank. AOC testified in support of the tax increase and recommended that the allocation formula remain the same. Currently counties receive approximately two percent of the tobacco tax, while historically counties have received as much as 25 percent. Most of the funds from the tobacco tax are allocated to the Oregon Health Plan.

Big Topic - PERS Reform .

It's no surprise that PERS has emerged as a major and contentious issue in this year's Legislature. The battle lines are being drawn. The Oregonian has been all over the story recently with a couple of articles outlining the arguments from those involved. Given that neither party has a super majority, it will take something close to a bi-partisan agreement for significant PERS reform to emerge from this session. AOC is keeping a close eye as the number of PERS related bills is winnowed down through the legislative process.

Authority Over Genetically Engineered Seeds

Sherman County Commissioner Tom McCoy, Linn County Commissioner Will Tucker, and AOC Executive Director Mike McArthur testified in support of Senate Bill 633, introduced by Sen. Bill Hansell, R-Athena. SB 633 would reserve to the State the authority to regulate seeds. The bill would override a Jackson County initiative measure to require the county to control genetically engineered seeds.

AOC generally looks with disfavor at preemptions of local authority, but counties are more real-world practical than academically orthodox. In this instance, AOC and the commissioners testified that counties do not have the resources, expertise, or budgets to handle this authority. Indeed, given the scientific testing that would be required and cross-border commerce, a county may not be able to perform this in any event. The skills and infrastructure exist at the Oregon Department of Agriculture and at the federal level. Moreover, balkanizing seed control would be expensive, confusing, and interfere with commerce. A county with this authority would most likely be subject to law suits for action or inaction.

Business Retention and Expansion Program

The House Transportation and Economic Development Committee removed the sunset and allowed more flexibility for the Oregon Business Retention and Expansion Program by passing HB 2225. This program was established in 2011 and is aimed at providing an incentive through forgivable loans for larger employers (at least 150 employees) who plan to hire a minimum of 50 new full-time employees earning at least 150 percent of the county or state average wage.

Most recently the Business Expansion Program was used to attract Salesforce, a San Francisco-based tech company, to Hillsboro. HB 2225 also gives the Oregon Business Development Department the ability to transfer money from the strategic reserve fund to make loans. The bill now moves to the Ways and Means committee for consideration.

Water Fees Challenged

Following direction from the 2009 Legislature, the Water Resources Department (WRD) had HB 2259 introduced to prevent roll-back of current water transaction fees to the 2003 levels. If the sunset takes effect, the roll-back would cause loss of seven full-time equivalent jobs (FTEs), dramatically reducing service to the public. HB 2259 removes the sunset and adjusts current fees to maintain the 50-50 split between general fund and fees negotiated in 2009.

The adjustment to fees to maintain the 50-50 split, in particular, drew opposition from user groups at the hearing on the bill on Thursday, before the House Agriculture & Natural Resources Committee, chaired by Rep. Brad Witt, D-Clatskanie. Dairymen, cattlemen, and others complained that their industries could not bear a fee increase in the present economy. Committee members sounded sympathetic. AOC joined the special districts and irrigators to support HB 2259, because the public needs an adequately staffed and fully functioning WRD to, among other things, provide accurate data on water availability for land use decision-making and support for local, place-based planning efforts.

Objections appear loud enough to stall action on the bill. Chair Witt expressed the need for funds to WRD, but will take some time to consider how to do that.

Agricultural Food Processing Equipment Property Tax Exemption Moves Forward

HB 2735 was sent to the House floor Thursday with a do-pass recommendation, extending the sunset to 2020 for the property tax exemption on newly acquired agricultural food processing equipment. The program grants the exemption for five years, then returns the equipment to the tax rolls. This kind of equipment holds its value relatively well, returning to the rolls generally at about 75 percent of its original value.

AOC was the only public sector group to support the original program in 2005, to help stop an industry sector that was in an economic tailspin. Counties with a direct stake in the industry supported continuing the program for a time to secure the economic condition of the sector. AOC followed suit, acknowledging that the stance is an exception to the general disfavor of property tax expenditures.

HB 2735 is expected to pass the House.

Early Learning Council Update

Deschutes County Commissioner Tammy Baney, Marion County Commissioner Janet Carlson, and Clackamas County Commissioner Tootie Smith testified before the House Human Services and Housing Committee on HB 2013. HB 2013 is the vehicle that will move the Early Learning Council (ELC) forward. The ELC has proposed regional "hubs" that will focus on coordinating and administering programs for children 0-3 years old. These hubs will take on some of the responsibilities currently handled by the commissions on children and families.

HB 2013 differs from the governor's plan by calling for five demonstration projects rather than a state-wide roll out of hubs. All three commissioners stated that the counties have been bringing together coalitions to build hubs and voiced concerns that five demonstration projects might leave some communities out. Commissioners also raised questions about how the ELC will coordinate with the Youth Development Council and Coordinated Care Organizations and what would happen to the rest of the state if there will only be five demonstration projects.

All commissioners emphasized that there has been a great deal of work at the county level around the state and that counties embrace and support the vision of the Early Learning Initiative.

In other ELC-related news, bills to establish the Early Learning Division and the Youth Development Division within the Department of Education have been introduced.

Early Learning Division

HB 3234 establishes the Early Learning Division in the Oregon Department of Education. The bill describes the administrative structure for the the ELC. Counties will be impacted because programs like Relief Nurseries, Healthy Start and some local public health home visiting programs may be coordinated through the Early Learning Division. It is still unclear whether the budgets of the public health programs will be run through the education department or whether it will remain in human services.

Youth Development Division

HB 3231 establishes the Youth Development Division in the Oregon Department of Education. This bill describes the administrative structure of the Youth Development Council (YDC). The YDC handles responsibilities for programs for children from 7 to 20 years of age.

Benton County Commissioner Jay Dixon, vice chair of the Youth Development Council, testified in favor of HB 3231. He highlighted that the YDC is working to keep children out of the criminal justice system and help them reach their potential.

Counties will be impacted by this bill and HB 2392 because youth programs once run through the local commissions will now be run through the Youth Development Council. HB 2392 helps define how the funding of these programs are allocated.

Oregon Business Development Department Budget

Polk County Commissioner Craig Pope and AOC Director Mike McArthur testified in favor of the Oregon Business Development Department (OBDD) budget on March 14. They stressed the importance of the tools and assistance provided by OBDD and the Infrastructure Finance Authority to counties to make economic development happen. Successful economic and community development requires a close partnership that includes state and local governments, businesses, economic development districts, ports and others. AOC supports the Regional Solutions/Infrastructure allocation of $50 million of lottery bond proceeds. Counties are co-sponsors and active participants of the regional solutions network.

Regional Solutions - SCR 4

Sen. Betsy Johnson, D-Scappoose, Columbia County Commissioner Tony Hyde, Tillamook County Commissioner Mark Labhart, and AOC Director Mike McArthur testified together in support of SCR 4 on March 11 before the Senate Business and Transportation Committee. SCR 4 directs state agencies to participate as project or team members to address regional priorities identified by Regional Advisory Committees as part of the Oregon Solutions Network.

Each official emphasized the value of Regional Solutions and talked about their experience as conveners. Director McArthur handed out a 1968 Executive Order signed by Governor Tom McCall and gave an historical perspective on efforts to take a more inclusive approach to regional governance. Commissioner Labhart highlighted the Oregon Solutions project he co-chaired with Senator Johnson that is working to lower flooding risks to Tillamook County. Commissioner Hyde spoke about the value of pulling together business, federal, state, and local governments to solve regional problems.

After hearing their testimony, the Senate Business and Transportation Committee voted unanimously to support the bill.

Gain Share Supported

The Oregonian

AOC Executive Director Mike McArthur, Multnomah County Chair Jeff Cogen, Washington County Chair Andy Duyck, Hillsboro Mayor Jerry Willey and Washingotn County Deputy Governmetn Affairs Manager Jim McCauley at The Oregonian Editorial Board Monday morning

Editorial Board heard from Multnomah County Chair Jeff Cogan, Washington County Chair Andy Duyck, AOC Executive Director Mike McArthur, Metro Chair Tom Hughes and Hillsboro Mayor Jerry Willey Monday morning on the timely subject of Gain Share. That's the state program that requires county governments to waive property taxes in some cases for business that expand locally and generate new jobs. In return, the state gives back 50 percent of the income taxes the new jobs generate. At least that's how it's supposed to work. The program was approved in 2007 and the state just recently came through with the first Gain Share payments.

SB 223 and SB 314 now under consideration in the Senate would fix some technical problems with the program. SB 223 extends the sunset of the program, a feature counties like. The O's Editorial Board heard support for the program from the local government perspective. A Senate committee heard testimony on both bills last week. It is not known when The Oregonian may offer its editorial opinion or what it will be.

State Trade and Export Promotion Grants Available

Do you have small businesses in your area that need a little financial help to attend trade shows? Well, late last year, Business Oregon received a grant of nearly $500,000 from the US Small Business Administration (SBA) to support Oregon business who plan to develop or expand their export market connections. This STEP (State Trade & Export Promotion) grant will primarily be used to provide matching grants for up to $5,000 directly to small businesses.

STEP grants are most commonly awarded to reimburse small businesses for costs associated with attending trade shows (domestic or international) where they can make contact with foreign buyers. Businesses interested in using the grant must apply to Business Oregon and be approved before they travel to the trade show.

If you know of any small businesses in your area that might benefit from such a program they can get more information from Business Oregon's STEP Webpage or from AOC's Ann Hanus.

Energy Star Benchmarking

The federal Environmental Protection Agency, Region 10, has developed a program to help you understand the current and past energy use of all your buildings. Such information can be used to develop strategies to improve your energy usage.

For more information on this free tool check out the EPA's Energy Star website.

New Opportunity Announcement

The Oregon Department of Energy is accepting applications for the Energy Incentives Program Renewable Thermal Energy Projects through March 29, 2013. The state has approximately $1.5 million in tax credits available for these projects.

Oregon Department of Energy is also accepting applications for the Energy Incentives Program Transit Services Projects through March 29, 2013. The state has approximately $8 million in tax credits available for these projects.

Register for the Future Energy Conference

Registration is now open for the - Oregon Future Energy Conference - April 16-17, at the Portland Red Lion Hotel - Jantzen Beach

www.futureenergyconference.com<http://www.futureenergyconference.com>

The conference is for those now building the new energy economy.

Returning for its seventh year, this is the event addressing the business side of clean energy. Presented by Northwest Environmental Business Council (NEBC), this conference provides an unmatched forum for learning, networking, and business development - and includes members of the energy industry, energy end-users, policy makers, and economic development professionals.

Addressing the industry's current challenges and opportunities, with content covering:

- The Business of Renewable Energy

- The Business of Energy Efficiency

- Energy Policy & Economic Development

- Energy Sector Insights.

Champions of Change

The White House Champions of Change program highlights the stories and examples of citizens across the country who are "Building an America to Last" with projects and initiatives that move their communities forward. All across the country, ordinary Americans are doing extraordinary things in their communities to out-innovate, out-educate, and out-build the rest of the world. Each week, The White House invites Champions of Change to share their ideas and to empower and inspire other members of their communities. This year's Transportation Champions of Change will focus on "Transportation Technology Solutions for the 21st Century. The deadline for submitting nominations is Thursday, March 28, 2013. Click Here for Nomination Process.

If you haven't set your clock ahead, it's too late

Have a great weekend.

Please feel free to submit your story ideas, announcements, recipes, photos and job changes to your Oregon Trails staff for inclusion in the next riveting edition.

See you next week - your Oregon Trails staff,

Laura Cleland & Eric Schmidt

Association of Oregon Counties

503-585-8351