Bills give 2007 legislative session a green hue

BYLINE: Wendy Culverwell, Andy Giegerich and Matthew Kish

The legacy of the 2007 Legislature will likely go in the books as one of the greenest in state history.

Encouraged by proposed renewable energy incentives, developers have announced plans for more than $1.2 billion in clean energy projects in Oregon since the Legislature's opening gavel.

The Legislature hit the home stretch this week after a critical Monday deadline for passing most bills out of committee. The deadline kicks off the furiously paced final phase of the session, as lawmakers rush to hammer through key measures before adjourning in late June.

Several other headline-grabbing measures have fared well, including the establishment of a rainy day fund and the expansion of the state's prescription drug program.

This year's conclave has also been refreshingly free of the rancor of past years. Whether that's a result of -- or the reason for -- the session's productivity is up for debate. But state lawmakers have shown a willingness to agree more than in previous years. At this point two years ago, lawmakers had passed 74 bills. This year they've already passed 149.

Yet a few huge question marks remain.

The April 30 deadline did not apply to bills being heard by the Ways and Means, Revenue and Rules committees. Those committees control several big-ticket items, including the corporate minimum tax, a sales tax, and a cigarette tax that would be used to provide health insurance for Oregon children.

The Joint Ways and Means Committee, for one, tends to consider many proposals immediately before the session ends, meaning the final chapter on the session won't be written until hours before adjournment.

A green economy

From the opening bell, Gov. Ted Kulongoski has pushed an aggressive series of bills that would make Oregon a powerhouse in the nation's developing green economy.

The centerpiece is a mandate that utilities get 25 percent of their power from renewable resources by 2025. A House committee passed the measure, known as a renewable portfolio standard, this week. It has already passed the Senate.

Proponents say the bill will create a market for renewable power and attract investments in solar, ocean and wind energy.

Since the bill was introduced, German company Solarworld AG announced it will spend nearly $400 million to build what could be the nation's largest solar manufacturing facility in Hillsboro. GroSolar, a White River Junction, Vt.-based company, has also said it would like to build utility-scale solar plants in Eastern Oregon.

Out on the coast, three developers have announced plans to build wave parks, putting Oregon at the forefront of another new green industry. A new wind project announced in March will power 12,000 homes in The Dalles. Scottish company PPM Energy also could make more local investments in wind projects if the legislation passes. It has already invested $500 million in Oregon.

The second-most important green measure to reach the governor's desk could be a bill that creates a property tax exemption for biofuel facilities and mandates that all gas contain a percentage of renewable fuel. The measure passed the House by an overwhelming 53-4 margin and appears headed for passage.

Just like the renewable portfolio standard, proponents say the measure creates a market for biofuels and makes investments in the sector more palatable to banks and industry. Also similar to the renewable portfolio standard, it appears to be working.

If even a fraction of the biofuel projects that have been announced since the bill was introduced come to fruition, Oregon could become the national leader in the production of biodiesel. Six projects being contemplated at the Port of Morrow alone could pump $400 million into the state's economy.

Several other sizable projects are in the works, including a facility in Clatskanie that could produce 113 million gallons of ethanol annually. Former state Rep. Jeff Kropf told the Business Journal in February he's an investor in a company that wants to build a 100-million gallon ethanol plant and a 75-million gallon biodiesel plant.

In addition, the Business Journal reported last September that as much as $180 million could be spent on biofuel facilities around Portland.

Measures expanding the commercial and residential tax credits for renewable energy projects are also likely to pass. Another bill, which would establish greenhouse gas reduction goals and create an Oregon Global Warming Commission, narrowly made it out of the House Committee on Energy and the Environment Monday. It could reach the governor's desk.

Several high-profile sustainability measures, however, have effectively died in committee. The measures include a cap-and-trade system for carbon dioxide emissions and statewide limits on such emissions by electricity providers.

The proposals faced stiff opposition from industry groups that argued such laws could cripple the state's recovering economy by driving up power and gas prices.

Reviewing revenue

As legislators seek to make Oregon greener, they could also dramatically change how the state collects revenue and doles out economic development incentives.

Businesses are particularly anxious over House Bill 2217, which would hike the current $10 minimum tax paid by corporations. The House Revenue Committee will decide the exact numbers, perhaps predicating it on a graduated system based on the payer's income.

Money from the increases -- which would require a three-fifths vote from lawmakers to pass -- would fund community colleges and Oregon University System initiatives. Legislators likely won't address the issue until after the state's May 15 economic forecast.

Also in play is a measure that would reduce personal income tax rates, including those on capital gains, and enact a uniform 5 percent sales tax. Lawmakers have said privately they're not sure if the measure will pass this session, but that supporters are laying the groundwork for future assemblies.

The ballyhooed Healthy Kids initiative, proposed by Gov. Ted Kulongoski, would have steered an 84-cent-per-pack cigarette tax toward insuring Oregon's uninsured children. Republicans refused to allow a House vote on the matter, calling it "fiscally unsustainable." On the Senate side, Ted Ferrioli, a Republican from John Day, said such money should come from the state's fortified general fund, as opposed to a new tax.

Yet Rebecca Orr, a House majority spokeswoman, said the measure isn't dead. Democrats have several options to move an identical bill to either the House Revenue or Joint Ways and Means committee, she said.

Legislators are also tracking a variety of economic development initiatives.