From Rep. Greg Macpherson
House District 38

Last week the Oregon Legislature reached its self- imposed deadline for introduction of bills for the 2007 session. After February 26 it became very difficult to start new proposals. In the days before the 26th, legislators passed draft bills around frantically in search of additional sponsors. Some introduce scores of bills, knowing that most won't pass. Sometimes the legislator knows it's a bad idea, but puts the bill in anyway just to please a constituent or supporter. I prefer to focus on fewer ideas and make sure they're worth the investment of staff and legislator time.

House Passes Biofuels Legislation
Proposals Boost Sustainability Strategy
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At their annual summit in January, Oregon business leaders made sustainability a core strategy. Last week the Oregon House advanced that strategy by passing a package of legislation on biofuels. It came out of the House Committee on Energy and Environment, where I serve as a member.

the time is right for a shift to biofuels and other renewable energy sources. Burning fossil fuels, like coal and oil, releases carbon dioxide, a major cause of global warming.

Unlike fossil fuels, which come from plants that grew millions of years ago, biofuels are produced from plants grown today. They burn cleaner than fossil fuels and the cycle of growing the plants and burning fuel made from them does not add carbon dioxide to the atmosphere.

Our legislation focuses on biodiesel and ethanol. Biodiesel is a vegetable oil extracted from seeds that can be grown in Oregon, like canola. It's burned in oil furnaces and in diesel cars and trucks.

Ethanol is blended into gasoline to expand its volume and cut harmful emissions. Currently ethanol comes from corn grown mainly in the Midwest. But a new technology hopes to make ethanol from cellulose, the fiber in straw and forest wastes.
The challenge is how to develop Oregon production of biodiesel and ethanol when they must compete with petroleum, which the federal government subsidizes in many ways. The competition gets tough as oil prices swing up and down in the global market.
One way to promote Oregon biofuels production is to give tax breaks. Our legislation increases tax credits for businesses and homeowners who install renewable energy equipment.

But tax breaks just spend the Oregon's general fund by reducing the revenue the state otherwise receives. And they're rarely eliminated, even when the need no longer exists.

Therefore, our biofuels legislation also creates two renewable fuel standards for Oregon - requiring that diesel contain 2 percent and later 5 percent biodiesel and that gasoline contain 10 percent ethanol. The standards go into effect when Oregon production of biodiesel and ethanol exceeds certain thresholds.

The only votes against the biofuels legislation last week were on the renewable fuel standards. Opponents argued that the state shouldn't require Oregonians to use renewable fuels, even in small percentages.

Despite this argument, I strongly support the renewable fuel standards. Unless we assure local biofuel producers a stable market, we cannot expect them to make a risky investment in this new technology. Furthermore, providing a local market for oil seeds and wood waste will support Oregon's farmers and forest owners.

I do not expect Oregon to become a major producer of biofuels. But I believe supporting biofuels will advance Oregon's broader reputation for sustainability. One of our greatest economic opportunities lies in becoming an intellectual center for renewable energy.

Several major developers of wind energy have their offices in Oregon. Researchers at Oregon State University are doing cutting edge work on new technologies. A pilot project for harnessing wave action is being developed on the coast. Other research aims at a hydrogen fuel cell that emits only water vapor.

All of this promotes Oregon as a leader in sustainability, a core strategy for our economy.

House Puts Corporate Kicker into Savings
Oregon to Get Rainy Day Fund at Last
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Ever since I entered the Legislature in 2003 I have advocated building a reserve to support state services when the economy declines. The idea has become known as a "rainy day fund”.

The challenge has been finding the money to build the fund. Today we acted on a good source: Oregon's peculiar "corporate kicker”. In the spring of each odd-numbered year state analysts must forecast how much corporate income tax revenue the state will receive in the 24 months starting on July 1. If the actual revenue exceeds the forecast by more than two percent, the entire excess must be paid out to corporations.

House members voted earlier today to suspend the corporate kicker that would be paid out for the current budget cycle. As a result, almost $300 million will go into the new rainy day fund, where it can be drawn down only when there is a significant decline in the economy.

In a recent floor debate on House Bill 2707, the suspension bill, I spoke in favor of placing the corporate kicker in a rainy day fund. The following is an excerpt from my floor speech:

"House Bill 2707 makes me proud to be an Oregon Legislator. This state has a great tradition of smart solutions for problems.

"House Bill 2707 goes a long way toward solving a big problem - Oregon has no reserves to pay for essential services when we hit the next downturn in the economy. You notice I said ‘when', not ‘if'. It's just a matter of time before our economic roller coaster takes another stomach-churning plunge.

"In the smart solution to this problem, HB 2707 saves the corporate kicker in a rainy day fund instead of paying it out to corporations. It's a smart solution because the corporate kicker represents a lot of money this budget cycle - $275 million in the last projection. It's a smart solution because the corporate kicker makes no sense. It's a windfall. No corporation has a line for ‘Oregon kicker' in its future revenue budgets. The kicker just drops on corporations out of the sky. Better that it drop into our new rainy day fund.

"My district probably has more owners and executives of corporations than any district in the state. But many of them, and much of the business community generally, supports House Bill 2707.”

Coffee Gathering
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Please join Representative Macpherson for coffee and conversation on Saturday, March 10 from 8- 9:30 a.m. at the Papaccino's Coffee House near the corner of Terwilliger and SW Taylor's Ferry Rd (8421 SW Terwilliger) in Portland.

Click here for a map to Papaccino's