Governor Kulongoski Issues Veto On House Bills 2472 And 2940 And Senate Bill 897

Press Release

Governor Kulongoski Issues Veto On House Bills 2472 And 2940 And Senate Bill 897

Bills relate to PERS benefits and reducing renewable energy incentives and standards

(Salem) - Today, pursuant to Article V, Section 15b of the Oregon State Constitution Governor Ted Kulongoski returned House Bill 2472, House Bill 2940 and Senate Bill 897 unsigned and disapproved to the Oregon Secretary of State.

House Bill 2472

House Bill 2472 reduces the Business Energy Tax Credit cap from $10.00 million to $3.5 million, a reduction that the Governor believes goes too far and would put Oregon at a competitive disadvantage in growing the state's renewable energy sector, resulting in fewer jobs and less clean, renewable energy sources. The bill would also expand the BETC to cover electric vehicle manufacturing and supporting parts.

"The BETC has aided the renewable energy industry, which in turn has provided much needed jobs while transitioning the state towards cleaner, renewable energy sources. Oregon now leads the nation in the percentage of jobs related to green energy," the Governor said the letter returned with the bill. "I cannot support a bill that would scale back our support for one of the few growing sectors of our economy at a time when encouraging new economic opportunity is so critically important."

In addition to the veto, the Governor signed House Bill 2180, which directs the Oregon Department of Energy, to conduct an economic analysis on renewable energy projects that qualify for the BETC.

"I agree with those who state that, while the BETC has been a very successful tool for growing our green economy, the time has come to examine the incentive levels," the Governor continued in his letter. "I am convinced, however, that we must first gather the facts concerning the BETC program and then apply those facts to the underlying economics of renewable energy projects before we make adjustments that may risk endangering a successful program."

In his letter the Governor also directed the Oregon Department of Energy to tighten the administrative rules that govern the BETC.

"I've asked them to clarify issues related to multiple projects and multiple BETC applications, and to establish further conditions for the approval of BETC applications as they relate to Oregon permitting and licensing laws, cost overruns, taxes owed to the state, length of operation of facilities, and enhanced accountability for jobs created and sustained," the Governor wrote.

The Governor closed his letter with a recommitment to supporting the development of the electric vehicle industry, the next generation of clean vehicles in Oregon.

"I will continue to work with state agencies and the legislature to develop policies to encourage the manufacture of electric vehicles and battery technology, so that we can grow this emerging technology," the Governor stated.

For the full text of the Governor's veto letter on HB 2472, click here.

House Bill 2940

House Bill 2940 would diminish the value of Oregon's Renewable Portfolio Standard (RPS) by including additional sources of generation not accounted for in the original standard at the expense of new renewable generation projects.

"The RPS is a great economic generator, and already has produced great environmental benefits. I cannot support reducing the standard and thereby, the economic and environmental benefits," the Governor wrote.

In the letter the Governor recognized the efforts by the bill's proponents to create additional economic opportunities for biomass facilities in Oregon built prior to 1995 and efforts to mitigate some of the bill's adverse impacts on the RPS, but he reiterated that he could not support the bill because of its diminishing effect to the RPS.

"The correct approach to prevent a depreciation of the RPS is to make a targeted expansion (increase) to the RPS to account for the additional renewable resources generated by biomass facilities built prior to 1995," the Governor wrote. "Such targeted expansion would benefit both the goals of the RPS and Oregon's biomass industry."

The governor committed to work with the legislature and stakeholders in the biomass industry to develop a policy for consideration during the February 2010 legislative session that both creates economic opportunity for biomass facilities, particularly in rural Oregon, while upholding the intent of the RPS, which is to generate new renewable energy in Oregon.

"We must maintain the growth and momentum in our renewable energy sector at this critical juncture, not slow it," the Governor wrote. "In that context, I hope to work with legislators and stakeholders to develop consensus on how to expand the number of megawatts required to be generated from renewable energy resources under the RPS, while also addressing in a more comprehensive way, concerns from individual renewable resource sectors that seek to become eligible for the RPS."

For the full text of the Governor's veto letter on HB 2940, click here.

Senate Bill 897

SB 897 would have required the Public Employee Retirement System to provide verification of member benefits, and then guarantee that level benefits regardless of their accuracy.

There are legal challenges pending in the courts related to these data verification and guarantee provisions and the Governor believes the court should rule before statutory changes should be made.

"My standing policy has been to allow matters pending in our appellate courts to run their course," the Governor wrote in his veto letter. "Once a final decision has been rendered by the appropriate appellate court, the Executive and Legislative branches then have the opportunity to determine what statutory changes are needed, if any. That policy applies here."

These vetoes conclude the Governor's action on legislation passed by the Oregon Legislature during the 2009 legislative session.

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