Bonus depreciation cancelled. “Cap and trade” remains a threat.

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By Associated Oregon Industries,
Legislative Update,

AOI tells legislators that “bonus depreciation” is critical for business investment and recovery.

Oregon businesses watched capitol proceedings closely last week as legislators figured out how to deal with the federal economic stimulus legislation being considered in Congress.  Legislative leaders were worried that such a federal bill might actually create a significant cost impact for state government.  The legislative solution, crafted in the past week, was HB 2157, which completely disconnects Oregon from the federal stimulus legislation.  The effect of the bill is to deny Oregon taxpayers the tax benefits of the federal legislation on their Oregon tax returns.

Of particular interest to business was the “bonus depreciation” component which allows Oregon companies to accelerate depreciation write-offs on capital purchases.  AOI testified in both the Oregon House and Senate against HB 2157, arguing that “bonus depreciation” was a critical component for business investment and recovery, and that separating from the federal stimulus legislation was premature and counterproductive.  HB 2157 passed the Oregon House on a party-line vote and is expected to be voted on by the Oregon Senate this week.

AOI tells House Committee that “Cap & Trade” will cost Oregon jobs.

Nearly a half-dozen AOI members – the only real business people in a packed hearing – warned that an Oregon “cap & trade” greenhouse gas reduction system would cost Oregon jobs, as manufacturers would no longer be able to do business in Oregon under such a system.  In a hearing last week on SB 80, which allows the Oregon DEQ to develop and implement a “cap & trade” system for Oregon, AOI represented the viewpoint of Oregon businesses and their employees who would be severely impacted by such regulation.  The dramatic change in Oregon’s economy has largely derailed the momentum behind an expensive, burdensome “cap & trade” system for Oregon.   But the debate over SB 80 is not over.  AOI will continue to oppose the bill and work for business-friendly alternatives on this issue.