OREGON HOUSE REPUBLICANS

FOR IMMEDIATE RELEASE February 5, 2010

Contact: Nick Smith 503-986-1351

HOUSE REPUBLICANS URGE PASSAGE OF JOBS BILLS

Main Street Incentive Plan, JOBS Act will Boost Oregon’s Economy

SALEM—House Republicans today urged the House Revenue Committee to consider and approve their solutions to put Oregonians back to work in the private sector. With Oregon leading the nation in new jobless claims last week, the Republicans asked the panel to advance the measures without delay.

House Republican Leader Bruce Hanna (R-Roseburg) and Rep. Tim Freeman (R-Roseburg) testified on HB 3620, also known as the Main Street Incentive Plan. The bill would create private sector jobs by encouraging businesses and owners to immediately invest in property improvements through a tax credit.

“The Main Street plan requires a short-term state investment, but it’s a smart investment towards putting people back to work,” Rep. Hanna said. “Unlike past stimulus bills, none of the costs of this program would go to administrative overhead or debt servicing. The Main Street plan will boost economic development throughout the state because it gives thousands of Oregonians and Oregon businesses an importance incentive to invest now.”

Under HB 3620, Oregonians would be able to claim 50 percent of the costs of their own capital construction projects over a five-year period. The program would limit the amount of the credit to $5,000 to $50,000 for home owners and $25,000 to $500,000 for business owners. The tax credit for property owners would only become effective after the projects are completed.  In order to quickly boost job creation, qualified projects must begin before May1, 2010.

“The amount of credits being claimed is directly related to the number of projects being done, and more projects mean more jobs,” said Rep. Freeman, the bill’s chief sponsor. “Additionally while the costs are spread over five years, the state will see increased tax revenues this summer due to increase payroll tax collections from Main Street projects. We all speak of how we need to ‘do something,’ and I believe this is an effective and efficient option to create jobs now.”

Rep. Scott Bruun (R-West Linn) testified on HB 3637--the Jobs, Opportunity and Business Success (JOBS) Act of 2010. The package creates a tax credit for businesses that create new jobs, allows small businesses to retain employees by deferring their state taxes until the economy improves, and provides new incentives for capital investment in the state.

“First, the JOBS Act promotes job creation by offering employers a $3,000 tax credit for every qualified new hire,” Rep. Bruun said. “To qualify, the new hire must be unemployed, the employer must retain the new hire for at least one year, and the new hire under the program must be a net increase in the total payroll of the employer.”

For a small business to qualify for tax deferment, the JOBS Act requires it to be a C-Corp less than five years old with less than $3.5 million in annual revenues. The total amount of allowable deferral is the lesser of 80 percent of state income tax liability, or $75,000. The interest rate for deferred taxes would be the prime rate, currently at 3.25 percent per annum.

“This program would give a young small business the ability to reinvest its own profits back into ongoing operations in order to hire employees, buy equipment, expand marketing efforts, or simply expand,” Rep. Bruun said.

Finally, the JOBS Act offers businesses relief from Oregon’s high capital gains taxes in 2010 as long as the gains are re-invested in an Oregon operation or entity within six months. The measure would incentivize the formation and movement of risk capital within a short time frame in order to spur new economic activity and job creation.

“Together, the three components of the 2010 JOBS Act will empower families, workers, small businesses and investors to accelerate job creation and retention in Oregon,” Rep. Bruun said.

Despite the House Republicans’ call for action, both the Main Street Incentive Plan and the JOBS Act remain pending in the House Revenue Committee.

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