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State overhauls 'green' tax breaks
Wednesday, November 04, 2009 | No comments posted.
SALEM (AP) — Oregon’s Department of Energy has issued new rules aimed at curbing a state program that grants lucrative tax credits for wind, solar and other renewable power plants.
The changes are intended to trim the program’s cost by making it harder for one project to qualify for multiple tax credits and by giving state officials greater leeway to deny an application.
The rules announced Tuesday also allow the state to withdraw a tax break if a company doesn’t produce the amount of energy, conservation or jobs it promised in its application. The rules become effective immediately but don’t apply to businesses that have already qualified for the tax credits.
While the rules are considered temporary, energy officials plan to file paperwork to make them permanent by May.
“We took this action because we wanted to preserve the program but also to make sure we were reducing the fast growth in the program and reducing its impact on the general fund,” Energy Department Director Mark Long said.
An Oregonian investigation found that some companies that got the tax credits filed for bankruptcy protection or failed to perform. Records show that 97 percent of applicants have been granted tax credits. Since 2007, the cost of the subsidies has jumped from about $10 million a year to an estimated $167 million in the 2009-11 biennium.
Oregon Windfarms was able to claim four tax credits, worth a total of $40 million, for what many in the Energy Department considered to be a single project, the newspaper reported.
The new rules spell out more clearly what qualifies for multiple tax credits, Long said.
Sen. Ginny Burdick, D-Portland, chairs the state Senate Finance and Revenue Committee and has been one of the harshest critics of the tax credits.
She spearheaded a bill to cut the subsidies to large wind farms, arguing that the incentives were unnecessary. The bill passed the Legislature but was vetoed by Gov. Ted Kulongoski. Burdick noted that many of the changes announced Tuesday were contained in the bill.
After vetoing the bill, the governor directed Long to come up with new rules addressing some of the program’s problems.
“The governor gave this direction at the end of the last legislative session and is pleased with this first step,” Kulongoski spokeswoman Anna Richter Taylor said. “He thinks the conversation needs to continue in February and the 2011 session.”
The changes are intended to trim the program’s cost by making it harder for one project to qualify for multiple tax credits and by giving state officials greater leeway to deny an application.
The rules announced Tuesday also allow the state to withdraw a tax break if a company doesn’t produce the amount of energy, conservation or jobs it promised in its application. The rules become effective immediately but don’t apply to businesses that have already qualified for the tax credits.
While the rules are considered temporary, energy officials plan to file paperwork to make them permanent by May.
“We took this action because we wanted to preserve the program but also to make sure we were reducing the fast growth in the program and reducing its impact on the general fund,” Energy Department Director Mark Long said.
An Oregonian investigation found that some companies that got the tax credits filed for bankruptcy protection or failed to perform. Records show that 97 percent of applicants have been granted tax credits. Since 2007, the cost of the subsidies has jumped from about $10 million a year to an estimated $167 million in the 2009-11 biennium.
Oregon Windfarms was able to claim four tax credits, worth a total of $40 million, for what many in the Energy Department considered to be a single project, the newspaper reported.
The new rules spell out more clearly what qualifies for multiple tax credits, Long said.
Sen. Ginny Burdick, D-Portland, chairs the state Senate Finance and Revenue Committee and has been one of the harshest critics of the tax credits.
She spearheaded a bill to cut the subsidies to large wind farms, arguing that the incentives were unnecessary. The bill passed the Legislature but was vetoed by Gov. Ted Kulongoski. Burdick noted that many of the changes announced Tuesday were contained in the bill.
After vetoing the bill, the governor directed Long to come up with new rules addressing some of the program’s problems.
“The governor gave this direction at the end of the last legislative session and is pleased with this first step,” Kulongoski spokeswoman Anna Richter Taylor said. “He thinks the conversation needs to continue in February and the 2011 session.”
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