BUSINESS & AG LIFE
2B — THE OBSERVER & BAKER CITY HERALD
THURSDAY, JUNE 17, 2021
Most new Oregon wells drilled in groundwater concern areas
By MATEUSZ PERKOWSKI
Capital Press
SALEM — Most new
wells in Oregon are drilled
where groundwater is
already at risk of depletion,
potentially aggravating
confl icts among irrigators,
according to state water
regulators.
In the past decade,
about 80% of applications
for groundwater permits
were in “areas of concern”
or “signifi cant concern”
for declining aquifers and
other groundwater prob-
lems, an agency study
found.
Roughly 80% of those
applications were approved
by the state’s Water
Resources Department, the
study said.
One-third of the “signif-
icant concern” areas iden-
tifi ed in the OWRD’s anal-
ysis aren’t currently subject
to regulatory groundwater
restrictions, the report said.
The report’s fi ndings
were recently met with con-
sternation by some mem-
bers of the Oregon Water
Resources Commission,
which oversees the agency.
The problem is remi-
niscent of falling Chinook
salmon populations in the
Brad Williams Water Well Service/Contributed Photo, File
Water well driller Brad Williams of Terrebonne stands beside his
equipment. He has been working in California since the Oregon Wa-
ter Resources Department in October 2019 revoked his license and
fi ned him $7,550 for a string of civil violations.
Willamette River, which
some consider the “best
studied extinction ever,”
said Joe Moll, commis-
sion member and executive
director of the McKenzie
River Trust.
“I kind of fear we have
a similar situation where
we’re watching something
mation,” but the study indi-
cates that Oregon may not
have the correct standards
for approving groundwater
applications, said Meg
Reeves, retired general
counsel for Oregon State
University and the commis-
sion’s chair.
“This does raise the
questions for me as to
whether we have drawn
the line in the right place
as to whether we would
act to limit further appro-
priation,” she said. “I hope
we’ll be able to fi nd a way
to do something with this
information that would
help us prevent further
drawdown.”
The OWRD’s study,
which has mapped the
state’s areas of concern for
groundwater, is intended to
“stimulate conversations”
with stakeholders and
may discourage drilling in
problem areas, Iverson said.
The analysis will also
help prioritize aquifer mon-
itoring and may indicate
where the agency should
re-evaluate the boundaries
of groundwater restricted
areas, he said.
For example, some wells
next to the Mount Angel
Groundwater Limited Area
are showing declines sim-
get worse. We’re kind of
working but we’re some-
what limited, i.e. help-
less,” Moll said during the
commission’s most recent
meeting.
Under Oregon water law,
regulators are limited in
their ability to reject per-
mits for new wells, said
Justin Iverson, OWRD’s
groundwater section
manager.
For example, wells
must generally be within a
mile of a stream or river to
trigger concerns about sub-
stantially interfering with
surface waters, he said.
Similarly, new wells are
only considered to interfere
with existing ones in lim-
ited circumstances, Iverson
said. “There is a fairly
high threshold for fi nding
injury.”
Applicants are often
“savvy” enough to know
which locations are more
likely to be approved for
drilling, he said.
“The statutes say that
we’re going to presume that
a new application is in the
public interest, but that’s a
rebuttable presumption,”
Iverson said.
Permitting entities must
always make decisions
based on “imperfect infor-
ilar to those within its
boundaries, said Ben Scan-
della, OWRD’s ground-
water data chief.
“This is an example
of how this tool can help
us see areas where the
existing boundaries of
groundwater restricted
areas may have been
appropriate when they
were created but don’t nec-
essarily refl ect the current
conditions,” he said.
The agency’s study does
have a “data availability
bias,” in that it focuses on
areas where irrigation is
the most prevalent, Iverson
said.
Areas of concern are
also measured by township,
a 36-square-mile unit of
land measurement in which
groundwater conditions
may vary, he said.
The map will be incre-
mentally improved as
OWRD incorporates more
data in the future, Iverson
said.
“We wanted to make an
objective and repeatable
evaluation,” he said. “This
groundwater concerns
map is going to be easily
updated over time and we
fully intend for it to be a
living map as more infor-
mation is brought in.”
Oregon Senate to vote on plan
to scale back business tax break
By HILLARY BORRUD
The Oregonian
Carol Ryan Dumas/Capital Press, File
The United States Department of Agriculture says it will begin work on three proposals to strengthen its
enforcement of the Packers and Stockyards Act.
USDA to bolster meatpacker
antitrust enforcement act
Packers and Stockyards Act is intended to protect producers
from unfair, deceptive, anti-competitive practices
By CAROL RYAN DUMAS
Capital Press
WASHINGTON — The
United States Department
of Agriculture says it will
begin work on three pro-
posals to strengthen its
enforcement of the Packers
and Stockyards Act.
The 100-year-old law
was designed to protect
poultry, hog and cattle
producers from unfair,
deceptive and anti-com-
petitive practices in meat
markets.
The Packers and Stock-
yards Act is a vital tool
for protecting farmers and
ranchers, but it needs to
take into account modern
market dynamics and
should not be used as a
safe haven for bad actors,
USDA Secretary Tom
Vilsack said Friday in
announcing the proposed
action.
USDA intends to take
three actions related to
rulemaking in the months
ahead. First is to propose a
new rule to provide greater
clarity to strengthen
enforcement of unfair and
deceptive practices, undue
preference and unjust prej-
udices. Second is to pro-
pose a new poultry grower
tournament system rule.
Third is to re-propose a
rule to clarify parties do
not need to demonstrate
harm to competition to
bring legal action against a
meatpacker.
National Cattlemen’s
Beef Association said
in a statement USDA’s
announcement signals the
start of a lengthy process,
not the conclusion.
“We don’t yet have lan-
guage for proposed rules,
and we don’t expect to see
specifi cs from USDA for
some time”, said Colin
Woodall, NCBA CEO.
“But we are actively
engaging with the agency
to get more information
and make sure that the
needs of our members are
front and center in the
administration’s thought
process,” he said.
NCBA will fi ght hard to
ensure that any regulations
created or revised do not
reduce cattle producers’
ability to realize higher
profi ts and make the deci-
sions that are best for their
business, he said.
NCBA is particularly
concerned with cattle
producers’ ability to use
alternative marketing
arrangements, which
represent value-added
opportunities.
The North American
Meat Institute issued a
Now Open for Dine In
statement saying these
sorts of proposals in the
past have been opposed by
many livestock producers
and Congress.
The National Farmers
Union welcomed the
announcement, saying
the Packers and Stock-
yards Act lacks the teeth
to achieve its intended
objectives and proposed
reforms are a step in the
right direction.
The Farm Action Alli-
ance also welcomed the
announcement, contending
USDA can’t rein in abu-
sive corporate monopo-
lies without new, strong
regulations.
“Past failures to ade-
quately strengthen the
Packers and Stockyards
Act left the regulatory
environment a safe haven
for huge corporations
to grow and consolidate
power,” said Joe Maxwell,
president of the alliance.
The Organization for
Competitive Markets said
the proposed rule in regard
to competitive injury is the
most needed reform.
“This regulation would
clarify that parties do not
need to demonstrate harm
to competition in order to
initiate legal action,” said
Mike Eby, the organiza-
tion’s executive director.
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SALEM — Oregon
lawmakers in the Demo-
cratic-controlled Senate
are set to vote as soon as
this week on a proposal
to trim a controversial
business tax break that
allows qualifying busi-
ness owners to pay much
lower tax rates than wage
earners.
With less than two
weeks left in the legis-
lative session, the plan
emerged from a seem-
ingly unlikely collabora-
tion between Sen. Ginny
Burdick, D-Portland,
and Sen. Brian Boquist,
a former Republican
from Dallas who is now a
member of the Indepen-
dent Party of Oregon.
In 2017, House Demo-
crats passed a bill to pare
back the tax break after
state tax data showed it
benefi tted lawyers and
doctors — “suits and
scrubs,” Democrats com-
plained — rather than
the manufacturers and
exporters touted as bene-
fi ciaries when lawmakers
approved the provision in
2013. The 2017 bill died
in the Senate and quali-
fying taxpayers continue
to use the break to cut
their taxes by approx-
imately $100 million a
year, meaning the state
misses out on an equiva-
lent amount of revenue.
Boquist said in an
interview Monday, June
14, that it’s not sur-
prising he and Burdick
worked together to scale
back the tax break for
pass-through businesses,
because eight years ago
they were both part of
the small group of law-
makers who worked
with then-Gov. John
Kitzhaber, a Democrat,
to craft the tax cut.
“The only thing Bur-
dick and I did is fi ne tune
some issues we’d raised
over those four months
(writing the tax law) in
2013,” Boquist said.
He said the bill now
moving forward does not
address all of the prob-
lems leaders were aware
of when they drafted the
law all those years ago.
“The concern then
was OK, you’re trying to
create jobs and we know
for the most part closely
held doctor’s offi ces don’t
create jobs,” he said. He
said it has proved chal-
lenging to fi nd a way to
restrict the break to cer-
tain sectors of business
without drawing a legal
challenge.
A large share of the
state’s top 1% of earners
receive income from the
types of businesses that
can take advantage of the
tax break: nearly 70%,
according to the Legis-
lative Revenue Offi ce.
Construction represented
the largest sector of pass-
through businesses in
Oregon, followed by the
combined category of
“professional,” scientifi c
and technology, which
includes lawyers and
doctors, according to the
state’s most recent tax
data from 2018.
The current proposal,
Senate Bill 139, would
completely eliminate the
tax break for owners of
businesses with more
than $5 million in annual
profi ts. For partnerships
and S corporations with
$251,000 to $500,000
in income, including
lawyers and doctors,
it would slightly lower
the tax rate from 7.2%
to 7%. By way of com-
parison, people’s wages
are taxed at 8.75% for a
single fi ler with $9,200 to
$125,000 of income and
8.75% for joint fi lers with
$18,400 to $250,000 of
income.
Senate Bill 139 would
also tighten employment
requirements businesses
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must meet to qualify,
with an increasing ratio
of employees to owners
the more profi ts a busi-
ness makes. For example,
business owners with
$250,000 to $500,000
in profi ts would have
to employ one Oregon
worker per owner of the
business, according to a
legislative document.
Currently, the state
allows businesses to
qualify if they have
at least one employee
other than the owner
who works at least 1,200
hours a year. Businesses
that could not meet the
tighter requirement could
still qualify for the spe-
cial business tax rates, if
they plow a large portion
of their profi ts — 75% —
back into the business.
Lawmakers on the
Senate Committee on
Finance and Revenue
voted along party lines
Monday to send the pro-
posal to the full Senate
for a vote. All three
Democrats plus Boquist
voted for it and Sen.
Lynn Findley, R-Vale,
voted “no.” Findley did
not express opposition
to the change itself but
questioned why his col-
leagues were not sending
the bill to the Ways and
Means committee, since
the state would have
to spend an estimated
$165,000 to administer
the changes over the next
two years.
Boquist said he and
Burdick pored over
reams of state tax data
in recent months as they
researched potential
changes to the business
tax break.
“Ironically, the com-
panies that are making
more than $5 million
a year in profi t don’t
seem to be reinvesting
the money and they
don’t seem to need the
money for additional
employees,” Boquist said.
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