Page 8A
OFF PAGE ONE
East Oregonian
Wednesday, June 24, 2015
TAX: Energy credits could cost the state $968.1M in revenue
XVHWKDWFHUWL¿FDWHXQOHVVLW¶V
registered with the Depart-
had a chilling effect at the ment of Revenue, and that
Department of Revenue. The can only be done through us.”
agency never moved ahead
The
department
is
with a project focused on working to clean up the mess,
energy tax credits, despite with a retroactive rule change
¿QGLQJ SUREOHPV RQ WD[ that would clarify all the
returns claiming business private deals since mid-2012
energy tax credits that were were above-board.
audited for other reasons
Business energy tax
since July 2013.
credits issued between 2006
and 2014 could cost the
Lax oversight
state up to $968.1 million
Around the same time, in tax revenue, according to
the Oregon Department of the Department of Energy.
Energy also scaled back its A majority of that cost —
oversight of the tax credit $703.6 million — comes
sales. The department quietly from tax credits that were
stopped enforcing pricing sold to investors.
and other rules for the sales
The companies and indi-
in fall 2011, which allowed viduals who bought those
private brokers to strike deals credits could realize a total
in which the prices were gain of $209.4 million, which
QHYHUYHUL¿HGE\WKHVWDWH
is the difference between the
The
Department
of value of the tax credits and
Energy has struggled to track the price taxpayers paid to
the private deals, including purchase them, according to
verifying who was entitled to analysis by the EO Media
the tax breaks and how much Group/Pamplin Media Group
they paid for them.
Capital Bureau.
Anthony L. Buckley,
FKLHI¿QDQFLDORI¿FHUIRUWKH Audit project nixed
energy agency, was reluctant
On April 6, 2012, William
to say the buyers and sellers Minor, a state tax auditor in
of tax credits have reported Medford, suggested a project
all those transactions to the WRVSHFL¿FDOO\ORRNDWZKHWKHU
Department of Energy.
taxpayers who claimed busi-
“I can’t say with any real ness energy tax credits had
surety that they are,” Buckley failed to pay capital gains
said. “I think the transactions WD[HV0LQRUKDGMXVW¿QLVKHG
are in jeopardy if they don’t. an audit that netted the state
The third-party buyer can’t $57,000 in taxes, including
Continued from 1A
from previously unpaid
capital gains tax on an energy
tax credit.
Joann Martin, manager of
the compliance section at the
Department of Revenue, laid
out the issues in an April 11,
2012 email to the agency’s
director, Bucholz.
“The (tax) credits can be
large and the gains substan-
tial,” Martin wrote, and the
,56 KDG UXOHG WKDW SUR¿WV
from sales of the credits were
taxable.
“The political issue is that
the brokers of these sales have
sold them as non-taxable
transactions — which they
aren’t,” Martin wrote. “They
feel that we should have told
them long ago about the
(taxability) issue, and since
we didn’t, it’s ‘unfair’ to tax
them now. Plus, taxing this
process is ‘anti’ business.”
Bucholz asked Scott
Nelson, who was then-Gov.
John Kitzhaber’s business
adviser, how to proceed.
“We have told our audi-
tors that if they come across
the issue in the normal course
of an audit, they are to make
the adjustment but we have
told them that we will not
‘run a project’ to identify
these taxpayers until we get
direction from the Gover-
QRU¶VRI¿FH´%XFKRO]ZURWH
in an email to Nelson, before
an April 11, 2012 meeting on
the subject.
After Bucholz’ meeting
with Nelson, a manager at
the Department of Revenue
told auditors to ignore any
problems they found related
to the business energy tax
credit.
“If you come across a
BETC (Business Energy Tax
Credit) that was sold by one
entity to another and there is
a potential capital or ordinary
gain issue please do not audit
that issue,” manager Keith
Shribbs wrote on April 13,
2012. Shribbs explained
that a bill planned for the
2013 legislative session
would retroactively make
any income from the credits
non-taxable, “so we don’t
want to waste our or the
taxpayers time in this case.”
When the Legislature
adjourned in 2013 without
passing the tax credit bill,
Bucholz wrote in an email
to Martin, “the previous
moratorium on running a
µSURMHFW¶WR¿QGDQGELOOWKHVH
taxpayers is lifted and any
auditor that wants to pursue
these taxpayers and bill them
is free to do so.”
However, the Department
of Revenue never went ahead
ZLWK D VSHFL¿F DXGLW SURMHFW
to look at the energy tax
credits.
Joy Krawczyk, a spokes-
woman for the agency, said
that auditors still have a large
amount of independence to
look for known problems.
“Without talking to each
individual auditor, I wouldn’t
be able to get an idea why
they didn’t go with it,” Kraw-
czyk said of the business
energy tax credit project.
Auditors have addressed
problems with the energy
tax credits that came to light
while they were looking at
other issues. They found
problems on tax returns for
21 taxpayers who claimed
the renewable energy and
HI¿FLHQF\ WD[ EUHDNV RXW RI
a total 34 audits of business
energy tax returns since July
2013.
The department would
not say how much tax those
investors owed the state,
EHFDXVHWKHQXPEHURI¿OHUV
audited was small enough the
Department of Revenue did
not want to risk disclosing
their identities. However, the
audits resulted in changes for
21 of the taxpayers.
“Basically, for all audits
when there’s a change made,
it means something wasn’t
reported properly whether
it was intentional or unin-
tentional,” Krawczyk said.
“And normally the taxpayer
will end up paying more
taxes.”
Auditors
are
still
UHYLHZLQJ ¿OLQJV E\ PRUH
than a dozen taxpayers who
claimed business energy tax
credits.
WHEAT: Farmers can only insure up to 85 percent of their crop
storage. He predicted yields
could be less than 10 bushels
$VLWLVKH¿JXUHVWRKDUYHVW per acre on land that typically
somewhere in the high-teens grows 35-40 bushels.
to mid-30s on bushels per
“Even with crop insur-
acre, depending on the loca- DQFHLWJHWVGLI¿FXOWWRPDNH
WLRQRIWKH¿HOG
ends meet,” Lutcher said.
“In
an
agricultural “They’ll get by, but they
endeavor, you just have to roll certainly won’t make any
with it and stay in business,” money generating yields like
he said.
this.”
This year actually marks
Umatilla and Morrow
the third straight year of FRXQWLHVUDQN¿UVWDQGVHFRQG
below-average precipitation by a wide margin in Oregon
for the region’s wheat wheat production. Last year,
farmers after a solid season the two counties combined
in 2012. That’s compounded to harvest 17.8 million
the problem for growers bushels of winter wheat on
like Rietmann who manage 357,000 acres, according
WKHLU¿HOGVLQDZKHDWIDOORZ to the National Agricultural
rotation to build up moisture Statistics Service.
deep in the soil.
In 2012, the counties
Larry
Lutcher,
soil harvested
21.7
million
scientist with Oregon State bushels, thanks in part to
University Extension Service higher rainfall. Precipitation
in Morrow County, said the in Ione averaged 12.23
cumulation of three dry years inches between the months
in a row has left farmers with of September and June from
virtually no water left in 2010-2012, but just 7.5
Continued from 1A
inches from 2013-2015.
The timing of rains is
also an important factor, said
Jason Middleton, director
of grain operations for
Pendleton Grain Growers.
Dryland farmers always need
precipitation in May and June
WR¿QLVKDZLQWHUZKHDWFURS
and precipitation has essen-
tially shut off the past month,
he said.
“I would expect (yields) to
be down across the board this
year,” Middleton said.
Lower yields means more
farmers could fall back on
crop insurance to make them
whole. Debbie Morrison,
an agent with Wheatland
Insurance in Pendleton, said
she expects a lot of claims in
the coming weeks.
“I don’t think we’ll have
the high yields we were
looking for,” Morrison
said. “As soon as they start
harvesting, they’ll call me
and tell me if they’re light.”
Crop insurance provides
FRYHUDJH EDVHG RQ D ¿HOG¶V
production over the past 10
years, marking a guaranteed
value that can be set either to
yield or revenue. If harvest
comes in below the guar-
antee, insurance pays the rest.
Farmers can only insure
up to 85 percent of their crop,
and the higher the percentage,
the higher the premium,
Morrison said.
Don Wysocki, soil scien-
tist with OSU Extension in
Umatilla County, said this is
the kind of year crop insur-
ance is designed to protect.
He said the best farmers can
do now is hope for a burst of
rain in August or September,
which will allow for earlier
planting of next year’s crop.
“An inch of rain in early
September would do a lot of
good,” Wysocki said. “Yield
expectations would be better
if you can plant during the
optimal time period.”
Early rains also allow
farmers to spray for grassy
weeds, such as cheatgrass
and feral rye, before planting,
which saves money on
specialized herbicides they
would otherwise have to
use to kill the weeds while
sparing wheat.
Growers certainly don’t
enjoy the dry years, Riet-
mann said, but they always
SODQ IRU GLI¿FXOW FRQGLWLRQV
and aren’t surprised when
they happen. Dry periods are
normal for the area, he said,
and conditions always turn
back around.
“There are worse things
in life than a dry crop year,”
Rietmann said. “This is just
part of farming ... I suspect
somewhere on the other end
of this, it will pick back up
again.”
———
Contact George Plaven at
gplaven@eastoregonian.com
or 541-564-4547.
FLAG: Vandals have spray-painted several Confederate monuments in recent days
Chris McDaniel, a state centuries, offer “a very narrow
senator and tea party hero interpretation of the past.”
WHQVLRQVDVWKHEDWWOHÀDJDQG who nearly unseated U.S.
There were signs that
Confederate heritage groups Sen. Thad Cochran last year, the tension was spilling
say the outcry is misplaced, decried Gunn’s call. “A beyond the political realm.
despite widely seen images of cultural or historical cleansing Vandals have tagged several
the church shooting suspect, of all things potentially monuments in recent days,
21-year-old Dylann Roof, offensive will do nothing to including a Charleston statue
KROGLQJWKHUHEHOÀDJ
alleviate the problems caused of John C. Calhoun, a strong
At the least, however, the by racism,” he said.
defender of slavery and
ÀDJDQGRWKHUWULEXWHVUHPDLQ
Deaton, the Georgia secession before the war. It
a constant reminder of the historian, said McDaniel and other targets in Maryland
nation’s perpetual struggle misses the point. “Symbols and Texas were spray-painted
with race, and of some South- do matter and naming with phrases such as “Black
HUQHUV¶GH¿DQFHRIWKHIHGHUDO practices do matter,” he said, Lives Matter,” a slogan rooted
government’s efforts on civil arguing that the Confederate in recent police shootings of
rights.
monuments across the region, black men.
“Statues and monuments placed mostly by Confederate
The leader of a national
aren’t history,” said Stan veterans and women’s groups Confederate heritage orga-
Deaton, a historian for the in the late 19th and early 20th nization argues that Roof’s
Georgia Historical Society.
“They are what we choose to
tell future generations about
the past. ... It’s a very delicate
subject, and let’s not kid
ourselves: So much of it has
to do with race.”
In
Kentucky,
the
Republican candidate for
r. ibbert
governor, Matt Bevin, and
U.S. Sen. Mitch McConnell
ental
said Tuesday that a statue
of Confederate President
1100 Southgate, Suite 3 Pendleton, OR 97801
Jefferson Davis should be
www.drhibbertdental.com • 541-612-3707
removed from the Capitol
rotunda, where it sits just feet
from a statue of Abraham
Lincoln, whose election
spurred the South’s seces-
sion. Both men were born
in Kentucky, a border state
during the Civil War.
is a certified, licensed Audiologist with
Top Mississippi Repub-
licans appear divided over
more than 20 years of experience.
WKHVWDWH¶VÀDJWKHODVWRIWKH
50 state banners to include a
Visit
VSHFL¿F LPDJH RI WKH EDWWOH
www.renataanderson.com
ÀDJ +RXVH 6SHDNHU 3KLOOLS
Gunn said Monday that the
and call for an appointment today!
image, which appears in the top
left corner of the Mississippi
ÀDJ LV RIIHQVLYH DQG VKRXOG
Certified,
be removed. Lt. Gov. Tate
Licensed
Reeves responded Tuesday
that the decision should be up
Audiologist
to Mississippians, who voted
2-to-1 in 2001 to keep the
Still Located at:
ÀDJ*RY3KLO%U\DQWDOVRD
Republican, said he supports
2237 SW Court, Pendleton
that referendum result.
541-276-5053
Continued from 1A
“ We wish you a
Great Summer! ”
D H
D
Here for you!
Renata Anderson, MA
DFWLRQV VKRXOG QRW UHÀHFW RQ
American citizens who iden-
tify with the Confederacy.
³)LUVWLW¶VWKHÀDJVWKHQWKH
monuments, then the streets
names, then the holidays. I
feel like it’s open season on
anything Confederate,” said
Kelly Barrow, commander in
chief of the Sons of Confed-
erate Veterans, adding that the
vandalism scares him.
“Is someone going to be
attacked because they have
an S.C.V. sticker on their car?
:H¶UHRSHQWDUJHWVEDWWOHÀDJ
or not,” he said.
Barrow, based south of
Atlanta, said the discussion
over the monuments should
at least wait until after the
church victims’ funerals.
McKay Creek Estates
presents:
SAFETY
Join us as we host a lecture series to
increase safety awareness on fall prevention,
common home injuries and provide solutions
to keep you and your loved one safe!
S
LANDSCAPE:
Tried to leave the
ordinance very
open-ended
Continued from 1A
example, pathways longer
than 30 feet must have
landscaped lighting and
rock beds cannot make up
more than one third of the
landscaping credit.
“A lot of people have a
lot of gravel and very little
planting and are calling it
landscaping,” Spencer said.
The ordinances was
drafted by the Community
Enhancement Committee
as part of the committee’s
efforts to increase Hermis-
ton’s curb appeal, but not
everyone was happy with
the proposed new rules.
Kathy Erz, a local
business owner, said she
spends an extra $40 to $50
a month on her summer
water bill to water the
landscaping at one of her
businesses, plus $100 a
month for someone to
weed and mow. She said
not everyone can afford
the upkeep or the original
planting and design costs.
“This is an unfunded
mandate against busi-
nesses,” she said.
Diana Ables said right
now she doesn’t own any
commercial property, but
would like to, and some
of the property she has
looked at isn’t landscaped
at all, meaning she would
probably have to tear up
part of the parking lot.
“It makes it very
cost-prohibitive for us,”
she said.
Spencer said 3 percent
of a property isn’t as much
as it sounds — Fiesta
Foods has nine percent of
its property landscaped
and still has plenty of room
for parking. And he said
city staff have discretion
in allowing for alternatives
like window planters and
decorative lighting when
a property’s slope or
location isn’t conducive to
much green space.
Councilwoman Jackie
Myers, who sits on the
Community Enhancement
Committee, said the
committee tried to leave
the ordinance very open-
ended, allowing property
owners to do what works
best for their situation.
“We did try to structure
this so it wouldn’t be a
burden on people,” she said.
In the end Myers, Rod
Hardin, John Kirwan,
Manuel Gutierrez and
Drotzmann voted in favor
of moving forward with
a public hearing and state
review process, while
Doug Smith, Lori Davis,
Clara Beas-Fitzgerald and
Doug Primmer voted no.
———
Contact
Jade
McDowell at jmcdowell@
eastoregonian.com
or
541-564-4536.
FIRST
SafetyMan says
“Always be Safe to Ensure an Active
& Independent Lifestyle”
Healthy Back Habits for Caregivers - C O N C L U D E D
TUESDAY, MAY 26, 3:30PM
Many adults spend a considerable portion of their week caring for aging parents,
relatives, friends, or other adults. According to the results of a recent study, the stresses
and strains of providing care to an ill loved one may take a considerable toll on the
mental and physical health of care- givers — including their back and spine health.
Learn healthy back habits to keep you safe.
Elder-Friendly Living: Modifying Your Home for Safety
TUESDAY, JUNE 23, 3:30 PM
- C ONCLUDED
No matter when the older person’s home was built and regardless of whether it is
modern or traditional in style, it likely was designed for young adults and their families.
As adults age their homes also grow older, but most are not updated to accommodate
the resident’s changing needs. Home adaptation or modification can provide friendlier
elder living so older occupants may continue to life safely in the comfort of their home.
Know Your Numbers
TUESDAY, JULY 28, 3:30 PM
Are you at risk for diabetes, heart disease and other chronic diseases? Learn about
the numbers and what they mean for various screenings to stay in control of your
health. We will talk about cholesterol, blood pressure, body mass index (BMI) numbers
and more.
For more information or to RSVP, call us at (541) 276-1987 or visit us today!
McKay Creek Estates
1601 Southgate Place
Pendleton, Oregon 97801
www.PrestigeCare.com