A few weeks ago we weighed in on legislation working its way through the special session of the Oregon legislature. In our paper, A Better BETC: Improving Oregon’s Business Energy Tax Credit we urged the legislature to:
- Keep BETC strong. The legislature should commit to a significant level of tax credits to support investments in clean energy that create new jobs. The legislature should also conduct further analysis of BETC—and expand it in the future if it continues to provide a handsome return to Oregon residents.
- Extend the sunset of credits. Extending the credits leads to more certainty for existing projects and new proposals that can create more green-collar jobs for Oregon’s economy. Ideally, the legislature would extend the credits through the end of 2016.
- Build in accountability. Creating a “claw-back” provision would allow the state to recoup any lost revenue if tax credits are given to facilities that fail to meet strict conditions. Accountability can ensure that BETC creates real jobs and economic benefits for Oregon.
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With the passage yesterday of House Bill 3680 it appears that the legislature has done the right thing, keeping $300 million in tax credits available through the end of 2013. Next stop is concurrence with the House and then to the Governor for signature. Success in the legislative process is often measured by what didn’t happen, and that is true in this case. The BETC program was not gutted or allowed to sunset next year.
The BETC program has been under heavy fire from many who argue that it was a big giveaway to business. However, our review of the program and studies of it over the last several years, lead us to conclude that BETC is a job creator.
While BETC survived a sustained attack, it still isn’t getting the respect it deserves. One Democratic legislator said after the passage that at least now there won’t be any more “loopholes that waste taxpayer money, or tax credits to bad actors who game the system.” Not exactly high praise for a program that put Oregon at the forefront of the clean energy economy in the country.
The good news is that BETC will live to see another day, but there should be a sustained effort to connect the program with the needs of those who were most aligned against it: advocates for the poor and under-served. I suggested looking at the great wind project going forward in Grays Harbor. That project uses federal tax credits to create jobs, clean energy, and revenue for an agency serving families hardest hit by the recession in a rural community.
Passage of this legislation is only part of the fix. The next step is turning critics and skeptics of the BETC program into its greatest advocates. The leaders of the BETC program now have a couple years to find projects that vividly demonstrate the benefit the program has to people who need jobs in Oregon. With the changes made yesterday they should find plenty.