Friday, July 20, 2012

Clatsop County Officials Sign Agreement For Wauna Tax Settlement


Thursday, July 19, 2012

Clatsop County officials on Thursday signed documents for a loan covering a settlement payment in the Georgia-Pacific tax appeal case.

The loan, from Bank of America, will cover a $2.5 million payment from the county and 60 other taxing districts to the owner of the Wauna pulp and paper mill.

The payment was agreed to under a settlement reached last May between Clatsop County and Georgia-Pacific over the company’s appeal of a tax penalty and tax assessments on part of the facility.

The county was able to secure an interest rate on the loan of 2.18 percent – below the 3 percent originally envisioned. Annual payments on the 10-year loan will total $283,251.30 and will be covered by all taxing districts in the county – the funds will be deducted from the districts’ yearly property tax disbursements, under the terms of an intergovernmental agreement that was signed by all the districts in 2009 in anticipation of a refund payment.

The case dates to 2004, when Georgia-Pacific was granted tax exemptions under the Lower Columbia Maritime Enterprise Zone for construction of its new No. 6 paper-making machine. Under the exemption, property taxes assessed on the new machine were to be waived for five years.

In 2007 the company was disqualified from the exemption program for failing to maintain a minimum required number of employees at the mill site. As a result of the disqualification, the company had to repay the exempted taxes, totaling approximately $4.1 million. That money was distributed among the 60 taxing districts.

Georgia-Pacific filed an appeal in Oregon Tax Court challenging not only the exemption penalty but also the assessed valuation of the entire mill for three tax years. The appeal claimed that the assessment, on which Wauna’s annual property tax bill is calculated, overvalued the mill by approximately $154 million.

Along with the payment, the settlement establishes the real market value for the mill at $291 million. Georgia-Pacific cannot challenge that assessment for five years.

Under Georgia-Pacific’s claim, Clatsop County and the other districts could have been required to refund more than $11 million if the company had prevailed on all appeals at trial.

State statute mandates that all of the 60 taxing districts in Clatsop County are liable for a portion of the settlement, regardless of whether Wauna Mill lies within their boundaries.

Wauna pays a total of $3,410,536 a year in property taxes to taxing entities in Clatsop County, making it by far the county’s biggest single taxpayer.

Released by:Tom Bennett
Community Relations Coordinator
(503) 338-3622

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