Questions and answers about the Portland Clean Energy Community Benefits Fund.
I noticed a 1% charge on grocery items. Why is this added to my bill?
After Portlanders voted to approve the Portland Clean Energy Community Benefits Initiative, a 1% surcharge (“Clean Energy Surcharge”) was imposed on large retailers with $1 billion in national revenue and $500,000 in revenue in Portland. The Clean Energy Surcharge is a surcharge on large retailers and is not a sales tax imposed on customers or consumers.
These large retailers with $1 billion in national revenue and $500,000 in Portland, can choose to separately itemize its obligation to pay the surcharge on its receipts or invoices to customers or consumers. In this case, you may see an increased amount on your receipt.
How is the surcharge applied to groceries?
The 1% surcharge does not apply to certain basic goods and services such as groceries that qualify for purchase under the U.S. Department of Agriculture (USDA) Supplemental Nutritional Assistance Program (SNAP) and qualified medicines or drugs.
Qualified medicines or drugs that are exempt from the surcharge include any medicine, drugs or medical devices that are regulated by the U.S. Food and Drug Administration (FDA) as a medicine or drug. Examples include over-the-counter drugs, prescription drugs, certain pet drugs and medical devices.
Examples of groceries that are not subject to the surcharge based on USDA SNAP guidance include:
- Fruits and vegetables
- Meat, poultry and fish
- Dairy products
- Breads and cereals
- Other foods such as snack foods and non-alcoholic beverages
- Seeds and plants, which produce food for the household to eat
Examples of groceries that are subject to the surcharge include:
- Beer, wine, liquor, cigarettes or tobacco
- Vitamins and supplements (if an item has a Supplement Facts label, it is considered a supplement and is not eligible for SNAP purchase)
- Live animals (except shellfish, fish removed from water, and animals slaughtered prior to pick-up from the store)
- Prepared foods fit for immediate consumption
- Hot foods
- Any nonfood items such as:
- Pet foods
- Cleaning supplies, paper products and other household supplies
- Hygiene items, cosmetics
Is my business subject to the 1% surcharge?
The Clean Energy Surcharge applies to large retailers with annual tax-year total gross revenue from retail sales of $1 billion or more in the U.S. and $500,000 or more within the City of Portland, excluding utilities, co-ops, credit unions, as well as sales of qualified groceries, medicine or drugs and health care services. For more information on the definition of a “large retailer,” tax filings and revenue collections of the Clean Energy Surcharge (Amendments to the Portland City Code Section 7.02, Business License Law), please visit the City’s Revenue Division’s website.
How much will the surcharge raise?
The City of Portland’s Revenue Division currently estimates annual tax receipts of $54 million to $71 million. Because of timing differences between tax and fiscal years and an option for taxpayers to extend their filing deadlines for an additional six months, the Revenue Division will not have a final accounting of first year (tax year 2019) revenues until late 2020/early 2021. Actual collections will vary based on economic conditions, the proportion of sales that are classified by taxpayers as retail or wholesale, and the definition of taxpayers and their tax liability.
Where will the money generated through the surcharge go?
Revenues from the Clean Energy Surcharge on large retailers will be deposited into the Portland Clean Energy Community Benefits Fund and disbursed as grants for programs and projects that meet the requirements and priorities of the ballot measure. Nonprofit organizations, including community centers and rental housing providers, will be eligible to apply either solely or in partnership with other nonprofit entities, government entities or for-profit businesses.
How do I apply for a PCEF grant?
Qualified nonprofit organizations will be eligible to apply for grants. Applicants are encouraged to partner with other nonprofits, governmental organizations, and for-profit businesses in developing projects and program proposals. More details about project eligibility will be available and released in Spring 2020 as grant criteria are developed.
How can I be sure the dollars will be spent wisely?
A nine-person oversight committee of experts and community members — modeled after the successful Portland Children's Levy — will recommend which projects get funded and ensure accountability. The Committee’s funding recommendations will be approved by City Council in a transparent and public process before funds are awarded. The Committee will also evaluate and report on the effectiveness of the funded programs in meeting their stated objectives and the overall goals of the initiative. In addition, the Fund will be subject to an annual financial audit and a performance audit every two years.
How will the Fund help people with low incomes?
The Fund will directly benefit people with low incomes. It will prioritize creating family-wage jobs, healthier homes and reduced utility costs for underserved communities. Landlords who agree to improve properties through the Fund’s energy efficiency upgrade programs will be required to limit rent increases. Robust contracting standards will also ensure that historically disadvantaged people are trained, and minority- and women-owned businesses are performing the work.
How is this different from the work of Energy Trust of Oregon and State of Oregon clean energy programs?
The Portland Clean Energy Community Benefits Fund is unique because it supports community-driven clean energy solutions and jobs to help Portlanders that need them the most. It also provides resources for families that do not have the disposable income to qualify for energy efficiency rebates and tax credits.
Energy Trust of Oregon provides support and incentives for residential energy efficiency and solar energy to the maximum level governed by the Oregon Public Utilities Commission, whose mission does not include climate change or social justice. The Portland Clean Energy Community Benefits Fund will add much-needed dollars on top of Energy Trust incentives. In addition, the Fund will provide a stable source of long-term funding for energy efficiency projects since the Oregon Department of Energy’s Residential Energy Tax Credit (RETC) program expired in 2017.