Resolution No. 36394

Direct City Attorney to file a formal complaint with the Oregon Public Utility Commission to request an investigation to establish whether PGE violated Oregon law by joining in consolidated tax filings with non-unitary subsidiaries of Enron for Oregon tax purposes, resulting in more than $50 million in Oregon corporate income taxes collected from ratepayers in rates but not properly remitted to the State of Oregon (Resolution)

WHEREAS, ORS 317.710 states in section 5(a) that if two or more affiliated corporations elect to file a consolidated Federal income tax return, that they shall only file a consolidated State income tax return with those entities who are unitary in nature; and

WHEREAS, unitary entities are affiliated entities who conduct a similar business; and

WHEREAS, in a sworn statement to the Securities Exchange Commission, Enron officials have described PGE and Enron’s business as separate, insulated, and at an arms length from each other; and

WHEREAS, it appears that PGE and Enron have violated Oregon law by improperly consolidating their income and losses for Oregon tax purposes, resulting in more than $50 million in Oregon tax being paid to Enron instead of the State of Oregon.

WHEREAS, the Oregon Public Utility Commission has the authority to investigate these concerns;

NOW, THEREFORE, BE IT RESOLVED, by the Council of the City of Portland, that the City Attorney is authorized and directed to file a complaint on behalf of the City with the Oregon Public Utility Commission (OPUC), requesting that the OPUC investigate whether Portland General Electric, a utility regulated by the OPUC, violated Oregon law by failing to file required separate Oregon corporate income tax returns from 1997 through 2005 inclusive, or by joining in consolidated Oregon corporate income tax returns for those same periods without properly eliminating losses of non-unitary businesses, including Enron and its subsidiaries, and resulting in more than $50 million of Oregon corporate income taxes collected from ratepayers which were not properly remitted to the State of Oregon, or took other actions that were in violation of Oregon law and detrimental to the interests of ratepayers, and to present the City's views and protect its interests and the interests of its citizens as may be necessary.

BACKING SHEET INFORMATION

AGENDA NO. 404-2006

ORDINANCE/RESOLUTION/COUNCIL DOCUMENT NO. 36394