71st OREGON LEGISLATIVE ASSEMBLY--2001 Regular Session
SA to A-Eng. HB 2332
LC 1912/HB 2332-A4
SENATE AMENDMENTS TO
A-ENGROSSED HOUSE BILL 2332
By COMMITTEE ON RULES AND REDISTRICTING
June 26
On page 1 of the printed A-engrossed bill, line 2, after the
semicolon insert 'creating new provisions; amending ORS 314.752
and 318.031;'.
On page 2, after line 39, insert:
' { + SECTION 4. + } { + Sections 5 to 9 of this 2001 Act
are added to and made a part of ORS chapter 285B. + }
' { + SECTION 5. + } { + As used in sections 5 to 9 of this
2001 Act:
' (1) 'Eligible business' means a business that:
' (a) Is engaged within a reservation enterprise zone in the
manufacture or provision of goods, products or services to other
businesses or to the general public, through activities
including, but not limited to, manufacturing, assembly,
fabrication, processing, shipping, storage, retail sales or
services, child care, housing, retail food service, health care,
tourism, entertainment, financial services, professional
services, energy development, construction or similar activities;
and
' (b) Occupies or owns a new business facility within a
reservation enterprise zone.
' (2) 'New business facility':
' (a) Means a physical asset within a reservation enterprise
zone that satisfies the following requirements:
' (A) The facility is used by a business in the operation of a
revenue-producing enterprise, except that the revenue-producing
enterprise must consist of activity other than leasing the
facility to another person; and
' (B) The facility is acquired by or leased to a business on or
after January 1, 2002, including a facility, the title or
possession of which is transferred to the business on or after
January 1, 2002, or a facility, the construction, erection or
installation of which is completed on or after January 1, 2002;
' (b) Subject to paragraph (c) of this subsection, includes a
facility acquired or leased from a person that used the facility
in a revenue-producing enterprise within the boundaries of the
same Indian reservation immediately prior to the transfer of
title or possession of the facility to the business; and
' (c) Does not include:
' (A) A facility that is used in a revenue-producing enterprise
that is the same or substantially identical to the
revenue-producing enterprise in which the facility was previously
used within the boundaries of the same Indian reservation; or
' (B) Any property that merely replaces existing property and
that does not expand the capacity of the revenue-producing
enterprise in which the facility is to be used.
' (3) 'Reservation enterprise zone' means a zone designated by
section 7 of this 2001 Act.
' (4) 'Tribal government' means the governing body of an Indian
tribe, if the governing body has the authority to levy, impose
and collect taxes within the boundaries of the reservation of the
tribe.
' (5) 'Tribal tax' means any specific tax that is or may be
levied or imposed by a tribal government upon a business and that
is measured with reference to a specific level or quantity of
that business's income, operations, use or ownership of property.
' Tribal tax' includes, but is not limited to, an income or
excise tax, an ad valorem property tax, a gross receipts tax or a
sales and use tax. + }
' { + SECTION 6. + } { + The Legislative Assembly finds that
the welfare of the residents of the rural Indian reservations of
this state is acutely dependent upon the growth, development and
expansion of employment and business opportunities within
reservation boundaries. Geographic and other obstacles have made
it difficult for rural Indian reservations to attract and retain
private business investment. The tax systems of this state, by
subjecting businesses located within reservation boundaries to
state taxation in addition to any taxation imposed by the
reservations themselves, has heightened the economic isolation of
this state's rural reservations and impeded the efforts of Indian
tribes to develop sufficient tax bases to fund essential
governmental services on their reservations. The Legislative
Assembly further finds that it is in the best interests of this
state to create equality that will enable rural Indian
reservations to attract and retain private business investment.
The Legislative Assembly declares that it is the purpose of
sections 5 to 9 of this 2001 Act to remove the tax disincentives
that currently inhibit private business and industry from
locating and operating enterprises within the boundaries of the
rural Indian reservations of this state. + }
' { + SECTION 7. + } { + (1) Trust land of an Indian tribe
that meets all of the following requirements is designated as a
reservation enterprise zone for the purposes of sections 5 to 9
of this 2001 Act:
' (a) The Indian tribe is a federally recognized Indian tribe;
' (b) The reservation of the Indian tribe is entirely within
the boundaries of this state;
' (c) The land for which zone designation is sought is land
held in trust by the United States for the benefit of the Indian
tribe and is located entirely within the boundaries of the
reservation;
' (d) As of January 1, 2002, the population density of the
reservation, as measured by the most recent federal decennial
census, does not exceed 15 persons per square mile;
' (e) Fifty percent or more of the households within the
boundaries of the reservation have incomes below 80 percent of
the median income of this state, as defined by the most recent
federal decennial census; and
' (f) The unemployment rate within the reservation for all
enrolled members of the tribe is at least 2.0 percentage points
greater than the comparable unemployment rate for this state, as
defined by the most recently available data published or
officially provided and verified by the United States Government,
the Employment Department, the Portland State University Center
for Population Research and Census or a special study conducted
under a contract with a regional academic institution.
' (2) At the request of a tribal government, the Economic and
Community Development Department shall determine if trust land is
designated as a reservation enterprise zone under this
section. + }
' { + SECTION 8. + } { + (1) A credit against the taxes that
are otherwise due under ORS chapter 316 or, if the taxpayer is a
corporation, under ORS chapter 317 or 318, is allowed to an
eligible business operating a new business facility in a
reservation enterprise zone.
' (2) The amount of the credit allowed to the eligible business
shall equal:
' (a) The amount of tribal property tax imposed on a new
business facility of an eligible business that is paid or
incurred by the eligible business during the income or corporate
excise tax year of the eligible business; or
' (b) If the eligible business has not previously conducted
business operations within the reservation enterprise zone, the
amount of tribal tax paid or incurred by the eligible business
during the income or corporate excise tax year of the eligible
business.
' (3) The credit allowed to the eligible business may not
exceed the tax liability of the eligible business for the tax
year and may not be carried over to another tax year.
' (4) A credit is allowable under this section only to the
extent the tribal tax on which the credit is based is imposed on
businesses not owned by Indians on a uniform basis within the
territory over which the tribal government has the authority to
levy, impose and collect taxes.
' (5) The credit shall be claimed on a form prescribed by the
Department of Revenue containing the information required by the
department, including information sufficient for the department
to determine that the taxpayer is an eligible business and that
the facility operated by the business is a new business facility.
' (6) An eligible nonresident individual shall be allowed the
credit computed in the same manner and subject to the same
limitations as the credit allowed a resident by subsection (1) of
this section. However, the credit shall be prorated using the
proportion provided in ORS 316.117.
' (7) If a change in the taxable year of a taxpayer occurs as
described in ORS 314.085, or if the Department of Revenue
terminates the taxpayer's taxable year under ORS 314.440, the
credit allowed by this section shall be prorated or computed in a
manner consistent with ORS 314.085.
' (8) If a change in the status of a taxpayer from resident to
nonresident or from nonresident to resident occurs, the credit
allowed by this section shall be determined in a manner
consistent with ORS 316.117.
' (9) An eligible business claiming a credit under this section
shall maintain records sufficient to authenticate the allowance
of the credit claimed under this section and shall furnish the
department with these records upon the request of the department.
' (10) A credit claimed by an eligible business may not be
disallowed solely because the eligible business conducts business
operations both within and outside of a reservation enterprise
zone. + }
' { + SECTION 9. + } { + (1) A reservation enterprise zone
shall be considered to be a nonurban enterprise zone for purposes
of ORS 285B.650 to 285B.728. The tribal government of the
reservation shall be considered to be the sponsor of the
reservation enterprise zone.
' (2) Reservation enterprise zones may not be taken into
account in determining the number of nonurban enterprise zones
allowable in this state under ORS 285B.650 to 285B.728, and are
not subject to numerical limitation under ORS 285B.650 to
285B.728.
' (3) In order for property within a reservation enterprise
zone to be exempt under ORS 285B.698, the business firm and
property must meet all of the requirements applicable to business
firms and property in any nonurban enterprise zone. + }
' { + SECTION 10. + } ORS 314.752 is amended to read:
' 314.752. (1) Except as provided in ORS 314.740 (5)(b), the
tax credits allowed or allowable to a C corporation for purposes
of ORS chapter 317 or 318 shall not be allowed to an S
corporation. The business tax credits allowed or allowable for
purposes of ORS chapter 316 shall be allowed or are allowable to
the shareholders of the S corporation.
' (2) In determining the tax imposed under ORS chapter 316, as
provided under ORS 314.734, on income of the shareholder of an S
corporation, there shall be taken into account the shareholder's
pro rata share of business tax credit (or item thereof) that
would be allowed to the corporation (but for subsection (1) of
this section) or recapture or recovery thereof. The credit (or
item thereof), recapture or recovery shall be passed through to
shareholders in pro rata shares as determined in the manner
prescribed under section 1377(a) of the Internal Revenue Code.
' (3) The character of any item included in a shareholder's pro
rata share under subsection (2) of this section shall be
determined as if such item were realized directly from the source
from which realized by the corporation, or incurred in the same
manner as incurred by the corporation.
' (4) If the shareholder is a nonresident and there is a
requirement applicable for the business tax credit that in the
case of a nonresident that the credit be allowed in the
proportion provided in ORS 316.117, then that provision shall
apply to the nonresident shareholder.
' (5) As used in this section, 'business tax credit' means a
tax credit granted to personal income taxpayers to encourage
certain investment, to create employment, economic opportunity or
incentive or for charitable, educational, scientific, literary or
public purposes that is listed under this subsection as a
business tax credit or is designated as a business tax credit by
law or by the Department of Revenue by rule and includes but is
not limited to the following credits: ORS 315.104 (forestation
and reforestation), ORS 315.134 (fish habitat improvement), ORS
315.138 (fish screening, by-pass devices, fishways), ORS 315.156
(crop gleaning), ORS 315.164 (farmworker housing), ORS 315.204
(dependent care assistance), ORS 315.208 (dependent care
facilities), ORS 315.234 (child development program
contributions), ORS 315.254 (youth apprenticeship sponsorship),
ORS 315.304 (pollution control facility), ORS 315.324 (plastics
recycling), ORS 315.354 and ORS 469.207 (energy conservation
facilities), ORS 315.504 (Oregon Capital Corporation), ORS
315.604 (bone marrow transplant expenses) and ORS 317.115
(fueling stations necessary to operate an alternative fuel
vehicle) { + and section 8 of this 2001 Act (tribal taxes on
reservation enterprise zones) + }.
' { + SECTION 11. + } ORS 318.031 is amended to read:
' 318.031. It being the intention of the Legislative Assembly
that this chapter and the Corporation Excise Tax Law of 1929
shall be administered as uniformly as possible (allowance being
made for the difference in imposition of the taxes and the
operative date of this chapter), the provisions of ORS 305.140
and 305.150 and ORS chapter 314 and of the following sections of
ORS chapter 315 or 317, as amended on or before August 3, 1955,
and as they may thereafter be amended, are incorporated into this
chapter by this reference and made a part hereof: ORS 315.104,
315.134, 315.156, 315.204, 315.208, 315.234, 315.254, 315.304,
315.504 and 315.604 (all only to the extent applicable for a
corporation) and ORS 317.010, 317.013, 317.018 to 317.022,
317.030, 317.035, 317.038, 317.080, 317.152 to 317.154, 317.259
to 317.303, 317.310 to 317.386, 317.476 to 317.485, 317.510 to
317.635 and 317.705 to 317.725 and section 40, chapter 835,
Oregon Laws 1997, and section 4, chapter 358, Oregon Laws
1999 { + , and section 8 of this 2001 Act + }.
' { + SECTION 12. + } { + Sections 5 to 9 of this 2001 Act
and the amendments to ORS 314.752 and 318.031 by sections 10 and
11 of this 2001 Act apply to tax years beginning on or after
January 1, 2002. + } ' .
In line 40, delete '4' and insert '13'.
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