71st OREGON LEGISLATIVE ASSEMBLY--2001 Regular Session
NOTE: Matter within { + braces and plus signs + } in an
amended section is new. Matter within { - braces and minus
signs - } is existing law to be omitted. New sections are within
{ + braces and plus signs + } .
LC 1575
B-Engrossed
House Bill 3105
Ordered by the Senate June 27
Including House Amendments dated May 30 and Senate Amendments
dated June 27
Sponsored by Representative KROPF; Representative BUTLER
SUMMARY
The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure.
Establishes income or corporate excise tax credit for 75
percent of market value of forgone crops when riparian land is
voluntarily taken out of farm production.
Applies credit to tax years beginning on or after January 1,
2004.
Modifies provisions prescribing method for valuation of
specially assessed property.
Applies modified valuation provisions to tax years beginning on
or after July 1, 2002.
A BILL FOR AN ACT
Relating to taxation; creating new provisions; and amending ORS
308A.107.
Be It Enacted by the People of the State of Oregon:
SECTION 1. { + Sections 2 and 3 of this 2001 Act are added to
and made a part of ORS chapter 315. + }
SECTION 2. { + The Legislative Assembly declares that the
purpose of section 3 of this 2001 Act is to encourage taxpayers
that have riparian land in farm production to voluntarily remove
the riparian land from farm production and employ conservation
practices applicable to the riparian land that minimize
contributions to undesirable water quality, habitat degradation
and stream bank erosion. + }
SECTION 3. { + (1) As used in this section:
(a) 'Crop' means the total yearly production of an agricultural
commodity, not including livestock, that is harvested from a
specified area.
(b) 'Riparian land' means land in this state that:
(A) Borders both a river, stream or other natural watercourse
and land that is in farm production; and
(B) Does not exceed a width of 35 feet between the land that is
in farm production and the bank of the river, stream or other
natural watercourse.
(c) 'Share-rent agreement' means an agreement in which the
person who engages in farming operations and the person who owns
the land where the farming operations are conducted share the
crop grown on that land or the profits from that crop.
(2) A taxpayer may claim a credit against the taxes otherwise
due under ORS chapter 316, 317 or 318 for 75 percent of the
market value of crops forgone when riparian land is voluntarily
taken out of farm production.
(3) A credit under this section may be claimed only if:
(a) The taxpayer owns the riparian land that is the basis of
the credit;
(b) The taxpayer is actively engaged in farming operations on
land adjacent to the riparian land;
(c) The riparian land was in farm production for the previous
tax year or a credit under this section was claimed during the
previous tax year;
(d) The conservation practices employed on the riparian land
are consistent with the agricultural water quality management
plan administered by the State Department of Agriculture in the
applicable river basin management area; and
(e) The decision to remove the riparian land from farm
production was a voluntary decision and not the result of a
federal, state or local law or government decision requiring the
riparian land to be taken out of farm production. For purposes of
this paragraph, action taken by a taxpayer under an agricultural
water quality management plan administered by the State
Department of Agriculture is not the result of a government
decision requiring the land to be taken out of farm production.
(4)(a) The amount of the credit shall be calculated by
multiplying the market value per acre of the forgone crop by the
acreage of the riparian land that is not in farm production and
multiplying that product by 75 percent.
(b) For the first tax year for which a credit is claimed under
this section, the forgone crop for which a value is determined
under this section shall be the crop grown on the land in the
previous tax year.
(c) For a tax year following the first tax year for which a
credit is claimed under this section, the forgone crop for which
a value is determined under this section shall be the crop for
which the value was determined for the preceding tax year.
(d) If a taxpayer does not claim a credit under this section
for a tax year, any credit claimed in a subsequent tax year shall
be treated as the first tax year for which a credit is claimed
under this section.
(5) Notwithstanding subsection (3)(a) and (b) of this section,
if the riparian land that is the basis of a credit under this
section is adjacent to land that is in farm production under a
share-rent agreement, the taxpayer that is engaged in farming
operations and the taxpayer that is the landowner may each claim
a credit under this section. The amount of the credit shall be
allocated to each taxpayer in the proportion that the share-rent
agreement allocates crop proceeds to each of those taxpayers. The
total amount of credit allowed to both taxpayers under this
subsection may not exceed the amount of the credit otherwise
allowable under this section if the farming operations were not
subject to a share-rent agreement.
(6) Notwithstanding subsections (3)(a) and (5), if the taxpayer
is actively engaged in farming operations and pays the landowner
in cash, the taxpayer may claim all of the credit available under
this section.
(7) The credit allowed in any one tax year may not exceed the
tax liability of the taxpayer.
(8) Any tax credit otherwise allowable under this section that
is not used by the taxpayer in a particular tax year may be
carried forward and offset against the taxpayer's tax liability
for the next succeeding tax year. Any credit remaining unused in
the next succeeding tax year may be carried forward and used in
the second succeeding tax year. Any credit remaining unused in
the second succeeding tax year may be carried forward and used in
the third succeeding tax year. Any credit remaining unused in the
third succeeding tax year may be carried forward and used in the
fourth succeeding tax year. Any credit remaining unused in the
fourth succeeding tax year may be carried forward and used in the
fifth succeeding tax year, but may not be used in any tax year
thereafter.
(9) In the case of a credit allowed under this section for
purposes of ORS chapter 316:
(a) A nonresident shall be allowed the credit in the same
manner and subject to the same limitations as a resident.
However, the credit shall be prorated using the proportion
provided in ORS 316.117.
(b) 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.
(c) 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.
(10) If a taxpayer that has claimed a credit under this section
places the riparian land for which the credit is claimed back in
farm production, the taxpayer may not claim a credit under this
section for five tax years following the year the riparian land
was placed back in farm production.
(11) The Department of Revenue may adopt rules prescribing
procedures for identifying forgone crops and for establishing the
market value of forgone crops. + }
SECTION 4. { + Section 3 of this 2001 Act applies to tax years
beginning on or after January 1, 2004. + }
SECTION 5. ORS 308A.107 is amended to read:
308A.107. (1) The value for farm use, maximum assessed value
and assessed value shall be determined under this section for
both:
(a) Exclusive farm use zone farmland that qualifies for special
assessment under ORS 308A.062; and
(b) Nonexclusive farm use zone farmland that qualifies for
special assessment under ORS 308A.068.
(2) The value for farm use for each property subject to special
assessment under this section shall equal the applicable value
derived from the tables created pursuant to ORS 308A.092 for the
{ - assessment - } { + tax + } year multiplied by the acreage
of the property within the applicable class and area.
(3)(a) The maximum assessed value for property subject to
special assessment under this section shall be determined as
provided in this subsection.
(b) The county assessor shall develop tables for each
{ - assessment - } { + tax + } year that provide, for each
class and area, a maximum assessed value per acre that is equal
to 103 percent of the { - maximum - } assessed value per acre
for the { - previous assessment - } { + preceding tax + }
year { + or 100 percent of the maximum assessed value per acre
for the preceding tax year, whichever is greater + }.
(4) Property subject to special assessment under this section
shall have an assessed value for the { - assessment - }
{ + tax + } year equal to the lesser of the value per acre
applicable to the property under subsection (2) of this section
or under subsection (3) of this section and multiplying the value
by the acreage of the property within the applicable class and
area.
{ + (5) If property subject to special assessment under this
section consists of different classes, the assessed value of the
property shall be the sum of the assessed values computed for
each applicable class under subsection (4) of this section. + }
{ - (5) - } { + (6) + } Property that newly qualifies for
farm use special assessment shall, for the first
{ - assessment - } { + tax + } year for which the special
assessment applies, have:
(a) A value for farm use as determined under subsection (2) of
this section;
(b) A maximum assessed value as determined under the tables
developed under subsection (3) of this section; and
(c) An assessed value as determined under { - subsection
(4) - } { + subsections (4) and (5) + } of this section.
SECTION 6. { + The amendments to ORS 308A.107 by section 5 of
this 2001 Act apply to tax years beginning on or after July 1,
2002. + }
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