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 4164
A-Engrossed
House Bill 3947
Ordered by the House May 21
Including House Amendments dated May 21
Sponsored by COMMITTEE ON WATER AND ENVIRONMENT
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.
Permits unexpired pollution control facility tax credits to be
carried forward for up to three additional tax years, if facility
remains in use and operation during each additional tax year to
which unused credit is carried.
Applies to pollution control facility credits that are
unexpired as of tax year beginning in 2001 calendar year.
{ + Extends sunset date for completing construction of
pollution control facilities and filing application for
certification with Environmental Quality Commission.
Takes effect on 91st day following adjournment sine die. + }
A BILL FOR AN ACT
Relating to taxation; creating new provisions; amending ORS
315.304, 468.165 and 468.170; and prescribing an effective
date.
Be It Enacted by the People of the State of Oregon:
SECTION 1. ORS 315.304 is amended to read:
315.304. (1) A credit against taxes imposed by ORS chapter 316
(or, if the taxpayer is a corporation, under ORS chapter 317 or
318) for a pollution control facility or facilities certified
under ORS 468.170 shall be allowed if the taxpayer qualifies
under subsection (4) of this section.
(2) For a facility certified under ORS 468.170, The maximum
credit allowed in any one tax year shall be the lesser of the tax
liability of the taxpayer or one-half of the certified cost of
the facility multiplied by the certified percentage allocable to
pollution control, divided by the number of years of the
facility's useful life. The number of years of the facility's
useful life used in this calculation shall be the remaining
number of years of useful life at the time the facility is
certified but not less than one year nor more than 10 years.
(3) To qualify for the credit the pollution control facility
must be erected, constructed or installed in accordance with the
provisions of ORS 468.165 (1) and must be certified for tax
relief under ORS 468.155 to 468.190.
(4) To qualify for a tax credit under this section:
(a) The taxpayer who is allowed the credit must be:
(A) The owner, including a contract purchaser, of the trade or
business that utilizes Oregon property requiring a pollution
control facility to prevent or minimize pollution;
(B) A person who, as a lessee or pursuant to an agreement,
conducts the trade or business that operates or utilizes such
property; or
(C) A person who, as an owner, including a contract purchaser,
or lessee, owns or leases a pollution control facility that is
used:
(i) In a business that is engaged in a production activity
described in 40 C.F.R. 430.20 (as of July 1, 1998); or
(ii) For recycling, material recovery or energy recovery as
defined in ORS 459.005; and
(b) The facility must be owned or leased during the tax year by
the taxpayer claiming the credit and must have been in use and
operation during the tax year for which the credit is claimed.
(5) Regardless of when the facility is erected, constructed or
installed, a credit under this section may be claimed by a
taxpayer:
(a) For a facility qualifying under ORS 468.165 (1)(a) or (b),
only in those tax years which begin on or after January 1, 1967.
(b) For a facility qualifying under ORS 468.165 (1)(c), in
those tax years which begin on or after January 1, 1973.
(c) For a facility qualifying under ORS 468.165 (1)(d), in
those tax years which begin on or after January 1, 1984.
(6) For a facility certified under ORS 468.170, the maximum
total credit allowable shall not exceed one-half of the certified
cost of the facility multiplied by the certified percentage
allocable to pollution control.
(7) The credit provided by this section is not in lieu of any
depreciation or amortization deduction for the facility to which
the taxpayer otherwise may be entitled under ORS chapter 316, 317
or 318 for such year.
(8) Upon any sale, exchange or other disposition of a facility,
notice thereof shall be given to the Environmental Quality
Commission who shall revoke the certification covering such
facility as of the date of such disposition. Notwithstanding ORS
468.170 (4)(c), the transferee may apply for a new certificate
under ORS 468.170, but the tax credit available to such
transferee shall be limited to the amount of credit not claimed
by the transferor. The sale, exchange or other disposition of
shares in an S corporation as defined in section 1361 of the
Internal Revenue Code or of a partner's interest in a partnership
shall not be deemed a sale, exchange or other disposition of a
facility for purposes of this subsection.
(9) { + (a) + } Any tax credit otherwise allowable under this
section
{ - which - } { + that + } is not used by the taxpayer in a
particular year may be carried forward and offset against the
taxpayer's tax liability for the next succeeding tax year. Any
credit remaining unused in
{ - such - } { + that + } next succeeding tax year may be
carried forward and used in the second succeeding tax year, and
likewise, any credit not used in that second succeeding tax year
may be carried forward and used in the third succeeding tax year,
but may not be carried forward for any tax year thereafter.
Credits may be carried forward to and used in a tax year beyond
the years specified in ORS 468.170.
{ + (b) Notwithstanding paragraph (a) of this subsection, if
the facility is in use and operation during the tax year
immediately following the third succeeding tax year, the credit
may be carried forward to that fourth succeeding tax year. If the
facility is in use and operation during the tax year immediately
following the fourth succeeding tax year, any credit remaining
unused may be carried forward to that fifth succeeding tax year.
If the facility is in use and operation during the tax year
immediately following the fifth succeeding tax year, any credit
remaining unused may be carried forward to that sixth succeeding
tax year, but may not be carried forward to any tax year
thereafter. + }
(10) The taxpayer's adjusted basis for determining gain or loss
shall not be further decreased by any tax credits allowed under
this section.
(11) A person described in subsection (4)(a)(C) of this section
may, but need not, operate the facility or conduct a trade or
business that utilizes property requiring the facility. If more
than one person has an interest under subsection (4)(a)(C) of
this section in the facility, only one person may claim the
credit allowed under this section. However, portions of the
facility may be certified separately in the same manner as
provided in ORS 468.170 (8) if ownership of the portions is in
more than one person. The person claiming the credit as between
an owner, including a contract purchaser, and lessee under this
subsection shall be designated in a written statement signed by
both the lessor and lessee of the facility. This statement shall
be filed with the Department of Revenue not later than the final
day of the first tax year for which a tax credit is claimed.
SECTION 2. { + (1) The amendments to ORS 315.304 by section 1
of this 2001 Act apply only to credits for pollution control
facilities that are unexpired as of the tax year of the taxpayer
that begins in the 2001 calendar year.
(2) For purposes of this section, unexpired credits include
credits claimed pursuant to ORS 315.304 (2) and credits carried
over from previous tax years pursuant to ORS 315.304 (9). + }
SECTION 3. ORS 468.165 is amended to read:
468.165. (1) Any person may apply to the Environmental Quality
Commission for certification under ORS 468.170 of a pollution
control facility or portion thereof erected, constructed or
installed by the person in Oregon if:
(a) The air or water pollution control facility was erected,
constructed or installed on or after January 1, 1967.
(b) The noise pollution control facility was erected,
constructed or installed on or after January 1, 1977.
(c) The solid waste facility was under construction on or after
January 1, 1973, the hazardous waste or used oil facility was
under construction on or after October 3, 1979, and if:
(A) The facility's principal or sole purpose conforms to the
requirements of ORS 468.155 (1) and (2);
(B) The facility will utilize material that would otherwise be
solid waste as defined in ORS 459.005, hazardous waste as defined
in ORS 466.005 or used oil as defined in ORS 459A.555 by
mechanical process or chemical process or through the production,
processing including presegregation, or use of, materials which
have useful chemical or physical properties and which may be used
for the same or other purposes, or materials which may be used in
the same kind of application as its prior use without change in
identity;
(C) The end product of the utilization is an item of real
economic value;
(D) The end product of the utilization, other than a usable
source of power, is competitive with an end product produced in
another state; and
(E) The Oregon law regulating solid waste imposes standards at
least substantially equivalent to the federal law.
(d) The hazardous waste control facility was erected,
constructed or installed on or after January 1, 1984, and if:
(A) The facility's principal or sole purpose conforms to the
requirements of ORS 468.155 (1) and (2); and
(B) The facility is designed to treat, substantially reduce or
eliminate hazardous waste as defined in ORS 466.005.
(2) The application shall be made in writing in a form
prescribed by the Department of Environmental Quality and shall
contain information on the actual cost of the facility, a
description of the materials incorporated therein, all machinery
and equipment made a part thereof, the existing or proposed
operational procedure thereof, and a statement of the purpose of
prevention, control or reduction of air, water or noise pollution
or solid or hazardous waste or recycling or appropriate disposal
of used oil served or to be served by the facility and the
portion of the actual cost properly allocable to the prevention,
control or reduction of air, water or noise pollution or solid or
hazardous waste or to recycling or appropriately disposing of
used oil.
(3) The Director of the Department of Environmental Quality may
require any further information the director considers necessary
before a certificate is issued.
(4) The application shall be accompanied by a fee established
under subsection (5) of this section. The fee may be refunded if
the application for certification is rejected.
(5) By rule and after hearing the commission may adopt a
schedule of reasonable fees which the department may require of
applicants for certificates issued under ORS 468.167 and 468.170.
Before the adoption or revision of any such fees the commission
shall estimate the total cost of the program to the department.
The fees shall be based on the anticipated cost of filing,
investigating, granting and rejecting the applications and shall
be designed not to exceed the total cost estimated by the
commission. Any excess fees shall be held by the department and
shall be used by the commission to reduce any future fee
increases. The fee may vary according to the size and complexity
of the facility. The fees { - shall - } { + may + } not be
considered by the commission as part of the cost of the facility
to be certified.
(6) The application shall be submitted after construction of
the facility is substantially completed and the facility is
placed in service and within two years after construction of the
facility is substantially completed. Failure to file a timely
application shall make the facility ineligible for tax credit
certification. An application { - shall - } { + may + } not
be considered filed until it is complete and ready for
processing. The commission may grant an extension of time to file
an application for circumstances beyond the control of the
applicant that would make a timely filing unreasonable. However,
the period for filing an application
{ - shall - } { + may + } not be extended to a date beyond
December 31, { - 2003 - } { + 2009 + }.
SECTION 4. ORS 468.170 is amended to read:
468.170. (1) The Environmental Quality Commission shall act on
an application for certification before the 120th day after the
filing of the application under ORS 468.165. The action of the
commission shall include certification of the actual cost of the
facility and the portion of the actual cost properly allocable to
the prevention, control or reduction of air, water or noise
pollution or solid or hazardous waste or to recycling or
appropriately disposing of used oil. The actual cost or portion
of the actual cost certified { - shall - } { + may + } not
exceed the taxpayer's own cash investment in the facility or
portion of the facility. Each certificate shall bear a separate
serial number for each such facility.
(2) If the commission rejects an application for certification,
or certifies a lesser actual cost of the facility or a lesser
portion of the actual cost properly allocable to the prevention,
control or reduction of air, water or noise pollution or solid or
hazardous waste or to recycling or appropriately disposing of
used oil than was claimed in the application for certification,
the commission shall cause written notice of its action, and a
concise statement of the findings and reasons therefor, to be
sent by registered or certified mail to the applicant before the
120th day after the filing of the application.
(3) If the application is rejected for any reason, including
the information furnished by the applicant as to the cost of the
facility, or if the applicant is dissatisfied with the
certification of actual cost or portion of the actual cost
properly allocable to prevention, control or reduction of air,
water or noise pollution or solid or hazardous waste or to
recycling or appropriately disposing of used oil, the applicant
may appeal from the rejection as provided in ORS 468.110. The
rejection or the certification is final and conclusive on all
parties unless the applicant takes an appeal therefrom as
provided in ORS 468.110 before the 30th day after notice was
mailed by the commission.
(4)(a) The commission shall certify a pollution control, solid
waste, hazardous waste or used oil facility or portion thereof,
for which an application has been made under ORS 468.165, if the
commission finds that the facility:
(A) Was erected, constructed or installed in accordance with
the requirements of ORS 468.165 (1);
(B) Is designed for, and is being operated or will operate in
accordance with the requirements of ORS 468.155; and
(C) Is necessary to satisfy the intents and purposes of ORS
454.010 to 454.040, 454.205 to 454.255, 454.505 to 454.535,
454.605 to 454.755, ORS chapters 459, 459A, 466 and 467 and ORS
chapters 468, 468A and 468B and rules thereunder.
(b) No determination of the proportion of the actual cost of
the facility to be certified shall be made until receipt of the
application.
(c) If one or more facilities constitute an operational unit,
the commission may certify such facilities under one certificate.
(d) A certificate under this section is effective for purposes
of tax relief in accordance with ORS 307.405 and 315.304 if, on
or before December 31, { - 2001 - } { + 2007 + }, erection,
construction or installation of the facility is completed, the
facility is placed in service and the application for
certification is filed with the commission under ORS 468.165.
(5) A person receiving a certificate under this section may
take tax relief only under ORS 315.304, depending upon the tax
status of the person's trade or business except that:
(a) A corporation organized under ORS chapter 65 or any
subsequent transferee of the corporation shall take tax relief
only under ORS 307.405; and
(b)(A) A corporation organized under ORS chapter 62 or any
predecessor to ORS chapter 62 relating to the incorporation of
cooperative associations or the subsequent transferee of the
corporation may make an irrevocable election to take the tax
relief under either ORS 315.304 or 307.405. The corporation shall
make the election at the time of applying for the certificate,
except that a corporation receiving a certificate prior to
December 31, 1995, may make the election at any time on or before
December 31, 1995. If a corporation elects on or before December
31, 1995, to take the tax relief under ORS 315.304, any income
taxes, penalties or interest otherwise payable by the corporation
for improperly taking the tax relief under ORS 315.304 in a
taxable year prior to making the election shall be waived.
(B) In the case of a corporation making the election under
subparagraph (A) of this paragraph, the election applies to:
(i) All existing or future facilities that are certified under
this section, if the corporation claimed a credit under ORS
315.304 for a tax year beginning prior to December 31, 1995; or
(ii) All future facilities that are certified under this
section, if the corporation did not claim a credit under ORS
315.304 for a tax year beginning prior to December 31, 1995.
(6) If the person receiving the certificate is a partnership,
each partner shall be entitled to take tax credit relief as
provided in ORS 315.304, based on that partner's pro rata share
of the certified cost of the facility.
(7) Certification under this section of a pollution control
facility qualifying under ORS 468.165 (1) shall be granted for a
period of 10 consecutive years which 10-year period shall begin
with the tax year of the person in which the facility is
certified under this section, except that if ad valorem tax
relief is utilized by a corporation organized under ORS chapter
62 or 65 the facility shall be exempt from ad valorem taxation
for a period of 20 consecutive years.
(8) Portions of a facility qualifying under ORS 468.165 (1)(c)
may be certified separately under this section if ownership of
the portions is in more than one person. Certification of such
portions of a facility shall include certification of the actual
cost of the portion of the facility to the person receiving the
certification. The actual cost certified for all portions of a
facility separately certified under this subsection
{ - shall - } { + may + } not exceed the total cost of the
facility that would have been certified under one certificate.
The provisions of ORS 315.304 (8)
{ - shall - } apply to any sale, exchange or other disposition
of a certified portion of a facility.
SECTION 5. { + This 2001 Act takes effect on the 91st day
after the date on which the regular session of the Seventy-first
Legislative Assembly adjourns sine die. + }
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