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
 
                         House Bill 3947
 
Sponsored by Representative BROWN; Representative MERKLEY (at the
  request of Georgia Pacific)
 
 
                             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 as
introduced.
 
  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.
 
                        A BILL FOR AN ACT
Relating to taxation; creating new provisions; and amending ORS
  315.304.
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). + }
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