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 2546
A-Engrossed
Senate Bill 479
Ordered by the Senate March 7
Including Senate Amendments dated March 7
Sponsored by COMMITTEE ON INFORMATION MANAGEMENT AND TECHNOLOGY
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 tax credit for advanced telecommunications
facilities, equal to 20 percent of certified cost of facilities.
Requires taxpayer to obtain certification from Economic and
Community Development Department in order to claim tax credit.
Permits certifications to be made on or after January 1, 2002,
and before December 31, 2005. { + Limits certifications to $10
million per year. + }
Directs Oregon Economic and Community Development Commission to
report to Seventy-third Legislative Assembly on efficacy of
advanced telecommunications facilities tax credit.
Prohibits Public Utility Commission from requiring
telecommunications utility rate reduction due to allowance of tax
credit.
A BILL FOR AN ACT
Relating to telecommunications; creating new provisions; and
amending ORS 314.752 and 318.031.
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 285B. + }
SECTION 2. { + (1) As used in this section and section 3 of
this 2001 Act:
(a) 'Advanced telecommunications facilities' means high-speed,
dedicated or switched broadband telecommunications infrastructure
or equipment that enables users to send or receive high quality
voice, data or video telecommunications using any technology.
(b) 'Last mile connection' means a communications channel from
the feed from a connecting bypassing intercity telecommunications
carrier through a telecommunications switching center, or an
individual message distribution point, to a user terminal.
(c) 'Local exchange carrier' means a person that holds a
certificate of authority issued by the Public Utility Commission
under ORS 759.020 to provide intrastate telecommunications
service or local exchange telecommunications service within this
state.
(d) 'Telecommunications carrier' means a provider of
telecommunications services, but does not include an aggregator,
as defined in 47 U.S.C. 226.
(2) A telecommunications carrier seeking a tax credit under
section 7 of this 2001 Act for the installation of advanced
telecommunications facilities, prior to incurring any costs
associated with the installation, shall apply to the Economic and
Community Development Department for certification of the
facilities as advanced telecommunications facilities.
(3) The application for certification shall be in the form and
shall contain the information required by the department pursuant
to rules adopted by the department for the administration of the
tax credit certification under this section, including but not
limited to:
(a) A complete description of the installation project and the
customers to be served by the project;
(b) The expected costs for completing the project;
(c) The expected start date and the expected date on which the
advanced telecommunications facilities are to be placed in
service;
(d) The geographic area or areas in which the advanced
telecommunications facilities are to be installed; and
(e) A description of how the facilities will be integrated into
the operations of the intrastate telecommunications services
provided by the telecommunications carrier.
(4) The application for certification shall be accompanied by
technical documentation demonstrating that the facilities will
meet or exceed applicable minimum performance standards
established by the department under section 3 of this 2001 Act.
(5) The department may approve or deny an application for
certification or may request changes to the application before
issuing certification. Denial of an application may be appealed
to the department in the manner of a contested case under ORS
183.310 to 183.550.
(6) The department shall approve an application and certify the
facilities as advanced telecommunications facilities if the
facilities:
(a) Are to be located in an area in which current minimum
bandwidth service is not available to a majority of customers;
(b) Improve access to advanced telecommunications services for
a majority of all customers in unserved or underserved service
areas; and
(c) Meet the minimum performance standards to comply with
section 3 of this 2001 Act.
(7) Upon approval of an application, the department shall send
to the applicant a written certification of the facilities as
advanced telecommunications facilities. The certification shall
state the date by which the facilities must be placed in service
and the cost of the facilities that are being certified.
(8) Notwithstanding subsection (6) of this section, the
department may not approve an application and certify a facility
if the cost of the facility plus the certified costs of all other
facilities that have been certified during the year exceeds $10
million.
(9) The department may charge a fee for processing applications
under this section. The fee may not exceed the average cost of
reviewing an application, performing a technical review of the
proposed project and issuing a written certification under this
section. + }
SECTION 3. { + (1) The Economic and Community Development
Department shall adopt rules setting minimum performance
standards that facilities must meet to be certified as advanced
telecommunications facilities. The rules must establish minimum
performance standards in the following areas:
(a) Enhancement of individual and business access to advanced
telecommunications services at an economically reasonable cost;
(b) Development and transition to a fully competitive
telecommunications marketplace;
(c) Provision of bidirectional bandwidth capabilities to
customers;
(d) Accessibility to competitive local exchange carriers;
(e) Improvement in access by public and private educational
institutions, rural health clinics and libraries to advanced
telecommunications services;
(f) Improvement in telecommunications connections between
communities in this state;
(g) Improvement in last mile connections within this state; and
(h) Improvement in access by Oregon health care providers to
interactive video and other health care applications requiring
advanced telecommunications services.
(2) In order for facilities to be certified under section 2 of
this 2001 Act, the facilities must meet or exceed the minimum
performance standards in at least one of the areas set forth in
subsection (1) of this section. + }
SECTION 4. { + The Economic and Community Development
Department may issue certifications under section 2 of this 2001
Act on or after January 1, 2002, and before December 31,
2005. + }
SECTION 5. { + The Oregon Economic and Community Development
Commission shall report to the Seventy-third Legislative Assembly
on the effectiveness of the tax credit provided under section 7
of this 2001 Act in improving advanced telecommunications
capability in underserved areas of this state and in achieving
the other purposes for which the credit was established. The
commission shall report to the Seventy-third Legislative Assembly
on or before March 15, 2005. + }
SECTION 6. { + Section 7 of this 2001 Act is added to and made
a part of ORS chapter 315. + }
SECTION 7. { + (1) There shall be allowed a credit against the
taxes otherwise due under ORS chapter 316 (or, if the taxpayer is
a corporation, under ORS chapters 317 and 318) for advanced
telecommunications facilities, as defined in section 2 of this
2001 Act, that have been certified by the Economic and Community
Development Department.
(2) The amount of the credit shall equal 20 percent of the
certified cost of the facilities that was actually paid or
incurred by the taxpayer, except that:
(a) The amount of the credit may not include facility costs
that were paid using moneys withdrawn from the taxpayer's
Telecommunications Infrastructure Account established pursuant to
ORS 759.405; and
(b) Revenues forgone by the taxpayer upon the taxpayer's waiver
of installation charges for advanced telecommunications
facilities to schools, rural health clinics or libraries may be
added to the amount of the credit.
(3) The credit may be claimed by the taxpayer for the tax year
in which the advanced telecommunications facilities are placed in
service.
(4) The credit allowed under this section may not exceed the
tax liability of the taxpayer and may not be carried forward to a
succeeding tax year.
(5) In the case of a credit allowed under this section:
(a) A nonresident shall be allowed the credit under this
section in the proportion provided in ORS 316.117.
(b) 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.
(c) 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 under this section shall be prorated or computed
in a manner consistent with ORS 314.085.
(6) The credit shall be claimed on a form prescribed by the
Department of Revenue and containing any information as may be
required by the department. The taxpayer shall attach a copy of
the certification to the return for the tax year for which the
credit is claimed. + }
SECTION 8. { + Section 7 of this 2001 Act applies to tax years
beginning on or after January 1, 2002. + }
SECTION 9. 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 7 of this 2001 Act (advanced
telecommunications facilities) + }.
SECTION 10. 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 { + and section 7 of this 2001 Act + } (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.
SECTION 11. { + Section 12 of this 2001 Act is added to and
made a part of ORS chapter 759. + }
SECTION 12. { + The Public Utility Commission may not require
a reduction in a rate or a schedule of rates as a result of a tax
credit under section 7 of this 2001 Act being allowed to a
telecommunications utility. + }
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