71st OREGON LEGISLATIVE ASSEMBLY--2001 Regular Session
Enrolled
Senate Bill 521
Sponsored by COMMITTEE ON REVENUE
CHAPTER ................
AN ACT
Relating to energy incentives; creating new provisions; amending
ORS 315.354, 315.356, 469.185, 469.205, 469.206, 469.207,
469.210 and 469.215; and prescribing an effective date.
Be It Enacted by the People of the State of Oregon:
SECTION 1. ORS 315.354 is amended to read:
315.354. (1) A credit is allowed against the taxes otherwise
due under ORS chapter 316 (or, if the taxpayer is a corporation,
under ORS chapter 317 or 318), based upon the certified cost of
the facility during the period for which that facility is
certified under ORS 469.185 to 469.225. The credit { + is
allowed as follows:
(a) Except as provided in paragraph (b) of this subsection, the
credit + } allowed in each of the first two tax years in which
the credit is claimed shall be 10 percent of the certified cost
of the facility, but { - shall - } { + may + } not exceed the
tax liability of the taxpayer. The credit allowed in each of the
succeeding three years shall be five percent of the certified
cost, but { - shall - } { + may + } not exceed the tax
liability of the taxpayer.
{ + (b) If the application for certification under ORS
469.185 to 469.225 was filed with the Office of Energy on or
after January 1, 2001, and the certified cost of the facility
does not exceed $20,000, the total amount of the credit allowable
under subsection (4) of this section may be claimed in the first
tax year for which the credit may be claimed, but may not exceed
the tax liability of the taxpayer. + }
(2) The facility must be in Oregon { - , - } and { - : - }
{ + the taxpayer must be an eligible applicant under ORS 469.205
(1)(c). + }
{ - (a) Owned during the tax year by the taxpayer claiming
the credit; - }
{ - (b) - } { + (3) + } If the facility is a qualified
transit pass contract, the taxpayer must be the obligated
purchaser of transit passes { - ; or - } { + . + }
{ - (c) If the taxpayer is a corporation, financed by a
public utility described in ORS 469.205 (1)(c)(B), that has been
issued a certificate under ORS 469.215. - }
{ - (3) A credit under this section may be claimed by a
taxpayer for a facility only in those tax years which begin on
and after January 1, 1980. - }
(4) The maximum total credit or credits allowed for a facility
under this section to eligible taxpayers { - shall - } { +
Enrolled Senate Bill 521 (SB 521-A) Page 1
may + } not exceed 35 percent of the certified cost of
{ - such - } { + the + } facility.
(5) { + (a) + } Upon any sale, termination of the lease or
contract, exchange or other disposition of the facility, notice
thereof shall be given to the administrator of the Office of
Energy who shall revoke the certificate covering the facility as
of the date of such disposition. The { - transferee - }
{ + new owner + }, or upon re-leasing of the facility, the
{ + new + } lessor, may apply for a new certificate under ORS
469.215, but the tax credit available to
{ - that transferee - } { + the new owner + } shall be
limited to the amount of credit not claimed by the
{ - transferor - } { + former owner + } or, for a { + new + }
lessor, the amount of credit not claimed by the lessor under all
previous leases.
{ + (b) The Office of Energy may not revoke the certificate
covering a facility under paragraph (a) of this subsection if the
tax credit associated with the facility has been transferred to a
taxpayer who is an eligible applicant under ORS 469.205
(1)(c)(A). + }
(6) 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 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,
and likewise, any credit not used in that third succeeding tax
year may be carried forward and used in the fourth succeeding tax
year, and likewise, any credit not used in that fourth succeeding
tax year may be carried forward and used in the fifth succeeding
tax year, and likewise, any credit not used in that fifth
succeeding tax year may be carried forward and used in the sixth
succeeding tax year, and likewise, any credit not used in that
sixth succeeding tax year may be carried forward and used in the
seventh succeeding tax year, and likewise, any credit not used in
that seventh succeeding tax year may be carried forward and used
in the eighth 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 subsection
(1) of this section only as provided in this subsection.
(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 for purposes of ORS
chapter 316, 317 or 318 for such year.
(8) The taxpayer's adjusted basis for determining gain or loss
{ - shall - } { + may + } not be decreased by any tax credits
allowed under this section.
{ - (9) Except as provided in subsection (2)(c) of this
section, a credit under the provisions of this section shall not
be allowed to any of the following: - }
{ - (a) A public utility, as defined in ORS 757.005, that
retails electricity or natural gas to more than 100 customers or,
if the taxpayer is a corporation, a public utility, as defined in
ORS 757.005, that retails electricity or natural gas to more than
100 customers unless the credit is for a facility for commercial
or residential property owned and managed by the utility; - }
{ - (b) A people's utility district, as defined in ORS
261.010, a municipal utility or a cooperative utility that
Enrolled Senate Bill 521 (SB 521-A) Page 2
retails electricity or natural gas to more than 100 customers;
or - }
{ - (c) A subsidiary or an affiliated interest, as defined in
ORS 757.015, of a public utility described in paragraph (a) of
this subsection, or if the taxpayer is a corporation, a
subsidiary or an affiliated interest, as defined in ORS 757.015,
of a public utility described in paragraph (a) of this subsection
unless the credit is for a facility for commercial or residential
property owned and managed by the subsidiary or affiliated
interest. - }
SECTION 2. ORS 315.356 is amended to read:
315.356. (1) If a taxpayer obtains a grant or tax credit from
the federal government other than an investment tax credit or a
low income housing tax credit in connection with a facility which
has been certified by the administrator of the Office of Energy,
the certified cost of the facility shall be reduced on a dollar
for dollar basis. Any income or excise tax credits which such
taxpayer would be entitled to under ORS 315.354 and 469.185 to
469.225 after any such reduction shall not be reduced by such
federal grants or tax credits. A taxpayer applying for a federal
grant or credit shall notify the Department of Revenue by
certified mail within 30 days after each application, and after
the receipt of any grant.
{ - (2) If a facility eligible for a credit under ORS 315.354
is financed in part by any governmental or quasi-governmental
body or municipal corporation, as defined in ORS 297.405, a tax
credit may be claimed only on the portion of the cost that is
privately financed. - }
{ - (3) - } { + (2) + } A taxpayer is eligible to
participate in both this tax credit program and low interest,
government-sponsored loans.
{ - (4) - } { + (3) + } A taxpayer who receives a tax
credit or ad valorem tax relief on a pollution control facility
or an alternative energy device under ORS 307.405, 315.304 or
316.116 is not eligible for a tax credit on the same facility or
device under ORS 315.354 and 469.185 to 469.225.
{ - (5) - } { + (4) + } { - No credit shall - } { + A
credit may not + } be allowed under ORS 315.354 if the taxpayer
has received a tax credit on the same facility or device under
ORS 315.324.
SECTION 3. { + The amendments to ORS 315.354 and 315.356 by
sections 1 and 2 of this 2001 Act apply to tax years beginning on
or after January 1, 2001. + }
SECTION 4. ORS 469.185 is amended to read:
469.185. As used in ORS 469.185 to 469.225 and 469.878:
(1) 'Alternative fuel vehicle' means a vehicle as defined by
the administrator of the Office of Energy by rule that is used
primarily in connection with the conduct of a trade or business
and that is manufactured or modified to use an alternative fuel,
including but not limited to electricity, ethanol, methanol,
gasohol and propane or natural gas, regardless of energy
consumption savings.
{ + (2) 'Car sharing facility' means the expenses of
operating a car sharing program, including but not limited to the
fair market value of parking spaces used to store the fleet of
cars available for a car sharing program, but does not include
the costs of the fleet of cars.
(3) 'Car sharing program' means a program in which drivers pay
to become members in order to have joint access to a fleet of
cars from a common parking area on an hourly basis. 'Car sharing
Enrolled Senate Bill 521 (SB 521-A) Page 3
program' does not include operations conducted by car rental
agencies. + }
{ - (2) - } { + (4) + } 'Cost' means the capital costs and
expenses necessarily incurred in the acquisition, erection,
construction and installation of a facility { + , including site
development costs and expenses for a sustainable building
practices facility + }.
{ - (3) - } { + (5) + } 'Energy facility' means any capital
investment for which the first year energy savings yields a
simple payback period of greater than one year. An energy
facility includes:
(a) Any land, structure, building, installation, excavation,
machinery, equipment or device, or any addition to,
reconstruction of or improvement of, land or an existing
structure, building, installation, excavation, machinery,
equipment or device necessarily acquired, erected, constructed or
installed by any person in connection with the conduct of a trade
or business and actually used in the processing or utilization of
renewable energy resources to:
(A) Replace a substantial part or all of an existing use of
electricity, petroleum or natural gas;
(B) Provide the initial use of energy where electricity,
petroleum or natural gas would have been used;
(C) Generate electricity to replace an existing source of
electricity or to provide a new source of electricity for sale by
or use in the trade or business; or
(D) Perform a process that obtains energy resources from
material that would otherwise be solid waste as defined in ORS
459.005.
(b) Any acquisition of, addition to, reconstruction of or
improvement of land or an existing structure, building,
installation, excavation, machinery, equipment or device
necessarily acquired, erected, constructed or installed by any
person in connection with the conduct of a trade or business in
order to substantially reduce the consumption of purchased
energy.
(c) A necessary feature of a new commercial building or
multiple unit dwelling, as dwelling is defined by ORS 469.160,
that causes that building or dwelling to exceed an energy
performance standard in the state building code.
(d) The replacement of an electric motor with another electric
motor that substantially reduces the consumption of electricity.
{ - (4) - } { + (6) + } 'Facility' means an energy
facility, recycling facility, transportation facility, { + car
sharing facility, sustainable building practices facility, + }
alternative fuel vehicle or facilities necessary to operate
alternative fuel vehicles, including but not limited to an
alternative fuel vehicle refueling station.
{ - (5) - } { + (7) + } 'Qualified transit pass contract'
means a purchase agreement entered into between a transportation
provider and { - an employer - } { + a person + }, the terms
of which obligate the
{ - employer - } { + person + } to purchase transit passes on
behalf { + or for the benefit + } of { - the employer's - }
employees { + , students, patients or other individuals + } over
a specified period of time.
{ - (6) - } { + (8) + } 'Recycling facility' means
equipment used by a trade or business solely for recycling:
(a) Including:
(A) Equipment used solely for hauling and refining used oil;
Enrolled Senate Bill 521 (SB 521-A) Page 4
(B) New vehicles or modifications to existing vehicles used
solely to transport used recyclable materials that cannot be used
further in their present form or location such as glass, metal,
paper, aluminum, rubber and plastic;
(C) Trailers, racks or bins that are used for hauling used
recyclable materials and are added to or attached to existing
waste collection vehicles; and
(D) Any equipment used solely for processing recyclable
materials such as bailers, flatteners, crushers, separators and
scales.
(b) But not including equipment used for transporting or
processing scrap materials that are recycled as a part of the
normal operation of a trade or business as defined by the
administrator.
{ - (7)(a) - } { + (9)(a) + } 'Renewable energy resource'
includes, but is not limited to, straw, forest slash, wood waste
or other wastes from farm or forest land, industrial waste, solar
energy, wind power, water power or geothermal energy.
(b) 'Renewable energy resource' does not include a
hydroelectric generating facility larger than one megawatt of
installed capacity unless the facility qualifies as a research,
development or demonstration facility.
{ + (10) 'Sustainable building practices facility' means a
commercial building in which building practices that reduce the
amount of energy, water or other resources needed for
construction and operation of the building are used. 'Sustainable
building practices facility' may be further defined by the Office
of Energy by rule, including rules that establish traditional
building practice baselines in energy, water or other resource
usage for comparative purposes for use in determining whether a
facility is a sustainable building practices facility. + }
{ - (8) - } { + (11) + } 'Transportation facility' means a
transportation project that reduces energy use during commuting
to and from work or { + school, + } during work-related travel,
{ + or during travel to obtain medical or other services, + }
and may be further defined by the Office of Energy by rule.
'Transportation facility' includes, but is not limited to, a
qualified transit pass contract or a transportation services
contract.
{ - (9) - } { + (12) + } 'Transportation provider' means a
public, private or nonprofit entity that provides transportation
services to members of the public.
{ - (10) - } { + (13) + } 'Transportation services
contract' means a contract that is related to a transportation
facility, and may be further defined by the Office of Energy by
rule.
SECTION 5. ORS 469.205 is amended to read:
469.205. (1) Prior to erection, construction, installation or
acquisition of a proposed facility any person may apply to the
Office of Energy for preliminary certification under ORS 469.210
if:
(a) The erection, construction, installation or acquisition of
the facility is to be commenced on or after October 3, 1979;
(b) The facility complies with the standards or rules adopted
by the administrator of the Office of Energy; and
(c) The applicant meets one of the following criteria:
{ + (A) The applicant is a person to whom a tax credit has
been transferred; or + }
{ - (A) - } { + (B) + } The applicant will be the owner or
contract purchaser of the facility at the time of erection,
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construction, installation or acquisition of the proposed
facility, and:
(i) The applicant is the owner, contract purchaser or lessee of
a trade or business that plans to utilize the facility in
connection with Oregon property; { + or + }
(ii) The applicant is the owner, contract purchaser or lessee
of a trade or business that plans to lease the facility to a
person who will utilize the facility in connection with Oregon
property { - ; or - } { + . + }
{ - (iii) The applicant is a person to whom a tax credit has
been transferred under ORS 469.208. - }
{ - (B) Notwithstanding ORS 315.354 (9)(a) and (b), the
applicant is a public utility as defined in ORS 757.005 or a
subsidiary or an affiliated interest of a public utility as
defined in ORS 757.015, for purposes of financing rental housing
unit energy conservation measures as described in ORS 469.636 or
alternative fuel vehicles for commercial or industrial customers
as provided in ORS 469.878. - }
{ - (C) Notwithstanding ORS 315.354 (9)(a) and (b), the
applicant is a public utility as defined in ORS 757.005 or a
subsidiary or an affiliated interest of a public utility as
defined in ORS 757.015, for purposes of financing alternative
fuel vehicles or associated facilities. - }
{ - (D) Notwithstanding ORS 315.354 (9)(a) and (b), the
applicant is a public utility as defined in ORS 757.005 or a
subsidiary or an affiliated interest of a public utility as
defined in ORS 757.015, for purposes of financing transportation
facilities. - }
(2) An application for preliminary certification shall be made
in writing on a form prepared by the Office of Energy and shall
contain:
(a) A statement that the applicant or the lessee of the
applicant's facility:
(A) Intends to convert from a purchased energy source to a
renewable energy resource;
(B) Plans to acquire, construct or install a facility that will
use a renewable energy resource or solid waste instead of
electricity, petroleum or natural gas;
(C) Plans to use a renewable energy resource in the generation
of electricity for sale or to replace an existing or proposed use
of an existing source of electricity;
(D) Plans to acquire, construct or install a facility that
substantially reduces the consumption of purchased energy;
(E) Plans to acquire, construct or install equipment for
recycling as defined in ORS 469.185 { - (6) - } { + (8) + };
(F) Plans to acquire an alternative fuel vehicle or to convert
an existing vehicle to an alternative fuel vehicle;
(G) Plans to acquire, construct or install a facility necessary
to operate alternative fuel vehicles;
(H) Plans to acquire transit passes for use by { - the
applicant's employees - } { + individuals specified by the
applicant + };
{ - or - }
(I) Plans to acquire, construct or install a transportation
facility { - . - } { + ;
(J) Plans to acquire a sustainable building practices facility;
or
(K) Plans to acquire a car sharing facility and operate a car
sharing program. + }
Enrolled Senate Bill 521 (SB 521-A) Page 6
(b) A detailed description of the proposed facility and its
operation and information showing that the facility will operate
as represented in the application.
(c) Information on the amount by which consumption of
electricity, petroleum or natural gas by the applicant or the
lessee of the applicant's facility will be reduced, and on the
amount of energy that will be produced for sale, as the result of
using the facility { + or, if applicable, information about the
expected level of sustainable building practices facility
performance + }.
(d) The projected cost of the facility.
(e) If applicable, a copy of the proposed qualified transit
pass contract { + , + } { - or - } transportation services
contract { + or contract for lease of parking spaces for a car
sharing facility + }.
(f) Any other information the administrator of Office of Energy
considers necessary to determine whether the proposed facility is
in accordance with the provisions of ORS 469.185 to 469.225, and
any applicable rules or standards adopted by the administrator.
(3) An application for preliminary certification shall be
accompanied by a fee established under ORS 469.217. The
administrator may refund the fee if the application for
certification is rejected.
(4) The administrator may allow an applicant to file the
preliminary application after the start of erection,
construction, installation or acquisition of the facility if the
administrator finds:
(a) Filing the application before the start of erection,
construction, installation or acquisition is inappropriate
because special circumstances render filing earlier unreasonable;
and
(b) The facility would otherwise qualify for tax credit
certification pursuant to ORS 469.185 to 469.225.
{ + (5) A preliminary certification of a sustainable building
practices facility shall be applied for and issued as prescribed
by the Office of Energy by rule. + }
SECTION 6. ORS 469.206 is amended to read:
469.206. (1) The owner of { - an energy - } { + a + }
facility { - described in ORS 469.185 (3)(a)(A) or (B) - } may
transfer a tax credit for the
{ - energy - } facility in exchange for a cash payment equal
to the present value of the tax credit.
(2) The Office of Energy may establish by rule uniform discount
rates to be used in calculating the present value of a tax credit
under this section.
SECTION 7. ORS 469.207 is amended to read:
469.207. (1) Except as provided in subsection (3) of this
section, an applicant under ORS 469.205 (1)(c) { - (A)(iii) or
(B) - } shall be eligible for a tax credit for energy
conservation measures installed in rental housing units pursuant
to ORS 469.636. The tax credit shall apply to only the first
$5,000 of actually installed energy conservation measure costs
per dwelling unit.
(2) An owner, contract purchaser or lessee of a rental housing
unit for which energy conservation measures have been financed by
an applicant under subsection (1) of this section is ineligible
for an energy conservation measure tax credit for such measures.
(3) No applicant under ORS 469.205 (1)(c) { - (A)(iii) or
(B) - } shall be eligible for a tax credit for energy
conservation measures installed in rental housing units pursuant
Enrolled Senate Bill 521 (SB 521-A) Page 7
to ORS 469.636 if the rental housing units are constructed on or
after January 1, 1996.
SECTION 7a. ORS 469.210 is amended to read:
469.210. (1) The administrator of the Office of Energy may
require the submission of plans, specifications and contract
terms, and after examination thereof, may request corrections and
revisions of the plans, specifications and terms.
(2) If the administrator determines that the proposed
acquisition, erection, construction or installation is
technically feasible and should operate in accordance with the
representations made by the applicant, and is in accordance with
the provisions of ORS 469.185 to 469.225 and any applicable rules
or standards adopted by the administrator, the administrator
shall issue a preliminary certificate approving the acquisition,
erection, construction or installation of the facility. If the
administrator determines that the acquisition, erection,
construction or installation does not comply with the provisions
of ORS 469.185 to 469.225 and applicable rules and standards, the
administrator shall issue an order denying certification.
{ - (3) If within 120 days of the receipt of an application
for preliminary certification, the administrator fails to issue a
preliminary certificate of approval or an order denying
certification, the preliminary certificate shall be considered to
have been denied. - }
SECTION 8. ORS 469.215 is amended to read:
469.215. (1) No { + final + } certification shall be issued by
the administrator of the Office of Energy under this section
unless the facility was acquired, erected, constructed or
installed under a preliminary certificate of approval issued
under ORS 469.210 and in accordance with the applicable
provisions of ORS 469.185 to 469.225 and any applicable rules or
standards adopted by the administrator.
(2) Any person may apply to the Office of Energy for final
certification of a facility:
(a) { - After having obtained - } { + If the office
issued + } preliminary certification for the facility under ORS
469.210; and
(b) { + (A) + } After completion of erection, construction,
installation or acquisition of the proposed facility or, if the
facility is a qualified transit pass contract, after entering
into the contract with a transportation provider { + ; or
(B) After transfer of the facility, as provided in ORS 315.354
(5) + }.
(3) An application for final certification shall be made in
writing on a form prepared by the Office of Energy and shall
contain:
(a) A statement that the conditions of the preliminary
certification have been complied with;
(b) The actual cost of the facility certified to by a certified
public accountant who is not an employee of the applicant or, if
the actual cost of the facility is less than $50,000, copies of
receipts for purchase and installation of the facility;
(c) A statement that the facility is in operation or, if not in
operation, that the applicant has made every reasonable effort to
make the facility operable; and
(d) Any other information determined by the administrator to be
necessary prior to issuance of a final certificate, including
inspection of the facility by the Office of Energy.
(4) The administrator shall act on an application for
certification before the 60th day after the filing of the
Enrolled Senate Bill 521 (SB 521-A) Page 8
application under this section. The administrator, after
consultation with the Public Utility Commission, may issue the
certificate together with such conditions as the administrator
determines are appropriate to promote the purposes of this
section and ORS 315.354, 469.185, 469.200, 469.205 and 469.878.
The action of the administrator shall include certification of
the actual cost of the facility. However, in no event shall the
administrator certify an amount for tax credit purposes which is
more than 10 percent in excess of the amount approved in the
preliminary certificate issued for the facility.
(5) If the administrator rejects an application for final
certification, or certifies a lesser actual cost of the facility
than was claimed in the application, the administrator shall send
to the applicant written notice of the action, together with a
statement of the findings and reasons therefor, by certified
mail, before the 60th day after the filing of the application.
Failure of the administrator to act constitutes rejection of the
application.
(6) Upon approval of an application for final certification of
a facility, the administrator shall certify the facility. Each
certificate shall bear a separate serial number for each device.
Where one or more devices constitute an operational unit, the
administrator may certify the operational unit under one
certificate.
SECTION 9. { + The amendments to ORS 469.185, 469.205,
469.206, 469.207, 469.210 and 469.215 by sections 4 to 8 of this
2001 Act apply to preliminary or final certifications issued on
or after January 1, 2001, and to the facilities for which these
certifications are issued. + }
SECTION 10. { + 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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Passed by Senate March 7, 2001
...........................................................
Secretary of Senate
...........................................................
President of Senate
Passed by House May 31, 2001
...........................................................
Speaker of House
Enrolled Senate Bill 521 (SB 521-A) Page 9
Received by Governor:
......M.,............., 2001
Approved:
......M.,............., 2001
...........................................................
Governor
Filed in Office of Secretary of State:
......M.,............., 2001
...........................................................
Secretary of State
Enrolled Senate Bill 521 (SB 521-A) Page 10