72nd OREGON LEGISLATIVE ASSEMBLY--2003 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 558
A-Engrossed
House Bill 2166
Ordered by the House February 5
Including House Amendments dated February 5
Ordered printed by the Speaker pursuant to House Rule 12.00A (5).
Presession filed (at the request of Governor Theodore R.
Kulongoski for Housing and Community Services Department)
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 taxpayer eligible to claim farmworker housing tax
credit to transfer all of credit to other taxpayer. Permits
application for farmworker housing tax credit approval to be
filed within six months of start of farmworker housing project.
Expands definition of farmworker housing project to include
acquisition of housing. { + Includes nonprofit corporation in
definition of taxpayer. + }
Applies to tax years beginning on or after January 1, 2004.
A BILL FOR AN ACT
Relating to farmworker housing tax credits; creating new
provisions; and amending ORS 315.164, 315.167 and 315.169.
Be It Enacted by the People of the State of Oregon:
SECTION 1. ORS 315.164 is amended to read:
315.164. (1) As used in this section and ORS 315.169 and
315.172:
(a) 'Condition of habitability' means a condition that is in
compliance with:
(A) The applicable provisions of the state building code under
ORS chapter 455 and the rules adopted thereunder; or
(B) If determined on or before December 31, 1995, sections 12
and 13, chapter 964, Oregon Laws 1989.
(b) 'Contributor' means a person that { + acquired, + }
constructed, manufactured, installed or contributed money to
finance a farmworker housing project.
(c) 'Eligible costs' includes finance costs, { + acquisition
costs, + } construction costs, excavation costs, installation
costs and permit costs and excludes land costs.
(d) 'Farmworker' means any person who, for an agreed
remuneration or rate of pay, performs temporary or permanent
labor for another in the production of farm products or in the
planting, cultivating or harvesting of seasonal agricultural
crops or in the forestation or reforestation of lands, including
but not limited to the planting, transplanting, tubing,
precommercial thinning and thinning of trees and seedlings, the
clearing, piling and disposal of brush and slash and other
related activities.
(e) 'Farmworker housing' means housing:
(A) Limited to occupancy by farmworkers and their immediate
families; and
(B) No dwelling unit of which is occupied by a relative of the
owner or operator of the farmworker housing.
(f) 'Farmworker housing project' means { + the
acquisition, + } construction, installation or rehabilitation of
farmworker housing.
(g) 'Owner' means a person that owns farmworker housing and
does not include a person that only has an interest in the
housing as a holder of a security interest.
(h) 'Rehabilitation' means to make repairs or improvements to a
building that improve its livability and are consistent with
applicable building codes.
(i) 'Relative' means a brother or sister (whether by the whole
or by half blood), spouse, ancestor (whether by law or by blood),
or lineal descendant of an individual.
{ + (j) 'Taxpayer' includes a nonprofit corporation or other
person not subject to tax under ORS chapter 316, 317 or 318. + }
(2) A taxpayer who is the owner or operator of farmworker
housing is allowed a credit against the taxes otherwise due under
ORS chapter 316, if the taxpayer is a resident individual, or
against the taxes otherwise due under ORS chapter 317, if the
taxpayer is a corporation. The total amount of the credit shall
be equal to 50 percent of the eligible costs actually paid or
incurred { + by the taxpayer + } to complete a farmworker
housing project, to the extent the eligible costs actually paid
or incurred { + by the taxpayer + } do not exceed the estimate
of eligible costs approved by the Housing and Community Services
Department under ORS 315.167.
(3) A taxpayer { - claiming - } { + who is otherwise
eligible to claim + } a credit under this section may elect to
transfer { + all or + } a portion of the credit to a contributor
in the manner provided in ORS 315.169. { - No more than 80
percent of the credit may be transferred. - }
(4)(a) The credit allowed under this section may be taken for
the tax year in which the farmworker housing project is completed
or in any of the nine tax years succeeding the tax year in which
the project is completed.
(b) The credit allowed in any one tax year may not exceed 20
percent of the amount determined under subsection (2) of this
section.
(5)(a) To claim a credit under this section, a taxpayer must
show in each year following the completion of a farmworker
housing project that the housing continues to be operated as
farmworker housing.
(b) A taxpayer need not make the showing required in paragraph
(a) of this subsection if the Housing and Community Services
Department waives the requirement after the taxpayer has
successfully met the requirement for the first five years after
completion of the housing project.
(c) The Housing and Community Services Department shall
determine by rule the factors necessary to grant a waiver. Such
factors may include a documented decline in a particular area for
farmworker housing.
(6) The credit shall apply only to a farmworker housing project
that is located within this state and physically begun on or
after January 1, 1990.
(7)(a) A credit may not be allowed under this section unless
the taxpayer claiming credit under this section:
(A) Obtains a letter of credit approval from the Housing and
Community Services Department pursuant to ORS 315.167; and
(B) Files with the Department of Revenue an annual
certification providing that all occupied units for which credit
is being claimed are occupied by farmworkers and their immediate
families.
(b) The certification described under this subsection shall be
made on the form and in the time and manner prescribed by the
Department of Revenue.
(8) Except as provided under subsection (9) of this section,
the credit allowed in any one year may not exceed the tax
liability of the taxpayer.
(9) 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, 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 any credit not used in
that third succeeding tax year may be carried forward and used in
the fourth succeeding tax year, and any credit not used in that
fourth succeeding tax year may be carried forward and used in the
fifth succeeding tax year, and any credit not used in that fifth
succeeding tax year may be carried forward and used in the sixth
succeeding tax year, and any credit not used in that sixth
succeeding tax year may be carried forward and used in the
seventh succeeding tax year, and any credit not used in that
seventh succeeding tax year may be carried forward and used in
the eighth succeeding tax year, and any credit not used in that
eighth succeeding tax year may be carried forward and used in the
ninth succeeding tax year, but may not be carried forward for any
tax year thereafter.
(10)(a) The credit provided by this section is not in lieu of
any depreciation or amortization deduction for the project to
which the taxpayer otherwise may be entitled under ORS chapter
316 or 317 for the year.
(b) The taxpayer's adjusted basis for determining gain or loss
may not be further decreased by any tax credits allowed under
this section.
(11) For a taxpayer to receive a credit under this section, the
farmworker housing must:
(a) Comply with all occupational safety or health laws, rules,
regulations and standards;
(b) If registration is required, be registered as a farmworker
camp with the Department of Consumer and Business Services under
ORS 658.750;
(c) Upon occupancy and if an indorsement is required, be
operated by a person who holds a valid indorsement as a
farmworker camp operator under ORS 658.730; and
(d) Continue to be operated as farmworker housing for a period
of at least 10 years after the completion of the farmworker
housing project, unless a waiver has been granted under
subsection (5) of this section.
(12)(a) Pursuant to the procedures for a contested case under
ORS 183.310 to 183.550, the Department of Revenue may order the
disallowance of the credit allowed under this section if it
finds, by order, that:
(A) The credit was obtained by fraud or misrepresentation; or
(B) In the event that an owner or operator claims or claimed
the credit:
(i) The taxpayer has failed to continue to substantially comply
with the occupational safety or health laws, rules, regulations
or standards;
(ii) After occupancy and if registration is required, the
farmworker housing is not registered as a farmworker camp with
the Department of Consumer and Business Services under ORS
658.750;
(iii) After occupancy and if an indorsement is required, the
farmworker housing is not operated by a person who holds a valid
indorsement as a farmworker camp operator under ORS 658.730; or
(iv) The taxpayer has failed to make a showing that the housing
continues to be operated as farmworker housing as required under
subsection (5)(a) of this section and the taxpayer has not been
granted a waiver by the Housing and Community Services Department
under subsection (5)(b) of this section.
(b) If the tax credit is disallowed pursuant to this
subsection, notwithstanding ORS 314.410 or other law, all prior
tax relief provided to the taxpayer shall be forfeited and the
Department of Revenue shall proceed to collect those taxes not
paid by the taxpayer as a result of the prior granting of the
credit.
(c) If the tax credit is disallowed pursuant to this
subsection, the taxpayer shall be denied any further credit
provided under this section, in connection with the farmworker
housing project, as the case may be, from and after the date that
the order of disallowance becomes final.
(13) In the event that the farmworker housing is destroyed by
fire, flood, natural disaster or act of God before all of the
credit has been used, the taxpayer may nevertheless claim the
credit as if no destruction had taken place. In the event of
fire, if the fire chief of the fire protection district or unit
determines that the fire was caused by arson, as defined in ORS
164.315 and 164.325, by the taxpayer or by another at the
taxpayer's direction, then the fire chief shall notify the
Department of Revenue. Upon conviction of arson, the Department
of Revenue shall disallow the credit in accordance with
subsection (12) of this section.
(14)(a) A nonresident individual shall be allowed the credit
computed in the same manner and subject to the same limitations
as the credit allowed a resident by this section. 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.
(15) The Department of Revenue may adopt rules for carrying out
the provisions of this section.
SECTION 2. ORS 315.167 is amended to read:
315.167. (1) Prior to { + six months after + } beginning a
farmworker housing project for which credit under ORS 315.164
will be claimed, an owner shall apply to the Housing and
Community Services Department for a letter of credit approval.
(2) The application shall be on such form as is prescribed by
the Housing and Community Services Department and shall provide:
(a) The name, address and taxpayer identification number of the
taxpayer;
(b) The location of the proposed farmworker housing;
(c) A description of the project identifying the type of
housing that is the subject of the project;
(d) An estimate of the eligible costs of the project; and
(e) Any other information as the Housing and Community Services
Department may require.
(3) The Housing and Community Services Department may review
applications using any reasonable system of prioritizing review
established by department rule.
(4) Applications filed in compliance with this section shall be
approved by the Housing and Community Services Department to the
extent that the total of estimated eligible costs for all
approved projects for the calendar year is equal to or less than
$7.5 million. No application shall be approved if the addition of
the estimated eligible costs of the project to the estimated
eligible costs for all approved projects for the calendar year
would exceed $7.5 million.
(5) Upon approval of an application, the Housing and Community
Services Department shall send a letter of credit approval to the
taxpayer. The letter of credit approval shall state the approved
amount of estimated eligible costs for the project.
(6) At the conclusion of each calendar year, the Housing and
Community Services Department shall send a list of the names,
addresses and taxpayer identification numbers of taxpayers to
whom a letter of credit approval has been issued under this
section during the calendar year, along with approved amounts of
estimated eligible costs for each project, to the Department of
Revenue.
(7) Notwithstanding that a letter of credit approval has been
issued to a taxpayer under this section, the Department of
Revenue may disallow, in whole or in part, a claim for credit
under ORS 315.164 upon the Department of Revenue's determination
that under the provisions of ORS 315.164 the taxpayer is not
entitled to the credit or is only entitled to a portion of the
amount claimed.
SECTION 3. ORS 315.169 is amended to read:
315.169. (1) A taxpayer that is a contributor is allowed a
credit against the taxes otherwise due under ORS chapter 316, if
the taxpayer is a resident individual, or ORS chapter 317, if the
taxpayer is a corporation, to the extent the owner or operator of
farmworker housing transferred { + all or + } a portion of the
credit allowed to the owner or operator under ORS 315.164.
(2) An owner or operator of farmworker housing may transfer
{ + all or + } a portion of the credit allowed to the owner or
operator under ORS 315.164 to one or more contributors { + , + }
{ - in portions that do - } { + but the amount transferred
may + } not total more than { - 80 percent of - } the total
credit the owner or operator may claim.
(3) To receive a credit under this section:
(a) The owner or operator and contributor must jointly file a
statement with the Department of Revenue stating the portion of
credit the contributor is allowed to claim and any other
information the department may require by rule; and
(b) The contributor must show that upon completion of the
farmworker housing project and first occupation by farmworkers,
the housing complies with all occupational safety or health laws,
rules, regulations and standards applicable for farmworker
housing.
(4) A contributor remains eligible to receive a credit under
this section even if the owner or operator of the farmworker
housing becomes ineligible for the credit as a result of:
(a) Failure to file the annual certification under ORS 315.164
(7);
(b) Failure to continue to substantially comply with
occupational safety or health laws, rules, regulations or
standards under ORS 315.164 (11);
(c) Failure to register as a farmworker camp with the
Department of Consumer and Business Services under ORS 658.750;
(d) Failure of the operator to hold a valid indorsement as a
farmworker camp operator under ORS 658.730; or
(e) Failure to comply with any other rules or provisions
relating to the operation or maintenance of the farmworker
housing after the contributor has completed work on the project.
(5)(a) A contributor does not remain eligible to receive a
credit under this section if the Department of Revenue finds, by
order of a disallowance of credit and pursuant to the procedures
for a contested case under ORS 183.310 to 183.550, that the
contributor obtained the credit by fraud or misrepresentation,
including a finding that the housing did not comply with all
occupational safety or health laws, rules, regulations and
standards applicable for farmworker housing at the time the
housing was completed.
(b) If the credit is disallowed pursuant to this subsection,
notwithstanding ORS 314.410 or other law, all prior tax relief
provided to the taxpayer shall be forfeited and the department
shall proceed to collect those taxes not paid by the taxpayer as
a result of the prior granting of the credit.
(c) If the credit is disallowed pursuant to this subsection,
the taxpayer shall be denied any further credit provided under
this section, in connection with the farmworker housing project,
as the case may be, from and after the date that the order of
disallowance becomes final.
(6)(a) The credit allowed under this section may be taken for
the tax year in which the farmworker housing project is completed
or in any of the nine tax years succeeding the tax year in which
the project is completed.
(b) The credit allowed in any one tax year may not exceed 20
percent of the amount determined under subsection (2) of this
section that was transferred to the contributor claiming the
credit.
(7) Except as provided under subsection (8) of this section,
the credit allowed in any one 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
such 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 any credit not used in
that third succeeding tax year may be carried forward and used in
the fourth succeeding tax year, and any credit not used in that
fourth succeeding tax year may be carried forward and used in the
fifth succeeding tax year, and any credit not used in that fifth
succeeding tax year may be carried forward and used in the sixth
succeeding tax year, and any credit not used in that sixth
succeeding tax year may be carried forward and used in the
seventh succeeding tax year, and any credit not used in that
seventh succeeding tax year may be carried forward and used in
the eighth succeeding tax year, and any credit not used in that
eighth succeeding tax year may be carried forward and used in the
ninth succeeding tax year, but may not be carried forward for any
tax year thereafter.
(9)(a) A nonresident individual shall be allowed the credit
computed in the same manner and subject to the same limitations
as the credit allowed a resident by this section. 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 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) The department may adopt rules for carrying out the
provisions of this section.
SECTION 4. { + The amendments to ORS 315.164, 315.167 and
315.169 by sections 1 to 3 of this 2003 Act apply to tax years
beginning on or after January 1, 2004. + }
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