73rd OREGON LEGISLATIVE ASSEMBLY--2005 Regular Session
Enrolled
Senate Bill 31
Printed pursuant to Senate Interim Rule 213.28 by order of the
President of the Senate in conformance with presession filing
rules, indicating neither advocacy nor opposition on the part
of the President (at the request of Senate Interim Committee on
Revenue for Department of Revenue)
CHAPTER ................
AN ACT
Relating to taxation; creating new provisions; amending ORS
305.230, 305.494, 305.690, 307.090, 307.130, 307.147, 310.140,
310.630, 310.800, 311.689, 314.011, 314.650, 314.665, 315.004,
315.262, 315.266, 316.012, 316.099, 316.116, 316.502, 317.010,
317.152, 317.154, 317.267, 469.160, 469.165, 469.170, 469.172,
469.176 and 469.180; repealing sections 2 and 6, chapter 739,
Oregon Laws 2003; and prescribing an effective date.
Be It Enacted by the People of the State of Oregon:
SECTION 1. ORS 307.090 is amended to read:
307.090. (1) Except as provided by law, all property of the
state and all public or corporate property used or intended for
corporate purposes of the several counties, cities, towns, school
districts, irrigation districts, drainage districts, ports, water
districts, housing authorities and all other public or municipal
corporations in this state, is exempt from taxation.
(2) Any city may agree with any school district to make
payments in lieu of taxes on all property of the city located in
any such school district, and which is exempt from taxation under
subsection (1) of this section when such property is outside the
boundaries of the city and owned, used or operated for the
production, transmission, distribution or furnishing of electric
power or energy or electric service for or to the public.
{ + (3)(a) Notwithstanding ORS 308.505 to 308.665, the
property described in paragraph (b) of this subsection is exempt
from taxation if the owner of the property described in paragraph
(b) of this subsection is a city or public entity of a state
other than Oregon and the city or public entity does not own a
fee title interest in any real property in Oregon.
(b) The property that is subject to exemption under paragraph
(a) of this subsection is tangible or intangible property,
property rights or property interests in or related to the
Pacific Northwest AC Intertie, as referenced in a written
capacity ownership agreement executed before the effective date
of this 2005 Act between the United States Department of Energy
and the city or public entity described in paragraph (a) of this
subsection. + }
SECTION 2. { + (1) The amendments to ORS 307.090 by section 1
of this 2005 Act apply to:
Enrolled Senate Bill 31 (SB 31-ACCA) Page 1
(a) Any tax year beginning on or after the date a written
capacity ownership agreement described in ORS 307.090 (3) is
executed; and
(b) Any tax year beginning on or after July 1, 2005. + } { +
(2) Notwithstanding subsection (1) of this section, nothing in
this section or the amendments to ORS 307.090 by section 1 of
this 2005 Act shall be construed as entitling a person to a
refund of taxes paid prior to the effective date of this 2005 Act
on any tangible or intangible property, property rights or
property interests. + }
SECTION 3. ORS 314.665 is amended to read:
314.665. (1) As used in ORS 314.650, the sales factor is a
fraction, the numerator of which is the total sales of the
taxpayer in this state during the tax period, and the denominator
of which is the total sales of the taxpayer everywhere during the
tax period.
(2) Sales of tangible personal property are in this state if:
(a) The property is delivered or shipped to a purchaser, other
than the United States Government, within this state regardless
of the f.o.b. point or other conditions of the sale; or
(b) The property is shipped from an office, store, warehouse,
factory, or other place of storage in this state and
{ - (A) - } the purchaser is the United States Government or
{ - (B) - } the taxpayer is not taxable in the state of the
purchaser. { + For purposes of this paragraph:
(A) The sale of goods shipped from a public warehouse is not
considered to take place in this state if:
(i) The taxpayer's only activity in Oregon is the storage of
the goods in the public warehouse prior to shipment; or
(ii) The taxpayer's only activities in Oregon are the storage
of the goods in the public warehouse prior to shipment and the
presence of employees within this state solely for purposes of
soliciting sales of the taxpayer's products; and
(B) 'Taxpayer' means a taxpayer as defined in section 7701 of
the Internal Revenue Code, an affiliate of the person storing
goods in a public warehouse or a person that is related under
section 267 of the Internal Revenue Code to the person storing
goods in a public warehouse. + }
(3) Subsection (2)(b) of this section shall not apply to sales
of tangible personal property if:
(a) The sales are included in the numerator of a formula used
to apportion business income to another state of the United
States, a foreign country or the District of Columbia; and
(b) The other state, a foreign country or the District of
Columbia has imposed a tax on or measured by the apportioned
business income.
(4) Sales, other than sales of tangible personal property, are
in this state if (a) the income-producing activity is performed
in this state; or (b) the income-producing activity is performed
both in and outside this state and a greater proportion of the
income-producing activity is performed in this state than in any
other state, based on costs of performance.
(5) Where the sales apportionment factor is determined by
administrative rule pursuant to ORS 314.682, 314.684, 317.660 or
other law, the Department of Revenue shall adopt rules that are
consistent with the determination of the sales factor under this
section.
(6) For purposes of this section, 'sales':
(a) Excludes gross receipts arising from the sale, exchange,
redemption or holding of intangible assets, including but not
Enrolled Senate Bill 31 (SB 31-ACCA) Page 2
limited to securities, unless those receipts are derived from the
taxpayer's primary business activity.
(b) Includes net gain from the sale, exchange or redemption of
intangible assets not derived from the primary business activity
of the taxpayer but included in the taxpayer's business income.
(c) Excludes gross receipts arising from an incidental or
occasional sale of a fixed asset or assets used in the regular
course of the taxpayer's trade or business if a substantial
amount of the gross receipts of the taxpayer arise from an
incidental or occasional sale or sales of fixed assets used in
the regular course of the taxpayer's trade or business.
Insubstantial amounts of gross receipts arising from incidental
or occasional transactions or activities may be excluded from the
sales factor unless the exclusion would materially affect the
amount of income apportioned to this state.
{ + (7) The department may determine that a warehouse that
meets the definition of 'public warehouse' under this section may
not be treated as a public warehouse if the warehouse is being
used primarily for tax avoidance purposes or if transactions
related to the use of the warehouse are primarily for tax
avoidance purposes.
(8) As used in this section, 'public warehouse':
(a) Means a warehouse owned or operated by a person that does
not own the goods stored in the warehouse; and
(b) Does not include a warehouse that is owned by a person that
is related to the person that owns goods that are stored in the
warehouse, as determined under section 267 of the Internal
Revenue Code, or an affiliate of the person that owns goods that
are stored in the warehouse. + }
SECTION 4. { + The amendments to ORS 314.665 by section 3 of
this 2005 Act apply to tax years beginning on or after January 1,
2006. + }
SECTION 5. ORS 316.116 is amended to read:
316.116. (1)(a) A resident individual shall be allowed a credit
against the taxes otherwise due under this chapter for costs paid
or incurred for construction or installation of an alternative
energy device in a dwelling.
(b) A resident individual shall be allowed a credit against the
taxes otherwise due under this chapter for costs paid or incurred
to modify or purchase an alternative fuel vehicle or related
equipment.
{ + (c) A resident individual shall be allowed a credit
against the taxes otherwise due under this chapter for costs paid
or incurred for construction or installation of a solar electric
system in a dwelling. + }
(2)(a) Except in the case of an alternative fuel device { + or
a solar electric system + }, the credit shall be based upon the
first year energy yield of the alternative energy device that
qualifies under ORS 469.160 to 469.180. The amount of the credit
shall be the same whether for collective or noncollective
investment.
(b) The credit allowed under this section for each dwelling
shall not exceed the lesser of:
(A) $1,500 or the first year energy yield in kilowatt hours per
year multiplied by 60 cents per dwelling utilizing the
alternative energy device used for space heating, cooling,
electrical energy or domestic water heating for tax years
beginning on or after January 1, 1990, and before January 1,
1996.
Enrolled Senate Bill 31 (SB 31-ACCA) Page 3
(B) $1,200 or the first year energy yield in kilowatt hours per
year multiplied by 48 cents per dwelling utilizing the
alternative energy device used for space heating, cooling,
electrical energy or domestic water heating for tax years
beginning on or after January 1, 1996, and before January 1,
1998.
(C) $1,500 or the first year energy yield in kilowatt hours per
year multiplied by 60 cents per dwelling utilizing the
alternative energy device used for space heating, cooling,
electrical energy or domestic water heating for tax years
beginning on or after January 1, 1998.
(c) For an alternative energy device used for swimming pool,
spa or hot tub heating, the credit allowed under this section
shall be based upon 50 percent of the cost of the device or the
first year's energy yield in kilowatt hours per year multiplied
by 15 cents, whichever is lower, up to:
(A) $1,500 for tax years beginning on or after January 1, 1990,
and before January 1, 1996.
(B) $1,200 for tax years beginning on or after January 1, 1996,
and before January 1, 1998.
(C) $1,500 for tax years beginning on or after January 1, 1998.
(d) For an alternative fuel device, the credit allowed under
this section is 25 percent of the cost of the alternative fuel
device but the total credit shall not exceed $750 if the device
is placed in service on or after January 1, 1998.
{ + (e)(A) For a solar electric system, the credit allowed
under this section shall equal $3 per watt of installed output,
but the installed output that is used to determine the amount of
credit under this paragraph may not exceed 2,000 watts.
(B) Notwithstanding subparagraph (A) of this paragraph, the
amount of the credit allowed in any one tax year may not exceed
the tax liability of the taxpayer or $1,500, whichever is
less. Unused credit amounts may be carried forward as provided in
subsection (7) of this section, but may not be carried forward to
a tax year that is more than five tax years following the first
tax year for which any credit was allowed with respect to the
solar electric system that is the basis for the credit.
(C) Notwithstanding subparagraph (A) of this paragraph, the
total amount of the credit allowed under this paragraph may not
exceed 50 percent of the total installed cost of the solar
electric system. + }
(3)(a) In the case of a credit for an alternative energy device
that is an energy efficient appliance, the credit allowed to a
resident individual under this section shall equal:
(A) 48 cents per first year kilowatt hour saved, or the
equivalent for other fuel saved, not to exceed $1,200 for each
tax year beginning on or after January 1, 1998, and before
January 1, 1999; and
(B) 40 cents per kilowatt hour saved, or the equivalent for
other fuel saved, not to exceed $1,000 for each tax year
beginning on or after January 1, 1999.
(b) Notwithstanding paragraph (a) of this subsection, the
credit allowed for an energy efficient appliance shall not exceed
25 percent of the cost of the appliance.
(4) To qualify for a credit under this section, all of the
following are required:
(a) The alternative energy device { + or solar electric
system + } must be purchased, constructed, installed and operated
in accordance with ORS 469.160 to 469.180 and a certificate
issued thereunder.
Enrolled Senate Bill 31 (SB 31-ACCA) Page 4
(b) Except for credits claimed for alternative fuel devices,
the taxpayer who is allowed the credit must be the owner or
contract purchaser of the dwelling or dwellings served by the
alternative energy device { + or solar electric system + } or
the tenant of the owner or of the contract purchaser and must:
(A) Use the dwelling or dwellings served by the alternative
energy device { + or solar electric system + } as a principal or
secondary residence; or
(B) Rent or lease, under a residential rental agreement, the
dwelling or dwellings to a tenant who uses the dwelling or
dwellings as a principal or secondary residence, unless the basis
for the credit is the installation of an energy efficient
appliance. If the basis for the credit is the installation of an
energy efficient appliance, the credit shall be allowed only to
the taxpayer who actually occupies the dwelling as a principal or
secondary residence.
(c) In the case of an alternative fuel device, if the device is
a fueling station necessary to operate an alternative fuel
vehicle, unless the verification form and certificate are
transferred as authorized under ORS 469.170 (8), the taxpayer who
is allowed the credit must be the contractor who constructs the
dwelling that incorporates the fueling station into the dwelling
or installs the fueling station in the dwelling. If the
alternative energy device is an alternative fuel vehicle, the
credit must be claimed by the owner as defined under ORS 801.375
or contract purchaser. If the alternative energy device is
related equipment, the credit may be claimed by the owner or
contract purchaser.
(d) The credit must be claimed for the tax year in which the
alternative energy device { + or solar electric system + } was
purchased if the { + device or + } system is operational by
April 1 of the next following tax year.
(5) The credit provided by this section { - shall - } { +
does + } not affect the computation of basis under this chapter.
(6) The credit allowed under this section in any one year
{ - shall - } { + may + } not exceed the tax liability of the
taxpayer.
(7) 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 - } { + 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, but
may not be carried forward for any tax year thereafter.
(8) A nonresident shall be allowed the credit under this
section in the proportion provided in ORS 316.117.
(9) 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.
(10) If a change in the status of a taxpayer from resident to
nonresident or from nonresident to resident occurs, the credit
Enrolled Senate Bill 31 (SB 31-ACCA) Page 5
allowed by this section shall be determined in a manner
consistent with ORS 316.117.
(11) A husband and wife who file separate returns for a taxable
year may each claim a share of the tax credit that would have
been allowed on a joint return in proportion to the contribution
of each. However, a husband or wife living in a separate
principal residence may claim the tax credit in the same amount
as permitted a single person.
(12) As used in this section, unless the context requires
otherwise:
(a) 'Collective investment' means an investment by two or more
taxpayers for the acquisition, construction and installation of
an alternative energy device for one or more dwellings.
(b) 'First year energy yield' has the meaning given in ORS
469.160.
(c) 'Noncollective investment' means an investment by an
individual taxpayer for the acquisition, construction and
installation of an alternative energy device for one or more
dwellings.
(13) As used in this section, 'taxpayer' includes a transferee
of a verification form under ORS 469.170 (8).
(14) Notwithstanding any provision of subsection (1) or (2) of
this section, the sum of the credit allowed under subsection (1)
of this section plus any similar credit allowed for federal
income tax purposes shall not exceed the cost to the taxpayer for
the acquisition, construction and installation of the alternative
energy device { + or solar electric system + }.
SECTION 5a. { + A taxpayer may not be allowed a credit under
ORS 316.116 if the first tax year for which the credit would
otherwise be allowed with respect to an alternative energy
device, solar electric system or alternative fuel vehicle or
related equipment is on or after January 1, 2016. + }
SECTION 6. ORS 469.160 is amended to read:
469.160. As used in ORS 316.116, 317.115 and 469.160 to
469.180:
(1) 'Alternative energy device' means:
(a) Any system, mechanism or series of mechanisms, including
photovoltaic systems, that uses solar radiation or wind for space
heating, cooling or electrical energy for one or more dwellings;
(b) Any system that uses solar radiation for:
(A) Domestic water heating; or
(B) Swimming pool, spa or hot tub heating and that meets the
requirements set forth in ORS 316.116;
(c) A ground water heat pump and ground loop system;
(d) A wind powered turbine that generates electricity;
(e) Any wind powered device used to offset or supplement the
use of electricity by performing a specific task such as pumping
water;
(f) Equipment used in the production of alternative fuels;
(g) A generator powered by alternative fuels and used to
produce electricity;
(h) A fuel cell;
(i) An energy efficient appliance; or
(j) An alternative fuel device.
(2) 'Alternative fuel device' means any of the following:
(a) An alternative fuel vehicle;
(b) Related equipment; or
(c) A fueling station necessary to operate an alternative fuel
vehicle.
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(3) 'Alternative fuel vehicle' means a motor vehicle as defined
in ORS 801.360 that is:
(a) Registered in this state; and
(b) Manufactured or modified to use an alternative fuel,
including but not limited to electricity, natural gas, ethanol,
methanol, propane and any other fuel approved in rules adopted by
the Director of the State Department of Energy that produces less
exhaust emissions than vehicles fueled by gasoline or diesel.
Determination that a vehicle is an alternative fuel vehicle shall
be made without regard to energy consumption savings.
(4) 'Coefficient of performance' means the ratio calculated by
dividing the usable output energy by the electrical input energy.
Both energy values must be expressed in equivalent units.
(5) 'Contractor' means a person whose trade or business
consists of offering for sale an alternative energy device,
construction service, installation service or design service.
(6)(a) 'Cost' means the actual cost of the acquisition,
construction and installation of the alternative energy
device { + or solar electric system + } paid by the taxpayer for
the alternative energy device { + or solar electric system + }.
(b) For an alternative fuel vehicle, 'cost' means the
difference between the cost of the alternative fuel vehicle and
the same vehicle or functionally similar vehicle manufactured to
use conventional gasoline or diesel fuel or, in the case of
modification of an existing vehicle, the cost of the
modification. ' Cost' does not include any amounts paid for
remodification of the same vehicle.
(c) For a fueling station necessary to operate an alternative
fuel vehicle, 'cost' means the cost to the contractor of
constructing or installing the fueling station in a dwelling and
of making the fuel station operational in accordance with the
specifications issued under ORS 469.160 to 469.180 and any rules
adopted by the Director of the State Department of Energy.
(d) For related equipment, 'cost' means the cost of the related
equipment and any modifications or additions to the related
equipment necessary to prepare the related equipment for use in
converting a vehicle to alternative fuel use.
(7) 'Domestic water heating' means the heating of water used in
a dwelling for bathing, clothes washing, dishwashing and other
related functions.
(8) 'Dwelling' means real or personal property ordinarily
inhabited as a principal or secondary residence and located
within this state. 'Dwelling' includes, but is not limited to, an
individual unit within multiple unit residential housing.
(9) 'Energy efficient appliance' means a clothes washer,
clothes dryer, water heater, refrigerator, freezer, dishwasher,
appliance designed to heat or cool a dwelling or other major
household appliance that has been certified by the State
Department of Energy to have premium energy efficiency
characteristics.
(10) 'First year energy yield' of an alternative energy device
is the usable energy produced under average environmental
conditions in one year.
(11) 'Fueling station' includes but is not limited to a
compressed natural gas compressor fueling system or an electric
charging system for vehicle power battery charging.
(12) 'Placed in service' means:
(a) The date an alternative energy device { + or solar
electric system + } is ready and available to produce usable
energy or save energy.
Enrolled Senate Bill 31 (SB 31-ACCA) Page 7
(b) For an alternative fuel vehicle:
(A) In the case of purchase, the date that the alternative fuel
vehicle is first purchased as an alternative fuel vehicle ready
and available for use.
(B) In the case of modification, the date that the modification
is completed and the vehicle is ready and available for use as an
alternative fuel vehicle.
(c) For a fueling station necessary to operate an alternative
fuel vehicle, the date that the fueling station is first
operational.
(d) For related equipment, the date that the equipment is first
operational.
(13) 'Related equipment' means equipment necessary to convert a
vehicle to use an alternative fuel.
{ + (14) 'Solar electric system' means any system, mechanism
or series of mechanisms, including photovoltaic systems, that
uses solar radiation to generate electrical energy for a
dwelling. + }
SECTION 7. ORS 469.165 is amended to read:
469.165. (1) For the purposes of carrying out ORS 469.160 to
469.180, the State Department of Energy may adopt rules
prescribing minimum performance criteria for alternative energy
devices for dwellings { + and solar electric systems + }.
(2) The department, in adopting rules under this section for
solar heating and cooling systems, shall take into consideration
applicable standards of federal performance criteria prescribed
pursuant to the provisions of section 5506, title 42, United
States Code (Solar Heating and Cooling Act of 1974).
(3) The Director of the State Department of Energy shall adopt
rules governing the determination of eligibility, verification
and certification of an alternative fuel device for purposes of
the tax credits granted under ORS 316.116 and 317.115, including
but not limited to rules that further define an alternative fuel
vehicle, related equipment or fueling station necessary to
operate an alternative fuel vehicle, that govern the computation
of costs eligible for credit and that require equitable
allocation of the tax credit benefits between the lessor and the
lessee of an alternative fuel vehicle as a condition of tax
credit eligibility.
SECTION 8. ORS 469.170 is amended to read:
469.170. (1) Any person may claim a tax credit under ORS
316.116 (or ORS 317.115, if the person is a corporation) if the
person:
(a) Meets the requirements of ORS 316.116 (or ORS 317.115, if
applicable);
(b) Meets the requirements of ORS 469.160 to 469.180; and
(c) Pays, subject to subsection (9) of this section, all or a
portion of the costs of an alternative energy device { + or a
solar electric system + }.
(2) A credit under ORS 317.115 may be claimed only if the
alternative energy device is a fueling station necessary to
operate an alternative fuel vehicle.
(3) { + (a) + } In order to be eligible for a tax credit under
ORS 316.116 or 317.115, a person claiming a tax credit for
construction or installation of an alternative energy device
(including a fueling station) { + or a solar electric system + }
shall have the { + device or + } system certified by the State
Department of Energy or constructed or installed by a contractor
certified by the department under subsection (5) of this section.
This
Enrolled Senate Bill 31 (SB 31-ACCA) Page 8
{ - subsection - } { + paragraph + } does not apply to an
alternative fuel vehicle or to related equipment.
{ + (b) + } Certification of an alternative fuel vehicle or
related equipment shall be accomplished under rules that shall be
adopted by the Director of the State Department of Energy.
(4) Verification of the purchase, construction or installation
of an alternative energy device { + or solar electric system + }
shall be made in writing on a form provided by the Department of
Revenue and, if applicable, shall contain:
(a) The location of the alternative energy device { + or solar
electric system + };
(b) A description of the type of device { + or system + };
(c) If the device { + or system + } was constructed or
installed by a contractor, evidence that the contractor has any
license, bond, insurance and permit required to sell and
construct or install the alternative energy device { + or solar
electric system + };
(d) If the device { + or system + } was constructed or
installed by a contractor, a statement signed by the contractor
that the applicant has received:
(A) A statement of the reasonably expected energy savings of
the device { + or system + };
(B) A copy of consumer information published by the State
Department of Energy;
(C) An operating manual for the alternative energy device
{ + or solar electric system + }; and
(D) A copy of the contractor's certification certificate or
alternative energy device system certificate { + for the
alternative energy device or solar electric system, + } as
appropriate;
(e) If the device { + or system + } was not constructed or
installed by a contractor, evidence that:
(A) The State Department of Energy has issued an alternative
energy device system certificate for the { + alternative
energy + } device { + or solar electric system + }; and
(B) The taxpayer has obtained all building permits required for
construction or installation of the device { + or system + };
(f) A statement, signed by both the taxpayer claiming the
credit and the contractor if the device { + or system + } was
constructed or installed by a contractor, that the construction
or installation meets all the requirements of ORS 469.160 to
469.180 or, if the device is a fueling station and the taxpayer
is the contractor, a statement signed by the contractor that the
construction or installation meets all of the requirements of ORS
469.160 to 469.180;
(g) The date the alternative energy device { + or solar
electric system + } was purchased;
(h) The date the alternative energy device { + or solar
electric system + } was placed in service; and
(i) Any other information that the Director of the State
Department of Energy or the Department of Revenue determines is
necessary.
(5)(a) When the State Department of Energy finds that an
alternative energy device { + or solar electric system + } can
meet the standards adopted under ORS 469.165, the Director of the
State Department of Energy may issue a contractor system
certification to the person selling and constructing or
installing the alternative energy device { + or solar electric
system + }.
Enrolled Senate Bill 31 (SB 31-ACCA) Page 9
(b) Any person who sells or installs more than 12 alternative
energy devices { + or solar electric systems + } in one year
shall apply for a contractor system certification. An application
for a contractor system certification shall be made in writing on
a form provided by the State Department of Energy and shall
contain:
(A) A statement that the contractor has any license, bonding,
insurance and permit that is required for the sale and
construction or installation of the alternative energy
device { + or solar electric system + };
(B) A specific description of the alternative energy device
{ + or solar electric system + }, including, but not limited
to, the material, equipment and mechanism used in the device { +
or system + }, operating procedure, sizing and siting method and
construction or installation procedure;
(C) The addresses of three installations of the { + device
or + } system that are available for inspection by the State
Department of Energy;
(D) The range of installed costs to purchasers of the device
{ + or system + };
(E) Any important construction, installation or operating
instructions; and
(F) Any other information that the State Department of Energy
determines is necessary.
(c) A new application for contractor system approval shall be
filed when there is a change in the information supplied under
paragraph (b) of this subsection.
(d) The State Department of Energy may issue contractor system
certificates to each contractor who on October 3, 1989, has a
valid dealer system certification, which shall authorize the sale
and installation of the same domestic water heating alternative
energy devices authorized by the dealer certification.
(e) If the State Department of Energy finds that an alternative
energy device { + or solar electric system + } can meet the
standards adopted under ORS 469.165, the Director of the State
Department of Energy may issue an alternative energy device
system certificate to the taxpayer constructing or installing or
having an alternative energy device { + or solar electric
system + } constructed or installed.
(f) An application for an alternative energy device system
certificate shall be made in writing on a form provided by the
State Department of Energy and shall contain:
(A) A specific description of the alternative energy device
{ + or solar electric system + }, including, but not limited
to, the material, equipment and mechanism used in the device { +
or system + }, operating procedure, sizing, siting method and
construction or installation procedure;
(B) The constructed or installed cost of the device { + or
system + }; and
(C) A statement that the taxpayer has all permits required for
construction or installation of the device { + or system + }.
(6) To claim the tax credit, the verification form described in
subsection (4) of this section shall be submitted with the
taxpayer's tax return for the year the alternative energy device
{ + or solar electric system + } is placed in service or the
immediately succeeding tax year. A copy of the contractor's
certification certificate, alternative energy device system
certificate or alternative fuel vehicle or related equipment
certificate also shall be submitted.
Enrolled Senate Bill 31 (SB 31-ACCA) Page 10
(7) The verification form and contractor's certificate,
alternative energy device system certificate or alternative fuel
vehicle or related equipment certificate described under this
section shall be effective for purposes of tax relief allowed
under ORS 316.116 or 317.115.
(8) The verification form and contractor's certificate
described under this section may be transferred to the first
purchaser of a dwelling or, in the case of construction or
installation of a fueling station in an existing dwelling, the
current owner, who intends to use or is using the dwelling as a
principal or secondary residence.
(9) Any person that pays the present value of the tax credit
for an alternative energy device { + or solar electric
system + } provided under ORS 316.116 or 317.115 and 469.160 to
469.180 to the person who constructs or installs the alternative
energy device { + or solar electric system + } shall be entitled
to claim the credit in the manner and subject to rules adopted by
the Department of Revenue to carry out the purposes of this
subsection. The State Department of Energy may establish by rule
uniform discount rates to be used in calculating the present
value of a tax credit under this subsection.
SECTION 8a. { + The State Department of Energy may not issue a
contractor's certification certificate, alternative energy device
system certificate or alternative fuel vehicle or related
equipment certificate under ORS 469.170 on or after January 1,
2016. + }
SECTION 9. ORS 469.172 is amended to read:
469.172. The following devices are not eligible for the
{ - alternative energy device - } tax credit under ORS
316.116:
(1) Standard efficiency furnaces;
(2) Standard back-up heating systems;
(3) Woodstoves or wood furnaces, or any part of a heating
system that burns wood;
(4) Heat pump water heaters that are part of a geothermal heat
pump space heating system;
(5) Structures that cover or enclose a swimming pool;
(6) Swimming pools, hot tubs or spas used to store heat;
(7) Above ground, uninsulated swimming pools, hot tubs or spas;
(8) Photovoltaic systems installed on recreational vehicles;
(9) Conversion of an existing alternative energy device { + or
solar electric system + } to another type of alternative energy
device { + or solar electric system + };
(10) Repair or replacement of an existing alternative energy
device { + or solar electric system + }; { - or - }
{ + (11) A solar electric system, if the equipment or other
property that comprises the solar electric system is also the
basis for an allowed credit for an alternative energy device
under ORS 316.116;
(12) An alternative energy device, if the equipment or other
property that comprises the alternative energy device is also the
basis for an allowed credit for a solar electric system under ORS
316.116; or + }
{ - (11) - } { + (13) + } Any other device identified by
the State Department of Energy. The department may adopt rules
defining standards for eligible and ineligible devices under this
section.
SECTION 10. ORS 469.176 is amended to read:
469.176. (1) Except for alternative fuel vehicles or related
equipment, in order to carry out ORS 469.160 to 469.180, the
Enrolled Senate Bill 31 (SB 31-ACCA) Page 11
State Department of Energy shall develop performance assumptions
and prescriptive measures to determine the eligibility and tax
credit amount for alternative energy devices { + and solar
electric systems + } constructed or installed in a dwelling.
(2) The department shall use the performance assumptions and
prescriptive measures to develop information for the Department
of Revenue to use to allow taxpayers to determine their
eligibility and tax credit amount. The State Department of Energy
may review this information on an annual basis to take into
consideration new technology and performance assumption accuracy.
(3) For the purpose of determining the first year energy yield
of an alternative energy device, the department shall use the
following assumptions and test standards:
(a) Solar Rating and Certification Corporation standard SRCC
100, 200, American Society of Heating, Refrigerating and
Air-Conditioning Engineers 93-77, or the American Refrigeration
Institute standard 325-85 test at 50 degrees entering water
temperature, as appropriate. The testing requirements under this
paragraph shall not apply to an owner-built alternative energy
device.
(b) For an alternative energy device used as a source for
domestic water heating energy, a hot water use of 75 gallons per
day at 120 degrees Fahrenheit. The load of 75 gallons per day at
120 degrees Fahrenheit shall be achieved by including
conservation measures in the construction or installation of the
alternative energy device.
(c) For an alternative energy device used as a source for space
heating or cooling, the heating or cooling energy load as
determined by a heat loss or gain calculation performed in
accordance with the methods established by the American Society
of Heating, Refrigerating and Air-Conditioning Engineers. Except
for an owner-built or site-built system, an alternative energy
device used as a source for domestic hot water heating must meet
the SRCC OG 300 systems test or comply with comparable
requirements as determined by the department.
(d) For an alternative energy device used as a source for
electrical energy, the first year energy yield shall be based
upon the electrical energy load of the dwelling as determined
according to the procedure established by the department.
(e) For an alternative energy device used as a source for
swimming pool, spa or hot tub heating, the first year energy
yield shall be based on the heating load of the swimming pool,
spa or hot tub as determined according to the procedure
established by the department.
SECTION 11. ORS 469.180 is amended to read:
469.180. (1) Upon the Department of Revenue's own motion, or
upon request of the State Department of Energy, the Department of
Revenue may initiate proceedings for the forfeiture of a tax
credit allowed under ORS 316.116 or 317.115 if:
(a) The verification was fraudulent because of a
misrepresentation by the taxpayer or investor owned utility;
(b) The verification was fraudulent because of a
misrepresentation by the contractor;
(c) In the case of { + a solar electric system or + } an
alternative energy device other than an alternative fuel vehicle
or related equipment, the { + solar electric system or + }
alternative energy device has not been constructed, installed or
operated in substantial compliance with the requirements of ORS
469.160 to 469.180; or
Enrolled Senate Bill 31 (SB 31-ACCA) Page 12
(d) The taxpayer or investor owned utility failed to consent to
an inspection of the constructed or installed alternative energy
device { + or solar electric system + } by the State Department
of Energy after a reasonable, written request for such an
inspection by the State Department of Energy. This paragraph does
not apply to an alternative fuel vehicle or to related equipment.
(2) Pursuant to the procedures for a contested case under ORS
chapter 183, the Director of the State Department of Energy may
order the revocation of a contractor certificate issued under ORS
469.170 if the director finds that:
(a) The contractor certificate was obtained by fraud or
misrepresentation by the contractor certificate holder;
(b) The contractor's performance for the alternative energy
device { + or solar electric system + } for which the contractor
is issued a certificate under ORS 469.170 does not meet industry
standards; or
(c) The contractor has misrepresented to the customer either
the tax credit program or the nature or quality of the
alternative energy device { + or solar electric system + }.
(3) If the tax credit allowed under ORS 316.116 or 317.115 for
the purchase, construction or installation of an alternative
energy device { + or solar electric system + } is ordered
forfeited due to an action of the taxpayer or investor owned
utility under subsection (1)(a), (c) or (d) of this section, all
prior tax relief provided to the taxpayer or investor owned
utility shall be forfeited and the Department of Revenue shall
proceed to collect those taxes not paid by the taxpayer or
utility as a result of the tax credit relief under ORS 316.116 or
317.115.
(4) If the tax credit for the construction or installation of
an alternative energy device { + or solar electric system + } is
ordered forfeited due to an action of the contractor under
subsection (1)(b) of this section, the Department of Revenue
shall proceed to collect, from the contractor, an amount
equivalent to those taxes not paid by the taxpayer or investor
owned utility as a result of the tax credit relief under ORS
316.116 or 317.115. { - So - } { + As + } long as the
forfeiture is due to an action of the contractor and not to an
action of the taxpayer or utility, the assessment of such taxes
shall be levied on the contractor and not on the taxpayer or
utility. Notwithstanding ORS 314.835, the Department of Revenue
may disclose information from income tax returns or reports to
the extent such disclosure is necessary to collect amounts from
contractors under this subsection.
(5) In order to obtain information necessary to verify
eligibility and amount of the tax credit, the State Department of
Energy or its representative may inspect an alternative energy
device { + or solar electric system + } that has been purchased,
constructed or installed. The inspection shall be made only with
the consent of the owner of the dwelling. Failure to consent to
the inspection is grounds for the forfeiture of any tax credit
relief under ORS 316.116 or 317.115. The Department of Revenue
shall proceed to collect any taxes due according to subsection
(4) of this section. For electrical generating alternative energy
devices { + or solar electric systems + }, the State Department
of Energy may obtain energy consumption records for the dwelling
the device { + or system + } serves, for a 12-month period, in
order to verify eligibility and amount of the tax credit.
SECTION 12. { + The amendments to ORS 316.116, 469.160,
469.165, 469.170, 469.172, 469.176 and 469.180 by sections 5, 6
Enrolled Senate Bill 31 (SB 31-ACCA) Page 13
to 8 and 9 to 11 of this 2005 Act apply to alternative energy
devices and solar electric systems certified by the State
Department of Energy on or after January 1, 2006. + }
SECTION 13. ORS 305.230 is amended to read:
305.230. (1) Notwithstanding ORS 9.320:
(a) Any person who is qualified to practice law or public
accountancy in this state, any person who has been granted active
enrollment to practice before the Internal Revenue Service and
who is qualified to prepare tax returns in this state or any
person who is the authorized employee of a taxpayer and is
regularly employed by the taxpayer in tax matters may represent
the taxpayer before a tax court magistrate or the Department of
Revenue in any conference or proceeding with respect to the
administration of any tax.
(b) Any person who is licensed by the State Board of Tax
Practitioners or who is exempt from such licensing requirement as
provided for and limited by ORS 673.610 may represent a taxpayer
before a tax court magistrate or the department in any conference
or proceeding with respect to the administration of any tax on or
measured by net income.
(c) Any shareholder of an S corporation, as defined in section
1361 of the Internal Revenue Code, as amended and in effect on
December 31, { - 2002 - } { + 2004 + }, may represent the
corporation in any proceeding before a tax court magistrate or
the department in the same manner as if the shareholder were a
partner and the S corporation were a partnership. The S
corporation must designate in writing a tax matters shareholder
authorized to represent the S corporation.
(d) Any person who is licensed as a real estate broker or
principal real estate broker under ORS 696.022 or is a state
certified appraiser or state licensed appraiser under ORS 674.310
or is a registered appraiser under ORS 308.010 may represent a
taxpayer before a tax court magistrate or the department in any
conference or proceeding with respect to the administration of
any ad valorem property tax.
(e) A general partner who has been designated by members of a
partnership as their tax matters partner under ORS 305.242 may
represent those partners in any conference or proceeding with
respect to the administration of any tax on or measured by net
income.
(f) In a small claims procedure, a taxpayer may be represented
by any of the persons described in paragraphs (a) to (e) of this
subsection or by any other person permitted by the tax court.
{ + (g) Any person authorized under rules adopted by the
department may represent a taxpayer before the department in any
conference or proceeding with respect to any tax. Rules adopted
under this paragraph, to the extent feasible, shall be consistent
with federal law that governs representation before the Internal
Revenue Service, as federal law is amended and in effect on
December 31, 2004. + }
(2) { - No person shall - } { + A person may not + } be
recognized as representing a taxpayer pursuant to this section
unless there is first filed with the magistrate or department a
written authorization, or unless it appears to the satisfaction
of the magistrate or department that the representative does in
fact have authority to represent the taxpayer. A person
recognized as an authorized representative under rules or
procedures adopted by the tax court shall be considered an
authorized representative by the department.
Enrolled Senate Bill 31 (SB 31-ACCA) Page 14
(3) A taxpayer represented by someone other than an attorney is
bound by all things done by the authorized representative, and
may not thereafter claim any proceeding was legally defective
because the taxpayer was not represented by an attorney.
(4) Prior to the holding of a conference or proceeding before
the tax court magistrate or department, written notice shall be
given by the magistrate or department to the taxpayer of the
provisions of subsections (1)(f) and (3) of this section.
SECTION 14. ORS 305.494 is amended to read:
305.494. Notwithstanding ORS 9.320, any shareholder of an S
corporation as defined in section 1361 of the Internal Revenue
Code, as amended and in effect on December 31, { - 2002 - }
{ + 2004 + }, may represent the corporation in any proceeding
before the Oregon Tax Court in the same manner as if the
shareholder were a partner and the S corporation were a
partnership.
SECTION 15. ORS 305.690 is amended to read:
305.690. As used in ORS 305.690 to 305.753, unless the context
otherwise requires:
(1) 'Biennial years' means the two income tax years of
individual taxpayers that begin in the two calendar years
immediately following the calendar year in which a list is
certified under ORS 305.715.
(2) 'Commission' means the Oregon Charitable Checkoff
Commission.
(3) 'Department' means the Department of Revenue.
(4) 'Internal Revenue Code' means the federal Internal Revenue
Code as amended and in effect on December 31, { - 2002 - }
{ + 2004 + }.
SECTION 16. ORS 307.130 is amended to read:
307.130. (1) Upon compliance with ORS 307.162, the following
property owned or being purchased by art museums, volunteer fire
departments, or incorporated literary, benevolent, charitable and
scientific institutions shall be exempt from taxation:
(a) Except as provided in ORS 748.414, only such real or
personal property, or proportion thereof, as is actually and
exclusively occupied or used in the literary, benevolent,
charitable or scientific work carried on by such institutions.
(b) Parking lots used for parking or any other use as long as
that parking or other use is permitted without charge for no
fewer than 355 days during the tax year.
(c) All real or personal property of a rehabilitation facility
or any retail outlet thereof, including inventory. As used in
this subsection, 'rehabilitation facility' means either those
facilities defined in ORS 344.710 or facilities which provide
physically, mentally or emotionally disabled individuals with
occupational rehabilitation activities of an educational or
therapeutic nature, even if remuneration is received by the
individual.
(d) All real and personal property of a retail store dealing
exclusively in donated inventory, where the inventory is
distributed without cost as part of a welfare program or where
the proceeds of the sale of any inventory sold to the general
public are used to support a welfare program. As used in this
subsection, ' welfare program' means the providing of food,
shelter, clothing or health care, including dental service, to
needy persons without charge.
(e) All real and personal property of a retail store if:
(A) The retail store deals primarily and on a regular basis in
donated and consigned inventory;
Enrolled Senate Bill 31 (SB 31-ACCA) Page 15
(B) The individuals who operate the retail store are all
individuals who work as volunteers; and
(C) The inventory is either distributed without charge as part
of a welfare program, or sold to the general public and the sales
proceeds used exclusively to support a welfare program. As used
in this paragraph, 'primarily' means at least one-half of the
inventory.
(f) The real and personal property of an art museum that is
used in conjunction with the public display of works of art or
used to educate the public about art, but not including any
portion of the art museum's real or personal property that is
used to sell, or hold out for sale, works of art, reproductions
of works of art or other items to be sold to the public.
(g) All real and personal property of a volunteer fire
department that is used in conjunction with services and
activities for providing fire protection to all residents within
a fire response area.
(2) An art museum or institution shall not be deprived of an
exemption under this section solely because its primary source of
funding is from one or more governmental entities.
(3) An institution shall not be deprived of an exemption under
this section because its purpose or the use of its property is
not limited to relieving pain, alleviating disease or removing
constraints.
(4) As used in this section:
(a) 'Art museum' means a nonprofit corporation organized to
display works of art to the public.
(b) 'Internal Revenue Code' means the federal Internal Revenue
Code as amended and in effect on December 31, { - 2002 - }
{ + 2004 + }.
(c) 'Nonprofit corporation' means a corporation that:
(A) Is organized not for profit, pursuant to ORS chapter 65 or
any predecessor of ORS chapter 65; or
(B) Is organized and operated as described under section 501(c)
of the Internal Revenue Code.
(d) 'Volunteer fire department' means a nonprofit corporation
organized to provide fire protection services in a specific
response area.
SECTION 17. ORS 307.147 is amended to read:
307.147. (1) For purposes of this section:
(a) 'Internal Revenue Code' means the federal Internal Revenue
Code as amended and in effect on December 31, { - 2002 - }
{ + 2004 + }.
(b) 'Nonprofit corporation' means a corporation that:
(A) Is organized not for profit, pursuant to ORS chapter 65 or
any predecessor of ORS chapter 65; or
(B) Is organized and operated as described under section 501(c)
of the Internal Revenue Code.
(c) 'Senior services center' means property that:
(A) Is owned or being purchased by a nonprofit corporation; and
(B) Is actually and exclusively used to provide services and
activities (including parking) primarily to or for persons over
50 years of age; and
(C) Is open generally to all persons over 50 years of age; and
(D) Is not used primarily for fund-raising activities; and
(E) Is not a residential or dwelling place.
(2) Upon compliance with ORS 307.162, a senior services center
is exempt from ad valorem property taxation.
SECTION 18. ORS 310.140 is amended to read:
Enrolled Senate Bill 31 (SB 31-ACCA) Page 16
310.140. The Legislative Assembly finds that section 11b,
Article XI of the Oregon Constitution, was drafted by citizens
and placed before the voters of the State of Oregon by initiative
petition. Section 11b, Article XI of the Oregon Constitution,
uses terms that do not have established legal meanings and
require definition by the Legislative Assembly. Section 11b,
Article XI of the Oregon Constitution, was amended by section 11
(11), Article XI of the Oregon Constitution. This section is
intended to interpret the terms of section 11b, Article XI of the
Oregon Constitution, as originally adopted and as amended by
section 11 (11), Article XI of the Oregon Constitution,
consistent with the intent of the people in adopting these
provisions, so that the provisions of section 11b, Article XI of
the Oregon Constitution, may be given effect uniformly throughout
the State of Oregon, with minimal confusion and misunderstanding
by citizens and affected units of government. As used in the
revenue and tax laws of this state, and for purposes of section
11b, Article XI of the Oregon Constitution:
(1) 'Actual cost' means all direct or indirect costs incurred
by a government unit in order to deliver goods or services or to
undertake a capital construction project. The ' actual cost' of
providing goods or services to a property or property owner
includes the average cost or an allocated portion of the total
amount of the actual cost of making a good or service available
to the property or property owner, whether stated as a minimum,
fixed or variable amount. 'Actual cost' includes, but is not
limited to, the costs of labor, materials, supplies, equipment
rental, property acquisition, permits, engineering, financing,
reasonable program delinquencies, return on investment, required
fees, insurance, administration, accounting, depreciation,
amortization, operation, maintenance, repair or replacement and
debt service, including debt service payments or payments into
reserve accounts for debt service and payment of amounts
necessary to meet debt service coverage requirements.
(2) 'Assessment for local improvement' means any tax, fee,
charge or assessment that does not exceed the actual cost
incurred by a unit of government for design, construction and
financing of a local improvement.
(3) 'Bonded indebtedness' means any formally executed written
agreement representing a promise by a unit of government to pay
to another a specified sum of money, at a specified date or dates
at least one year in the future.
(4) 'Capital construction':
(a) For bonded indebtedness issued prior to December 5, 1996,
and for the proceeds of any bonded indebtedness approved by
electors prior to December 5, 1996, that were spent or
contractually obligated to be spent prior to June 20, 1997, means
the construction, modification, replacement, repair, remodeling
or renovation of a structure, or addition to a structure, that is
expected to have a useful life of more than one year, and
includes, but is not limited to:
(A) Acquisition of land, or a legal interest in land, in
conjunction with the capital construction of a structure.
(B) Acquisition, installation of machinery or equipment,
furnishings or materials that will become an integral part of a
structure.
(C) Activities related to the capital construction, including
planning, design, authorizing, issuing, carrying or repaying
interim or permanent financing, research, land use and
Enrolled Senate Bill 31 (SB 31-ACCA) Page 17
environmental impact studies, acquisition of permits or licenses
or other services connected with the construction.
(D) Acquisition of existing structures, or legal interests in
structures, in conjunction with the capital construction.
(b) For bonded indebtedness issued on or after December 5,
1996, except for the proceeds of any bonded indebtedness approved
by electors prior to December 5, 1996, that were spent or
contractually obligated to be spent before June 20, 1997, has the
meaning given that term in paragraph (a) of this subsection,
except that 'capital construction':
(A) Includes public safety and law enforcement vehicles with a
projected useful life of five years or more; and
(B) Does not include:
(i) Maintenance and repairs, the need for which could be
reasonably anticipated;
(ii) Supplies and equipment that are not intrinsic to the
structure; or
(iii) Furnishings, unless the furnishings are acquired in
connection with the acquisition, construction, remodeling or
renovation of a structure, or the repair of a structure that is
required because of damage or destruction of the structure.
(5) 'Capital improvements':
(a) For bonded indebtedness issued prior to December 5, 1996,
and for the proceeds of any bonded indebtedness approved by
electors before December 5, 1996, that were spent or
contractually obligated to be spent before June 20, 1997, means
land, structures, facilities, as that term is defined in ORS
288.805, machinery, equipment or furnishings having a useful life
longer than one year.
(b) For bonded indebtedness issued on or after December 5,
1996, except for the proceeds of any bonded indebtedness approved
by electors prior to December 5, 1996, that were spent or
contractually obligated to be spent before June 20, 1997, has the
meaning given that term in paragraph (a) of this subsection,
except that 'capital improvements':
(A) Includes public safety and law enforcement vehicles with a
projected useful life of five years or more; and
(B) Does not include:
(i) Maintenance and repairs, the need for which could be
reasonably anticipated;
(ii) Supplies and equipment that are not intrinsic to the
structure; or
(iii) Furnishings, unless the furnishings are acquired in
connection with the acquisition, construction, remodeling or
renovation of a structure, or the repair of a structure that is
required because of damage or destruction of the structure.
(6) 'Direct consequence of ownership' means that the obligation
of the owner of property to pay a tax arises solely because that
person is the owner of the property, and the obligation to pay
the tax arises as an immediate and necessary result of that
ownership without respect to any other intervening transaction,
condition or event.
(7)(a) 'Exempt bonded indebtedness' means:
(A) Bonded indebtedness authorized by a specific provision of
the Oregon Constitution;
(B) Bonded indebtedness incurred or to be incurred for capital
construction or capital improvements that was issued as a general
obligation of the issuing governmental unit on or before November
6, 1990;
Enrolled Senate Bill 31 (SB 31-ACCA) Page 18
(C) Bonded indebtedness incurred or to be incurred for capital
construction or capital improvements that was issued as a general
obligation of the issuing governmental unit after November 6,
1990, with the approval of the electors of the issuing
governmental unit; or
(D) Bonded indebtedness incurred or to be incurred for capital
construction or capital improvements, if the issuance of the
bonds is approved by voters on or after December 5, 1996, in an
election that is in compliance with the voter participation
requirements of section 11 (8), Article XI of the Oregon
Constitution.
(b) 'Exempt bonded indebtedness' includes bonded indebtedness
issued to refund or refinance any bonded indebtedness described
in paragraph (a) of this subsection.
(8)(a) 'Incurred charge' means a charge imposed by a unit of
government on property or upon a property owner that does not
exceed the actual cost of providing goods or services and that
can be controlled or avoided by the property owner because:
(A) The charge is based on the quantity of the goods or
services used, and the owner has direct control over the
quantity;
(B) The goods or services are provided only on the specific
request of the property owner; or
(C) The goods or services are provided by the government unit
only after the individual property owner has failed to meet
routine obligations of ownership of the affected property, and
such action is deemed necessary by an appropriate government unit
to enforce regulations pertaining to health or safety.
(b) For purposes of this subsection, an owner of property may
control or avoid an incurred charge if the owner is capable of
taking action to affect the amount of a charge that is or will be
imposed or to avoid imposition of a charge even if the owner must
incur expense in so doing.
(c) For purposes of paragraph (a)(A) of this subsection, an
owner of property has direct control over the quantity of goods
or services if the owner of property has the ability, whether or
not that ability is exercised, to determine the quantity of goods
or services provided or to be provided.
(9)(a) 'Local improvement' means a capital construction
project, or part thereof, undertaken by a local government,
pursuant to ORS 223.387 to 223.399, or pursuant to a local
ordinance or resolution prescribing the procedure to be followed
in making local assessments for benefits from a local improvement
upon the lots that have been benefited by all or a part of the
improvement:
(A) That provides a special benefit only to specific properties
or rectifies a problem caused by specific properties;
(B) The costs of which are assessed against those properties in
a single assessment upon the completion of the project; and
(C) For which the property owner may elect to make payment of
the assessment plus appropriate interest over a period of at
least 10 years.
(b) For purposes of paragraph (a) of this subsection, the
status of a capital construction project as a local improvement
is not affected by the accrual of a general benefit to property
other than the property receiving the special benefit.
(10) 'Maintenance and repairs, the need for which could be
reasonably anticipated':
(a) Means activities, the type of which may be deducted as an
expense under the provisions of the federal Internal Revenue
Enrolled Senate Bill 31 (SB 31-ACCA) Page 19
Code, as amended and in effect on December 31, { - 2002 - }
{ + 2004 + }, that keep the property in ordinarily efficient
operating condition and that do not add materially to the value
of the property nor appreciably prolong the life of the property;
(b) Does not include maintenance and repair of property that is
required by damage, destruction or defect in design, or that was
otherwise not reasonably expected at the time the property was
constructed or acquired, or the addition of material that is in
the nature of the replacement of property and that arrests the
deterioration or appreciably prolongs the useful life of the
property; and
(c) Does not include street and highway construction, overlay
and reconstruction.
(11) 'Projected useful life' means the useful life, as
reasonably estimated by the unit of government undertaking the
capital construction or capital improvement project, beginning
with the date the property was acquired, constructed or
reconstructed and based on the property's condition at the time
the property was acquired, constructed or reconstructed.
(12) 'Routine obligations of ownership' means a standard of
operation, maintenance, use or care of property established by
law, or if established by custom or common law, a standard that
is reasonable for the type of property affected.
(13) 'Single assessment' means the complete assessment process,
including preassessment, assessment or reassessment, for any
local improvement authorized by ORS 223.387 to 223.399, or a
local ordinance or resolution that provides the procedure to be
followed in making local assessments for benefits from a local
improvement upon lots that have been benefited by all or part of
the improvement.
(14) 'Special benefit only to specific properties' shall have
the same meaning as 'special and peculiar benefit' as that term
is used in ORS 223.389.
(15) 'Specific request' means:
(a) An affirmative act by a property owner to seek or obtain
delivery of goods or services;
(b) An affirmative act by a property owner, the legal
consequence of which is to cause the delivery of goods or
services to the property owner; or
(c) Failure of an owner of property to change a request for
goods or services made by a prior owner of the property.
(16) 'Structure' means any temporary or permanent building or
improvement to real property of any kind that is constructed on
or attached to real property, whether above, on or beneath the
surface.
(17) 'Supplies and equipment intrinsic to a structure ' means
the supplies and equipment that are necessary to permit a
structure to perform the functions for which the structure was
constructed, or that will, upon installation, constitute fixtures
considered to be part of the real property that is comprised, in
whole or part, of the structure and land supporting the
structure.
(18) 'Tax on property' means any tax, fee, charge or assessment
imposed by any government unit upon property or upon a property
owner as a direct consequence of ownership of that property, but
does not include incurred charges or assessments for local
improvements. As used in this subsection, 'property' means real
or tangible personal property, and intangible property that is
part of a unit of real or tangible personal property to the
Enrolled Senate Bill 31 (SB 31-ACCA) Page 20
extent that such intangible property is subject to a tax on
property.
SECTION 19. ORS 310.630 is amended to read:
310.630. As used in ORS 310.630 to 310.706:
(1) 'Contract rent' means rental paid to the landlord for the
right to occupy a homestead, including the right to use the
personal property located therein. 'Contract rent' does not
include rental paid for the right to occupy a homestead that is
exempt from taxation, unless payments in lieu of taxes of 10
percent or more of the rental exclusive of fuel and utilities are
made on behalf of the homestead. 'Contract rent' does not include
advanced rental payments for another period and rental deposits,
whether or not expressly set out in the rental agreement, or
payments made to a nonprofit home for the elderly described in
ORS 307.375. If a landlord and tenant have not dealt with each
other at arm's length, and the Department of Revenue is satisfied
that the contract rent charged was excessive, it may adjust the
contract rent to a reasonable amount for purposes of ORS 310.630
to 310.706.
(2) 'Department' means the Department of Revenue.
(3) 'Fuel and utility payments' includes payments for heat,
lights, water, sewer and garbage made solely to secure those
commodities or services for the homestead of the taxpayer. 'Fuel
and utility payments' does not include telephone service.
(4) 'Gross rent' means contract rent paid plus the fuel and
utility payments made for the homestead in addition to the
contract rent, during the calendar year for which the claim is
filed.
(5) 'Homestead' means the taxable principal dwelling located in
Oregon, either real or personal property, rented by the taxpayer,
and the taxable land area of the tax lot upon which it is built.
(6) 'Household' means the taxpayer, the spouse of the taxpayer
and all other persons residing in the homestead during any part
of the calendar year for which a claim is filed.
(7) 'Household income' means the aggregate income of the
taxpayer and the spouse of the taxpayer who reside in the
household, that was received during the calendar year for which
the claim is filed. 'Household income' includes payments received
by the taxpayer or the spouse of the taxpayer under the federal
Social Security Act for the benefit of a minor child or minor
children who are members of the household.
(8) 'Income' means 'adjusted gross income' as defined in the
federal Internal Revenue Code, as amended and in effect on
December 31, { - 2002 - } { + 2004 + }, even when the
amendments take effect or become operative after that date,
relating to the measurement of taxable income of individuals,
estates and trusts, with the following modifications:
(a) There shall be added to adjusted gross income the following
items of otherwise exempt income:
(A) The gross amount of any otherwise exempt pension less
return of investment, if any.
(B) Child support received by the taxpayer.
(C) Inheritances.
(D) Gifts and grants, the sum of which are in excess of $500
per year.
(E) Amounts received by a taxpayer or spouse of a taxpayer for
support from a parent who is not a member of the taxpayer's
household.
(F) Life insurance proceeds.
Enrolled Senate Bill 31 (SB 31-ACCA) Page 21
(G) Accident and health insurance proceeds, except
reimbursement of incurred medical expenses.
(H) Personal injury damages.
(I) Sick pay which is not included in federal adjusted gross
income.
(J) Strike benefits excluded from federal gross income.
(K) Worker's compensation, except for reimbursement of medical
expense.
(L) Military pay and benefits.
(M) Veteran's benefits.
(N) Payments received under the federal Social Security Act
which are excluded from federal gross income.
(O) Welfare payments, except as follows:
(i) Payments for medical care, drugs and medical supplies, if
the payments are not made directly to the welfare recipient;
(ii) In-home services authorized and approved by the Department
of Human Services; and
(iii) Direct or indirect reimbursement of expenses paid or
incurred for participation in work or training programs.
(P) Nontaxable dividends.
(Q) Nontaxable interest not included in federal adjusted gross
income.
(R) Rental allowance paid to a minister that is excluded from
federal gross income.
(S) Income from sources without the United States that is
excluded from federal gross income.
(b) Adjusted gross income shall be increased due to the
disallowance of the following deductions:
(A) The amount of the net loss, in excess of $1,000, from all
dispositions of tangible or intangible properties.
(B) The amount of the net loss, in excess of $1,000, from the
operation of a farm or farms.
(C) The amount of the net loss, in excess of $1,000, from all
operations of a trade or business, profession or other activity
entered into for the production or collection of income.
(D) The amount of the net loss, in excess of $1,000, from
tangible or intangible property held for the production of rents,
royalties or other income.
(E) The amount of any net operating loss carryovers or
carrybacks included in federal adjusted gross income.
(F) The amount, in excess of $5,000, of the combined deductions
or other allowances for depreciation, amortization or depletion.
(G) The amount added or subtracted, as required within the
context of this section, for adjustments made under ORS 316.680
(2)(d) and 316.707 to 316.737.
(c) 'Income' does not include any of the following:
(A) Any governmental grant which must be used by the taxpayer
for rehabilitation of the homestead of the taxpayer.
(B) The amount of any payments made pursuant to ORS 310.630 to
310.706.
(C) Any refund of Oregon personal income taxes that were
imposed under ORS chapter 316.
(9) 'Payments for heat' means those payments made to secure the
commodities or services to be used as the principal source of
heat for the homestead of the taxpayer and includes payments for
natural gas, oil, firewood, coal, sawdust, electricity, steam or
other materials that are capable of use as a primary source of
heat for the homestead.
(10) 'Statement of gross rent' means a declaration by the
applicant, under penalties of false swearing, that the amount of
Enrolled Senate Bill 31 (SB 31-ACCA) Page 22
contract rent and fuel and utility payments designated is the
actual amount both incurred and paid during the year for which
elderly rental assistance is claimed.
(11) 'Taxpayer' means an individual who is a resident of this
state on December 31 of the year for which elderly rental
assistance is claimed and whose homestead, as of the same
December 31 and during all or a portion of the year ending on the
same December 31, is rented and while rented is the subject,
directly or indirectly, of property tax levied by this state or a
political subdivision or of payments made in lieu of taxes.
SECTION 20. ORS 310.800 is amended to read:
310.800. (1) As used in this section:
(a) 'Authorized representative' means a senior citizen who is
authorized by a tax-exempt entity to perform charitable or public
service on behalf of a senior citizen who has entered into a
contract under subsection (2) of this section.
(b) 'Homestead' means an owner-occupied principal residence.
(c) 'Senior citizen' means a person who is 60 years of age or
older.
(d) 'Tax-exempt entity' means an entity that is exempt from
federal income taxes under section 501 (c) of the Internal
Revenue Code, as amended and in effect on December 31,
{ - 2002 - } { + 2004 + }.
(e) 'Taxing unit' means any county, city or common or union
high school district, community college service district or
community college district within this state with authority to
impose ad valorem property taxes.
(2) A tax-exempt entity may establish a property tax work-off
program pursuant to which a senior citizen may contract to
perform charitable or public service in consideration of payment
of property taxes extended against the homestead of the senior
citizen and billed to the senior citizen. For purposes of ORS
chapters 316 and 656, and notwithstanding ORS 314.013 or 670.600
or other law, a senior citizen who enters into a contract under
this subsection shall be considered an independent contractor and
not a worker or employee with respect to the services performed
pursuant to the contract. Nothing in this section precludes a
taxing unit from being considered an employer, for purposes of
unemployment compensation under ORS chapter 657, of a senior
citizen who enters into a contract under this section.
(3) A taxing unit may enter into an agreement with a tax-exempt
entity that has established a property tax work-off program.
Pursuant to the agreement the taxing unit may accept, as
volunteer and public service, the services of a senior citizen
who has entered into a contract described in subsection (2) of
this section or an authorized representative.
(4) A taxing unit may provide funds or make grants to any
tax-exempt entity that has established a property tax work-off
program for use to carry out the program.
SECTION 21. ORS 311.689 is amended to read:
311.689. (1) Notwithstanding ORS 311.668 or any other provision
of ORS 311.666 to 311.701, if the individual or, in the case of
two or more individuals electing to defer property taxes jointly,
all of the individuals together, or the spouse who has filed a
claim under ORS 311.688, has federal adjusted gross income that
exceeds $32,000 for the tax year that began in the previous
calendar year, then for the tax year next beginning, the amount
of taxes for which deferral is allowed shall be reduced by $0.50
for each dollar of federal adjusted gross income in excess of
$32,000.
Enrolled Senate Bill 31 (SB 31-ACCA) Page 23
(2) Prior to June 1 of each year, and notwithstanding ORS
314.835, the Department of Revenue shall review returns filed
under ORS chapter 314 and 316 to determine if subsection (1) of
this section is applicable for a homestead for the tax year next
beginning. If subsection (1) of this section is applicable, the
department shall notify by mail the taxpayer or spouse electing
deferral, and the taxes otherwise to be deferred for the tax year
next beginning shall be reduced as provided in subsection (1) of
this section or, if federal adjusted gross income in excess of
$32,000 exceeds the amount of property taxes by a factor of two,
the property taxes shall not be deferred.
(3) If the taxpayer or spouse does not file a return for
purposes of ORS chapters 314 and 316 and the department has
reason to believe that the federal adjusted gross income of the
taxpayer or spouse exceeds $32,000 for the tax year that began in
the previous calendar year, the department shall notify by mail
the taxpayer or spouse electing deferral. If, within 30 days
after the notice is mailed, the taxpayer or spouse does not file
a return under ORS chapter 314 or 316 or otherwise satisfy the
department that federal adjusted gross income does not exceed
$32,000, the department shall again notify the taxpayer or
spouse, and the taxes otherwise to be deferred for the tax year
next beginning shall not be deferred.
(4) For tax years beginning on or after July 1, 2002, the
federal adjusted gross income limit set forth in subsections (1)
to (3) of this section shall be recomputed by multiplying $32,000
by the indexing factor described in ORS 311.668 (7)(a)(A), and
rounding the amount so computed to the nearest multiple of $500.
(5) Nothing in this section shall affect the continued deferral
of taxes that have been deferred for tax years beginning prior to
the tax year next beginning or the right to deferral of taxes for
a tax year beginning after the tax year next beginning if
subsection (1) is not applicable for that tax year for the
homestead.
(6) As used in this section, 'federal adjusted gross income'
means federal adjusted gross income of the individual or, in the
case of two or more individuals electing to defer property tax
jointly, the combined federal adjusted gross income of the
individuals, or the federal adjusted gross income of the spouse
who has filed a claim under ORS 311.688, all as determined for
the tax year beginning in the calendar year prior to which a
determination is required under subsection (2) of this section.
' Federal adjusted gross income' shall be determined under the
Internal Revenue Code, as amended and in effect on December 31,
{ - 2002 - } { + 2004 + }, without any of the additions,
subtractions or other modifications or adjustments required under
ORS chapter 314 or 316.
(7)(a) If, after an initial determination under this section
has been made by the department, upon audit or examination or
otherwise, it is discovered that the taxpayer or spouse had
federal adjusted gross income in excess of the limitation
provided under subsection (1) of this section, the department
shall determine the amount of taxes deferred that should not have
been deferred and give notice to the taxpayer or spouse of the
amount of taxes that should not have been deferred. The
provisions of ORS chapters 305 and 314 shall apply to a
determination of the department under this section in the same
manner as those provisions are applicable to an income tax
deficiency. The amount of deferred taxes that should not have
been deferred shall bear interest from the date paid by the
Enrolled Senate Bill 31 (SB 31-ACCA) Page 24
department until paid at the rate established under ORS 305.220
for deficiencies. A deficiency shall not be assessed under this
section if notice required under this section is not given to the
taxpayer or spouse within three years after the date that the
department has paid the deferred taxes to the county. Upon
payment of the amount assessed as deficiency, and interest, the
department shall execute a release in the amount of the payment
and the release shall be conclusive evidence of the removal and
extinguishment of the lien under ORS 311.666 to 311.701 to the
extent of the payment.
(b) If, after an initial determination under this section has
been made by the department, upon claim for refund, audit or
examination or otherwise, it is discovered that the taxpayer or
spouse had federal adjusted gross income in the amount of or less
than the limitation provided under subsection (1) of this
section, the department shall determine the amount of taxes
deferred that should have been deferred and give notice to the
taxpayer or spouse of the amount of taxes that should have been
deferred. The provisions of ORS chapters 305 and 314 shall apply
to a determination of the department under this section in the
same manner as those provisions are applicable to an income tax
refund. The amount of the taxes that should have been deferred
shall bear interest from the date paid by the taxpayer to the
county at the rate established under ORS 305.220 for refunds
until paid. Claim for refund under this paragraph must be filed
within three years after the earliest date that the taxpayer or
spouse is notified by the department that the taxes are not
deferred.
(8) This section applies to all tax-deferred property,
notwithstanding that election to defer taxes is made under ORS
311.666 to 311.701 before or after October 3, 1989.
SECTION 22. ORS 314.011 is amended to read:
314.011. (1) As used in this chapter, unless the context
requires otherwise, 'department' means the Department of Revenue.
(2)(a) As used in this chapter, any term has the same meaning
as when used in a comparable context in the laws of the United
States relating to federal income taxes, unless a different
meaning is clearly required or the term is specifically defined
in this chapter.
(b) Except where the Legislative Assembly has provided
otherwise, a reference to the laws of the United States or to the
Internal Revenue Code refers to the laws of the United States or
to the Internal Revenue Code as they are amended and in effect:
(A) On December 31, { - 2002 - } { + 2004 + }; or
{ - (B) If related to the definition of taxable income and
attributable to a change in the laws of the United States or in
the Internal Revenue Code that is enacted after December 31,
2005, as applicable to the tax year of the taxpayer. - }
{ - (c) A reference to the laws of the United States or to
the Internal Revenue Code refers to the laws of the United States
or to the Internal Revenue Code as they are amended and in effect
and applicable for the tax year of the taxpayer, if the reference
relates to: - }
{ - (A) Pension, profit-sharing or stock bonus plans,
deferred compensation plans, employee stock ownership plans,
individual retirement accounts (including Roth individual
retirement accounts), medical savings accounts, education IRAs,
qualified tuition savings programs or other tax-deferred or
tax-exempt savings programs benefiting individuals; or - }
Enrolled Senate Bill 31 (SB 31-ACCA) Page 25
{ - (B) The allowance and amount of a deduction under section
167 or 168 or another provision of the Internal Revenue Code, to
the allowance and amount of a deduction for expensing depreciable
assets under section 179 of the Internal Revenue Code or to the
adjusted basis of an asset that is depreciated or expensed for
federal tax purposes. - }
{ + (B) If related to the definition of taxable income, as
applicable to the tax year of the taxpayer. + }
{ - (d) - } { + (c) + } With respect to ORS 314.105,
314.256 (relating to proxy tax on lobbying expenditures), 314.260
(1)(b), 314.265 (1)(b), 314.302, 314.306, 314.330, 314.360,
314.362, 314.385, 314.402, 314.410, 314.412, 314.525, 314.742
(7), 314.750 and 314.752 and other provisions of this chapter,
except those described in { - paragraphs (b) and (c) - }
{ + paragraph (b) + } of this subsection, any reference in this
chapter to the laws of the United States or to the Internal
Revenue Code means the laws of the United States relating to
income taxes or the Internal Revenue Code as they are amended on
or before December 31, { - 2002 - } { + 2004 + }, even when
the amendments take effect or become operative after that date,
except where the Legislative Assembly has specifically provided
otherwise.
(3) Insofar as is practicable in the administration of this
chapter, the department shall apply and follow the administrative
and judicial interpretations of the federal income tax law. When
a provision of the federal income tax law is the subject of
conflicting opinions by two or more federal courts, the
department shall follow the rule observed by the United States
Commissioner of Internal Revenue until the conflict is resolved.
Nothing contained in this section limits the right or duty of the
department to audit the return of any taxpayer or to determine
any fact relating to the tax liability of any taxpayer.
(4) When portions of the Internal Revenue Code incorporated by
reference as provided in subsection (2) of this section refer to
rules or regulations prescribed by the Secretary of the Treasury,
then such rules or regulations shall be regarded as rules adopted
by the department under and in accordance with the provisions of
this chapter, whenever they are prescribed or amended.
(5)(a) When portions of the Internal Revenue Code incorporated
by reference as provided in subsection (2) of this section are
later corrected by an Act or a Title within an Act of the United
States Congress designated as an Act or Title making technical
corrections, then notwithstanding the date that the Act or Title
becomes law, those portions of the Internal Revenue Code, as so
corrected, shall be the portions of the Internal Revenue Code
incorporated by reference as provided in subsection (2) of this
section and shall take effect, unless otherwise indicated by the
Act or Title (in which case the provisions shall take effect as
indicated in the Act or Title), as if originally included in the
provisions of the Act being technically corrected. If, on account
of this subsection, any adjustment is required to an Oregon
return that would otherwise be prevented by operation of law or
rule, the adjustment shall be made, notwithstanding any law or
rule to the contrary, in the manner provided under ORS 314.135.
(b) As used in this subsection, 'Act or Title' includes any
subtitle, division or other part of an Act or Title.
SECTION 23. { + If House Bill 2933 becomes law, section 22 of
this 2005 Act (amending ORS 314.011) is repealed and ORS 314.011,
as amended by section 8, chapter 519, Oregon Laws 2005 (Enrolled
House Bill 2933), is amended to read: + }
Enrolled Senate Bill 31 (SB 31-ACCA) Page 26
314.011. (1) As used in this chapter, unless the context
requires otherwise, 'department' means the Department of Revenue.
(2)(a) As used in this chapter, any term has the same meaning
as when used in a comparable context in the laws of the United
States relating to federal income taxes, unless a different
meaning is clearly required or the term is specifically defined
in this chapter.
(b) Except where the Legislative Assembly has provided
otherwise, a reference to the laws of the United States or to the
Internal Revenue Code refers to the laws of the United States or
to the Internal Revenue Code as they are amended and in effect:
(A) On December 31, { - 2002 - } { + 2004 + }; or
{ - (B) If related to the definition of taxable income and
attributable to a change in the laws of the United States or in
the Internal Revenue Code that is enacted after December 31,
2005, as applicable to the tax year of the taxpayer. - }
{ - (c) A reference to the laws of the United States or to
the Internal Revenue Code refers to the laws of the United States
or to the Internal Revenue Code as they are amended and in effect
and applicable for the tax year of the taxpayer, if the reference
relates to: - }
{ - (A) Pension, profit-sharing or stock bonus plans,
deferred compensation plans, employee stock ownership plans,
individual retirement accounts (including Roth individual
retirement accounts), medical savings accounts, education IRAs,
qualified tuition savings programs or other tax-deferred or
tax-exempt savings programs benefiting individuals; - }
{ - (B) The allowance and amount of a deduction under section
167 or 168 or another provision of the Internal Revenue Code, to
the allowance and amount of a deduction for expensing depreciable
assets under section 179 of the Internal Revenue Code or to the
adjusted basis of an asset that is depreciated or expensed for
federal tax purposes; or - }
{ - (C) The allowance of an exclusion for combat zone
compensation received by a member of the armed forces and
excluded from federal taxable income under section 112 of the
Internal Revenue Code. - }
{ + (B) If related to the definition of taxable income, as
applicable to the tax year of the taxpayer. + }
{ - (d) - } { + (c) + } With respect to ORS 314.105,
314.256 (relating to proxy tax on lobbying expenditures), 314.260
(1)(b), 314.265 (1)(b), 314.302, 314.306, 314.330, 314.360,
314.362, 314.385, 314.402, 314.410, 314.412, 314.525, 314.742
(7), 314.750 and 314.752 and other provisions of this chapter,
except those described in { - paragraphs (b) and (c) - }
{ + paragraph (b) + } of this subsection, any reference in this
chapter to the laws of the United States or to the Internal
Revenue Code means the laws of the United States relating to
income taxes or the Internal Revenue Code as they are amended on
or before December 31, { - 2002 - } { + 2004 + }, even when
the amendments take effect or become operative after that date,
except where the Legislative Assembly has specifically provided
otherwise.
(3) Insofar as is practicable in the administration of this
chapter, the department shall apply and follow the administrative
and judicial interpretations of the federal income tax law. When
a provision of the federal income tax law is the subject of
conflicting opinions by two or more federal courts, the
department shall follow the rule observed by the United States
Commissioner of Internal Revenue until the conflict is resolved.
Enrolled Senate Bill 31 (SB 31-ACCA) Page 27
Nothing contained in this section limits the right or duty of the
department to audit the return of any taxpayer or to determine
any fact relating to the tax liability of any taxpayer.
(4) When portions of the Internal Revenue Code incorporated by
reference as provided in subsection (2) of this section refer to
rules or regulations prescribed by the Secretary of the Treasury,
then such rules or regulations shall be regarded as rules adopted
by the department under and in accordance with the provisions of
this chapter, whenever they are prescribed or amended.
(5)(a) When portions of the Internal Revenue Code incorporated
by reference as provided in subsection (2) of this section are
later corrected by an Act or a Title within an Act of the United
States Congress designated as an Act or Title making technical
corrections, then notwithstanding the date that the Act or Title
becomes law, those portions of the Internal Revenue Code, as so
corrected, shall be the portions of the Internal Revenue Code
incorporated by reference as provided in subsection (2) of this
section and shall take effect, unless otherwise indicated by the
Act or Title (in which case the provisions shall take effect as
indicated in the Act or Title), as if originally included in the
provisions of the Act being technically corrected. If, on account
of this subsection, any adjustment is required to an Oregon
return that would otherwise be prevented by operation of law or
rule, the adjustment shall be made, notwithstanding any law or
rule to the contrary, in the manner provided under ORS 314.135.
(b) As used in this subsection, 'Act or Title' includes any
subtitle, division or other part of an Act or Title.
SECTION 24. ORS 315.004 is amended to read:
315.004. (1) Except when the context requires otherwise, the
definitions contained in ORS chapters 314, 316, 317 and 318 are
applicable in the construction, interpretation and application of
the personal and corporate income and excise tax credits
contained in this chapter.
(2)(a) For purposes of the tax credits contained in this
chapter, any term has the same meaning as when used in a
comparable context in the laws of the United States relating to
federal income taxes, unless a different meaning is clearly
required or the term is specifically defined for purposes of
construing, interpreting and applying the credit.
(b) With respect to the tax credits contained in this chapter,
any reference to the laws of the United States or to the Internal
Revenue Code means the laws of the United States relating to
income taxes or the Internal Revenue Code as they are amended on
or before December 31, { - 2002 - } { + 2004 + }, even when
the amendments take effect or become operative after that date.
(3) Insofar as is practicable in the administration of this
chapter, the Department of Revenue shall apply and follow the
administrative and judicial interpretations of the federal income
tax law. When a provision of the federal income tax law is the
subject of conflicting opinions by two or more federal courts,
the department shall follow the rule observed by the United
States Commissioner of Internal Revenue until the conflict is
resolved. Nothing contained in this section limits the right or
duty of the department to audit the return of any taxpayer or to
determine any fact relating to the tax liability of any taxpayer.
(4) When portions of the Internal Revenue Code incorporated by
reference as provided in subsection (2) of this section refer to
rules or regulations prescribed by the Secretary of the Treasury,
then such rules or regulations shall be regarded as rules adopted
Enrolled Senate Bill 31 (SB 31-ACCA) Page 28
by the department under and in accordance with the provisions of
this chapter, whenever they are prescribed or amended.
(5)(a) When portions of the Internal Revenue Code incorporated
by reference as provided in subsection (2) of this section are
later corrected by an Act or a Title within an Act of the United
States Congress designated as an Act or Title making technical
corrections, then notwithstanding the date that the Act or Title
becomes law, those portions of the Internal Revenue Code, as so
corrected, shall be the portions of the Internal Revenue Code
incorporated by reference as provided in subsection (2) of this
section and shall take effect, unless otherwise indicated by the
Act or Title (in which case the provisions shall take effect as
indicated in the Act or Title), as if originally included in the
provisions of the Act being technically corrected. If, on account
of this subsection, any adjustment is required to an Oregon
return that would otherwise be prevented by operation of law or
rule, the adjustment shall be made, notwithstanding any law or
rule to the contrary, in the manner provided under ORS 314.135.
(b) As used in this subsection, 'Act or Title' includes any
subtitle, division or other part of an Act or Title.
SECTION 25. ORS 315.262 is amended to read:
315.262. (1) As used in this section:
(a) 'Child care' means care provided to a qualifying child of
the taxpayer for the purpose of allowing the taxpayer to be
gainfully employed, to seek employment or to attend school on a
full-time or part-time basis, except that the term does not
include care provided by:
(A) The child's parent or guardian, unless the care is provided
{ - by the parent - } in a certified or registered child care
facility; or
(B) { - A child of the taxpayer - } { + A person who has a
relationship to the taxpayer that is described in section 152(a)
of the Internal Revenue Code + } who has not yet attained 19
years of age at the close of the tax year.
(b) 'Child care expenses' means the costs associated with
providing child care to a qualifying child of a qualified
taxpayer.
(c) 'Earned income' has the meaning given that term in section
32 of the Internal Revenue Code.
(d) 'Qualified taxpayer' means a taxpayer:
(A) With at least $6,000 of earned income for the tax year;
(B) With federal adjusted gross income for the tax year that
does not exceed 250 percent of the federal poverty level; and
(C) Who does not have more than the maximum amount of
disqualified income under section 32(i) of the Internal Revenue
Code that is allowed to a taxpayer entitled to the earned income
tax credit for federal tax purposes.
(e) 'Qualifying child' { - means a child of the taxpayer - }
{ + has the meaning given that term in section 152 of the
Internal Revenue Code except that it is limited to an
individual + } who is under 13 years of age, or who is a disabled
child, as that term is defined in ORS 316.099.
(2) A qualified taxpayer shall be allowed a credit against the
taxes otherwise due under ORS chapter 316 equal to the applicable
percentage of the qualified taxpayer's child care expenses
(rounded to the nearest $50).
(3) The applicable percentage to be used in calculating the
amount of the credit provided in this section shall be determined
in accordance with the following table:
_________________________________________________________________
Enrolled Senate Bill 31 (SB 31-ACCA) Page 29
____NOTE_TO_WEB_CUSTOMERS:__________________________________
THE FOLLOWING TABULAR TEXT MAY BE IRREGULAR.
FOR COMPLETE INFORMATION PLEASE SEE THE PRINTED MEASURE.
_______________________________________________________________
Applicable Federal Adjusted
Percentage Gross Income as Percent
of Federal Poverty Level
____NOTE_TO_WEB_CUSTOMERS:__________________________________
THE FOLLOWING TABULAR TEXT MAY BE IRREGULAR.
FOR COMPLETE INFORMATION PLEASE SEE THE PRINTED MEASURE.
_______________________________________________________________
40 200 or less
36 Greater than 200 and less than
or equal to 210
32 Greater than 210 and less than
or equal to 220
24 Greater than 220 and less than
or equal to 230
16 Greater than 230 and less than
or equal to 240
8 Greater than 240 and less than
or equal to 250
0 Greater than 250 percent
of federal poverty level
____________________________________________________________
END OF POSSIBLE IRREGULAR TABULAR TEXT
____________________________________________________________
_________________________________________________________________
(4) The credit shall be claimed on such form and containing
such information as may be prescribed by the Department of
Revenue.
(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.
(d) In the case of a qualified taxpayer who is married, a
credit shall be allowed under this section only if:
(A) The taxpayer files a joint return;
(B) The taxpayer files a separate return and is legally
separated or subject to a separate maintenance agreement; or
(C) The taxpayer files a separate return and the taxpayer and
the taxpayer's spouse reside in separate households on the last
day of the tax year with the intent of remaining in separate
households in the future.
Enrolled Senate Bill 31 (SB 31-ACCA) Page 30
(6) If the amount allowable as a credit under this section,
when added to the sum of the amounts allowable as payment of tax
under ORS 316.187 (withholding), ORS 316.583 (estimated tax),
other tax prepayment amounts and other refundable credit amounts,
exceeds the taxes imposed by ORS chapters 314 and 316 for the tax
year (reduced by any nonrefundable credits allowable for purposes
of ORS chapter 316 for the tax year), the amount of the excess
shall be refunded to the taxpayer as provided in ORS 316.502.
(7)(a) The minimum amount of earned income a taxpayer must earn
in order to be a qualified taxpayer shall be adjusted for tax
years beginning in each calendar year by multiplying $6,000 by
the ratio of the monthly averaged U.S. City Average Consumer
Price Index for the 12 consecutive months ending August 31 of the
prior calendar year over the monthly averaged index for the
second quarter of the calendar year 1998.
(b) As used in this subsection, 'U.S. City Average Consumer
Price Index' means the U.S. City Average Consumer Price Index for
All Urban Consumers (All Items) as published by the Bureau of
Labor Statistics of the United States Department of Labor.
(c) If any adjustment determined under paragraph (a) of this
subsection is not a multiple of $50, the adjustment shall be
rounded to the nearest multiple of $50.
(d) Notwithstanding paragraphs (a) to (c) of this subsection,
the adjusted minimum amount of earned income a taxpayer must earn
may not exceed the amount an individual would earn if the
individual worked 1,040 hours at the minimum wage established
under ORS 653.025 and in effect on January 1 of the calendar year
in which begins the tax year of the taxpayer, rounded to the next
lower multiple of $50.
SECTION 26. ORS 316.012 is amended to read:
316.012. Any term used in this chapter has the same meaning as
when used in a comparable context in the laws of the United
States relating to federal income taxes, unless a different
meaning is clearly required or the term is specifically defined
in this chapter. Except where the Legislative Assembly has
provided otherwise, any reference in this chapter to the laws of
the United States or to the Internal Revenue Code { - : - }
{ - (1) - } refers to the laws of the United States or to
the Internal Revenue Code as they are amended and in effect:
{ - (a) - } { + (1) + } On December 31, { - 2002 - }
{ + 2004 + }; or
{ - (b) If related to the definition of taxable income and
attributable to a change in the laws of the United States or in
the Internal Revenue Code that is enacted after December 31,
2005, as applicable to the tax year of the taxpayer. - }
{ - (2) Refers to the laws of the United States or to the
Internal Revenue Code as they are amended and in effect and
applicable for the tax year of the taxpayer, if the reference
relates to: - }
{ - (a) Pension, profit-sharing or stock bonus plans,
deferred compensation plans, employee stock ownership plans,
individual retirement accounts (including Roth individual
retirement accounts), medical savings accounts, education IRAs,
qualified tuition savings programs or other tax-deferred or
tax-exempt savings programs benefiting individuals; or - }
{ - (b) The allowance and amount of a deduction under section
167 or 168 or another provision of the Internal Revenue Code, to
the allowance and amount of a deduction for expensing depreciable
assets under section 179 of the Internal Revenue Code or to the
Enrolled Senate Bill 31 (SB 31-ACCA) Page 31
adjusted basis of an asset that is depreciated or expensed for
federal tax purposes. - }
{ + (2) If related to the definition of taxable income, as
applicable to the tax year of the taxpayer. + }
SECTION 27. { + If House Bill 2933 becomes law, section 26 of
this 2005 Act (amending ORS 316.012) is repealed and ORS 316.012,
as amended by section 9, chapter 519, Oregon Laws 2005 (Enrolled
House Bill 2933), is amended to read: + }
316.012. Any term used in this chapter has the same meaning as
when used in a comparable context in the laws of the United
States relating to federal income taxes, unless a different
meaning is clearly required or the term is specifically defined
in this chapter. Except where the Legislative Assembly has
provided otherwise, any reference in this chapter to the laws of
the United States or to the Internal Revenue Code { - : - }
{ - (1) - } refers to the laws of the United States or to
the Internal Revenue Code as they are amended and in effect:
{ - (a) - } { + (1) + } On December 31, { - 2002 - }
{ + 2004 + }; or
{ - (b) If related to the definition of taxable income and
attributable to a change in the laws of the United States or in
the Internal Revenue Code that is enacted after December 31,
2005, as applicable to the tax year of the taxpayer. - }
{ - (2) Refers to the laws of the United States or to the
Internal Revenue Code as they are amended and in effect and
applicable for the tax year of the taxpayer, if the reference
relates to: - }
{ - (a) Pension, profit-sharing or stock bonus plans,
deferred compensation plans, employee stock ownership plans,
individual retirement accounts (including Roth individual
retirement accounts), medical savings accounts, education IRAs,
qualified tuition savings programs or other tax-deferred or
tax-exempt savings programs benefiting individuals; - }
{ - (b) The allowance and amount of a deduction under section
167 or 168 or another provision of the Internal Revenue Code, to
the allowance and amount of a deduction for expensing depreciable
assets under section 179 of the Internal Revenue Code or to the
adjusted basis of an asset that is depreciated or expensed for
federal tax purposes; or - }
{ - (c) The allowance of an exclusion for combat zone
compensation received by a member of the armed forces and
excluded from federal taxable income under section 112 of the
Internal Revenue Code. - }
{ + (2) If related to the definition of taxable income, as
applicable to the tax year of the taxpayer. + }
SECTION 28. ORS 316.099 is amended to read:
316.099. (1) As used in this section, unless the context
requires otherwise:
(a) 'Early intervention services' means programs of treatment
and habilitation designed to address a child's developmental
deficits in sensory, motor, communication, self-help and
socialization areas.
(b) 'Disabled child' means a { + qualifying + } child
{ - from the age of identification of the disability to the age
of 18 - } { + under section 152 of the Internal Revenue
Code + } who has been determined eligible for early intervention
services or is diagnosed for the purposes of special education as
being mentally retarded, multidisabled, visually impaired,
hearing impaired, deaf-blind, orthopedically impaired or other
health impaired or as having autism, emotional disturbance or
Enrolled Senate Bill 31 (SB 31-ACCA) Page 32
traumatic brain injury, in accordance with State Board of
Education rules.
(c) 'Special education' means specially designed instruction to
meet the unique needs of a disabled child, including regular
classroom instruction, instruction in physical education, home
instruction and instruction in hospitals, institutions and
special schools.
(2) The State Board of Education shall adopt rules further
defining 'disabled child' for purposes of this section. A
diagnosis obtained for the purposes of entitlement to special
education or early intervention services shall serve as the basis
for a claim for the additional credit allowed under subsection
(3) of this section.
(3) In addition to the personal exemption credit allowed by
this chapter for state personal income tax purposes for a
dependent { - child - } of the taxpayer, there shall be
allowed an additional personal exemption credit for a disabled
child if the child is a disabled child at the close of the tax
year. The amount of the credit shall be equal to the amount
allowed as the personal exemption credit for the dependent
{ - child - } for state personal income tax purposes for the
tax year.
(4) Each taxpayer qualifying for the additional personal
exemption credit allowed by this section may claim the credit on
the personal income tax return. However, the claim shall be
substantiated by any proof of entitlement to the credit as may be
required by the state board by rule.
SECTION 29. { + Section 30 of this 2005 Act is added to and
made a part of ORS chapter 316. + }
SECTION 30. { + (1) A taxpayer that elects to deduct state and
local sales taxes under section 164(b)(5) of the Internal Revenue
Code for federal tax purposes must make the same election for
purposes of the tax imposed by this chapter.
(2) A taxpayer that elects to deduct state and local sales
taxes under section 164(b)(5) of the Internal Revenue Code for
federal tax purposes shall add the amount deducted to federal
taxable income for purposes of the tax imposed by this
chapter. + }
SECTION 31. ORS 317.010 is amended to read:
317.010. As used in this chapter, unless the context requires
otherwise:
(1) 'Centrally assessed corporation' means every corporation
the property of which is assessed by the Department of Revenue
under ORS 308.505 to 308.665.
(2) 'Department' means the Department of Revenue.
(3)(a) 'Consolidated federal return' means the return permitted
or required to be filed by a group of affiliated corporations
under section 1501 of the Internal Revenue Code.
(b) 'Consolidated state return' means the return required to be
filed under ORS 317.710 (5).
(4) 'Doing business' means any transaction or transactions in
the course of its activities conducted within the state by a
national banking association, or any other corporation; provided,
however, that a foreign corporation whose activities in this
state are confined to purchases of personal property, and the
storage thereof incident to shipment outside the state, shall not
be deemed to be doing business unless such foreign corporation is
an affiliate of another foreign or domestic corporation which is
doing business in Oregon. Whether or not corporations are
Enrolled Senate Bill 31 (SB 31-ACCA) Page 33
affiliated shall be determined as provided in section 1504 of the
Internal Revenue Code.
(5) 'Excise tax' means a tax measured by or according to net
income imposed upon national banking associations, all other
banks, and financial, centrally assessed, mercantile,
manufacturing and business corporations for the privilege of
carrying on or doing business in this state.
(6) 'Financial institution' or 'financial corporation ' means a
bank or trust company organized under ORS chapter 707, national
banking association or production credit association organized
under federal statute, building and loan association, savings and
loan association, mutual savings bank, and any other corporation
whose principal business is in direct competition with national
and state banks.
{ - (7) 'Internal Revenue Code,' except where the Legislative
Assembly has provided otherwise: - }
{ - (a) Refers to the laws of the United States or to the
Internal Revenue Code as they are amended and in effect: - }
{ - (A) On December 31, 2002; or - }
{ - (B) If related to the definition of taxable income and
attributable to a change in the laws of the United States or in
the Internal Revenue Code that is enacted after December 31,
2005, as applicable to the tax year of the taxpayer. - }
{ - (b) Refers to the laws of the United States or to the
Internal Revenue Code as they are amended and in effect and
applicable for the tax year of the taxpayer, if the reference
relates to: - }
{ - (A) Pension, profit-sharing or stock bonus plans,
deferred compensation plans, employee stock ownership plans,
individual retirement accounts (including Roth individual
retirement accounts), medical savings accounts, education IRAs,
qualified tuition savings programs or other tax-deferred or
tax-exempt savings programs benefiting individuals; or - }
{ - (B) The allowance and amount of a deduction under section
167 or 168 or another provision of the Internal Revenue Code, to
the allowance and amount of a deduction for expensing depreciable
assets under section 179 of the Internal Revenue Code or to the
adjusted basis of an asset that is depreciated or expensed for
federal tax purposes. - }
{ + (7) 'Internal Revenue Code,' except where the Legislative
Assembly has provided otherwise, refers to the laws of the United
States or to the Internal Revenue Code as they are amended and in
effect:
(a) On December 31, 2004; or
(b) If related to the definition of taxable income, as
applicable to the tax year of the taxpayer. + }
(8) 'Oregon taxable income' means taxable income, less the
deduction allowed under ORS 317.476, except as otherwise provided
with respect to insurers in subsection (11) of this section and
ORS 317.650 to 317.665.
(9) 'Oregon net loss' means taxable loss, except as otherwise
provided with respect to insurers in subsection (11) of this
section and ORS 317.650 to 317.665.
(10) 'Taxable income or loss' means the taxable income or loss
determined, or in the case of a corporation for which no federal
taxable income or loss is determined, as would be determined,
under chapter 1, Subtitle A of the Internal Revenue Code and any
other laws of the United States relating to the determination of
taxable income or loss of corporate taxpayers, with the
additions, subtractions, adjustments and other modifications as
Enrolled Senate Bill 31 (SB 31-ACCA) Page 34
are specifically prescribed by this chapter except that in
determining taxable income or loss for any year, no deduction
under ORS 317.476 or 317.478 and section 45b, chapter 293, Oregon
Laws 1987, shall be allowed. If the corporation is a corporation
to which ORS 314.280 or 314.605 to 314.675 (requiring or
permitting apportionment of income from transactions or
activities carried on both within and without the state) applies,
to derive taxable income or loss, the following shall occur:
(a) From the amount otherwise determined under this subsection,
subtract nonbusiness income, or add nonbusiness loss, whichever
is applicable.
(b) Multiply the amount determined under paragraph (a) of this
subsection by the Oregon apportionment percentage defined under
ORS 314.280, 314.650 or 314.670, whichever is applicable. The
resulting product shall be Oregon apportioned income or loss.
(c) To the amount determined as Oregon apportioned income or
loss under paragraph (b) of this subsection, add nonbusiness
income allocable entirely to Oregon under ORS 314.280 or 314.625
to 314.645, or subtract nonbusiness loss allocable entirely to
Oregon under ORS 314.280 or 314.625 to 314.645. The resulting
figure is 'taxable income or loss' for those corporations
carrying on taxable transactions or activities both within and
without Oregon.
(11) As used in ORS 317.122 and 317.650 to 317.665, ' insurer'
means any domestic, foreign or alien insurer as defined in ORS
731.082 and any interinsurance and reciprocal exchange and its
attorney in fact with respect to its attorney in fact net income
as a corporate attorney in fact acting as attorney in compliance
with ORS 731.458, 731.462, 731.466 and 731.470 for the reciprocal
or interinsurance exchange. However, 'insurer' does not include
title insurers or health care service contractors operating
pursuant to ORS 750.005 to 750.095.
SECTION 32. { + (1) Except as provided in subsections (2) and
(3) of this section, the amendments to statutes by sections 13 to
28 and 31 of this 2005 Act and section 30 of this 2005 Act apply
to transactions or activities occurring on or after January 1,
2005, in tax years beginning on or after January 1, 2005.
(2) The effective and applicable dates, and the exceptions,
special rules and coordination with the Internal Revenue Code, as
amended, relative to those dates, contained in the Veterans
Benefits Act of 2002 (P.L. 107-330), the Jobs and Growth Tax
Relief Reconciliation Act of 2003 (P.L. 108-27), the Military
Family Tax Relief Act of 2003 (P.L. 108-121), the Working
Families Tax Relief Act of 2004 (P.L. 108-311), the American Jobs
Creation Act of 2004 (P.L. 108-357) and other federal law
amending the Internal Revenue Code apply for Oregon personal
income and corporate excise and income tax purposes, to the
extent they can be made applicable, in the same manner as they
are applied under the Internal Revenue Code and related federal
law.
(3)(a) If a deficiency is assessed against any taxpayer for a
tax year beginning before January 1, 2005, and the deficiency or
any portion thereof is attributable to any retroactive treatment
under the amendments to statutes by sections 13 to 28 and 31 of
this 2005 Act and section 30 of this 2005 Act, then any interest
or penalty assessed under ORS chapter 305, 314, 315, 316, 317 or
318 with respect to the deficiency or portion thereof shall be
canceled.
(b) If a refund is due any taxpayer for a tax year beginning
before January 1, 2005, and the refund or any portion thereof is
Enrolled Senate Bill 31 (SB 31-ACCA) Page 35
due the taxpayer on account of any retroactive treatment under
the amendments to statutes by sections 13 to 28 and 31 of this
2005 Act and section 30 of this 2005 Act, then notwithstanding
ORS 305.270 or 314.415 or other law, the refund or portion
thereof shall be paid without interest.
(c) Any changes required because of the amendments to statutes
by sections 13 to 28 and 31 of this 2005 Act and section 30 of
this 2005 Act for a tax year beginning before January 1, 2005,
shall be made by filing an amended return within the time
prescribed by law.
(d) If a taxpayer fails to file an amended return under
paragraph (c) of this subsection, the Department of Revenue shall
make any changes under paragraph (c) of this subsection on the
return to which the changes relate within the period specified
for issuing a notice of deficiency or claiming a refund as
otherwise provided by law with respect to that return, or within
one year after a return for a tax year beginning on or after
January 1, 2005, and before January 1, 2006, is filed, whichever
period expires later. + }
SECTION 33. ORS 317.267 is amended to read:
317.267. (1) To derive Oregon taxable income, there shall be
added to federal taxable income amounts received as dividends
from corporations deducted for federal purposes pursuant to
section 243 or 245 of the Internal Revenue Code, except
{ + section + } 245(c) of the Internal Revenue Code, amounts
paid as dividends by a public utility or telecommunications
utility and deducted for federal purposes pursuant to section 247
of the Internal Revenue Code or dividends eliminated under
Treasury Regulations adopted under section 1502 of the Internal
Revenue Code that are paid by members of an affiliated group that
are eliminated from a consolidated federal return pursuant to ORS
317.715 (2).
(2) To derive Oregon taxable income, after the modification
prescribed under subsection (1) of this section, there shall be
subtracted from federal taxable income an amount equal to 70
percent of dividends (determined without regard to section 78 of
the Internal Revenue Code) received or deemed received from
corporations if such dividends are included in federal taxable
income. However:
(a) In the case of any dividend on debt-financed portfolio
stock as described in section 246A of the Internal Revenue Code,
the subtraction allowed under this subsection shall be reduced
under the same conditions and in same amount as the dividends
received deduction otherwise allowable for federal income tax
purposes is reduced under section 246A of the Internal Revenue
Code.
(b) No subtraction shall be allowed under this subsection if
the dividends received or deemed received are from the Oregon
Capital Corporation established pursuant to ORS 284.750 to
284.770.
(c) In the case of any dividend received from a 20 percent
owned corporation, as defined in section 243(c) of the Internal
Revenue Code, this subsection shall be applied by substituting '
80 percent' for '70 percent. '
{ + (d) A dividend that is not treated as a dividend under
section 243(d) or 965(c)(3) of the Internal Revenue Code may not
be treated as a dividend for purposes of this subsection.
(e) If a dividends received deduction is not allowed for
federal tax purposes because of section 246(a) or (c) of the
Internal Revenue Code, a subtraction may not be made under this
Enrolled Senate Bill 31 (SB 31-ACCA) Page 36
subsection for received dividends that are described in section
246(a) or (c) of the Internal Revenue Code. + }
(3) There shall be excluded from the sales factor of any
apportionment formula employed to attribute income to this state
any amount subtracted from federal taxable income under
subsection (2) of this section.
SECTION 34. { + The amendments to ORS 317.267 by section 33 of
this 2005 Act apply to tax years beginning on or after January 1,
2006. + }
SECTION 35. { + Notwithstanding ORS 317.267, a dividends
received deduction allowed under section 965 of the Internal
Revenue Code for federal tax purposes shall be allowed in
determining taxable income under ORS chapter 317 for the same tax
year as the deduction is allowed for federal tax purposes. + }
SECTION 35a. { + Section 35 of this 2005 Act applies only to
tax years beginning before January 1, 2007. + }
SECTION 36. { + Section 35 of this 2005 Act is repealed on
January 2, 2008. + }
SECTION 37. { + Nothing in the repeal of section 35 of this
2005 Act by section 36 of this 2005 Act affects the allowance of
a deduction under section 35 of this 2005 Act for a tax year
beginning before January 1, 2007. + }
SECTION 38. { + Section 39 of this 2005 Act is added to and
made a part of ORS chapter 314. + }
SECTION 39. { + Public Law 109-1 applies for purposes of
computing federal taxable income for Oregon tax purposes under
ORS chapter 316, 317 or 318. + }
SECTION 40. { + Sections 41 and 42 of this 2005 Act are added
to and made a part of ORS chapter 316. + }
SECTION 41. { + A taxpayer that is allowed a deduction for
qualified production activities income under section 199 of the
Internal Revenue Code for federal tax purposes shall add the
amount deducted to federal taxable income for purposes of the tax
imposed by this chapter. + }
SECTION 42. { + A taxpayer that is allowed an exclusion from
gross income under section 139A of the Internal Revenue Code for
federal tax purposes shall add the amount excluded to federal
taxable income for purposes of the tax imposed by this
chapter. + }
SECTION 43. { + Sections 44 and 45 of this 2005 Act are added
to and made a part of ORS chapter 317. + }
SECTION 44. { + A taxpayer that is allowed a deduction for
qualified production activities income under section 199 of the
Internal Revenue Code for federal tax purposes shall add the
amount deducted to federal taxable income for purposes of the tax
imposed by this chapter. + }
SECTION 45. { + A taxpayer that is allowed an exclusion from
gross income under section 139A of the Internal Revenue Code for
federal tax purposes shall add the amount excluded to federal
taxable income for purposes of the tax imposed by this
chapter. + }
SECTION 46. { + Sections 41 and 44 of this 2005 Act apply to
tax years beginning on or after January 1, 2005. + }
SECTION 47. { + Sections 42 and 45 of this 2005 Act apply to
tax years beginning on or after January 1, 2008. + }
SECTION 48. ORS 314.650 is amended to read:
314.650. { + (1) + } All business income shall be apportioned
to this state by multiplying the income by { - a multiplier
equal to 80 percent of - } the sales factor { - plus 10
Enrolled Senate Bill 31 (SB 31-ACCA) Page 37
percent of the property factor plus 10 percent of the payroll
factor - } . { +
(2)(a) Notwithstanding subsection (1) of this section, the
business income of a taxpayer that is in the forest products
industry, that owns and manages 300,000 or more acres in this
state, but less than 400,000 acres, and that processes at least
20 percent of the taxpayer's total wood chip supply for
papermaking from sawmill residue generated within this state,
shall be apportioned to this state by multiplying the income by a
fraction, the numerator of which is the property factor plus the
payroll factor plus two times the sales factor, and the
denominator of which is four.
(b) If the denominator of the property factor, payroll factor
or sales factor, as determined under ORS 314.650 to 314.665, is
zero, then the denominator specified in paragraph (a) of this
subsection shall be reduced by the number of factors with a
denominator of zero. + }
SECTION 48a. { + The amendments to ORS 314.650 by section 48
of this 2005 Act apply to tax years beginning on or after July 1,
2005. + }
SECTION 49. ORS 314.650, as amended by section 1, chapter 739,
Oregon Laws 2003, is amended to read:
314.650. (1) All business income shall be apportioned to this
state by multiplying the income by { - a multiplier equal to 90
percent of - } the sales factor { - plus five percent of the
property factor plus five percent of the payroll factor - } .
(2)(a) Notwithstanding subsection (1) of this section, the
business income of a taxpayer that is in the forest products
industry, that owns and manages 300,000 or more acres in this
state, but less than 400,000 acres, and that processes at least
20 percent of the taxpayer's total wood chip supply for
papermaking from sawmill residue generated within this state,
shall be apportioned to this state by multiplying the income by a
fraction, the numerator of which is the property factor plus the
payroll factor plus two times the sales factor, and the
denominator of which is four.
(b) If the denominator of the property factor, payroll factor
or sales factor, as determined under ORS 314.650 to 314.665, is
zero, then the denominator specified in paragraph (a) of this
subsection shall be reduced by the number of factors with a
denominator of zero.
SECTION 50. { + Sections 2 and 6, chapter 739, Oregon Laws
2003, are repealed. + }
SECTION 51. { + + } ORS 317.152, as amended by section 12,
chapter 739, Oregon Laws 2003, is amended to read:
317.152. (1) A credit against taxes otherwise due under this
chapter shall be allowed to eligible taxpayers for increases in
qualified research expenses and basic research payments. The
credit shall be determined in accordance with section 41 of the
Internal Revenue Code, except as follows:
(a) The applicable percentage specified in section 41(a) of the
Internal Revenue Code shall be five percent.
(b) 'Qualified research' and 'basic research' shall consist
only of research conducted in Oregon.
(c) The following do not apply to the credit allowable under
this section:
(A) Section 41(c)(4) of the Internal Revenue Code (relating to
the alternative incremental credit).
(B) Section 41(h) of the Internal Revenue Code (relating to
termination of the federal credit).
Enrolled Senate Bill 31 (SB 31-ACCA) Page 38
(2) For purposes of this section, 'eligible taxpayer' means a
corporation, other than a corporation excluded under Internal
Revenue Code section 41(e)(7)(E).
(3) The Income Tax Regulations as prescribed by the Secretary
of the Treasury under authority of section 41 of the Internal
Revenue Code apply for purposes of this section, except as
modified by this section or as provided in rules adopted by the
Department of Revenue.
(4) The maximum credit under this section may not exceed
{ - $750,000 - } { + $2 million + }.
(5) Any tax credit that is otherwise allowable under this
section and that is not used by the taxpayer in that 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, but may not be carried forward for any
tax year thereafter.
SECTION 52. { + + } ORS 317.154, as amended by section 13,
chapter 739, Oregon Laws 2003, is amended to read:
317.154. (1) A credit against taxes otherwise due under this
chapter shall be allowed for qualified research expenses that
exceed 10 percent of Oregon sales.
(2) For purposes of this section:
(a) 'Oregon sales' shall be computed using the laws and
administrative rules for calculating the numerator of the Oregon
sales factor under ORS 314.665.
(b) 'Qualified research' has the meaning given the term under
section 41(d) of the Internal Revenue Code and shall consist only
of research conducted in Oregon.
(3) The credit under this section is equal to five percent of
the amount by which the qualified research expenses exceed 10
percent of Oregon sales.
(4) The credit under this section shall not exceed $10,000
times the number of percentage points by which the qualifying
research expenses exceed 10 percent of Oregon sales.
(5) The maximum credit under this section may not exceed
{ - $750,000 - } { + $2 million + }.
(6) Any tax credit that is otherwise allowable under this
section and that is not used by the taxpayer in that 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, but may not be carried forward for any
tax year thereafter.
SECTION 53. { + The amendments to ORS 317.152 and 317.154 by
sections 51 and 52 of this 2005 Act apply to tax years beginning
on or after January 1, 2006. + }
SECTION 54. ORS 315.266 is amended to read:
Enrolled Senate Bill 31 (SB 31-ACCA) Page 39
315.266. (1) In addition to any other credit available for
purposes of ORS chapter 316, an eligible resident individual
shall be allowed a credit against the tax otherwise due under ORS
chapter 316 for the tax year in an amount equal to five percent
of the earned income credit allowable to the individual for the
same tax year under section 32 of the Internal Revenue Code.
(2) An eligible 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 subsection (1) of
this section. However, the credit shall be prorated using the
proportion provided in ORS 316.117.
(3) 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.
(4) 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.
{ - (5) 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) If the amount allowable as a credit under this
section, when added to the sum of the amounts allowable as
payment of tax under ORS 316.187 or 316.583, other tax prepayment
amounts and other refundable credit amounts, exceeds the taxes
imposed by ORS chapters 314 and 316 for the tax year after
application of any nonrefundable credits allowable for purposes
of ORS chapter 316 for the tax year, the amount of the excess
shall be refunded to the taxpayer as provided in ORS 316.502. + }
(6) The Department of Revenue may adopt rules for purposes of
this section, including but not limited to rules relating to
proof of eligibility and the furnishing of information regarding
the federal earned income credit claimed by the taxpayer for the
tax year.
(7) Refunds attributable to the earned income credit allowed
under this section shall not bear interest.
SECTION 55. ORS 316.502 is amended to read:
316.502. (1) The net revenue from the tax imposed by this
chapter, after deducting refunds, shall be paid over to the State
Treasurer and held in the General Fund as miscellaneous receipts
available generally to meet any expense or obligation of the
State of Oregon lawfully incurred.
(2) A working balance of unreceipted revenue from the tax
imposed by this chapter may be retained for the payment of
refunds, but such working balance shall not at the close of any
fiscal year exceed the sum of $1 million.
(3) Moneys are continuously appropriated to the Department of
Revenue to make:
(a) The refunds authorized under subsection (2) of this
section; and
(b) The refund payments in excess of tax liability authorized
under ORS 315.262 { + and 315.266 + }.
SECTION 56. { + The amendments to ORS 315.266 and 316.502 by
sections 54 and 55 of this 2005 Act apply to tax years beginning
on or after January 1, 2006. + }
SECTION 57. ORS 315.266, as amended by section 54 of this 2005
Act, is amended to read:
Enrolled Senate Bill 31 (SB 31-ACCA) Page 40
315.266. (1) In addition to any other credit available for
purposes of ORS chapter 316, an eligible resident individual
shall be allowed a credit against the tax otherwise due under ORS
chapter 316 for the tax year in an amount equal to { - five - }
{ + six + } percent of the earned income credit allowable to
the individual for the same tax year under section 32 of the
Internal Revenue Code.
(2) An eligible 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 subsection (1) of
this section. However, the credit shall be prorated using the
proportion provided in ORS 316.117.
(3) 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.
(4) 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.
(5) If the amount allowable as a credit under this section,
when added to the sum of the amounts allowable as payment of tax
under ORS 316.187 or 316.583, other tax prepayment amounts and
other refundable credit amounts, exceeds the taxes imposed by ORS
chapters 314 and 316 for the tax year after application of any
nonrefundable credits allowable for purposes of ORS chapter 316
for the tax year, the amount of the excess shall be refunded to
the taxpayer as provided in ORS 316.502.
(6) The Department of Revenue may adopt rules for purposes of
this section, including but not limited to rules relating to
proof of eligibility and the furnishing of information regarding
the federal earned income credit claimed by the taxpayer for the
tax year.
(7) Refunds attributable to the earned income credit allowed
under this section shall not bear interest.
SECTION 58. { + The amendments to ORS 315.266 by section 57 of
this 2005 Act apply to tax years beginning on or after January 1,
2008. + }
SECTION 59. ORS 315.266, as amended by sections 54 and 57 of
this 2005 Act, is amended to read:
315.266. (1) In addition to any other credit available for
purposes of ORS chapter 316, an eligible resident individual
shall be allowed a credit against the tax otherwise due under ORS
chapter 316 for the tax year in an amount equal to { + + }six
percent of the earned income credit allowable to the individual
for the same tax year under section 32 of the Internal Revenue
Code.
(2) An eligible 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 subsection (1) of
this section. However, the credit shall be prorated using the
proportion provided in ORS 316.117.
(3) 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.
(4) If a change in the status of a taxpayer from resident to
nonresident or from nonresident to resident occurs, the credit
Enrolled Senate Bill 31 (SB 31-ACCA) Page 41
allowed by this section shall be determined in a manner
consistent with ORS 316.117.
{ - (5) If the amount allowable as a credit under this
section, when added to the sum of the amounts allowable as
payment of tax under ORS 316.187 or 316.583, other tax prepayment
amounts and other refundable credit amounts, exceeds the taxes
imposed by ORS chapters 314 and 316 for the tax year after
application of any nonrefundable credits allowable for purposes
of ORS chapter 316 for the tax year, the amount of the excess
shall be refunded to the taxpayer as provided in ORS 316.502. - }
{ +
(5) 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. + }
(6) The Department of Revenue may adopt rules for purposes of
this section, including but not limited to rules relating to
proof of eligibility and the furnishing of information regarding
the federal earned income credit claimed by the taxpayer for the
tax year.
(7) Refunds attributable to the earned income credit allowed
under this section shall not bear interest.
SECTION 60. ORS 316.502, as amended by section 55 of this 2005
Act, is amended to read:
316.502. (1) The net revenue from the tax imposed by this
chapter, after deducting refunds, shall be paid over to the State
Treasurer and held in the General Fund as miscellaneous receipts
available generally to meet any expense or obligation of the
State of Oregon lawfully incurred.
(2) A working balance of unreceipted revenue from the tax
imposed by this chapter may be retained for the payment of
refunds, but such working balance shall not at the close of any
fiscal year exceed the sum of $1 million.
(3) Moneys are continuously appropriated to the Department of
Revenue to make:
(a) The refunds authorized under subsection (2) of this
section; and
(b) The refund payments in excess of tax liability authorized
under ORS 315.262 { - and 315.266 - } .
SECTION 61. { + The amendments to ORS 315.266 and 316.502 by
sections 59 and 60 of this 2005 Act apply to tax years beginning
on or after January 1, 2011. + }
SECTION 62. { + (1) Section 63 of this 2005 Act is added to
and made a part of ORS 316.143 to 316.146.
(2) ORS 316.143 to 316.146 are added to and made a part of ORS
chapter 315. + }
SECTION 63. { + (1) A resident or nonresident individual who
is certified as eligible under ORS 442.550 to 442.570 and who is
certified as an emergency medical technician under ORS chapter
682 shall be allowed a credit against the taxes that are
otherwise due under ORS chapter 316 if the Office of Rural Health
certifies that the individual provides volunteer emergency
medical technician services in a rural area that comprise at
least 20 percent of the total emergency medical technician
services provided by the individual in the tax year.
(2) The amount of the credit shall equal $250.
(3) A nonresident shall be allowed the credit under this
section in the proportion provided in ORS 316.117. If a change in
the status of a taxpayer from resident to nonresident or from
nonresident to resident occurs, the credit allowed by this
Enrolled Senate Bill 31 (SB 31-ACCA) Page 42
section shall be determined in a manner consistent with ORS
316.117.
(4) As used in this section, 'rural area' means a geographic
area that is located at least 25 miles from any city with a
population of 30,000 or more. + }
SECTION 64. { + Section 65 of this 2005 Act is added to and
made a part of ORS 442.550 to 442.570. + }
SECTION 65. { + The Office of Rural Health shall establish
criteria for certifying individuals who are certified as
emergency medical technicians under ORS chapter 682 as eligible
for the tax credit authorized by section 63 of this 2005 Act.
Upon application for the credit and upon a finding that the
applicant will be providing emergency medical technician services
in one or more rural areas and otherwise meets the eligibility
criteria established by the office, the office shall certify the
individual as eligible for the tax credit authorized by section
63 of this 2005 Act. + }
SECTION 66. { + Section 63 of this 2005 Act applies to tax
credit certifications issued by the Office of Rural Health on or
after January 1, 2006, and before January 1, 2011. + }
SECTION 67. { + This 2005 Act takes effect on the 91st day
after the date on which the regular session of the Seventy-third
Legislative Assembly adjourns sine die. + }
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Enrolled Senate Bill 31 (SB 31-ACCA) Page 43
Passed by Senate February 9, 2005
Repassed by Senate August 5, 2005
...........................................................
Secretary of Senate
...........................................................
President of Senate
Passed by House July 10, 2005
Repassed by House August 5, 2005
...........................................................
Speaker of House
Enrolled Senate Bill 31 (SB 31-ACCA) Page 44
Received by Governor:
......M.,............., 2005
Approved:
......M.,............., 2005
...........................................................
Governor
Filed in Office of Secretary of State:
......M.,............., 2005
...........................................................
Secretary of State
Enrolled Senate Bill 31 (SB 31-ACCA) Page 45