74th OREGON LEGISLATIVE ASSEMBLY--2007 Regular Session
NOTE: Matter within { + braces and plus signs + } in an
amended section is new. Matter within { - braces and minus
signs - } is existing law to be omitted. New sections are within
{ + braces and plus signs + } .
LC 562
House Bill 2211
Ordered printed by the Speaker pursuant to House Rule 12.00A (5).
Presession filed (at the request of Governor Theodore R.
Kulongoski for State Department of Energy)
SUMMARY
The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure as
introduced.
Increases annual cap on amount of business energy tax credit
that may be claimed for certified facilities using renewable
energy resources or renewable energy resource equipment
manufacturing facilities. Eliminates required reduction in value
of credit when taxpayer also claims federal income tax credit for
same facility.
Expands business energy tax credit to include credit for
homebuilder-installed renewable energy systems, high-performance
homes, renewable energy resource equipment manufacturing
facilities and energy facilities that manufacture or distribute
alternative fuels. Modifies period over which credit may be
claimed if facility upon which credit is based uses or produces
renewable energy resources. Defines terms and authorizes State
Department of Energy to adopt performance, efficiency and other
criteria for certain types of facilities that qualify for credit.
Applies to certifications issued on or after effective date of
Act and to tax years beginning on or after January 1, 2007.
Takes effect on 91st day following adjournment sine die.
A BILL FOR AN ACT
Relating to renewable energy; creating new provisions; amending
ORS 315.354, 315.356, 469.185, 469.200, 469.205 and 469.215;
and prescribing an effective date.
Be It Enacted by the People of the State of Oregon:
SECTION 1. ORS 315.354 is amended to read:
315.354. (1) A credit is allowed against the taxes otherwise
due under ORS chapter 316 (or, if the taxpayer is a corporation,
under ORS chapter 317 or 318), based upon the certified cost of
the facility during the period for which that facility is
certified under ORS 469.185 to 469.225. The credit is allowed as
follows:
(a) Except as provided in paragraph (b) { + or (c) + } of this
subsection, the credit allowed in each of the first two tax years
in which the credit is claimed shall be 10 percent of the
certified cost of the facility, but may not exceed the tax
liability of the taxpayer. The credit allowed in each of the
succeeding three years shall be five percent of the certified
cost, but may not exceed the tax liability of the taxpayer.
(b) If { - the application for certification under ORS
469.185 to 469.225 was filed with the State Department of Energy
on or after January 1, 2001, and - } the certified cost of the
facility does not exceed $20,000, the total amount of the credit
allowable under subsection { - (3) - } { + (4) + } of this
section may be claimed in the first tax year for which the credit
may be claimed, but may not exceed the tax liability of the
taxpayer.
{ + (c) If the facility uses or produces renewable energy
resources or is a renewable energy resource equipment
manufacturing facility, the credit allowed in each of five
succeeding tax years shall be 10 percent of the certified cost of
the facility, but may not exceed the tax liability of the
taxpayer.
(2) Notwithstanding subsection (1) of this section:
(a) If the facility is one or more renewable energy resource
systems installed in a single-family dwelling, the amount of the
credit for each system shall be determined as if the facility was
considered a residential alternative energy device under ORS
316.116, but subject to the maximum credit amount under
subsection (4)(b) of this section;
(b) If the facility is a high-performance home, the amount of
the credit shall equal the amount determined under paragraph (a)
of this subsection plus $3,000; and
(c) If the facility is a high-performance home or a
homebuilder-installed renewable energy system, the total amount
of the credit may be claimed in the first tax year for which the
credit is claimed, but may not exceed the tax liability of the
taxpayer. + }
{ - (2) - } { + (3) + } In order for a tax credit to be
allowable under this section:
(a) The facility must be located in Oregon;
(b) The facility must have received final certification from
the Director of the State Department of Energy under ORS 469.185
to 469.225; and
(c) The taxpayer must be an eligible applicant under ORS
469.205 (1)(c).
{ - (3) - } { + (4) + } { - The maximum total credit or
credits allowed for a facility under this section to eligible
taxpayers - } { + The total amount of credit allowable to an
eligible taxpayer under this section + } may not exceed { + :
(a) 50 percent of the certified cost of a renewable energy
resources facility, a renewable energy resource equipment
manufacturing facility or a high-efficiency combined heat and
power facility;
(b) $9,000 per single-family dwelling for homebuilder-installed
renewable energy systems;
(c) $12,000 per single-family dwelling for
homebuilder-installed renewable energy systems, if the dwelling
also constitutes a high-performance home; or
(d) + } 35 percent of the certified cost of { - the - } { +
any other + } facility.
{ - (4)(a) - } { + (5)(a) + } Upon any sale, termination of
the lease or contract, exchange or other disposition of the
facility, notice thereof shall be given to the Director of the
State Department of Energy who shall revoke the certificate
covering the facility as of the date of such disposition. The new
owner, or upon re-leasing of the facility, the new lessor, may
apply for a new certificate under ORS 469.215, but the tax credit
available to the new owner shall be limited to the amount of
credit not claimed by the former owner or, for a new lessor, the
amount of credit not claimed by the lessor under all previous
leases.
(b) The State Department of Energy may not revoke the
certificate covering a facility under paragraph (a) of this
subsection if the tax credit associated with the facility has
been transferred to a taxpayer who is an eligible applicant under
ORS 469.205 (1)(c)(A).
{ - (5) - } { + (6) + } Any tax credit otherwise allowable
under this section that is not used by the taxpayer in a
particular year may be carried forward and offset against the
taxpayer's tax liability for the next succeeding tax year. Any
credit remaining unused in that next succeeding tax year may be
carried forward and used in the second succeeding tax year, and
likewise, any credit not used in that second succeeding tax year
may be carried forward and used in the third succeeding tax year,
and likewise, any credit not used in that third succeeding tax
year may be carried forward and used in the fourth succeeding tax
year, and likewise, any credit not used in that fourth succeeding
tax year may be carried forward and used in the fifth succeeding
tax year, and likewise, any credit not used in that fifth
succeeding tax year may be carried forward and used in the sixth
succeeding tax year, and likewise, any credit not used in that
sixth succeeding tax year may be carried forward and used in the
seventh succeeding tax year, and likewise, any credit not used in
that seventh succeeding tax year may be carried forward and used
in the eighth succeeding tax year, but may not be carried forward
for any tax year thereafter. Credits may be carried forward to
and used in a tax year beyond the years specified in subsection
(1) of this section only as provided in this subsection.
{ - (6) - } { + (7) + } The credit provided by this section
is not in lieu of any depreciation or amortization deduction for
the facility to which the taxpayer otherwise may be entitled for
purposes of ORS chapter 316, 317 or 318 for such year.
{ - (7) - } { + (8) + } The taxpayer's adjusted basis for
determining gain or loss may not be decreased by any tax credits
allowed under this section.
{ + (9) If a homebuilder claims a credit under this section
with respect to a homebuilder-installed renewable energy system
or a high-performance home:
(a) The homebuilder may not claim credits for both a
homebuilder-installed renewable energy system and a
high-performance home with respect to the same dwelling;
(b) The homebuilder must inform the buyer of the dwelling that
the homebuilder is claiming a tax credit under this section with
respect to the dwelling; and
(c) The buyer of the dwelling may not claim a credit under this
section that is based on any facility for which the homebuilder
has already claimed a credit.
(10) The definitions in ORS 469.185 apply to this section. + }
SECTION 2. ORS 315.356 is amended to read:
315.356. (1) If a taxpayer obtains a grant { - or tax
credit - } from the federal government { - other than an
investment tax credit or a low income housing tax credit - } in
connection with a facility
{ - which - } { + that + } has been certified by the Director
of the State Department of Energy, the certified cost of the
facility shall be reduced on a dollar for dollar basis. Any
income or excise tax credits { - which such - } { + that
the + } taxpayer would be entitled to under ORS 315.354 and
469.185 to 469.225 after any { - such reduction shall - } { +
reduction described in this subsection may + } not be reduced by
{ - such - } { + the + } federal { - grants or tax
credits - } { + grant + }. A taxpayer applying for a federal
grant { - or credit - } shall notify the Department of Revenue
by certified mail within 30 days after each application, and
after the receipt of any grant.
(2) A taxpayer is eligible to participate in both this tax
credit program and low interest, government-sponsored loans.
(3) A taxpayer who receives a tax credit or { - ad
valorem - } { + property + } tax relief on a pollution control
facility or an alternative energy device under ORS 307.405,
315.304 or 316.116 is not eligible for a tax credit on the same
facility or device under ORS 315.354 and 469.185 to 469.225.
(4) A credit may not be allowed under ORS 315.354 if the
taxpayer has received a tax credit on the same facility or device
under ORS 315.324.
SECTION 3. ORS 469.185 is amended to read:
469.185. As used in ORS 469.185 to 469.225 and 469.878:
(1) 'Alternative fuel vehicle' means a vehicle as defined by
the Director of the State Department of Energy by rule that is
used primarily in connection with the conduct of a trade or
business and that is manufactured or modified to use an
alternative fuel, including but not limited to electricity,
ethanol, methanol, gasohol and propane or natural gas, regardless
of energy consumption savings.
(2) 'Car sharing facility' means the expenses of operating a
car sharing program, including but not limited to the fair market
value of parking spaces used to store the fleet of cars available
for a car sharing program, but does not include the costs of the
fleet of cars.
(3) 'Car sharing program' means a program in which drivers pay
to become members in order to have joint access to a fleet of
cars from a common parking area on an hourly basis. 'Car sharing
program' does not include operations conducted by car rental
agencies.
(4) 'Cost' means the capital costs and expenses necessarily
incurred in the acquisition, erection, construction and
installation of a facility, including site development costs and
expenses for a sustainable building practices facility.
(5) 'Energy facility' means any capital investment for which
the first year energy savings yields a simple payback period of
greater than one year. An energy facility includes:
(a) Any land, structure, building, installation, excavation,
machinery, equipment or device, or any addition to,
reconstruction of or improvement of, land or an existing
structure, building, installation, excavation, machinery,
equipment or device necessarily acquired, erected, constructed or
installed by any person in connection with the conduct of a trade
or business and actually used in the processing or utilization of
renewable energy resources to:
(A) Replace a substantial part or all of an existing use of
electricity, petroleum or natural gas;
(B) Provide the initial use of energy where electricity,
petroleum or natural gas would have been used;
(C) Generate electricity to replace an existing source of
electricity or to provide a new source of electricity for sale by
or use in the trade or business; { - or - }
(D) Perform a process that obtains energy resources from
material that would otherwise be solid waste as defined in ORS
459.005 { + ; or
(E) Manufacture or distribute alternative fuels, including but
not limited to electricity, ethanol, methanol, gasohol or
biodiesel + }.
(b) Any acquisition of, addition to, reconstruction of or
improvement of land or an existing structure, building,
installation, excavation, machinery, equipment or device
necessarily acquired, erected, constructed or installed by any
person in connection with the conduct of a trade or business in
order to substantially reduce the consumption of purchased
energy.
(c) A necessary feature of a new commercial building or
multiple unit dwelling, as dwelling is defined by ORS 469.160,
that causes that building or dwelling to exceed an energy
performance standard in the state building code.
(d) The replacement of an electric motor with another electric
motor that substantially reduces the consumption of electricity.
(6) 'Facility' means an energy facility, recycling facility,
transportation facility, car sharing facility, sustainable
building practices facility, alternative fuel vehicle or
facilities necessary to operate alternative fuel vehicles,
including but not limited to an alternative fuel vehicle
refueling station { + , a high-efficiency combined heat and power
facility, a high-performance home, a homebuilder-installed
renewable energy system, or a renewable energy resource equipment
manufacturing facility.
(7) 'High-efficiency combined heat and power facility ' means a
device or equipment that simultaneously produces heat and
electricity from a single source of fuel and that meets the
criteria established for a high-efficiency combined heat and
power facility under section 8 of this 2007 Act.
(8) 'High-performance home' means a new single-family dwelling
that:
(a) Is designed and constructed to reduce net purchased energy
to an annualized level that is less than ___; and
(b) Meets the criteria established for a high-performance home
under section 8 of this 2007 Act.
(9) 'Homebuilder-installed renewable energy system' means a
renewable energy resource system that:
(a) Meets the criteria established for a renewable energy
resource system under section 8 of this 2007 Act; and
(b) Is installed in a new single-family dwelling by, or at the
direction of, the homebuilder constructing the dwelling + }.
{ - (7) - } { + (10) + } 'Qualified transit pass contract'
means a purchase agreement entered into between a transportation
provider and a person, the terms of which obligate the person to
purchase transit passes on behalf or for the benefit of
employees, students, patients or other individuals over a
specified period of time.
{ - (8) - } { + (11) + } 'Recycling facility' means
equipment used by a trade or business solely for recycling:
(a) Including:
(A) Equipment used solely for hauling and refining used oil;
(B) New vehicles or modifications to existing vehicles used
solely to transport used recyclable materials that cannot be used
further in their present form or location such as glass, metal,
paper, aluminum, rubber and plastic;
(C) Trailers, racks or bins that are used for hauling used
recyclable materials and are added to or attached to existing
waste collection vehicles; and
(D) Any equipment used solely for processing recyclable
materials such as bailers, flatteners, crushers, separators and
scales.
(b) But not including equipment used for transporting or
processing scrap materials that are recycled as a part of the
normal operation of a trade or business as defined by the
director.
{ - (9)(a) - } { + (12)(a) + } 'Renewable energy resource'
includes, but is not limited to { - , - } { + :
(A) + } Straw, forest slash, wood waste or other wastes from
farm or forest land, { - industrial waste - } { +
nonpetroleum plant or animal based biomass + }, solar energy,
wind power, water power or geothermal energy { + ; or
(B) A hydroelectric generating facility that obtains all
applicable permits and complies with all state and federal
statutory requirements for the protection of fish and wildlife
and:
(i) That does not exceed 10 megawatts of installed capacity; or
(ii) Qualifies as a research, development or demonstration
facility + }.
(b) 'Renewable energy resource' does not include a
hydroelectric generating facility { - larger than one megawatt
of installed capacity unless the facility qualifies as a
research, development or demonstration facility - } { + that is
not described in paragraph (a) of this subsection.
(13) 'Renewable energy resource equipment manufacturing
facility' means any structure, building, installation,
excavation, machinery, equipment or device, or an addition,
reconstruction or improvement to land or an existing structure,
building, installation, excavation, machinery, equipment or
device, that is necessarily acquired, constructed or installed by
a person in connection with the conduct of a trade or business,
that is used primarily to manufacture equipment, machinery or
other products designed to use a renewable energy resource and
that meets the criteria established under section 8 of this 2007
Act + }.
{ - (10) - } { + (14) + } 'Sustainable building practices
facility' means a commercial building in which building practices
that reduce the amount of energy, water or other resources needed
for construction and operation of the building are used.
'Sustainable building practices facility' may be further defined
by the State Department of Energy by rule, including rules that
establish traditional building practice baselines in energy,
water or other resource usage for comparative purposes for use in
determining whether a facility is a sustainable building
practices facility.
{ - (11) - } { + (15) + } 'Transportation facility' means a
transportation project that reduces energy use during commuting
to and from work or school, during work-related travel, or during
travel to obtain medical or other services, and may be further
defined by the department by rule. 'Transportation facility '
includes, but is not limited to, a qualified transit pass
contract or a transportation services contract.
{ - (12) - } { + (16) + } 'Transportation provider' means a
public, private or nonprofit entity that provides transportation
services to members of the public.
{ - (13) - } { + (17) + } 'Transportation services
contract' means a contract that is related to a transportation
facility, and may be further defined by the department by rule.
SECTION 4. ORS 469.200 is amended to read:
469.200. { + (1) + } The total cost of a facility that
receives a preliminary certification from the Director of the
State Department of Energy for tax credits in any calendar year
{ - shall - } { + may + } not exceed { + :
(a) $20 million, in the case of a facility using or producing
renewable energy resources, a renewable energy resource equipment
manufacturing facility or a high-efficiency combined heat and
power facility; or
(b) + } $10 million { + , in the case of any other
facility + }.
{ + (2) + } The director shall determine the dollar amount
certified for any facility and the priority between applications
for certification based upon the criteria contained in ORS
469.185 to 469.225 and applicable rules and standards adopted
under ORS 469.185 to 469.225. The director may consider the
status of a facility as a research, development or demonstration
facility of new renewable resource generating and conservation
technologies or a qualified transit pass contract in the
determination.
SECTION 5. ORS 469.205 is amended to read:
469.205. (1) Prior to erection, construction, installation or
acquisition of a proposed facility, any person may apply to the
State Department of Energy for preliminary certification under
ORS 469.210 if:
(a) The erection, construction, installation or acquisition of
the facility is to be commenced on or after October 3, 1979;
(b) The facility complies with the standards or rules adopted
by the Director of the State Department of Energy; and
(c) The applicant meets one of the following criteria:
(A) The applicant is a person to whom a tax credit has been
transferred; or
(B) The applicant will be the owner or contract purchaser of
the facility at the time of erection, construction, installation
or acquisition of the proposed facility, and:
(i) The applicant is the owner, contract purchaser or lessee of
a trade or business that plans to utilize the facility in
connection with Oregon property; or
(ii) The applicant is the owner, contract purchaser or lessee
of a trade or business that plans to lease the facility to a
person who will utilize the facility in connection with Oregon
property.
(2) An application for preliminary certification shall be made
in writing on a form prepared by the department and shall
contain:
(a) A statement that the applicant or the lessee of the
applicant's facility:
(A) Intends to convert from a purchased energy source to a
renewable energy resource;
(B) Plans to acquire, construct or install a facility that will
use a renewable energy resource or solid waste instead of
electricity, petroleum or natural gas;
(C) Plans to use a renewable energy resource in the generation
of electricity for sale or to replace an existing or proposed use
of an existing source of electricity;
(D) Plans to acquire, construct or install a facility that
substantially reduces the consumption of purchased energy;
(E) Plans to acquire, construct or install equipment for
recycling as defined in ORS 469.185 { - (8) - } { + (11) + };
(F) Plans to acquire an alternative fuel vehicle or to convert
an existing vehicle to an alternative fuel vehicle;
(G) Plans to acquire, construct or install a facility necessary
to operate alternative fuel vehicles;
(H) Plans to acquire transit passes for use by individuals
specified by the applicant;
(I) Plans to acquire, construct or install a transportation
facility;
(J) Plans to acquire a sustainable building practices facility;
{ - or - }
(K) Plans to acquire a car sharing facility and operate a car
sharing program { + ;
(L) Plans to construct a high-efficiency combined heat and
power facility;
(M) Is a homebuilder and plans to construct a
homebuilder-installed renewable energy system;
(N) Is a homebuilder and plans to construct a high-performance
home; or
(O) Plans to acquire, construct or install a renewable energy
resource equipment manufacturing facility + }.
(b) A detailed description of the proposed facility and its
operation and information showing that the facility will operate
as represented in the application.
(c) Information on the amount by which consumption of
electricity, petroleum or natural gas by the applicant or the
lessee of the applicant's facility will be reduced, and on the
amount of energy that will be produced for sale, as the result of
using the facility or, if applicable, information about the
expected level of sustainable building practices facility
performance.
(d) The projected cost of the facility.
(e) If applicable, a copy of the proposed qualified transit
pass contract, transportation services contract or contract for
lease of parking spaces for a car sharing facility.
(f) Any other information the director considers necessary to
determine whether the proposed facility is in accordance with the
provisions of ORS 469.185 to 469.225, and any applicable rules or
standards adopted by the director.
(3) An application for preliminary certification shall be
accompanied by a fee established under ORS 469.217. The director
may refund the fee if the application for certification is
rejected.
(4) The director may allow an applicant to file the preliminary
application after the start of erection, construction,
installation or acquisition of the facility if the director
finds:
(a) Filing the application before the start of erection,
construction, installation or acquisition is inappropriate
because special circumstances render filing earlier unreasonable;
and
(b) The facility would otherwise qualify for tax credit
certification pursuant to ORS 469.185 to 469.225.
(5) A preliminary certification of a sustainable building
practices facility shall be applied for and issued as prescribed
by the department by rule.
SECTION 6. ORS 469.215 is amended to read:
469.215. (1) { - No - } { + A + } final certification
{ - shall - } { + may not + } be issued by the Director of the
State Department of Energy under this section unless the facility
was acquired, erected, constructed or installed under a
preliminary certificate of approval issued under ORS 469.210 and
in accordance with the applicable provisions of ORS 469.185 to
469.225 and any applicable rules or standards adopted by the
director.
(2) Any person may apply to the State Department of Energy for
final certification of a facility:
(a) If the department issued preliminary certification for the
facility under ORS 469.210; and
(b)(A) After completion of erection, construction, installation
or acquisition of the proposed facility or, if the facility is a
qualified transit pass contract, after entering into the contract
with a transportation provider; or
(B) After transfer of the facility, as provided in ORS 315.354
{ - (4) - } { + (5) + }.
(3) An application for final certification shall be made in
writing on a form prepared by the department and shall contain:
(a) A statement that the conditions of the preliminary
certification have been complied with;
(b) The actual cost of the facility certified to by a certified
public accountant who is not an employee of the applicant or, if
the actual cost of the facility is less than $50,000, copies of
receipts for purchase and installation of the facility;
(c) A statement that the facility is in operation or, if not in
operation, that the applicant has made every reasonable effort to
make the facility operable; and
(d) Any other information determined by the director to be
necessary prior to issuance of a final certificate, including
inspection of the facility by the department.
(4) The director shall act on an application for certification
before the 60th day after the filing of the application under
this section. The director, after consultation with the Public
Utility Commission, may issue the certificate together with such
conditions as the director determines are appropriate to promote
the purposes of this section and ORS 315.354, 469.185, 469.200,
469.205 and 469.878. The action of the director shall include
certification of the actual cost of the facility. However, in no
event shall the director certify an amount for tax credit
purposes which is more than 10 percent in excess of the amount
approved in the preliminary certificate issued for the facility.
(5) If the director rejects an application for final
certification, or certifies a lesser actual cost of the facility
than was claimed in the application, the director shall send to
the applicant written notice of the action, together with a
statement of the findings and reasons therefor, by certified
mail, before the 60th day after the filing of the application.
Failure of the director to act constitutes rejection of the
application.
(6) Upon approval of an application for final certification of
a facility, the director shall certify the facility. Each
certificate shall bear a separate serial number for each device.
Where one or more devices constitute an operational unit, the
director may certify the operational unit under one certificate.
SECTION 7. { + Section 8 of this 2007 Act is added to and made
a part of ORS 469.185 to 469.225. + }
SECTION 8. { + The State Department of Energy shall by rule
establish all of the following criteria:
(1) For a high-performance home, the minimum design and
construction standards that must be met or exceeded for a
dwelling to be considered a high-performance home, including but
not limited to standards for the building envelope, HVAC systems,
lighting, appliances, water conservation measures, use of
sustainable building materials and on-site renewable energy
systems. The criteria must also establish the minimum reduction
in estimated net purchased energy that a dwelling must achieve to
be considered a high-performance home.
(2) For a homebuilder-installed renewable energy system, the
minimum performance and efficiency standards that a solar
electric system, solar domestic water heating system, passive
solar space heating system, wind power system, geothermal heating
system, fuel cell system or other system utilizing renewable
resources must achieve to be considered a homebuilder-installed
renewable energy system.
(3) For a high-efficiency combined heat and power facility, the
minimum performance and efficiency standards that the facility
must achieve to be considered a high-efficiency combined heat and
power facility.
(4) For a renewable energy resource equipment manufacturing
facility, standards relating to the type of equipment, machinery
or other products being manufactured and related performance and
efficiency standards applicable to the manufactured products. + }
SECTION 9. { + Section 8 of this 2007 Act and the amendments
to ORS 315.354, 315.356, 469.185, 469.200, 469.205 and 469.215 by
sections 1 to 6 of this 2007 Act apply to facilities certified on
or after the effective date of this 2007 Act and to tax years
beginning on or after January 1, 2007. + }
SECTION 10. { + This 2007 Act takes effect on the 91st day
after the date on which the regular session of the Seventy-fourth
Legislative Assembly adjourns sine die. + }
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