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 2254
A-Engrossed
House Bill 3500
Ordered by the House June 23
Including House Amendments dated June 23
Sponsored by COMMITTEE ON REVENUE (at the request of Oregon
Business Association)
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.
{ - Modifies pollution control facility tax credit and
extends period for which facilities may be certified for tax
credit, if facilities constitute enhanced pollution control
facilities. - }
{ - Requires pollution control facility owners to report on
continued operation and effectiveness of facilities. - }
{ + Modifies provisions relating to pollution control
incentives. + }
Takes effect on 91st day following adjournment sine die.
A BILL FOR AN ACT
Relating to pollution control facilities; creating new
provisions; amending ORS 307.405, 307.430, 314.255, 314.752,
315.304, 315.324, 315.356, 465.015, 468.153, 468.155, 468.160,
468.165, 468.167, 468.170, 468.173, 468.185, 468.190, 468A.020,
468A.096 and 468A.605 and section 3, chapter 928, Oregon Laws
2001; repealing ORS 468.150, 468.163, 468.172 and 468.180;
appropriating money; and prescribing an effective date.
Be It Enacted by the People of the State of Oregon:
SECTION 1. ORS 468.153 is amended to read:
468.153. (1) The Legislative Assembly finds that the concept of
environmental responsibility has matured beyond basic compliance
with regulatory requirements to one in which citizens and
businesses voluntarily implement innovative solutions to achieve
shared environmental goals.
(2) The Legislative Assembly declares that a { - pollution
control - } tax credit that shifts the majority of the incentive
away from compensation for basic regulatory compliance and toward
encouraging voluntary investment is an effective way to achieve
environmental goals.
(3) The Legislative Assembly finds and declares that it is the
policy of this state to promote sustainability and provide
incentives for the voluntary prevention, elimination, reduction
or control of air pollution, water pollution, solid waste and
hazardous waste through the voluntary application of innovative
solutions to achieve the environmental goals of this state.
(4) The Legislative Assembly declares it to be the policy of
this state to promote social, economic and environmental
principles of sustainability by providing incentives to
individuals and businesses that support social, economic and
environmental sustainability goals.
SECTION 2. ORS 468.155 is amended to read:
468.155. { - (1)(a) - } As used in ORS 468.155 to 468.190
{ - , - } { + :
(1) + } Unless the context requires otherwise, { - '
pollution control facility' or 'facility' - } { + '
control' + } means 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 reasonably used, erected, constructed or
installed { - by any person if: - } { + in Oregon to achieve
an environmental benefit.
(2) 'Environmental benefit' means:
(a) The prevention, control or reduction of air or water
pollution or solid or hazardous waste; or
(b) The recycling or appropriate disposal of used oil. + }
{ - (A) The principal purpose of such use, erection,
construction or installation is to comply with a requirement
imposed by the Department of Environmental Quality, the federal
Environmental Protection Agency or regional air pollution
authority to prevent, control or reduce air, water or noise
pollution or solid or hazardous waste or to recycle or provide
for the appropriate disposal of used oil; or - }
{ - (B) The sole purpose of such use, erection, construction
or installation is to prevent, control or reduce a substantial
quantity of air, water or noise pollution or solid or hazardous
waste or to recycle or provide for the appropriate disposal of
used oil. - }
{ - (b) Such prevention, control or reduction required by
this subsection shall be accomplished by: - }
{ + (3)(a) 'Eligible method' means a control that: + }
(A) { - The disposal or elimination of or redesign - }
{ + Disposes of or eliminates or is redesigned + } to eliminate
industrial waste { - and - } { + or water pollution,
including + } the use of treatment works for industrial waste as
defined in ORS 468B.005;
(B) { - The disposal or elimination of or redesign - }
{ + Disposes of or eliminates or is redesigned + } to
{ + dispose of or + } eliminate air contaminants or air
pollution or air contamination sources { - and - } { + ,
including + } the use of air cleaning devices as defined in ORS
468A.005;
{ - (C) The substantial reduction or elimination of or
redesign to eliminate noise pollution or noise emission sources
as defined by rule of the Environmental Quality Commission; - }
{ - (D) - } { + (C) + } { - The use of - } { + Uses + }
a material recovery process
{ - which - } { + that + } obtains useful material from
material that would otherwise be solid waste as defined in ORS
459.005, hazardous waste as defined in ORS 466.005 { - , - } or
used oil as defined in ORS 459A.555; { - or - }
{ - (E) - } { + (D) + } { - The treatment, substantial
reduction or elimination of or redesign to treat, substantially
reduce or eliminate - } { + Uses a plastic reclaimed through a
material recovery process in the manufacture of an end product of
real economic value.
(E) Treats, substantially reduces or eliminates or is
redesigned to treat, substantially reduce or eliminate a
substantial quantity of + } hazardous waste as defined in ORS
466.005 { - . - } { + ; or
(F) Is an alternative to field burning.
(b) With respect to the reduction of carbon dioxide emissions,
a substantial quantity is 1,000 tons per year or, for any
reduction in excess of 100 tons per year, a reduction by 40
percent of the prior emissions.
(c) The commission may adopt rules defining 'substantial
reduction,' 'prevention,' 'control' or 'reuse. '
(4) 'Base pollution control' means:
(a) A control, or that portion of a control, that uses an
eligible method to:
(A) Meet a requirement imposed by the Department of
Environmental Quality or a regional air pollution authority that
provides an environmental benefit that goes beyond or is in
addition to the environmental benefits of any requirement imposed
by the federal Environmental Protection Agency under a numerical
emission standard or limit of national applicability; or
(B) Reduce or prevent pollution from combined animal feeding
operations or nonpoint sources as set forth by rules adopted by
the Environmental Quality Commission; or
(b) With respect to stormwater, the controls necessary to
achieve Oregon stormwater permit benchmarks, to the extent the
controls provide an environmental benefit that goes beyond or is
in addition to the environmental benefits of any requirement
imposed by the federal Environmental Protection Agency under a
limit of national applicability, will be considered base
pollution controls. + }
{ - (2)(a) As used in ORS 468.155 to 468.190, 'pollution
control facility' or 'facility' includes a nonpoint source
pollution control facility. - }
{ - (b) As used in this subsection, 'nonpoint source
pollution control facility' means a facility - }
{ + (5) 'Nonpoint source pollution control' means practices,
methods, processes or equipment + } that the Environmental
Quality Commission has identified by rule as reducing or
controlling significant amounts of nonpoint source pollution.
{ - (3) As used in ORS 468.155 to 468.190, 'pollution control
facility' or 'facility' does not include: - }
{ - (a) Air conditioners; - }
{ - (b) Septic tanks or other facilities for human waste; - }
{ - (c) Property installed, constructed or used for moving
sewage to the collecting facilities of a public or quasi-public
sewerage system; - }
{ - (d) Any distinct portion of a pollution control facility
that makes an insignificant contribution to the principal or sole
purpose of the facility including the following specific
items: - }
{ - (A) Office buildings and furnishings; - }
{ - (B) Parking lots and road improvements; - }
{ - (C) Landscaping; - }
{ - (D) External lighting; - }
{ - (E) Company or related signs; and - }
{ - (F) Automobiles; - }
{ - (e) Replacement or reconstruction of all or a part of any
facility for which a pollution control facility certificate has
previously been issued under ORS 468.170, except: - }
{ - (A) If the cost to replace or reconstruct the facility is
greater than the like-for-like replacement cost of the original
facility due to a requirement imposed by the department, the
federal Environmental Protection Agency or a regional air
pollution authority, then the facility may be eligible for tax
credit certification up to an amount equal to the difference
between the cost of the new facility and the like-for-like
replacement cost of the original facility; or - }
{ - (B) If a facility is replaced or reconstructed before the
end of its useful life then the facility may be eligible for the
remainder of the tax credit certified to the original
facility; - }
{ - (f) Asbestos abatement; or - }
{ - (g) Property installed, constructed or used for cleanup
of emergency spills or unauthorized releases, as defined by the
commission. - }
{ + (6) 'Environmental enhancement' means a control, or that
portion of a control, that uses an eligible method and:
(a) Provides an environmental benefit that is not required by
the Department of Environmental Quality, the State Department of
Agriculture, the federal Environmental Protection Agency or a
regional air pollution authority; or
(b) Is a base pollution control constructed or installed in
advance of the time the Department of Environmental Quality, the
State Department of Agriculture, the federal Environmental
Protection Agency or a regional air pollution control authority
requires the environmental benefit achieved by the control.
(7) 'Environmental management system' means a systematic,
documented, continual cycle of planning, implementing, reviewing
and improving the actions undertaken at a plant, mill, facility
or place of business in Oregon to meet environmental obligations
and improve environmental performance that includes a means to
measure the environmental benefit and that meets:
(a) The standards established by the International Organization
for Standardization under ISO 14001;
(b) The standards established in the Green Permit program
established under ORS 468.501 to 468.521; or
(c) Other criteria established by the commission by rule.
(8) 'Environmental improvement process' means an improvement
implemented as a result of an environmental management system, to
the extent that the improvement is beyond what is required by a
requirement or effluent limit established by the Department of
Environmental Quality, the State Department of Agriculture, the
federal Environmental Protection Agency or a regional air
pollution authority and that provides:
(a) A direct, substantial increase in pollution control by
preventing, controlling or reducing a substantial quantity of air
or water pollution or solid or hazardous waste;
(b) For recycling or the appropriate disposal of used oil; or
(c) For the substantial reduction in waste or recycling of
waste beyond what federal, state or local law requires.
(9) 'Environmental investment' or 'investment' means:
(a) Base pollution control;
(b) Environmental enhancement;
(c) Nonpoint source pollution control;
(d) Environmental management system;
(e) Environmental improvement process; or
(f) Pollution control facility.
(10) 'Alternative to field burning' means a base pollution
control that provides an alternative method for field sanitation
and straw utilization and disposal as established by the
Environmental Quality Commission by rule.
(11) 'Material recovery process' means a process that obtains
useful material from material that would otherwise be solid waste
as defined in ORS 459.005, hazardous waste as defined in ORS
466.005 or used oil as defined in ORS 459A.555.
(12) 'Licensed engineer's statement' means a statement prepared
by an independent engineer licensed under ORS chapter 672, or by
a Department of Environmental Quality engineer, that documents:
(a) The extent to which a control will achieve an environmental
enhancement;
(b) The actual cost attributable to the environmental
enhancement, separate from any costs associated with base and
nonpoint source pollution controls;
(c) The permit limits existing at the time the costs were
incurred;
(d) The permit limits that would become applicable during the
certificate life; and
(e) Other criteria established by the commission by rule,
including documentation of base pollution control costs if deemed
necessary.
(13) Unless the context requires otherwise, 'pollution control
facility' or 'facility' means a control constructed or installed
before January 1, 2008, that:
(a) Complies with a requirement imposed by the Department of
Environmental Quality, the federal Environmental Protection
Agency or a regional air pollution authority using an eligible
method; or
(b) Provides a substantial environmental benefit using an
eligible method.
(14)(a) 'Commencement' means:
(A) The date on which the person constructing or installing a
control has obtained all necessary preliminary approvals and has
begun continuous on-site modification, construction, installation
or other activity, the completion of which will cause the person
to be able to obtain certification under ORS 468.155 to 468.190.
(B) With respect to an environmental management system or
environmental improvement process, the date on which internal or
external resources are first expended to develop the
environmental management system or environmental improvement
process for which the person seeks certification, the development
of which is then continuous.
(b) Interruptions and delays resulting from natural disasters,
strikes, litigation or other matters beyond the control of the
owner shall be disregarded in determining whether the actions
undertaken by the person are continuous.
(c) The burden of demonstrating that environmental investment
is commenced shall be borne by the person filing an application
for certification under ORS 468.165. + }
SECTION 3. ORS 468.165 is amended to read:
468.165. (1) Any person may apply to the Environmental Quality
Commission for certification under ORS 468.170 of { - a
pollution control facility - } { + an environmental
investment + } or portion thereof { - erected, constructed or
installed by the person - } in Oregon { + . + } { - if: - }
{ - (a) The air or water pollution control facility was
erected, constructed or installed on or after January 1,
1967. - }
{ - (b) The noise pollution control facility was erected,
constructed or installed on or after January 1, 1977. - }
{ - (c) The solid waste facility was under construction on or
after January 1, 1973, the hazardous waste or used oil facility
was under construction on or after October 3, 1979, and if: - }
{ - (A) The facility's principal or sole purpose conforms to
the requirements of ORS 468.155 (1) and (2); - }
{ - (B) The facility will utilize material that would
otherwise be solid waste as defined in ORS 459.005, hazardous
waste as defined in ORS 466.005 or used oil as defined in ORS
459A.555 by mechanical process or chemical process or through the
production, processing including presegregation, or use of,
materials which have useful chemical or physical properties and
which may be used for the same or other purposes, or materials
which may be used in the same kind of application as its prior
use without change in identity; - }
{ - (C) The end product of the utilization is an item of real
economic value; - }
{ - (D) The end product of the utilization, other than a
usable source of power, is competitive with an end product
produced in another state; and - }
{ - (E) The Oregon law regulating solid waste imposes
standards at least substantially equivalent to the federal
law. - }
{ - (d) The hazardous waste control facility was erected,
constructed or installed on or after January 1, 1984, and if: - }
{ - (A) The facility's principal or sole purpose conforms to
the requirements of ORS 468.155 (1) and (2); and - }
{ - (B) The facility is designed to treat, substantially
reduce or eliminate hazardous waste as defined in ORS
466.005. - }
(2) The application shall be made in writing in a form
prescribed by the Department of Environmental Quality and
{ - shall - } { + may + } contain { + :
(a) + } { - information on - } { + Documentation of + } the
actual cost { - of the facility, - } { + or portion of the
actual cost directly attributed to the environmental investment;
(b) Documentation describing and data supporting the extent to
which the investment would achieve the environmental benefit;
(c) + } A description of { - the - } { + any + } materials
{ - incorporated therein, - } { + and + } all machinery and
equipment made a part { - thereof, - } { + of the
environmental investment;
(d) + } { - the - } { + Any + } existing or proposed
operational procedure
{ - thereof, and a statement of the purpose of prevention,
control or reduction of air, water or noise pollution or solid or
hazardous waste or recycling or appropriate disposal of used oil
served or to be served by the facility and the portion of the
actual cost properly allocable to the prevention, control or
reduction of air, water or noise pollution or solid or hazardous
waste or to recycling or appropriately disposing of used oil. - }
{ + related to the environmental investment and the
environmental benefit; and
(e) If required by the department, a licensed engineer's
statement. + }
(3) { - The Director of the Department of Environmental
Quality - } { + The department + } may require any further
information the { - director - } { + department + } considers
necessary before { - a certificate is issued - }
{ + recommending that the commission approve certification + }.
(4) The application shall be accompanied by a fee established
under subsection (5) of this section. The { - fee may be
refunded - } { + Department of Environmental Quality may refund
the fee + } if the application for certification is rejected { +
or withdrawn + }.
(5) By rule and after hearing the commission may adopt a
schedule of reasonable fees { - which - } { + that + } the
department may require of applicants for certificates issued
under ORS 468.167 and 468.170. Before the adoption or revision of
any such fees the commission shall estimate the total cost of the
program to the department. The fees shall be based on the
anticipated { - cost - } { + costs + } of filing,
investigating, granting and rejecting the applications { + and
of reporting results to the Legislative Assembly, + } and shall
be designed not to exceed the total cost estimated by the
commission. Any excess fees shall be held by the department and
shall be used by the commission to reduce any future fee
increases. The fee may vary according to the size and complexity
of the { - facility - } { + environmental investment + }. The
{ - fees - } { + commission + } may not { - be considered by
the commission - } { + consider the fee + } as part of the cost
of the { - facility to be certified - } { + environmental
investment + }.
(6) { + For pollution control facilities, + } the application
shall be submitted after construction of the facility is
substantially completed and the facility is placed in service and
within one year after construction of the facility is
substantially completed. Failure to file a timely application
shall make the facility ineligible for tax credit certification.
An application may not be considered filed until it is complete
and ready for processing. The commission may grant an extension
of time to file an application for circumstances beyond the
control of the applicant that would make a timely filing
unreasonable. However, the period for filing an application may
not be extended to a date beyond December 31, 2008.
{ + (7) For environmental investments commenced after
December 31, 2007, the application shall be submitted within one
year after:
(a) Construction of the control is substantially completed and
the control is placed in service;
(b) The environmental management system is substantially
completed; or
(c) The environmental process improvement is substantially
implemented.
(8) Failure to file a timely application under subsections (6)
and (7) of this section shall make the environmental investment
ineligible for tax credit certification. The commission may grant
an extension of time to file an application for circumstances
beyond the control of the applicant that would make a timely
filing unreasonable.
(9) An application may not be considered filed until it is
complete and ready for processing and includes information
requested by the department pursuant to subsection (3) of this
section.
(10) The final date the department may accept an application
filed under this section shall be:
(a) December 31, 2008, for pollution control facilities; or
(b) Four years after the final eligible project commencement,
as established by ORS 468.173, for environmental investments.
(11) The commission may adopt rules with respect to the
submission and timing of applications. + }
SECTION 4. ORS 468.167 is amended to read:
468.167. (1) Any person proposing to apply for certification
for tax relief under ORS 468.155 to 468.190 may apply, before the
completion of { - a pollution control facility - } { + an
environmental investment + }, for precertification of the
{ - facility - } { + investment + } with the Environmental
Quality Commission.
(2)(a) The application shall be made in writing in a form
prescribed by the Department of Environmental Quality. { - The
application shall contain the following information: - }
{ - (A) A statement of the purpose of prevention, control or
reduction of air, water or noise pollution or solid or hazardous
waste or recycling or appropriate disposal of used oil served or
to be served by the facility. - }
{ - (B) A description of the materials for incorporation into
the facility or incorporated into the facility, machinery and
equipment to be made or made a part of the facility and the
proposed or existing operational procedure of the facility. - }
{ - (C) Any further information the Director of the
Department of Environmental Quality considers necessary before
precertification is issued. - }
(b) The application need not contain information on the actual
{ - cost of the facility - } { + investment costs + } or the
portion of the actual { - cost properly allocable to the
prevention, control or reduction of air, water or noise pollution
or solid or hazardous waste or to recycling or appropriately
disposing of used oil - } { + investment costs attributed to the
environmental benefit + }.
(c) The application shall be accompanied by a fee as provided
under ORS 468.165 (5). The { - fee may be refunded - }
{ + department may refund the fee + } if the application for
preliminary certification is rejected { + or withdrawn + }.
(3) If the commission determines that { - the person and the
pollution control facility will be eligible for tax relief under
ORS 307.405 or 315.304 if the facility is erected, constructed,
reconstructed, added to, installed, improved or used in
accordance with the application for precertification - }
{ + the environmental investment would be eligible for
certification under ORS 468.170 + }, the commission shall
precertify the { - facility - } { + investment + } by
approving the application.
(4) If the { - facility is erected, constructed,
reconstructed, added to, installed, improved or used - }
{ + environmental investment is completed + } as proposed in the
application for precertification, the commission's approval of
the application shall be prima facie evidence that the
{ - facility - } { + investment + } is qualified for
certification { - for tax relief - } under ORS 468.170.
However, precertification shall not ensure that { - a facility
erected, constructed, reconstructed, added to, installed,
improved or used by the precertified person - } { + an
investment + } will receive certification under ORS 468.170 or
tax relief under ORS 307.405 or 315.304.
(5) If the commission fails or refuses to precertify { - a
person and facility - } { + an environmental investment + },
the person may appeal as provided in ORS 468.170 (3).
SECTION 5. ORS 468.170 is amended to read:
468.170. (1) The Environmental Quality Commission shall act on
an application for certification before the { - 120th - }
{ + 180th + } day after the filing of the application under ORS
468.165. The action of the commission shall include certification
of the { - actual cost of the facility and the portion of the
actual cost properly allocable to the prevention, control or
reduction of air, water or noise pollution or solid or hazardous
waste or to recycling or appropriately disposing of used oil. The
actual cost or portion of the actual cost certified may not
exceed the taxpayer's own cash investment in the facility or
portion of the facility - } { + environmental investment and the
amount of the tax credit + }. Each certificate shall bear a
separate serial number for each such
{ - facility - } { + investment. Certification of
environmental enhancements shall be separate and shall bear a
separate serial number for each such certification + }.
(2) If the commission rejects an application for certification,
or certifies a lesser { - actual cost of the facility or a
lesser portion of the actual cost properly allocable to the
prevention, control or reduction of air, water or noise pollution
or solid or hazardous waste or to recycling or appropriately
disposing of used oil - } { + amount of the tax credit + } than
was claimed in the application for certification, the commission
shall cause written notice of its action, and a concise statement
of the findings and reasons therefor, to be sent by registered or
certified mail to the applicant before the { - 120th - }
{ + 90th + } day after the { - filing of the application - }
{ + date of the hearing at which the commission made its
decision + }.
(3) If the { + commission rejects the + } application { - is
rejected - } for any reason, including the information furnished
by the applicant as to the cost of the { - facility - } { +
investment + }, or if the applicant is dissatisfied with the
certification of { - actual cost or portion of the actual cost
properly allocable to prevention, control or reduction of air,
water or noise pollution or solid or hazardous waste or to
recycling or appropriately disposing of used oil - } { + the
amount of the tax credit + }, the applicant may appeal from the
rejection { + or certification of a lesser amount of the tax
credit + } as provided in ORS 468.110. The rejection or the
certification is final and conclusive on all parties unless the
applicant takes an appeal therefrom as provided in ORS 468.110
before the 30th day after notice was mailed by the commission.
(4)(a) The commission shall certify { - a pollution control,
solid waste, hazardous waste or used oil facility or portion
thereof - } { + an environmental investment + } { - , - } for
which an application has been made under ORS 468.165 { - , - }
{ + and the amount of the tax credit + } if the commission finds
that { - the facility - } :
(A) { - Was erected, constructed or installed in accordance
with the requirements of ORS 468.165 (1) - } { + The investment
meets the definition of an environmental investment + };
(B) { + The investment + } is designed for, and is being
operated or will operate { - in accordance with the
requirements of ORS 468.155 - } { + to provide, an environmental
benefit + }; { - and - }
(C) { - Is necessary to satisfy - } The { + investment
furthers the + } intents and purposes of ORS 454.010 to 454.040,
454.205 to 454.255, 454.505 to 454.535, 454.605 to 454.755, ORS
chapters 459, 459A, 466 and 467 and ORS chapters 468, 468A and
468B and rules thereunder { - . - } { + ; and
(D) Such certification will not exceed any limitation or
certification priority set forth in paragraph (e) of this
subsection. + }
(b) No determination of the { - proportion of the actual cost
of the facility - } { + amount of the tax credit + } to be
certified shall be made until receipt of the { + final + }
application.
(c) If one or more { - facilities - } { + environmental
investments + } constitute an operational unit, the commission
may certify such
{ - facilities - } { + investments + } under one
certificate { + , provided that certification of environmental
enhancements shall be separate and bear a separate serial
number + }.
(d) A certificate under this section is effective for purposes
of tax relief in accordance with ORS 307.405 and 315.304 if, on
or before December 31, { - 2007, erection, construction or
installation of the facility is completed, the facility is placed
in service and the - } { + 2013, the applicant files a
complete + } application for certification { - is filed with
the commission - } { + with the Department of Environmental
Quality + } under ORS 468.165.
{ + (e) In determining the amount of a tax credit under this
section, and the procedure for awarding credits subject to this
section, the commission may not certify a tax credit that exceeds
the program limitation or the proposed project limitation
determined under paragraph (f) of this subsection.
(f) The commission shall adopt rules implementing limitations
and priorities that consider the following:
(A) The commission may not certify tax credits in excess of 150
percent of $13 million in any one calendar year, which is the
program limitation.
(B) The commission shall reduce the program limitation below
150 percent of $13 million as needed if the estimated revenue
impact to the state for any year after December 31, 2007, exceeds
$13 million. The estimate shall:
(i) Exclude any data from certified pollution control
facilities tax credits;
(ii) Consider the period over which the certificate holder may
claim the amount of the tax credit provided in subsection (7) of
this section; and
(iii) Consider historic usage rates for different categories of
tax credits.
(C) The commission may not certify more than $5 million for any
one project. Projects relating to the same environmental benefit
at the same facility or physically contiguous facilities shall be
treated as one project.
(D) The commission may, on an annual or other periodic basis,
give priority to certification of environmental investments that
are environmental enhancements, environmental management systems
or environmental improvement processes.
(E) An application or portion of an application that exceeds
the program limitation may be carried over to the next calendar
year or next applicable period, but will be subject to any
priority established by the commission under subparagraph (D) of
this paragraph for the next calendar year or next applicable
period. + }
(5) A person receiving a certificate under this section may
take tax relief only under ORS 315.304, depending upon the tax
status of the person's trade or business except that:
(a) A corporation organized under ORS chapter 65 or any
subsequent transferee of the corporation shall take tax relief
only under ORS 307.405; and
(b)(A) A corporation organized under ORS chapter 62 or any
predecessor to ORS chapter 62 relating to the incorporation of
cooperative associations or the subsequent transferee of the
corporation may make an irrevocable election to take the tax
relief under either ORS 315.304 or 307.405. The corporation shall
make the election at the time of applying for the certificate,
except that a corporation receiving a certificate prior to
December 31, 1995, may make the election at any time on or before
December 31, 1995. If a corporation elects on or before December
31, 1995, to take the tax relief under ORS 315.304, any income
taxes, penalties or interest otherwise payable by the corporation
for improperly taking the tax relief under ORS 315.304 in a
taxable year prior to making the election shall be waived.
(B) In the case of a corporation making the election under
subparagraph (A) of this paragraph, the election applies to:
(i) All existing or future { - facilities - }
{ + environmental investments + } that are certified under this
section, if the corporation claimed a credit under ORS 315.304
for a tax year beginning prior to December 31, 1995; or
(ii) All future { - facilities - } { + environmental
investments + } that are certified under this section, if the
corporation did not claim a credit under ORS 315.304 for a tax
year beginning prior to December 31, 1995.
(6) If the person receiving the certificate is a partnership,
each partner shall be entitled to take tax credit relief as
provided in ORS 315.304, based on that partner's pro rata share
of the certified cost of the { - facility - } { +
investment + }.
{ - (7) Certification under this section of a pollution
control facility qualifying under ORS 468.165 (1) shall be
granted for a period of 10 consecutive years which 10-year period
shall begin with the tax year of the person in which the facility
is certified under this section, except that if ad valorem tax
relief is utilized by a corporation organized under ORS chapter
62 or 65 the facility shall be exempt from ad valorem taxation
for a period of 20 consecutive years. - }
{ - (8) Portions of a facility qualifying under ORS 468.165
(1)(c) may be certified separately under this section if
ownership of the portions is in more than one person.
Certification of such portions of a facility shall include
certification of the actual cost of the portion of the facility
to the person receiving the certification. The actual cost
certified for all portions of a facility separately certified
under this subsection may not exceed the total cost of the
facility that would have been certified under one certificate.
The provisions of ORS 315.304 (8) apply to any sale, exchange or
other disposition of a certified portion of a facility. - }
{ + (7) Certification of an environmental investment under
this section is valid:
(a) For an environmental management system, one year, which
shall be the tax year of the person in which the Environmental
Quality Commission certified the investment under this section;
or
(b) For base pollution controls, nonpoint source pollution
controls, environmental enhancements, environmental improvement
processes or pollution control facilities:
(A) 10 years, subject to the provisions of ORS 315.304, which
valid 10-year period shall begin with the tax year of the person
in which the investment is certified under this section; or
(B) 20 years if ad valorem tax relief is utilized by a
corporation organized under ORS chapter 62 or 65, and the
investment shall be exempt from ad valorem taxation for a period
of 20 consecutive years. + }
{ - (9) - } { + (8) + } A certificate issued under this
section shall state the { - applicable percentage of the
certified cost of the facility - } { + amount of the tax
credit + }, as determined { + by multiplying the eligible cost
determined under ORS 468.190 by the maximum percentage
determined + } under ORS 468.173.
{ - (10) - } { + (9) + } If the construction or
installation of a { + pollution control + } facility is
commenced after December 31, 2005, the facility may be certified
only if the facility or applicant is described in ORS 468.173
(3). A facility described in ORS 468.173 (2) for which
construction or installation is commenced after December 31,
2005, may not be certified under this section.
SECTION 6. ORS 468.173 is amended to read:
468.173. For purposes of ORS 315.304, the { - applicable - }
{ + maximum + } percentage of the certified cost of { - a
facility - } { + an environmental investment or pollution
control facility + } shall be one of the following:
(1) If { - the - } { + a pollution control + } facility is
certified under ORS 468.155 to 468.190 (1999 Edition) or if
construction or installation of the facility is commenced prior
to January 1, 2001, and completed prior to January 1, 2004, 50
percent.
(2) Except as provided in subsection (1) or (3) of this
section, if the { + pollution control + } facility is certified
pursuant to application for certification filed on or after
January 1, 2002, and:
(a) Construction or installation of the facility is commenced
on or after January 1, 2001, and on or before December 31, 2003,
25 percent; or
(b) Construction or installation of the facility is commenced
after December 31, 2003, and on or before December 31, 2005, 15
percent.
(3) If { + a pollution control facility is + } certified
pursuant to { + an + } application for { + pollution control
facility + } certification filed on or after January 1, 2002, 35
percent if:
(a) The applicant is certified under International Organization
for Standardization standard ISO 14001;
(b) A Green Permit that applies to the facility has been issued
under ORS 468.501 to 468.521;
(c) The facility is a nonpoint source { + pollution
control + } or is regulated as a confined animal feeding
operation under ORS 468B.200 to 468B.230;
(d) The facility is used for material recovery or recycling, as
those terms are defined in ORS 459.005;
(e) The facility is used in an agricultural or forest products
operation and is used for energy recovery, as defined in ORS
459.005;
(f) The certified cost of the facility does not exceed
$200,000;
(g) Construction or installation of the facility is entirely
voluntary and no portion of it is required in order to comply
with a federal law administered by the United States
Environmental Protection Agency, a state law administered by the
Department of Environmental Quality or a law administered by a
regional air pollution authority;
(h) The facility is, at the time of certification, located
within an enterprise zone established under ORS 285C.050 to
285C.250 or within an area that has been designated a distressed
area, as defined in ORS 285A.010, by the Economic and Community
Development Department; or
(i) The applicant demonstrates to the Department of
Environmental Quality that the applicant uses an environmental
management system at the facility. In order for the department to
determine that the applicant uses an environmental management
system at the facility:
(A) The applicant must have the environmental management system
used at the facility reviewed by an independent third party
familiar with environmental management systems and submit a
report to the department stating that the provisions of this
paragraph have been met. The report shall be accompanied by
supporting materials that document compliance with the provisions
of this paragraph. The report shall include certification from a
registered or certified environmental management auditor employed
by, or under contract with, the independent third party that
reviewed the environmental management system; or
(B) The department shall contract with an independent third
party familiar with environmental management systems to review
the environmental management system employed at the facility. The
third party shall review the environmental management system,
and, if the third party determines that the environmental
management system meets the provisions of this paragraph, a
registered or certified environmental management system auditor
employed by, or contracted with, the third party shall certify
that determination to the department. The department shall
recover from the applicant the costs incurred by the department
as prescribed in ORS 468.073. An applicant shall be liable for
the costs of the department under this subparagraph without
regard to whether the department certifies the facility as a
pollution control facility. The department may not certify a
facility to which this subparagraph applies until the department
has received full payment from the applicant.
{ + (4) If an environmental investment is commenced after
December 31, 2007, and before the final eligible project
commencement date, the maximum percentage of the appropriate
costs determined under ORS 468.190 shall be:
(a) For base pollution controls and nonpoint source pollution
controls:
(A) 35 percent of the costs determined under ORS 468.190 if the
environmental investment is commenced before January 1, 2011; or
(B) 25 percent of the costs determined under ORS 468.190 if the
environmental investment is commenced on or after January 1,
2011.
(b) For environmental enhancements, 50 percent of the costs
determined under ORS 468.190.
(c) For environmental management systems and environmental
improvement processes, 50 percent of the costs determined under
ORS 468.190, not to exceed:
(A) $25,000 for a business with fewer than 50 employees
employed at the Oregon site for which the environmental
management system applies;
(B) $50,000 for a business with 50 to 500 employees employed at
the Oregon site for which the environmental management system
applies; or
(C) $100,000 for a business with more than 500 employees
employed at the Oregon site for which the environmental
management system applies.
(5) For purposes of this section, the final eligible project
commencement date is December 31, 2013. + }
SECTION 7. ORS 468.185 is amended to read:
468.185. (1) Pursuant to the procedures for a contested case
under ORS chapter 183, the Environmental Quality Commission may
order the revocation of the certification issued under ORS
468.170 of any { - pollution control or solid waste, hazardous
wastes or used oil facility, - } { + environmental
investment + } if it finds that:
(a) The certification was obtained by fraud or
misrepresentation; or
(b) The { + certificate + } holder { - of the
certificate - } has failed substantially to { - operate the
facility - } { + utilize the environmental investment + } for
the purpose of, and to the extent necessary { - for,
preventing, controlling or reducing air, water or noise pollution
or solid waste, hazardous wastes or used oil as specified in such
certificate - } { + to provide, the environmental benefit + }.
(2) As soon as the order of revocation under this section has
become final, the commission shall notify the Department of
Revenue and the county assessor of the county in which the
{ - facility - } { + environmental investment + } is located
of such order.
(3) If the { + commission orders the revocation of the
environmental investment + } certification { - of a pollution
control or solid waste, hazardous wastes or used oil facility is
ordered revoked - } pursuant to subsection (1)(a) of this
section, all prior tax relief provided to the
{ + certificate + } holder { - of such certificate - } by
virtue of such certificate shall be forfeited and the Department
of Revenue or the proper county officers shall proceed to collect
those taxes not paid by the certificate holder as a result of the
tax relief provided to the { + certificate + } holder under any
provision of ORS 307.405 and 315.304.
(4) Except as provided in subsection (5) of this section, if
the { + commission orders the revocation of the environmental
investment + } certification { - of a pollution control or
solid waste, hazardous wastes or used oil facility is ordered
revoked - } pursuant to subsection (1)(b) of this section, the
certificate holder shall be denied any further relief provided
under ORS 307.405 or 315.304 in connection with such
{ - facility - } { + investment + }, as the case may be, from
and after the date that the order of revocation becomes final.
(5) The commission may reinstate a tax credit certification
revoked under subsection (1)(b) of this section if the commission
finds the { - facility - } { + investment + } has been
brought into compliance. If the commission reinstates
certification under this subsection, the commission shall notify
the Department of Revenue or the county assessor of the county in
which the { - facility - } { + investment + } is located that
the tax credit certification is reinstated for the remaining
period of the tax credit, less the period of revocation as
determined by the commission.
SECTION 8. ORS 468.190 is amended to read:
468.190. (1) { - Subject to subsections (2), (3) and (4) of
this section, in establishing the portion of costs properly
allocable to the prevention, control or reduction of air, water
or noise pollution or solid or hazardous waste or to recycling or
appropriately disposing of used oil for facilities qualifying - }
{ + In establishing the appropriate costs of an environmental
investment + } for certification under ORS 468.170, the
Environmental Quality Commission { - shall - } { + may + }
consider the following factors:
(a) { - If applicable, - } The extent to which the
{ - facility is used to recover and convert waste products into
a salable or usable commodity. - } { + environmental investment
is or would be used to provide an environmental benefit;
(b) The pro rata portion of time the investment is or would be
used to achieve the environmental benefit as compared to the
entire time the investment is used for any purpose; + }
{ - (b) The estimated annual percent return on the investment
in the facility. - }
(c) { - If applicable, the - } { + Any + } alternative
methods, equipment and costs for achieving the same
{ - pollution control objective. - } { + environmental benefit;
(d) The estimated annual percentage return on the environmental
investment; + }
{ - (d) - } { + (e) + } Any related savings or increase in
costs { - which - } { + that + } occur or may occur as a
{ + direct + } result of the { - installation of the
facility. - } { + environmental investment; and + }
{ - (e) - } { + (f) + } Any other { + relevant + } factors
{ - which are relevant in establishing the portion of the actual
cost of the facility properly allocable to the prevention,
control or reduction of air, water or noise pollution or solid or
hazardous waste or to recycling or appropriately disposing of
used oil - } { + used to establish the appropriate costs of the
investment that achieve the environmental benefit + }.
{ + (2) For environmental enhancements, the commission shall:
(a) Consider the information provided in the licensed
engineer's statement to determine the appropriate cost of the
environmental enhancement portion of a control, excluding any
costs associated with the base or nonpoint source pollution
portion of the control; and
(b) Allocate a portion of the total costs of an environmental
enhancement defined in ORS 468.155 to the pro rata portion of
time the control was completed in advance of the time the law
requires the control as compared to the useful life of the
control.
(3) For environmental management systems, the commission shall
consider all costs directly incurred in the development of the
environmental management system, including costs associated with
internal staff and contractors that developed the system.
(4) For environmental process improvements, the commission
shall consider costs directly incurred in the implementation of a
system described in the applicant's environmental management
system, including costs associated with internal staff and
contractors that implemented the system. + }
{ - (2) - } { + (5) + } { - The portion of actual costs
properly allocable shall be from zero to 100 percent in
increments of one percent. If zero percent - } { + If the
costs, determined under this section, of the investment that
achieves the environmental benefit is less than $1 + }, the
commission shall issue an order denying certification.
{ - (3) - } { + (6) + } If the cost of the { - facility
(or facilities - } { + investment (or investments + } certified
under one certificate) does not exceed $50,000, the portion of
the actual costs properly allocable shall be { - in the
proportion that the ratio - } { + the pro rata portion + } of
the time the { - facility is used for prevention, control or
reduction of air, water or noise pollution or solid or hazardous
waste or to recycling or appropriately disposing of used oil
bears - } { + investment is used to achieve the environmental
benefit as compared + }to the entire time the { - facility - }
{ + investment + } is used for any purpose.
{ + (7) The cost of the environmental investment determined
under this section shall not exceed the applicant's own cash
outlay for the investment. + }
{ - (4) - } { + (8) + } In the case of a business described
in ORS 315.304 (4)(a)(C) { - (i) - } , the { - Environmental
Quality - } commission shall consider the factors listed in
{ - subsection (1) - } { + subsections (1) to (4) + } of this
section as if the person operating the { - facility - }
{ + environmental investment + } or conducting the trade or
business that utilizes property requiring such { - a
facility - } { + an investment + } were the applicant for the
credit, regardless of whether the person is the { + contract
purchaser, + } lessee or lessor of the facility.
{ - (5) - } { + (9) + } The commission may adopt rules
establishing { + :
(a) The costs allocable to the environmental investment; and
(b) + } Methods to be used to determine the portion of costs
properly allocable to { + achieving + } the { - prevention,
control or reduction of air, water or noise pollution or solid or
hazardous waste or to recycling or appropriately disposing of
used oil. - } { + environmental benefit.
(10) The cost of the environmental investment may not include
any costs that the commission has identified by rule as
ineligible or any of the following:
(a) Air conditioners;
(b) Septic tanks or other facilities for human waste;
(c) Property installed, constructed or used for moving sewage
to the collecting facilities of a public or quasi-public sewerage
system;
(d) Controls of less than 100 total horsepower for chipping or
shredding of wood waste;
(e) Any distinct portion of an environmental investment that
makes an insignificant contribution to an environmental benefit,
including the following specific items:
(A) Office buildings and furnishings;
(B) Parking lots and road improvements;
(C) Landscaping;
(D) External lighting;
(E) Company or related signs; and
(F) Automobiles;
(f) Replacement or reconstruction of all or a part of any
environmental investment for which a certificate has previously
been issued under ORS 468.170, except:
(A) If such costs would otherwise be eligible costs, the extent
to which the cost to replace or reconstruct the investment is
greater than the like-for-like replacement cost of the original
investment, then the investment may be eligible for tax credit
certification up to an amount equal to the difference between the
cost of the new investment and the like-for-like replacement cost
of the original investment; or
(B) If an investment is replaced or reconstructed before the
end of the certificate life, then the investment may be eligible
for the remainder of the tax credit certified to the original
investment;
(g) Asbestos abatement;
(h) Property installed, constructed or used for cleanup of
emergency spills or unauthorized releases, as defined by the
commission by rule;
(i) Cleanup of land or the sediment of the watercourses of this
state;
(j) For environmental enhancements, the costs for corrective
actions required under a permit or order issued by this state or
by the federal government; or
(k) Any portion of a material recovery process:
(A) In which the major purpose is the production of fuel from
solid waste, hazardous waste or used oil that can be utilized for
heat content or other forms of energy; or
(B) That burns waste to produce energy or to reduce the amount
of waste. However, this subsection does not eliminate from
eligibility a control associated with a process that burns
waste. + }
SECTION 9. { + Sections 10 and 11 of this 2007 Act are added
to and made a part of ORS 468.155 to 468.190. + }
SECTION 10. { + (1) For the purpose of defraying the costs of
rulemaking and other administrative functions attributable to
changes that result from this 2007 Act, the applicant shall pay a
program development fee with an application for certification
under ORS 468.170. The fee shall:
(a) Apply to environmental investments commenced after December
31, 2007;
(b) Be payable at the time of application and in addition to
the application fee required under ORS 468.165;
(c) Equal one percent of the claimed environmental investments
cost claimed on the application;
(d) Be payable to the Department of Environmental Quality; and
(e) Be nonrefundable.
(2) The department shall discontinue charging the program
development fee when the state has paid all costs associated with
rulemaking and other administrative changes needed to implement
this 2007 Act. + }
SECTION 11. { + (1) On or before March 15 of each year in
which a taxpayer claims a tax credit under ORS 468.170 for an
environmental investment that is a base pollution control, a
nonpoint source pollution control or an environmental enhancement
for the preceding tax year, the person that owns the control or
enhancement shall provide a report to the Department of
Environmental Quality, on a form prescribed by the department,
that:
(a) Attests to the continued use of the control or enhancement
and the continued environmental benefit arising from the use of
the control or enhancement; and
(b) Identifies and quantifies the environmental and other
benefits of the control or enhancement.
(2) In the case of a property owner that claims an exemption
for a base pollution control under ORS 307.405, the property
owner shall submit the report described in subsection (1) of this
section on or before September 15 of the tax year.
(3) If the owner of the control fails to file a report by the
date prescribed in this section, the Environmental Quality
Commission may order revocation of the certification under ORS
468.185.
(4) The commission shall prepare and make available a written
report to the Legislative Assembly each biennium that summarizes
the information reported by control owners under this
section. + }
SECTION 12. ORS 315.304 is amended to read:
315.304. (1) A credit against taxes imposed by ORS chapter 316
(or, if the taxpayer is a corporation, under ORS chapter 317 or
318) for { - a pollution control facility or facilities - }
{ + an environmental investment + } certified under ORS 468.170
shall be allowed if the taxpayer qualifies under subsection (4)
of this section.
(2) For { - a facility - } { + an investment + } certified
under ORS 468.170, the maximum credit allowed in any one tax year
shall be the lesser of the tax liability of the taxpayer or the
{ - applicable percentage of the certified cost of the
facility - } { + amount of the tax credit + }, as determined
under ORS { - 468.173 or 468.183, multiplied by the certified
percentage allocable to pollution control, - } { + 468.170, + }
divided by the number of years of the
{ - facility's - } { + investment's + } useful life. The
number of years of the
{ - facility's - } { + investment's + } useful life used in
this calculation shall be the remaining number of years of useful
life at the time the { - facility - } { + investment + }is
certified but not less than one year nor more than 10 years
{ + for a base pollution control, nonpoint source pollution
control, environmental enhancement or environmental improvement
process. In the case of an environmental improvement process, the
useful life of the investment shall be equivalent to the useful
life of the tangible machinery or equipment most closely
associated with the process change, but may not exceed 10 years.
In the case of an investment that is an environmental management
system, the useful life of the investment shall be deemed to be
one year + }.
(3) To qualify for the credit the { - pollution control
facility - } { + environmental investment + } must be
{ - erected, - } constructed or installed in accordance with
the provisions of ORS { - 468.165 (1) - } { + 468.173 + } and
must be certified for tax relief under ORS 468.155 to 468.190.
(4) To qualify for a tax credit under this section:
(a) The taxpayer who is allowed the credit must be:
(A) The owner, including a contract purchaser, of the trade or
business that utilizes Oregon property { - requiring a
pollution control facility to prevent or minimize pollution - }
{ + implementing an environmental investment to provide an
environmental benefit + };
(B) A person who, as a lessee or pursuant to an agreement,
conducts the trade or business that operates or utilizes such
property; or
(C) A person who, as an owner, including a contract purchaser,
or lessee, owns or leases { - a pollution control facility - }
{ + an environmental investment + } that is used:
(i) In a business that is engaged in a production activity
described in 40 C.F.R. 430.20 (as of July 1, 1998); or
(ii) For recycling, material recovery or energy recovery as
defined in ORS 459.005; and
(b) The { - facility - } { + investment + } must be owned
or leased during the tax year by the taxpayer claiming the credit
and must have been in use and operation during the tax year for
which the credit is claimed.
{ - (5) Regardless of when the facility is erected,
constructed or installed, a credit under this section may be
claimed by a taxpayer: - }
{ - (a) For a facility qualifying under ORS 468.165 (1)(a) or
(b), only in those tax years which begin on or after January 1,
1967. - }
{ - (b) For a facility qualifying under ORS 468.165 (1)(c),
in those tax years which begin on or after January 1, 1973. - }
{ - (c) For a facility qualifying under ORS 468.165 (1)(d),
in those tax years which begin on or after January 1, 1984. - }
{ - (6) - } { + (5) + } { - For a facility - } { + For
an investment + } certified under ORS 468.170, the maximum total
credit allowable { - shall not exceed one-half of the certified
cost of the facility multiplied by the certified percentage
allocable to pollution control - } { + may not exceed the
amount of the tax credit determined under ORS 468.170 (8) + }.
{ - (7) - } { + (6) + } The credit provided by this section
is not in lieu of any depreciation or amortization deduction for
the { - facility - } { + investment + } to which the taxpayer
otherwise may be entitled under ORS chapter 316, 317 or 318 for
such year.
{ - (8) - } { + (7) + } Upon any sale, exchange or other
disposition of { - a facility - } { + an investment + },
notice thereof shall be given to the Environmental Quality
Commission { - who - } { + , which + } shall revoke the
certification covering such { - facility - }
{ + investment + } as of the date of such disposition.
Notwithstanding ORS 468.170 (4)(c), the transferee may apply for
a new certificate under ORS 468.170, but the tax credit available
to such transferee shall be limited to the amount of credit not
claimed by the transferor. The sale, exchange or other
disposition of shares in an S corporation as defined in section
1361 of the Internal Revenue Code or of a partner's interest in a
partnership shall not be deemed a sale, exchange or other
disposition of { - a facility - } { + an investment + } for
purposes of this subsection.
{ - (9) - } { + (8) + } 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 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, 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 ORS 468.170.
{ - (10) - } { + (9) + } The taxpayer's adjusted basis for
determining gain or loss shall not be further decreased by any
tax credits allowed under this section.
{ - (11) - } { + (10) + } A person described in subsection
(4)(a)(C) of this section may, but need not, operate the
{ - facility - } { + investment + } or conduct a trade or
business that utilizes property requiring the { - facility - }
{ + investment + }. If more than one person has an interest
under subsection (4)(a) { - (C) - } of this section in the
{ - facility - } { + investment + }, only one person may claim
the credit allowed under this section. { - However, portions of
the facility may be certified separately in the same manner as
provided in ORS 468.170 (8) if ownership of the portions is in
more than one person. - } The person claiming the credit as
between an owner, including a contract purchaser, and lessee
under this subsection shall be designated in a written statement
signed by both the lessor and lessee of the
{ - facility - } { + investment + }. This statement shall be
filed with the Department of Revenue not later than the final day
of the first tax year for which a tax credit is claimed.
{ - (12)(a) - } { + (11)(a) + } A taxpayer may not be
allowed a tax credit under this section for any tax year during
which the taxpayer is convicted of a felony under ORS 468.922 to
468.956 that is related to the { - facility - }
{ + investment + } for which the tax credit would otherwise be
claimed, or for the four tax years succeeding the tax year during
which the taxpayer is convicted.
(b) The amount of any tax credit that is otherwise allowable
under this section but for paragraph (a) of this subsection shall
be considered to be claimed by the taxpayer for purposes of
determining the amount of tax credit that may be claimed in a tax
year in which paragraph (a) of this subsection permits the
taxpayer to claim the credit.
SECTION 13. { + Section 14 of this 2007 Act is added to and
made a part of ORS chapter 315. + }
SECTION 14. { + (1) The owner of an environmental enhancement
for which a certificate has been issued under ORS 468.170 that
has not claimed any tax credit under ORS 315.304 may transfer the
environmental enhancement certificate to a taxpayer subject to
tax under ORS chapter 316, 317 or 318.
(2) In order to transfer an environmental enhancement
certificate, the owner of the control and the taxpayer that will
claim the credit shall jointly file a notice of tax credit
transfer with the Department of Revenue on a form prescribed by
the department and containing information prescribed by the
department. + }
SECTION 15. { + Section 14 of this 2007 Act and the amendments
to ORS 315.304 by section 12 of this 2007 Act apply to tax years
beginning on or after January 1, 2008. + }
SECTION 16. ORS 307.405 is amended to read:
307.405. (1) { - A pollution control facility or facilities
which have been constructed in accordance with the requirements
of ORS 468.165 (1), and - } { + An environmental investment or
investments that + } have been certified by the Environmental
Quality Commission pursuant to ORS 468.170 are exempt to the
{ - extent of the highest percentage figure - } { + amount of
the tax credit + } certified by the Environmental Quality
Commission { - as the portion of the actual cost properly
allocable to the prevention, control or reduction of
pollution - } . The exemption shall be allowed only if the
taxpayer is a corporation organized under ORS chapter 62 or 65,
or any predecessor to ORS chapter 62 relating to incorporation of
cooperative associations, or is a subsequent transferee of such a
corporation. If the subsequent transferee is organized under
other than ORS chapter 62 or 65, the exemption shall only be
allowed if the transfer occurs after the expiration of five years
from the date of original certification by the commission.
(2) To qualify for the ad valorem tax relief:
(a) The { - pollution control facility - } { +
environmental investment + } must be erected, constructed or
installed in connection with the trade or business conducted by
the taxpayer on Oregon property owned or leased by said taxpayer.
(b) The taxpayer must be the owner of the trade or business
that utilizes Oregon property requiring { - a pollution control
facility - } { + an environmental investment + } to
{ - prevent or minimize pollution - } { + provide an
environmental benefit + } or a person who, as a lessee under a
written lease or pursuant to a written agreement, conducts the
trade or business that operates or utilizes such property and who
by the terms of such lease or agreement is obliged to pay the ad
valorem taxes on such property. As used in this subsection,
'owner' includes a contract purchaser.
(3) The ad valorem exemption of { - a facility - } { + an
investment + } shall expire, in any event, 20 years from the date
of its first certification for any owner or lessee by the
Environmental Quality Commission.
(4) Upon any sale, exchange { - , - } or other disposition of
{ - a facility - } { + an environmental investment or the
trade or business that implemented the investment + }, notice
thereof shall be given to the Environmental Quality Commission
{ - who - } { + , which + } shall revoke the certification
covering such { - facility - } { + investment + } as of the
date of such disposition. The transferee may apply for a new
certificate under ORS 468.170, but the number of years of ad
valorem tax exemption that may be claimed by the transferee is
the remainder of the exemption period specified in subsection (3)
of this section.
(5) If the { - facility - } { + investment + } also
functions to prevent pollution from operations conducted on other
property owned or leased by the taxpayer { + , + } the
Environmental Quality Commission shall state in its certification
of the { - facility - } { + investment + } the percentage of
the { - facility - } { + investment + } used to prevent
pollution from such qualifying trade or business conducted on
such qualifying property. The exemption from ad valorem taxes
under this section shall be limited to such percentage of the
value of the { - facility - } { + investment + }.
SECTION 17. ORS 314.255 is amended to read:
314.255. (1) Upon receipt of notice of the revocation of a
certification of a pollution control facility { + or
environmental investment + } pursuant to ORS 468.185 (1), the
Department of Revenue immediately shall collect any taxes due by
reason of such revocation, and shall have the benefit of all laws
of this state pertaining to the collection of income and excise
taxes. No assessment of such taxes shall be necessary and no
statute of limitation shall preclude the collection of such
taxes.
(2) No tax relief shall be allowed under ORS 307.405 or 315.304
for any { - pollution control facility - } { + environmental
investment + } constructed or used by or for the benefit of any
governmental or quasi-governmental body or public corporation or
form thereof, except where such { - facilities are - } { +
investment is + } used for resource recovery.
SECTION 18. ORS 314.752 is amended to read:
314.752. (1) Except as provided in ORS 314.740 (5)(b), the tax
credits allowed or allowable to a C corporation for purposes of
ORS chapter 317 or 318 shall not be allowed to an S corporation.
The business tax credits allowed or allowable for purposes of ORS
chapter 316 shall be allowed or are allowable to the shareholders
of the S corporation.
(2) In determining the tax imposed under ORS chapter 316, as
provided under ORS 314.734, on income of the shareholder of an S
corporation, there shall be taken into account the shareholder's
pro rata share of business tax credit (or item thereof) that
would be allowed to the corporation (but for subsection (1) of
this section) or recapture or recovery thereof. The credit (or
item thereof), recapture or recovery shall be passed through to
shareholders in pro rata shares as determined in the manner
prescribed under section 1377(a) of the Internal Revenue Code.
(3) The character of any item included in a shareholder's pro
rata share under subsection (2) of this section shall be
determined as if such item were realized directly from the source
from which realized by the corporation, or incurred in the same
manner as incurred by the corporation.
(4) If the shareholder is a nonresident and there is a
requirement applicable for the business tax credit that in the
case of a nonresident the credit be allowed in the proportion
provided in ORS 316.117, then that provision shall apply to the
nonresident shareholder.
(5) As used in this section, 'business tax credit' means a tax
credit granted to personal income taxpayers to encourage certain
investment, to create employment, economic opportunity or
incentive or for charitable, educational, scientific, literary or
public purposes that is listed under this subsection as a
business tax credit or is designated as a business tax credit by
law or by the Department of Revenue by rule and includes but is
not limited to the following credits: ORS 285C.309 (tribal taxes
on reservation enterprise zones), ORS 315.104 (forestation and
reforestation), ORS 315.134 (fish habitat improvement), ORS
315.138 (fish screening, by-pass devices, fishways), ORS 315.156
(crop gleaning), ORS 315.164 and 315.169 (farmworker housing),
ORS 315.204 (dependent care assistance), ORS 315.208 (dependent
care facilities), ORS 315.213 (contributions for child care), ORS
315.254 (youth apprenticeship sponsorship), ORS 315.304
{ - (pollution control facility) - } { + (environmental
investment) + }, ORS 315.324 (plastics recycling), ORS 315.354
and ORS 469.207 (energy conservation facilities), ORS 315.507
(electronic commerce), ORS 315.511 (advanced telecommunications
facilities), ORS 315.604 (bone marrow transplant expenses) and
ORS 317.115 (fueling stations necessary to operate an alternative
fuel vehicle).
SECTION 19. ORS 315.324 is amended to read:
315.324. (1) A credit against taxes imposed by ORS chapter 316
(or, if the taxpayer is a corporation, under ORS chapter 317) for
the investments certified under ORS 468.466 shall be allowed if
the taxpayer qualifies under subsection (4) of this section.
(2) A taxpayer shall be allowed a tax credit under this section
each year for five tax years beginning in the tax year the
investment receives final certification under ORS 468.466. The
maximum credit allowed in any one tax year shall be the lesser of
the tax liability of the taxpayer or 10 percent of the certified
cost of the taxpayer's investment.
(3) To qualify for the credit the investment must be made in
accordance with the provisions of ORS 468.461.
(4)(a) The taxpayer who is allowed the credit must be:
(A) The owner of the business that collects, transports or
processes reclaimed plastic or manufactures a reclaimed plastic
product;
(B) A person who, as a lessee or pursuant to an agreement,
conducts the business that collects, transports or processes
reclaimed plastic or manufactures a reclaimed plastic product; or
(C) A person who, as an owner, lessee or pursuant to an
agreement, owns, leases or has a beneficial interest in a
business that collects, transports or processes reclaimed plastic
or manufactures a reclaimed plastic product. Such person may, but
need not, operate or conduct such a business that collects,
transports or processes reclaimed plastic or manufactures a
reclaimed plastic product. If more than one person has an
interest under this subparagraph in a qualifying business and one
or more persons receive a certificate, such person or persons may
allocate all or any part of the certified investment cost among
any persons and their successors or assigns having an interest
under this subparagraph. Such allocation shall be evidenced by a
written statement signed by the person or persons receiving the
certificate and designating the persons to whom the certified
investment costs have been allocated and the amount of certified
investment cost allocated to each. This statement shall be filed
with the Department of Revenue not later than the final day of
the first tax year for which a tax credit is claimed pursuant to
such agreement. In no event shall the aggregate certified
investment costs allocated between or among more than one person
exceed the amount of the total certified cost of the investment.
As used in this paragraph, 'owner' includes a contract purchaser;
(b) The business must be owned or leased during the tax year by
the taxpayer claiming the credit, except as otherwise provided in
paragraph (a)(C) of this subsection, and must have been
collecting, transporting or processing reclaimed plastic or
manufacturing a reclaimed plastic product during the tax year for
which the credit is claimed; and
(c) The reclaimed plastic collected, transported, processed or
used to manufacture the reclaimed plastic product must not be an
industrial waste generated by the person claiming the tax credit,
but must be purchased from a plastic recycler other than the
person claiming the tax credit.
(5) The credit provided by this section is not in lieu of any
depreciation or amortization deduction for the investment to
which the taxpayer otherwise may be entitled under ORS chapter
316 or 317 for such year.
(6) Upon any sale, exchange, or other disposition of a
qualifying business, notice thereof shall be given to the
Environmental Quality Commission { - who - } { + , which + }
shall revoke the certification covering the investment of such
business as of the date of such disposition. Notwithstanding ORS
468.461 (6), the transferee may apply for a new certificate under
ORS 468.466, but the tax credit available to such transferee
shall be limited to the amount of credit not claimed by the
transferor. The sale, exchange or other disposition of shares in
an S corporation as defined in section 1361 of the Internal
Revenue Code or of a partner's interest in a partnership shall
not be deemed a sale, exchange or other disposition of a business
for purposes of this subsection.
(7) Any tax credit otherwise allowable under this section which
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
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. Credits may be carried forward to and used
in a tax year beyond the years specified in ORS 468.461.
(8) The taxpayer's adjusted basis for determining gain or loss
shall not be further decreased by any tax credits allowed under
this section.
(9) A nonresident shall be allowed the credit under this
section in the proportion provided in ORS 316.117.
(10) 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.
(11) If a change in the taxable year of a taxpayer occurs as
described in ORS 314.085, or if the department terminates the
taxpayer's taxable year under ORS 314.440, the credit allowed
under this section shall be prorated or computed in a manner
consistent with ORS 314.085.
(12) No credit shall be allowed under this section and under
ORS 468.451 to 468.491 for any portion of a facility { + ,
control or environmental investment + } for which the taxpayer
claims a tax credit or ad valorem tax relief under ORS 307.405,
315.304, 315.354, 315.356 and 469.185 to 469.225 or 316.116.
SECTION 20. ORS 315.356 is amended to read:
315.356. (1) If a taxpayer obtains a grant or tax credit from
the federal government other than an investment tax credit or a
low income housing tax credit in connection with a facility which
has been certified by the 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 taxpayer would be entitled to under ORS 315.354 and 469.185
to 469.225 after any such reduction shall not be reduced by such
federal grants or tax credits. A taxpayer applying for a federal
grant or credit shall notify the Department of Revenue by
certified mail within 30 days after each application, and after
the receipt of any grant.
(2) 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 tax
relief on { - a pollution control facility - } { + an
environmental investment + } 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 - } { + investment + } 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 - }
{ + investment + } or device under ORS 315.324.
SECTION 21. { + ORS 468.150, 468.163, 468.172 and 468.180 are
repealed. + }
SECTION 22. ORS 468A.096 is amended to read:
468A.096. (1) Any person may apply for certification under ORS
468A.098 of the cost of production technologies or processes
installed at a business location within this state and producing
emission levels and types not subject to regulation under 42
U.S.C. 7412 if:
(a) The technologies or processes are installed in replacement
of technologies or processes that produce emission levels and
types that are subject to or are installed in lieu of systems
that would produce emission levels and types subject to
regulation under:
(A) 40 C.F.R. 63.320 to 63.325 (national perchloroethylene air
emission standards for dry cleaning facilities);
(B) 40 C.F.R. 63.340 to 63.347 (national emission standards for
chromium emissions from hard and decorative chromium anodizing
tanks); or
(C) 40 C.F.R. 63.460 to 63.469 (national emission standards for
halogenated solvent cleaning);
(b) The technologies or processes are installed on or after
January 1, 1996, and on or before December 31, 1999; and
(c) The cost of the technologies and processes does not qualify
for certification under ORS { - 468.165 and - } 468.170.
Subject to any applicable limits on credit amounts, the granting
of certification of { - a pollution control facility - } { +
an environmental investment + } under ORS { - 468.165 and - }
468.170 shall not prevent an application under this section for
the cost of technologies and processes not included in the
{ - pollution control facility - } { + environmental
investment + }.
(2) The application shall be made in writing in a form
prescribed by the Department of Environmental Quality and shall
contain information on the actual cost of the technologies or
processes for which a certificate is sought and a statement
explaining how the technologies or processes used will prevent or
eliminate emissions regulated under 40 C.F.R. 63.320 to 63.325,
63.340 to 63.347 or 63.460 to 63.469.
(3) The Director of the Department of Environmental Quality may
require any further information that the director considers
necessary before a certificate is issued.
(4) The application shall be accompanied by a fee established
under subsection (5) of this section. The fee may be refunded if
the application for certification is rejected.
(5) By rule and after hearing, the Environmental Quality
Commission may adopt a schedule of reasonable fees that the
department may require of applicants for certificates issued
under this section. Before the adoption or revision of the fees,
the commission shall estimate the total cost of the program to
the department. The fees shall be based on the anticipated cost
of filing, investigating, granting and rejecting the applications
and shall be designed not to exceed the total cost estimated by
the commission. Any excess fees shall be held by the department
and shall be used by the commission to reduce any future fee
increases. The fees may vary according to the complexity of the
technology or process. The fees shall not be considered by the
commission as part of the cost to be certified.
(6) The application shall be submitted within one year of
installation of the technologies or processes. Failure to file a
timely application shall make the cost of a technology or process
ineligible for certification. An application shall not be
considered filed until it is complete and ready for processing.
The commission may grant an extension of time, not exceeding one
year, to file an application when circumstances beyond the
control of the applicant would make a timely filing unreasonable.
SECTION 23. { + Section 24 of this 2007 Act is added to and
made a part of ORS 468.155 to 468.190. + }
SECTION 24. { + (1) In addition to the application fee
required under ORS 468.165, an applicant for certification of an
environmental investment under ORS 468.170 must pay to the
Department of Environmental Quality a surcharge equal to 1.5
percent of the appropriate cost of the investment determined
under ORS 468.190.
(2) All moneys collected under subsection (1) of this section
shall be deposited in the Ground Water Protection Account
established under section 25 of this 2007 Act. + }
SECTION 25. { + (1) The Ground Water Protection Account is
established in the State Treasury, separate and distinct from the
General Fund. Interest earned by the Ground Water Protection
Account shall be credited to the account.
(2) Moneys in the Ground Water Protection Account are
continuously appropriated to the Department of Environmental
Quality for the purpose of funding ground water protection
programs. + }
SECTION 26. Section 3, chapter 928, Oregon Laws 2001, is
amended to read:
{ + Sec. 3. + } (1) Notwithstanding ORS 315.304 { - (9) - }
{ + (8) + }, in the case of a pollution control facility { +
or environmental investment + } for which unexpired tax credits
exist as of the tax year of the taxpayer that begins in the 2001
calendar year, if the facility { + or investment + } is in use
and operation during the tax year immediately following the third
succeeding tax year described in ORS 315.304
{ - (9) - } { + (8) + }, any credit under ORS 315.304
remaining unused may be carried forward to that fourth succeeding
tax year. If the facility { + or investment + } is in use and
operation during the tax year immediately following the fourth
succeeding tax year, any credit under ORS 315.304 remaining
unused may be carried forward to that fifth succeeding tax year.
If the facility { + or investment + }is in use and operation
during the tax year immediately following the fifth succeeding
tax year, any credit under ORS 315.304 remaining unused may be
carried forward to that sixth succeeding tax year, but may not be
carried forward to any tax year thereafter.
(2) For purposes of this section, unexpired tax credits include
credits claimed pursuant to ORS 315.304 (2) and credits carried
over from previous tax years pursuant to ORS 315.304
{ - (9) - } { + (8) + }.
SECTION 27. ORS 307.430 is amended to read:
307.430. (1) Upon receipt of notice of the revocation of a
certification of a pollution control facility { + or an
environmental investment + } pursuant to ORS 468.185 (1)(a), the
county assessor shall proceed to correct the assessment and tax
roll or rolls from which the facility { + or investment + } was
omitted from taxation, in the manner provided in ORS 311.216 to
311.232, and in all cases shall add interest in the manner
provided in ORS 311.229. The five-year limitation provided for in
ORS 311.205 shall not apply to such corrections.
(2) Upon receipt of notice of the revocation of a certification
of a pollution control facility { + or an environmental
investment + } pursuant to ORS 468.185 (1)(b), if the final
revocation occurs before September 15 of any assessment year, the
exemption otherwise allowable shall terminate and not be allowed
beginning with the assessment and tax rolls prepared as of
January 1 of the assessment year.
SECTION 28. ORS 465.015 is amended to read:
465.015. (1) Except as provided in subsection (2) of this
section, a person shall, within 120 days after notification in
writing by the Department of Environmental Quality that the
person meets the definition of a toxics user, complete a toxics
use reduction and hazardous waste reduction plan. At a minimum, a
plan shall include:
(a) A written policy articulating organizational support for
the toxics use reduction and hazardous waste reduction plan and a
commitment by the organization to implement plan goals.
(b) A description of its scope and objectives, including the
evaluation of technologies, procedures and personnel training
programs to ensure unnecessary toxic substances are not used and
unnecessary waste is not generated.
(c) Internal analysis and periodic assessment of individual
processes for toxics use and hazardous waste generation.
(d) Identification of opportunities to reduce or eliminate
toxics use and hazardous waste generation.
(e) Employee awareness and training programs that involve
employees in toxics use reduction and hazardous waste reduction
planning and implementation.
(f) Institutionalization of the plan by incorporating the plan
into management practices and procedures.
(2) A person is not required to complete a plan if the person
has implemented an environmental management system, as defined in
ORS { - 468.172 - } { + 468.155 + }.
(3) A toxics user shall incorporate into the plan and
associated decision-making process, the costs of using toxic
substances and generating hazardous waste. The costs may
represent, among other things, the costs of management, liability
insurance, regulatory compliance and oversight.
(4) As part of each plan, a toxics user shall evaluate
technically and economically practicable toxics use reduction and
hazardous waste reduction opportunities for:
(a) Any toxic substance for which the toxics user reports as a
large user; and
(b) Any hazardous waste representing 10 percent or more by
weight of the cumulative hazardous waste stream generated per
year.
(5) A toxics user shall explain the rationale for each toxics
use reduction and waste reduction opportunity specified in the
plan, including any impediments, such as technical or economic
barriers, to toxics use reduction and hazardous waste reduction.
(6) A toxics use reduction and hazardous waste reduction plan
developed under this section or the documentation for an
environmental management system shall be retained at the
facility. To the extent that a plan or system may be considered
a public record under ORS 192.410, the information contained in
the plan or system is confidential and is exempt from public
disclosure pursuant to ORS 192.502.
(7) It is the policy of this state that plans developed under
this section be kept current and that the plans reflect changes
in toxics use over time. In furtherance of this policy, a toxics
user may update its plan or modify its environmental management
system to reflect any changes.
SECTION 29. ORS 468.160 is amended to read:
468.160. In the interest of the public peace, health and
safety, it is the policy of the State of Oregon to assist in the
prevention, control and reduction of air { - , water and
noise - } { + and water + } pollution and solid waste,
hazardous wastes and used oil in this state by providing tax
relief with respect to Oregon facilities constructed to
accomplish such prevention, control and reduction.
SECTION 30. ORS 468A.020 is amended to read:
468A.020. (1) Except as provided in this section and in ORS
476.380 and 478.960, the air pollution laws contained in ORS
chapters 468, 468A and 468B do not apply to:
(a) Agricultural operations and the growing or harvesting of
crops and the raising of fowls or animals, except field burning
which shall be subject to regulation pursuant to ORS 468.140,
{ - 468.150, - } 468A.555 to 468A.620 and 468A.992 and this
section;
(b) Use of equipment in agricultural operations in the growth
of crops or the raising of fowls or animals, except field burning
which shall be subject to regulation pursuant to ORS 468.140,
{ - 468.150, - } 468A.555 to 468A.620 and 468A.992 and this
section;
(c) Barbecue equipment used in connection with any residence;
(d) Agricultural land clearing operations or land grading;
(e) Heating equipment in or used in connection with residences
used exclusively as dwellings for not more than four families,
except woodstoves which shall be subject to regulation under this
section, ORS 468A.460 to 468A.480, 468A.490 and 468A.515;
(f) Fires set or permitted by any public agency when such fire
is set or permitted in the performance of its official duty for
the purpose of weed abatement, prevention or elimination of a
fire hazard, or instruction of employees in the methods of fire
fighting, which in the opinion of the agency is necessary;
(g) Fires set pursuant to permit for the purpose of instruction
of employees of private industrial concerns in methods of fire
fighting, or for civil defense instruction;
(h) The propagation and raising of nursery stock, except
boilers used in connection with the propagation and raising of
nursery stock;
(i) The propane flaming of mint stubble; or
(j) Stack or pile burning of residue from Christmas trees, as
defined in ORS 571.505, during the period beginning October 1 and
ending May 31 of the following year.
(2) As used in subsection (1) of this section, 'field burning'
does not include propane flaming of mint stubble.
SECTION 31. ORS 468A.605 is amended to read:
468A.605. The Department of Environmental Quality, in
coordinating efforts under ORS 468.140, { - 468.150, - }
468A.020, 468A.555 to 468A.620 and 468A.992, shall:
(1) Enforce all field burning rules adopted by the
Environmental Quality Commission and all related statutes; and
(2) Monitor and prevent unlawful field burning.
SECTION 32. { + 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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