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
House Bill 3500
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 as
introduced.
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.
Takes effect on 91st day following adjournment sine die.
A BILL FOR AN ACT
Relating to pollution control facilities; creating new
provisions; amending ORS 315.304, 468.155, 468.165, 468.170,
468.172, 468.173 and 468.190; and prescribing an effective
date.
Be It Enacted by the People of the State of Oregon:
SECTION 1. ORS 468.155 is amended to read:
468.155. (1)(a) As used in ORS 468.155 to 468.190, unless the
context requires otherwise, 'pollution control facility' or '
facility' 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:
(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:
(A) The disposal or elimination of or redesign to eliminate
industrial waste and the use of treatment works for industrial
waste as defined in ORS 468B.005;
(B) The disposal or elimination of or redesign to eliminate air
contaminants or air pollution or air contamination sources and
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) The use of a material recovery process which 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) The treatment, substantial reduction or elimination of or
redesign to treat, substantially reduce or eliminate hazardous
waste as defined in ORS 466.005.
(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 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.
{ + (4) As used in ORS 468.155 to 468.190, 'enhanced
pollution control facility' means a pollution control facility
that:
(a) Achieves greater pollution control, waste reduction or
waste recycling than is required by federal, state or local law;
(b) Provides for the segregation of used oil for disposal in
circumstances when the segregation of oil for disposal is not
otherwise required by federal, state or local law;
(c) Constitutes an environmental management system, as defined
in ORS 468.172; or
(d) Includes any portion of process improvements implemented as
a result of an environmental management system that provides:
(A) A direct, substantial increase in pollution control by
preventing, controlling or reducing a substantial quantity of
air, water or noise 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 is required by federal, state or local law.
(5) For purposes of subsection (4) of this section:
(a) An enhanced pollution control facility does not include the
cleanup of land or watercourses of this state.
(b) A pollution control facility may constitute an enhanced
pollution control facility because the facility is erected,
constructed or installed in advance of the time the facility is
required to be erected, constructed or installed by federal,
state or local law. The certified costs of a facility described
in this paragraph shall be subject to ORS 468.190 (8).
(c) The prevention, control or reduction required in order for
a facility to constitute an enhanced pollution control facility
must be accomplished by:
(A) The disposal, elimination or redesign of processes that
results in:
(i) A reduction in industrial waste, as defined in ORS
468B.005;
(ii) A reduction in air contaminants, air pollution or air
contamination sources, as defined in ORS 468A.005;
(iii) An increase in the use of air cleaning devices, as
defined in ORS 468A.005; or
(iv) A substantial reduction in noise pollution or noise
emission sources as defined by rules of the Environmental Quality
Commission; or
(B) The use of a material recovery process that obtains useful
material from material that would otherwise be:
(i) Solid waste, as defined in ORS 459.005;
(ii) Hazardous waste, as defined in ORS 466.005; or
(iii) Used oil, as defined in ORS 459A.555.
(d) 'Base pollution control certified costs' mean costs that
are determined under ORS 468.173 to be attributable to pollution
control facilities that do not constitute enhanced pollution
control facilities.
(e) 'Environmental enhancement certified costs' mean costs that
are determined under ORS 468.173 to be attributable to enhanced
pollution control and that do not include any base pollution
control certified costs. + }
SECTION 2. 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 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.
{ + (e) The facility is an enhanced pollution control
facility that was erected, constructed or installed on or after
January 1, 2006. + }
(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 facility, a
description of the materials incorporated therein, all machinery
and equipment made a part thereof, the 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. { + In the case of an enhanced pollution control
facility, the application shall also describe in quantitative
terms the extent to which the facility will constitute an
enhanced pollution control facility and the actual cost allocable
to costs that the applicant considers will be environmental
enhancement certified costs upon certification. An application
for an enhanced pollution control facility shall include an
engineering analysis, prepared by an engineer licensed under ORS
chapter 672, documenting the extent to which the facility will
achieve enhanced pollution control and the actual cost allocable
to the enhancement. + }
(3) The Director of the Department of Environmental Quality may
require any further information 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 commission may adopt a
schedule of reasonable fees which 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 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 fee may vary according to the size and complexity
of the facility. The fees may not be considered by the commission
as part of the cost of the facility to be certified.
(6) 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 - } { + 2014 + }.
SECTION 3. ORS 468.170 is amended to read:
468.170. (1) The Environmental Quality Commission shall act on
an application for certification before the 120th 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. Each
certificate shall bear a separate serial number for each such
facility. { + In the case of an application for an enhanced
environmental control facility, the certified costs shall be
comprised of the following two components:
(a) Base pollution control certified costs; and
(b) Environmental enhancement certified costs. + }
(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 than was claimed in the application for
certification { + , or lesser environmental enhancement certified
costs than was claimed in the application + }, 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 day after the
filing of the application.
(3) If the application is rejected for any reason, including
the information furnished by the applicant as to the cost of the
facility, 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 applicant
may appeal from the rejection 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,
for which an application has been made under ORS 468.165, if the
commission finds that the facility:
(A) Was erected, constructed or installed in accordance with
the requirements of ORS 468.165 (1);
(B) Is designed for, and is being operated or will operate in
accordance with the requirements of ORS 468.155; and
(C) Is necessary to satisfy 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.
(b) No determination of the proportion of the actual cost of
the facility to be certified shall be made until receipt of the
application.
(c) If one or more facilities constitute an operational unit,
the commission may certify such facilities under one certificate.
(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 - } { + 2013 + }, erection,
construction or installation of the facility is completed, the
facility is placed in service and the application for
certification is filed with the commission under ORS 468.165.
(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 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 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.
(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.
(9) A certificate issued under this section shall state the
applicable percentage of the certified cost of the facility, as
determined under ORS 468.173.
(10) If the { + erection, + } construction or installation of
a 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) { + or (4) + }. 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 4. ORS 468.172 is amended to read:
468.172. { + (1) + } As used in ORS 468.173, 'environmental
management system' means a { + systematic, documented + }
continual cycle of planning, implementing, reviewing and
improving the actions undertaken at the facility to meet
environmental obligations and improve environmental performance
that meet:
{ - (1) - } { + (a) + } The standards established by the
International Organization for Standardization under ISO 14001;
{ - (2) - } { + (b) + } The standards established in the
Green Permit program established under ORS 468.501 to 468.521; or
{ - (3) - } { + (c) + } Other standards that meet criteria
established by the Environmental Quality Commission by rule.
{ + (2) In order to qualify as an enhanced pollution control
facility, the environmental management system must include a
means to measure and report how much pollution is reduced or
prevented. + }
SECTION 5. ORS 468.173 is amended to read:
468.173. For purposes of ORS 315.304 { - , the applicable
percentage of the certified cost of a facility shall be one of
the following - } :
(1) { + The applicable percentage of the certified cost of a
facility shall be, + }if the 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) { + The applicable percentage of the certified cost of a
facility shall be, + }except as provided in subsection (1) or (3)
of this section, if the facility is certified pursuant to
application for certification filed on or after January 1,
2002 { + , and before January 1, 2007 + }, 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) { + The applicable percentage of the certified cost of a
facility shall be, + }if certified pursuant to application for
certification filed on or after January 1, 2002 { + , and before
January 1, 2007 + }, 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 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 certified pursuant to application for
certification filed on or after January 1, 2007, and if otherwise
qualified under subsection (3) of this section, the certified
cost for which a credit may be claimed is the sum of the base
pollution control certified costs and the environmental
enhancement certified costs, determined after application of the
following applicable percentages:
(a) The applicable percentage of base pollution control
certified costs, is:
(A) 20 percent, if certified prior to January 1, 2008;
(B) 15 percent, if certified prior to January 1, 2009;
(C) 10 percent, if certified prior to January 1, 2010;
(D) Five percent, if certified prior to January 1, 2011; and
(E) Zero percent, if certified on or after January 1, 2011.
(b) The applicable percentage of environmental enhancement
certified costs is:
(A) 25 percent, if certified prior to January 1, 2008;
(B) 30 percent, if certified prior to January 1, 2009;
(C) 35 percent, if certified prior to January 1, 2010;
(D) 40 percent, if certified prior to January 1, 2011; and
(E) 45 percent, if certified on or after January 1, 2011. + }
SECTION 6. 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 for
certification under ORS 468.170, the Environmental Quality
Commission shall 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.
(b) The estimated annual percent return on the investment in
the facility.
(c) If applicable, the alternative methods, equipment and costs
for achieving the same pollution control objective.
(d) Any related savings or increase in costs which occur or may
occur as a result of the installation of the facility.
(e) Any other 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.
(2) The portion of actual costs properly allocable shall be
from zero to 100 percent in increments of one percent. If zero
percent, the commission shall issue an order denying
certification.
(3) If the cost of the facility (or facilities 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 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 to the entire time the facility is used for any
purpose.
(4) 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) of this section as if the
person operating the facility or conducting the trade or business
that utilizes property requiring such a facility were the
applicant for the credit, regardless of whether the person is the
lessee or lessor of the facility.
{ + (5) In the case of an enhanced pollution control
facility, in addition to the other factors set forth in this
section, the commission shall consider the following factors:
(a) The actual costs of the facility as contrasted with the
costs that would be incurred in order to erect, construct or
install a facility that complied with but did not exceed existing
federal, state or local law, including but not limited to permit
limits existing at the time the costs are incurred and permit
limits that will become applicable during the useful life of the
facility.
(b) An engineering analysis of the portion of the facility and
the related costs that provide environmental benefits beyond what
is required by federal, state or local law.
(c) In the case of a facility that constitutes enhanced storm
water pollution control or other water pollution control where
permits do not apply, the application of permit benchmarks shall
establish the point of compliance with existing law.
(6) In considering the portion of costs properly allocable to
base control certified costs or environmental enhancement
certified costs, the commission shall exclude costs for
corrective actions required under a permit issued by this state
or by the federal government.
(7) In the case of an enhanced pollution control facility that
is an environmental management system, the commission shall
include all costs directly incurred in development and
implementation of the system, including but not limited to:
(a) Internal staff and contractors that develop or implement
the system; and
(b) Process improvement implementation costs that provide a
direct and substantial increase in pollution control, waste
reduction or waste recycling beyond what is required by law and
also beyond the cost of an equivalent process that does not
provide equivalent environmental benefits.
(8) If a pollution control facility is an enhanced pollution
control facility because the facility is erected, constructed or
installed in advance of the time the facility is required by law,
the commission shall allocate that portion of total costs to
environmental enhancement certified costs based on the pro rata
portion of costs that is attributable to the period of time
before the facility is required by law as compared to the total
useful life of the facility. + }
{ - (5) - } { + (9) + } The commission may adopt rules
establishing methods to be used to determine 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.
SECTION 7. { + Section 8 of this 2007 Act is added to and made
a part of ORS 468.155 to 468.190. + }
SECTION 8. { + (1) On or before March 15 of each year in which
a taxpayer claims a tax credit under ORS 315.304 for a pollution
control facility for the preceding tax year, the person that owns
the facility shall report to the Department of Environmental
Quality, on a form prescribed by the department, that:
(a) Attests to the continued use of the facility and the
continued environmental benefit arising from the use of the
facility; and
(b) Identifies and quantifies the environmental benefit of the
facility.
(2) In the case of a property owner who claims an exemption for
a pollution control facility 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 facility 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 submit a written report to
the Legislative Assembly each biennium that summarizes the
information reported by facility owners under this section. + }
SECTION 9. 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 certified
under ORS 468.170 shall be allowed if the taxpayer qualifies
under subsection (4) of this section.
(2) For a facility 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 { + amount determined by
applying the + } applicable percentage { - of - } { + to + }
the certified cost of the facility, as determined under ORS
468.173 or 468.183, multiplied by the certified percentage
allocable to pollution control, divided by the number of years of
the facility's useful life. The number of years of the facility's
useful life used in this calculation shall be the remaining
number of years of useful life at the time the facility is
certified but not less than one year nor more than 10 years. { +
In the case of a facility that is an environmental improvement
system, the useful life of the facility shall be deemed to be
five years, unless the system also results in a process change,
in which case the useful life of the facility shall be equivalent
to the useful life of the tangible machinery or equipment most
closely associated with the process change, not to exceed 10
years. + }
(3) To qualify for the credit the pollution control facility
must be erected, constructed or installed in accordance with the
provisions of ORS 468.165 (1) 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;
(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 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 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) For a facility 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.
(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 under ORS chapter 316, 317
or 318 for such year.
(8) Upon any sale, exchange or other disposition of a facility,
notice thereof shall be given to the Environmental Quality
Commission who shall revoke the certification covering such
facility 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 for purposes of this subsection.
(9) 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, 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) The taxpayer's adjusted basis for determining gain or loss
shall not be further decreased by any tax credits allowed under
this section.
(11) A person described in subsection (4)(a)(C) of this section
may, but need not, operate the facility or conduct a trade or
business that utilizes property requiring the facility. If more
than one person has an interest under subsection (4)(a)(C) of
this section in the facility, 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. 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) 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 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 10. { + Section 11 of this 2007 Act is added to and
made a part of ORS chapter 315. + }
SECTION 11. { + (1) The owner of a certified pollution control
facility that has not claimed any tax credit under ORS 315.304
may transfer the pollution control facility certificate to a
taxpayer subject to tax under ORS 316, 317 or 318.
(2) In order to transfer a pollution control facility
certificate, the owner of the facility 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 the information prescribed by the
department. + }
SECTION 12. { + Section 11 of this 2007 Act and the amendments
to ORS 315.304 by section 9 of this 2007 Act apply to tax years
beginning on or after January 1, 2007. + }
SECTION 13. { + 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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