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 3303
Senate Bill 938
Sponsored by Senator WESTLUND; Senator FERRIOLI, Representatives
DALLUM, ROBLAN, P SMITH
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.
Creates income tax credit for production or collection of
biomass used to produce biofuel.
Applies to tax credits for tax years beginning on or after
January 1, 2007, and before January 1, 2013.
Takes effect on 91st day following adjournment sine die.
A BILL FOR AN ACT
Relating to tax credits for biomass producers; creating new
provisions; amending ORS 314.752 and 318.031; and prescribing
an effective date.
Be It Enacted by the People of the State of Oregon:
SECTION 1. { + Sections 2 and 3 of this 2007 Act are added to
and made a part of ORS chapter 315. + }
SECTION 2. { + (1) As used in this section:
(a) 'Agricultural producer' means a person that produces
biomass that is used in Oregon as biofuel or to produce biofuel.
(b) 'Biofuel' means liquid, gaseous or solid fuels derived from
biomass.
(c) 'Biomass' means organic matter that is available on a
renewable or recurring basis and that is derived from:
(A) Forest or rangeland woody debris from harvesting or
thinning conducted to improve forest or rangeland ecological
health and reduce uncharacteristic stand replacing wildfire risk;
(B) Wood material from hardwood timber described in ORS 321.267
(3);
(C) Agricultural residues;
(D) Offal and tallow from animal rendering;
(E) Food wastes collected as provided under ORS chapter 459 or
459A;
(F) Yard or wood debris collected as provided under ORS chapter
459 or 459A;
(G) Wastewater solids; or
(H) Crops grown solely to be used for energy.
(d) 'Biomass' does not mean wood that has been treated with
creosote, pentachlorophenol, inorganic arsenic or other inorganic
chemical compounds.
(e) 'Biomass collector' means a person that collects biomass to
be used in Oregon as biofuel or to produce biofuel.
(2)(a) An agricultural producer or biomass collector shall be
allowed a credit against the taxes that would otherwise be due
under ORS chapter 316 or, if the taxpayer is a corporation, under
ORS chapter 317 or 318 for:
(A) The production of biomass that is used in Oregon as biofuel
or to produce biofuel; or
(B) The collection of biomass that is used in Oregon as biofuel
or to produce biofuel.
(b) A credit under this section may be claimed in the tax year
in which the agricultural producer or biomass collector transfers
biomass to a biofuel producer.
(3) The amount of the credit shall be calculated as follows:
(a) Determine the quantity of biomass transferred to a biofuel
producer during the tax year;
(b) Categorize the biomass into appropriate categories; and
(c) Multiply the quantity of biomass in a particular category
by the appropriate credit rate for that category, expressed in
dollars and cents, that is prescribed in section 5 of this 2007
Act.
(4) The amount of the credit claimed under this section for any
tax year may not exceed the tax liability of the taxpayer.
(5)(a) A biofuel producer shall provide a written receipt to an
agricultural producer or biomass collector at the time biomass is
transferred from the agricultural producer or biomass collector
to the biofuel producer. The receipt must state the quantity and
type of biomass being transferred and that the biomass is to be
used to produce biofuel.
(b) Each agricultural producer or biomass collector shall
maintain the receipts described in this subsection in their
records for a period of at least five years after the tax year in
which the credit is claimed or for a longer period of time
prescribed by the Department of Revenue.
(6) The credit shall be claimed on a form prescribed by the
Department of Revenue that contains the information required by
the department.
(7) Any tax credit otherwise allowable under this section that
is not used by the taxpayer in a particular tax year may be
carried forward and offset against the taxpayer's tax liability
for the next succeeding tax year. Any credit remaining unused in
the next succeeding tax year may be carried forward and used in
the second succeeding tax year, and likewise any credit not used
in that second succeeding tax year may be carried forward and
used in the third succeeding tax year, and any credit not used in
that third succeeding tax year may be carried forward and used in
the fourth succeeding tax year, but may not be carried forward
for any tax year thereafter.
(8) In the case of a credit allowed under this section:
(a) A nonresident shall be allowed the credit under this
section in the proportion provided in ORS 316.117.
(b) If a change in the status of the taxpayer from resident to
nonresident or from nonresident to resident occurs, the credit
allowed by this section shall be determined in a manner
consistent with ORS 316.117.
(c) If a change in the taxable year of the 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. + }
SECTION 3. { + (1) A person that has obtained a tax credit
under section 2 of this 2007 Act may transfer the credit for
consideration to a taxpayer subject to tax under ORS chapter 316,
317 or 318.
(2) To transfer the tax credit, the taxpayer earning the credit
and the taxpayer that will claim the credit shall jointly file a
notice of tax credit transfer with the Department of Revenue. The
notice shall be given on a form prescribed by the department that
contains all of the following:
(a) The name, address and taxpayer identification number of the
transferor and transferee;
(b) The amount of the tax credit; and
(c) Any other information required by the department.
(3) Notwithstanding subsection (1) of this section, a tax
credit may not be transferred under this section:
(a) From an agricultural producer to a biomass collector
claiming a credit for collecting the biomass; or
(b) From a biomass collector to an agricultural producer
claiming a credit for producing the biomass. + }
SECTION 4. { + Section 5 of this 2007 Act is added to and made
a part of ORS chapter 469. + }
SECTION 5. { + To be eligible for the tax credit under section
2 of this 2007 Act, the biomass must be produced or collected in
Oregon as a feedstock for bioenergy or biofuel production in
Oregon. The credit rates for biomass are:
(1) For oil seed crops, $0.05 per pound.
(2) For grain crops, including but not limited to wheat, barley
and triticale, $0.90 per bushel.
(3) For virgin oil or alcohol delivered for production in
Oregon from Oregon-based feedstock, $0.10 per gallon.
(4) For used cooking oil or waste grease, $0.10 per gallon.
(5) For wastewater biosolids, $10.00 per wet ton.
(6) For woody biomass collected from nursery, orchard,
agricultural, forest or rangeland property in Oregon, including
but not limited to prunings, thinning, plantation rotations, log
landing or slash resulting from harvest or forest health
stewardship, $10.00 per green ton.
(7) For grass, wheat, straw or other vegetative biomass from
agricultural crops, $10.00 per green ton.
(8) For yard debris and municipally generated food waste, $5.00
per wet ton.
(9) For animal manure or rendering offal, $5.00 per wet
ton. + }
SECTION 6. { + Sections 2, 3 and 5 of this 2007 Act apply to
tax credits for tax years beginning on or after January 1, 2007,
and before January 1, 2013. + }
SECTION 7. 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), 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) { + and section 2 of
this 2007 Act (biomass production for biofuel) + }.
SECTION 8. ORS 318.031 is amended to read:
318.031. It being the intention of the Legislative Assembly
that this chapter and ORS chapter 317 shall be administered as
uniformly as possible (allowance being made for the difference in
imposition of the taxes), ORS 305.140 and 305.150, ORS chapter
314 and the following sections are incorporated into and made a
part of this chapter: ORS 285C.309, 315.104, 315.134, 315.156,
315.204, 315.208, 315.213, 315.254, 315.304, 315.507, 315.511 and
315.604 { + and section 2 of this 2007 Act + } (all only to the
extent applicable
{ - for - } { + to + } a corporation) and ORS chapter 317.
SECTION 9. { + 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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