74th OREGON LEGISLATIVE ASSEMBLY--2008 Special 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 14
Senate Bill 1091
Sponsored by Senator BURDICK (Presession filed.)
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 environmental investment tax credit.
Creates Ground Water Protection Account. Continuously
appropriates moneys from account to Department of Environmental
Quality for ground water protection programs.
Takes effect on 91st day following adjournment sine die.
A BILL FOR AN ACT
Relating to environmental investments; creating new provisions;
amending ORS 314.255, 314.752, 315.324 and 315.356;
appropriating money; and prescribing an effective date.
Be It Enacted by the People of the State of Oregon:
SECTION 1. { + Sections 2 to 15 of this 2008 Act are added to
and made a part of ORS chapter 468. + }
SECTION 2. { + Definitions. As used in sections 2 to 15 of
this 2008 Act:
(1) 'Application for certification' means an application for
certification of an environmental investment under section 5 of
this 2008 Act.
(2) 'Eligible environmental facility' means an environmental
facility described in section 3 of this 2008 Act.
(3) 'Environmental benefit' means:
(a) The prevention, control or reduction of air or water
pollution;
(b) The prevention, control or reduction of solid waste or
hazardous waste; or
(c) The recycling or environmentally safe disposal of used oil.
(4) 'Environmental facility' means:
(a) Any land, structure, building, installation, excavation,
machinery, equipment or device used, erected, constructed or
installed in Oregon for the purpose of providing an environmental
benefit; or
(b) Any addition to, reconstruction of or improvement of land
or of an existing structure, building, installation, excavation,
machinery, equipment or device used, erected, constructed or
installed in Oregon for the purpose of providing an environmental
benefit.
(5) 'Environmental investment' means the amount of an
investment in an eligible environmental facility as determined
under section 9 of this 2008 Act.
(6) 'Hazardous waste' has the meaning given that term in ORS
466.005.
(7) 'Material recovery process' means a process that obtains
useful material from material that would otherwise be solid
waste, hazardous waste or used oil.
(8) 'Solid waste' has the meaning given that term in ORS
459.005.
(9) 'Used oil' has the meaning given that term in ORS
459A.555. + }
SECTION 3. { + Eligible environmental facilities. The
Environmental Quality Commission may certify an investment in an
environmental facility under sections 2 to 15 of this 2008 Act if
the facility:
(1) Disposes of or eliminates industrial waste or water
pollution, including a facility that uses treatment works for
industrial waste as those terms are defined in ORS 468B.005.
(2) Disposes of or eliminates air contaminants, air pollution
or air contamination sources, including a facility that uses
air-cleaning devices as defined in ORS 468A.005.
(3) Uses a material recovery process.
(4) Uses a plastic reclaimed through a material recovery
process in the manufacture of an end product having economic
value.
(5) Treats, reduces or eliminates a substantial quantity of
hazardous waste. + }
SECTION 4. { + Certifiable environmental investments. The
Environmental Quality Commission may certify an environmental
investment under sections 2 to 15 of this 2008 Act if:
(1) The investment is in an eligible environmental facility;
(2) The investment is not required at the time the certificate
is issued, or at any time during the term of the certificate, by
reason of a statute, rule, order, ordinance or other law that is
in effect on the date the certificate is issued; and
(3) The investment is for an environmental benefit. + }
SECTION 5. { + Application for certification; contents. (1)
Any person may apply to the Department of Environmental Quality
for certification under sections 2 to 15 of this 2008 Act of an
environmental investment. A certificate issued under sections 2
to 15 of this 2008 Act may be used for the purposes of the tax
credit under section 17 of this 2008 Act.
(2) An application for certification must be made in writing in
a form prescribed by the department. The department may require
that an applicant provide with the application:
(a) Documentation of the cost of the environmental facility.
(b) A description of the environmental facility in which the
environmental investment is made and documentation supporting a
finding that the facility is an eligible environmental facility.
(c) Documentation describing how the environmental investment
will meet the requirement that approved environmental facilities
employ innovative techniques or strategies as described in
section 11 (1) of this 2008 Act.
(d) Documentation and data supporting a finding that the
environmental investment meets the requirements of section 4 of
this 2008 Act.
(e) Proposed operating procedures for the environmental
facility in which the environmental investment is made.
(f) Any other information the department considers necessary.
(3) The department may require that an applicant provide with
the application for certification a statement prepared by an
independent engineer holding a valid certificate under ORS
672.002 to 672.325, or by a department engineer, that documents:
(a) The extent to which the environmental facility will provide
environmental benefits.
(b) The cost of the environmental facility.
(c) Statutes, rules, orders, ordinances and other laws that
impose requirements on the applicant relating to the
environmental benefits.
(d) Other information required by rule of the Environmental
Quality Commission. + }
SECTION 6. { + Application fee. (1) An application for
certification must be accompanied by the fee established under
subsection (2) of this section. The Department of Environmental
Quality may refund the fee if the application is rejected or
withdrawn.
(2) The Environmental Quality Commission may adopt a schedule
of fees for certificates issued under sections 2 to 15 of this
2008 Act. Before adopting or revising fees under this section,
the commission shall estimate the total cost to the department
and to the commission of administering sections 2 to 15 of this
2008 Act. The fees shall be based on the estimated cost to the
department and commission, and shall be calculated to generate an
amount that does not exceed the total estimated cost. Any fees
collected by the department in excess of the total estimated cost
shall be held by the department and used by the commission to
reduce future fees. The fee may vary according to the size and
complexity of the environmental facility identified in the
application for certification.
(3) The commission may not include any fee paid under this
section as part of the certified environmental investment. + }
SECTION 7. { + Time limitation on filing application for
certification; sunset. (1) An application for certification must
be filed with the Department of Environmental Quality within one
year after the environmental facility in which the investment is
made is placed in service.
(2) The Environmental Quality Commission may not certify an
environmental investment under sections 2 to 15 of this 2008 Act
if an application for certification is not filed with the
department within the time allowed by this section. The
commission may grant an extension of time to file an application
for certification for circumstances beyond the control of the
applicant that prevented timely filing of the application.
(3) An application for certification may not be considered
filed for the purposes of this section until the application is
complete.
(4) The department may not accept an application for
certification more than four years after construction or
installation of the environmental facility is commenced as
described in subsection (6) of this section.
(5) The department may not accept an application for
certification if construction or installation of the
environmental facility is commenced as described in subsection
(6) of this section after December 31, 2013.
(6) Construction or installation of an environmental facility
is commenced for the purposes of this section on the date on
which the person constructing or installing the facility obtains
all necessary preliminary approvals and begins continuous on-site
construction or installation of the facility. A person engages in
continuous on-site construction or installation of an
environmental facility for the purposes of this subsection even
though the construction or installation is interrupted or delayed
by natural disasters, strikes, litigation or other matters beyond
the control of the person. + }
SECTION 8. { + Precertification. (1) Any person may apply to
the Department of Environmental Quality for precertification of
an investment in an environmental facility before the facility is
placed in service. The application for precertification must be
made in writing in a form prescribed by the department and must
be accompanied by a fee established under section 6 of this 2008
Act.
(2) An application for precertification need not contain
information relating to the cost of the environmental facility.
(3) If the Environmental Quality Commission determines that the
facility in which the environmental investment is made is an
eligible environmental facility under section 3 of this 2008 Act,
the commission shall precertify the investment.
(4) If the facility in which the environmental investment is
made is completed as proposed in the application for
precertification, the commission's approval of the application
shall be prima facie evidence that the facility is an eligible
environmental facility and that all or part of the costs of the
facility are allowable as an environmental investment.
(5) If the commission fails to act on an application within 120
days after the application is filed with the department, or
refuses to precertify an environmental investment, the applicant
for precertification may appeal the commission's decision in the
manner provided in ORS 468.110.
(6) Precertification of an environmental investment under this
section does not affect the requirement that the construction or
installation of the facility in which the investment is made
commence before January 1, 2014. + } { + + }
SECTION 9. { + Determination of the environmental investment.
(1) The environmental investment determined by the Environmental
Quality Commission may not exceed the actual expenditures for the
facility in which the investment is made.
(2) The environmental investment may include only those costs
attributable to the environmental benefit provided by the
facility in which the investment is made.
(3) Subject to subsections (6), (7) and (8) of this section, if
the facility in which the investment is made is used solely to
provide an environmental benefit, the environmental investment
includes all costs of the facility.
(4) For an environmental facility that costs $50,000 or less
and is used both to provide an environmental benefit and for
other purposes, the commission shall calculate the costs of the
facility allocable to the environmental benefit based on the time
the facility is used to achieve the environmental benefit as
compared to the total time the facility is in use.
(5) For an environmental facility that costs more than $50,000
and is used both to provide an environmental benefit and for
other purposes, the commission shall establish methods to
determine the environmental investment.
(6) In determining the environmental investment, the commission
may not include the cost of:
(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) Equipment of less than 100 total horsepower for chipping or
shredding wood waste.
(e) Any separate portion of an environmental facility that does
not make a significant contribution to an environmental benefit,
including:
(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) Asbestos abatement.
(g) Property installed, constructed or used for cleanup of
emergency spills or unauthorized releases, as defined by the
commission by rule.
(h) Cleanup of land or the sediment of the watercourses of this
state.
(i) Any other property or expense identified by the commission
as not includable in determining the environmental investment.
(7) In determining the environmental investment, the commission
may not include the cost of replacement or reconstruction of all
or a part of any environmental facility if a certificate has
previously been issued under sections 2 to 15 of this 2008 Act
for the facility, except:
(a) If the cost of replacement or reconstruction would
otherwise be allowable as an environmental investment and the
cost is greater than the cost of simple replacement or
reconstruction of the environmental facility, the difference
between the cost actually incurred and cost of simple replacement
or reconstruction may be included in the environmental
investment; and
(b) If the environmental facility is replaced or reconstructed
before the end of the certificate's term, the cost of replacement
or reconstruction may be included in the environmental investment
for the remainder of the term of the original certificate.
(8) In determining the environmental investment, the commission
may not include the cost of a material recovery process if:
(a) The major purpose of the process is to produce, from solid
waste, hazardous waste or used oil, fuel that can be utilized for
heat or other forms of energy; or
(b) The process burns waste to produce energy or to reduce the
amount of waste. + }
SECTION 10. { + Percentage of the environmental investment
that may be certified. (1) Except as provided in this section,
the Environmental Quality Commission may certify no more
than ___ percent of an environmental investment.
(2) The commission may certify no more than ___ percent of an
environmental investment if the applicant installs an
environmental management system for the facility in which the
investment is made that includes a systematic, documented,
continual cycle of planning, implementing, reviewing and
improving the processes used to achieve an environmental benefit.
The system must measure the environmental benefits provided by
the facility and must meet:
(a) The standards established by the International Organization
for Standardization under ISO 14001;
(b) The standards established in the Green Permit program under
ORS 468.501 to 468.521; or
(c) Other criteria established by the commission by rule.
(3)(a) An applicant seeking certification under subsection (2)
of this section must submit a report to the Department of
Environmental Quality stating that the provisions of subsection
(2) of this section have been met. The report must be prepared by
an independent third party that is familiar with environmental
management systems. The report must include a statement from a
registered or certified environmental management system auditor
that indicates that the system meets the requirements of
subsection (2) of this section.
(b) The independent third party preparing a report under this
subsection may be contracted for by the applicant or by the
department. If the department contracts for the services, the
department shall recover the costs of the services from the
applicant in the manner prescribed in ORS 468.073. An applicant
is liable for the costs of the services without regard to whether
the commission accepts or rejects the application. The commission
may not certify an environmental investment until the department
has received full payment from the applicant.
(4) The commission shall prepare an estimate of the revenue
impact of tax credits under section 17 of this 2008 Act for all
environmental investments certified in a calendar year. The
commission may not certify environmental investments in a
calendar year in excess of an aggregate amount estimated by the
commission to cause a revenue impact in excess of $10 million in
any subsequent calendar year. The Department of Revenue shall
monitor the actual revenue impact of tax credits claimed under
section 17 of this 2008 Act. If the actual revenue impact in any
calendar year exceeds $10 million, the Department of Revenue
shall report the amount of the excess to the commission and the
commission shall reduce the amount of environmental investments
certified in subsequent calendar years to offset the excess and
to avoid a revenue impact in excess of $10 million in any
subsequent calendar year.
(5) The commission may not certify more than $5 million in
environmental investments for any single facility. + }
SECTION 11. { + Approval and rejection of application;
issuance of certificate. (1) In certifying environmental
investments, the Environmental Quality Commission shall give
priority to investments in environmental facilities that the
commission determines exemplify future best practices or
demonstrate innovative techniques or strategies.
(2) The commission shall act on an application for
certification within 120 days after the filing of the application
under section 5 of this 2008 Act. The commission shall give the
applicant written notice of the commission's decision and, if the
application is rejected, a concise statement of the commission's
findings and reasons.
(3) If the commission rejects an application for certification,
or the applicant objects to the amount certified by the
commission, the applicant may appeal the commission's decision in
the manner provided in ORS 468.110. An appeal under this
subsection must be made not more than 30 days after notice of the
decision is mailed by the commission to the applicant.
(4) The commission shall issue a certificate for an
environmental investment if the commission finds that the
investment meets the requirements of sections 2 to 15 of this
2008 Act. The certificate must state the investment that has been
certified.
(5) If one or more environmental facilities constitute a single
operational unit, the commission may certify the environmental
investment in the facilities under a single certificate. + }
SECTION 12. { + Term of certificate. A certificate for an
environmental investment is valid for a term of 10 years. + }
{ + + }
SECTION 13. { + Revocation of certificate. (1) The
Environmental Quality Commission shall order the revocation of a
certificate issued under sections 2 to 15 of this 2008 Act if the
commission finds that:
(a) The certificate was obtained by fraud or misrepresentation;
or
(b) The certificate holder has failed to utilize the
environmental facility in which the environmental investment is
made to provide an environmental benefit.
(2) The commission shall notify the Department of Revenue when
an order of revocation becomes final.
(3) If the commission orders the revocation of a certificate
under subsection (1)(a) of this section, all prior tax relief
provided to the certificate holder by virtue of the certificate
is forfeited, and the Department of Revenue shall proceed to
collect those taxes not paid by the certificate holder as a
result of the tax credit provided under the provisions of section
17 of this 2008 Act.
(4) Except as provided in subsection (5) of this section, if
the commission orders the revocation of a certificate under
subsection (1)(b) of this section, the certificate holder shall
be denied any further tax relief under section 17 of this 2008
Act after the order of revocation becomes final.
(5) The commission may reinstate a certificate revoked under
subsection (1)(b) of this section if the commission finds the
environmental facility is once more being used to provide an
environmental benefit. If the commission reinstates a certificate
under this subsection, the commission shall notify the Department
of Revenue that the certificate has been reinstated for the
remainder of the certificate's term.
(6) Revocation of a certificate under this section may be
appealed in the manner provided in ORS 468.110. + }
SECTION 14. { + Ground water protection surcharge. (1) In
addition to the application fee required under section 6 of this
2008 Act, an applicant for certification of an environmental
investment under sections 2 to 15 of this 2008 Act must pay to
the Department of Environmental Quality a surcharge equal to 1.5
percent of the amount certified by the commission under section
10 of this 2008 Act.
(2) All moneys collected under subsection (1) of this section
shall be deposited in the Ground Water Protection Account
established under section 15 of this 2008 Act. + }
SECTION 15. { + Ground Water Protection Account. (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 16. { + Section 17 of this 2008 Act is added to and
made a part of ORS chapter 315. + }
SECTION 17. { + Tax credit for environmental investments. (1)
A credit against taxes imposed by ORS chapter 316 (or, if the
taxpayer is a corporation, under ORS chapter 317 or 318) for an
environmental investment certified under sections 2 to 15 of this
2008 Act shall be allowed if the taxpayer qualifies for the
credit under this section.
(2) The maximum credit allowed in any one tax year under this
section is the lesser of the tax liability of the taxpayer or the
amount certified by the Environmental Quality Commission under
section 10 of this 2008 Act, divided by the number of years of
the useful life of the environmental facility in which the
investment is made. For the purposes of this calculation, the
number of years of the facility's useful life is the remaining
number of years of useful life at the time the environmental
investment is certified. The number of years of the facility's
useful life may not be less than one year or more than 10 years.
(3) To qualify for a tax credit under this section, the
taxpayer must be:
(a) The owner or contract purchaser of the trade or business
that utilizes the environmental facility;
(b) A person who, as a lessee or pursuant to an agreement,
conducts the trade or business that operates or utilizes the
facility; or
(c) A person who, as an owner, contract purchaser or lessee,
owns or leases the environmental facility that is used in a
business that is engaged in a production activity described in 40
C.F.R. 430.20, as in effect on July 1, 1998, or is used for
recycling, material recovery or energy recovery as those terms
are defined in ORS 459.005. A person described in this paragraph
need not operate the facility, or conduct a trade or business
that utilizes the facility.
(4) To qualify for a tax credit under this section, the
environmental facility in which the investment is made 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) The maximum credit allowed in all tax years under this
section may not exceed the amount certified by the commission
under section 10 of this 2008 Act.
(6) The credit provided by this section is in addition to any
depreciation or amortization deduction that the taxpayer
otherwise may be entitled to under ORS chapter 316, 317 or 318
for the environmental facility in which the investment is made.
(7) Upon any sale, exchange or other disposition of an
environmental facility for which an environmental investment has
been certified under sections 2 to 15 of this 2008 Act, the
person making the disposition shall give notice of the
disposition to the Environmental Quality Commission. The
commission shall revoke the certificate for the environmental
investment in the facility, as of the date of the disposition, in
the manner provided by section 13 of this 2008 Act. The
transferee may apply for certification of the investment in the
facility under sections 2 to 15 of this 2008 Act, but the tax
credit available to the transferee shall be reduced by any credit
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, is not a disposition for purposes of this
subsection.
(8) Any tax credit otherwise allowable under this section that
is not used by the taxpayer in a 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. Any credit not used in that second
succeeding tax year may be carried forward and used in the third
succeeding tax year. The credit may not be carried forward for
any tax year after that third succeeding year. Credits may be
carried forward to and used in a tax year after the term of the
certificate specified in section 12 of this 2008 Act.
(9) The taxpayer's adjusted basis for determining gain or loss
shall not be decreased by reason of a tax credit allowed under
this section.
(10) If more than one person has an interest in a facility
described in subsection (3)(c) of this section, only one person
may claim the credit allowed under this section. If a person
described in subsection (3)(c) of this section is a lessee of the
environmental facility, the person must submit a written
statement signed by the lessor of the facility that authorizes
the person to claim the credit. The statement must be filed with
the Department of Revenue not later than the final day of the
first tax year for which the tax credit is claimed.
(11) A taxpayer may not be allowed a tax credit under this
section for any tax year in which the taxpayer is convicted of a
felony under ORS 468.922 to 468.956 that is related to the
environmental facility in which the certified environmental
investment is made. If a tax credit is disallowed under this
subsection, a tax credit may not be allowed to the taxpayer under
this section for the four tax years following the tax year in
which the taxpayer is convicted. + }
SECTION 18. { + Section 17 of this 2008 Act applies to tax
years beginning on or after January 1, 2009. + } { + + }
SECTION 19. { + Section 20 of this 2008 Act is added to and
made a part of ORS chapter 314. + }
SECTION 20. { + Taxpayer reports. (1) On or before March 15 of
each year in which a taxpayer claims a tax credit for an
environmental investment under section 17 of this 2008 Act, the
person that owns the environmental facility in which the
investment is made shall provide a report to the Department of
Environmental Quality in a form prescribed by the department. The
report must:
(a) Attest to the continued use of the facility and the
continued environmental benefit provided by the facility; and
(b) Identify and quantify the environmental benefit provided by
the facility.
(2) If the holder of a certificate for an environmental
investment under sections 2 to 15 of this 2008 Act fails to file
a report by the date prescribed in this section, the
Environmental Quality Commission may order revocation of the
certificate in the manner provided by section 13 of this 2008
Act.
(3) Each biennium, the commission shall prepare and make
available to the Legislative Assembly a written report that
summarizes the information reported by taxpayers under this
section. + }
SECTION 21. 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 pursuant to ORS
468.185 (1), { + or of an environmental investment under section
13 of this 2008 Act, + } the Department of Revenue immediately
shall collect any taxes due by reason of { - such - } { +
the + } 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 - } { + may not + }
be allowed under ORS 307.405 or 315.304 for { - any - } { +
a + } pollution control facility { + , or under section 17 of
this 2008 Act for an investment in an environmental facility, if
the facility is + } constructed or used by or for the benefit of
any governmental or quasi-governmental body or public corporation
or form thereof, { - except where such - } { + unless the + }
facilities are used for resource recovery.
SECTION 22. 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) { + , section 17 of this 2008 Act
(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), ORS 317.115 (fueling stations necessary to
operate an alternative fuel vehicle) and ORS 315.141 (biomass
production for biofuel).
SECTION 23. ORS 314.752, as amended by section 13, chapter 625,
Oregon Laws 2007, 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
315.156 (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) { + , section 17 of this
2008 Act (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), ORS 317.115 (fueling stations
necessary to operate an alternative fuel vehicle) and ORS 315.141
(biomass production for biofuel).
SECTION 24. ORS 314.752, as amended by section 13, chapter 625,
Oregon Laws 2007, and section 3, chapter 883, Oregon Laws 2007,
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 315.134 (fish habitat
improvement), 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) { + ,
section 17 of this 2008 Act (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), ORS 317.115 (fueling stations
necessary to operate an alternative fuel vehicle) and ORS 315.141
(biomass production for biofuel).
SECTION 25. 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 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 { + or section 17 of this 2008 Act + }.
SECTION 26. ORS 315.356 is amended to read:
315.356. (1) If a taxpayer obtains a grant from the federal
government in connection with a facility that has been certified
by the Director of the State Department of Energy, the certified
cost of the facility shall be reduced on a dollar for dollar
basis. Any income or excise tax credits that the taxpayer would
be entitled to under ORS 315.354 and 469.185 to 469.225 after any
reduction described in this subsection may not be reduced by the
federal grant. A taxpayer applying for a federal grant 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 property tax relief
on a pollution control facility { + , an environmental
investment + } or an alternative energy device under ORS 307.405,
315.304 or 316.116 { + or section 17 of this 2008 Act + }is not
eligible for a tax credit on the same facility or device under
ORS 315.354 and 469.185 to 469.225.
(4) A credit may not be allowed under ORS 315.354 if the
taxpayer has received a tax credit on the same facility or device
under ORS 315.324.
SECTION 27. { + The section captions used in this 2008 Act are
provided only for the convenience of the reader and do not become
part of the statutory law of this state or express any
legislative intent in the enactment of this 2008 Act. + }
SECTION 28. { + This 2008 Act takes effect on the 91st day
after the date on which the special session of the Seventy-fourth
Legislative Assembly adjourns sine die. + }
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