Chapter 29 Oregon Laws 2008 Special Session
AN ACT
HB 3619
Relating to tax credits; creating new provisions; amending ORS 317.097,
469.197, 469.200, 469.205, 469.215 and 469.225 and section 2, chapter 28,
Oregon Laws 2008 (Enrolled House Bill 3618); and prescribing an effective date.
Be It Enacted by the People of
the State of
SECTION 1.
ORS 469.197 is amended to read:
469.197. The State
Department of Energy shall by rule establish all of the following criteria:
(1) For a
high-performance home, the minimum design and construction standards that must
be met or exceeded for a dwelling to be considered a high-performance home,
including but not limited to standards for the building envelope, HVAC systems,
lighting, appliances, water conservation measures, use of sustainable building
materials and on-site renewable energy systems. The criteria must also
establish the minimum reduction in estimated net purchased energy that a
dwelling must achieve to be considered a high-performance home.
(2) For a
homebuilder-installed renewable energy system, the minimum performance and
efficiency standards that a solar electric system, solar domestic water heating
system, passive solar space heating system, wind power system, geothermal
heating system, fuel cell system or other system utilizing renewable resources
must achieve to be considered a homebuilder-installed renewable energy system.
(3) For a
high-efficiency combined heat and power facility, the minimum performance and
efficiency standards that the facility must achieve to be considered a
high-efficiency combined heat and power facility.
(4) For a renewable
energy resource equipment manufacturing facility[,]:
(a) Standards relating to the type of equipment,
machinery or other products being manufactured and related performance and
efficiency standards applicable to the manufactured products[.];
(b) Standards,
consistent with the definitions in ORS 469.185, relating to what constitutes a
single renewable energy resource equipment manufacturing facility and what
constitutes property that is not included within a renewable energy resource
equipment manufacturing facility;
(c) Standards relating
to the minimum level of increased employment in
(d) Standards relating
to indicators of financial viability of an applicant for preliminary
certification under ORS 469.205;
(e) Standards relating
to the likelihood of long-term success of a renewable energy resource equipment
manufacturing facility; and
(f) Standards relating
to the likelihood that an applicant seeking preliminary certification of a
renewable energy resource equipment manufacturing facility will base decisions
to locate or expand a facility in Oregon on the allowance of a tax credit under
ORS 315.354.
SECTION 2.
ORS 469.200 is amended to read:
469.200. (1) For a
facility, the total cost [of a
facility] that receives a preliminary certification from the Director of
the State Department of Energy for tax credits in any calendar year may not
exceed:
(a) $20 million, in the
case of a facility using or producing renewable energy resources[, a renewable energy resource equipment
manufacturing facility] or a high-efficiency combined heat and power
facility; [or]
(b) $40 million, in
the case of a renewable energy resource equipment manufacturing facility; or
[(b)] (c) $10 million, in the case of any other facility.
(2) Notwithstanding
subsection (1)(b) of this section, the director may certify a lesser amount
than the total cost of the renewable energy resource equipment manufacturing
facility, or need not certify any amount, if any of the following conditions
exist at the time of preliminary certification:
(a) The last quarterly
economic and revenue forecast for a biennium indicates that moneys available to
the General Fund for the next biennium will be at least three percent less than
appropriations from the General Fund for the current biennium;
(b) A quarterly economic
and revenue forecast projects that revenues in the General Fund in the current
biennium will be at least two percent below what revenues were projected to be
in the revenue forecast on which the legislatively adopted budget, as defined
in ORS 291.002, for the current biennium was based;
(c) The proposed
facility, in the estimate of the director, does not possess the likelihood of
success established in criteria of success under ORS 469.197 (4);
(d) The proposed
facility, in the estimate of the director, is not likely to increase employment
in Oregon to the minimum threshold level established in rules under ORS 469.197
(4);
(e) The applicant lacks
the minimum level of financial viability established in rules adopted under ORS
469.197 (4); or
(f) The applicant is
unlikely, in the estimate of the director, to base a decision to relocate or
expand a facility in Oregon on allowance of the tax credit, given the criteria
established in rules under ORS 469.197 (4).
[(2)] (3) The director shall determine the dollar amount
certified for any facility and the priority between applications for
certification based upon the criteria contained in ORS 469.185 to 469.225 and
applicable rules and standards adopted under ORS 469.185 to 469.225. The
director may consider the status of a facility as a research, development or
demonstration facility of new renewable resource generating and conservation
technologies or a qualified transit pass contract in the determination.
SECTION 3.
ORS 469.205 is amended to read:
469.205. (1) Prior to
erection, construction, installation or acquisition of a proposed facility, any
person may apply to the State Department of Energy for preliminary
certification under ORS 469.210 if:
(a) The erection,
construction, installation or acquisition of the facility is to be commenced on
or after October 3, 1979;
(b) The facility
complies with the standards or rules adopted by the Director of the State
Department of Energy; and
(c) The applicant meets
one of the following criteria:
(A) The applicant is a
person to whom a tax credit has been transferred; or
(B) The applicant will
be the owner or contract purchaser of the facility at the time of erection,
construction, installation or acquisition of the proposed facility, and:
(i) The applicant is the
owner, contract purchaser or lessee of a trade or business that plans to
utilize the facility in connection with
(ii) The applicant is
the owner, contract purchaser or lessee of a trade or business that plans to
lease the facility to a person who will utilize the facility in connection with
(2) An application for
preliminary certification shall be made in writing on a form prepared by the
department and shall contain:
(a) A statement that the
applicant or the lessee of the applicant’s facility:
(A) Intends to convert
from a purchased energy source to a renewable energy resource;
(B) Plans to acquire,
construct or install a facility that will use a renewable energy resource or
solid waste instead of electricity, petroleum or natural gas;
(C) Plans to use a
renewable energy resource in the generation of electricity for sale or to
replace an existing or proposed use of an existing source of electricity;
(D) Plans to acquire,
construct or install a facility that substantially reduces the consumption of
purchased energy;
(E) Plans to acquire,
construct or install equipment for recycling as defined in ORS 469.185 (11);
(F) Plans to acquire an
alternative fuel vehicle or to convert an existing vehicle to an alternative
fuel vehicle;
(G) Plans to acquire,
construct or install a facility necessary to operate alternative fuel vehicles;
(H) Plans to acquire
transit passes for use by individuals specified by the applicant;
(I) Plans to acquire,
construct or install a transportation facility;
(J) Plans to acquire a
sustainable building practices facility;
(K) Plans to acquire a
car sharing facility and operate a car sharing program;
(L) Plans to construct a
high-efficiency combined heat and power facility;
(M) Is a homebuilder and
plans to construct a homebuilder-installed renewable energy system;
(N) Is a homebuilder and
plans to construct a high-performance home; or
(O) Plans to acquire,
construct or install a renewable energy resource equipment manufacturing
facility.
(b) A detailed
description of the proposed facility and its operation and information showing
that the facility will operate as represented in the application.
(c) Information on the
amount by which consumption of electricity, petroleum or natural gas by the
applicant or the lessee of the applicant’s facility will be reduced, and on the
amount of energy that will be produced for sale, as the result of using the
facility or, if applicable, information about the expected level of sustainable
building practices facility performance.
(d) The projected cost
of the facility.
(e) If applicable, a
copy of the proposed qualified transit pass contract, transportation services
contract or contract for lease of parking spaces for a car sharing facility.
(f) Any other
information the director considers necessary to determine whether the proposed
facility is in accordance with the provisions of ORS 469.185 to 469.225, and
any applicable rules or standards adopted by the director.
(3) An application for
preliminary certification shall be accompanied by a fee established under ORS
469.217. The director may refund the fee if the application for certification
is rejected.
(4) The director may
allow an applicant to file the preliminary application after the start of
erection, construction, installation or acquisition of the facility if the
director finds:
(a) Filing the
application before the start of erection, construction, installation or
acquisition is inappropriate because special circumstances render filing
earlier unreasonable; and
(b) The facility would
otherwise qualify for tax credit certification pursuant to ORS 469.185 to
469.225.
(5) A preliminary
certification of a sustainable building practices facility shall be applied for
and issued as prescribed by the department by rule.
(6) A preliminary
certification of a renewable energy resource equipment manufacturing facility
shall remain valid for a period of five calendar years after the date the
preliminary certification is issued by the director.
SECTION 4.
ORS 469.215 is amended to read:
469.215. (1) A final certification
may not be issued by the Director of the State Department of Energy under this
section unless the facility was acquired, erected, constructed or installed
under a preliminary certificate of approval issued under ORS 469.210 and in
accordance with the applicable provisions of ORS 469.185 to 469.225 and any
applicable rules or standards adopted by the director.
(2) Any person may apply
to the State Department of Energy for final certification of a facility:
(a) If the department
issued preliminary certification for the facility under ORS 469.210; and
(b)(A) After completion
of erection, construction, installation or acquisition of the proposed facility
or, if the facility is a qualified transit pass contract, after entering into
the contract with a transportation provider; or
(B) After transfer of
the facility, as provided in ORS 315.354 (5).
(3) An application for
final certification shall be made in writing on a form prepared by the
department and shall contain:
(a) A statement that the
conditions of the preliminary certification have been complied with;
(b) The actual cost of
the facility certified to by a certified public accountant who is not an
employee of the applicant or, if the actual cost of the facility is less than
$50,000, copies of receipts for purchase and installation of the facility;
(c) A statement that the
facility is in operation or, if not in operation, that the applicant has made
every reasonable effort to make the facility operable; and
(d) Any other
information determined by the director to be necessary prior to issuance of a
final certificate, including inspection of the facility by the department.
(4) The director shall
act on an application for certification before the 60th day after the filing of
the application under this section. The director[, after consultation with the Public Utility Commission,] may issue
the certificate together with such conditions as the director determines are
appropriate to promote the purposes of [this
section and ORS 315.354, 469.185, 469.200, 469.205 and 469.878.] ORS
315.354, 469.185 to 469.225 and 469.878. If the applicant is an entity subject
to regulation by the Public Utility Commission, the director may consult with
the commission prior to issuance of the certificate. The action of the
director shall include certification of the actual cost of the facility.
However, [in no event shall] the
director may not certify an amount for tax credit purposes which is more
than 10 percent in excess of the amount approved in the preliminary certificate
issued for the facility.
(5) If the director
rejects an application for final certification, or certifies a lesser actual
cost of the facility than was claimed in the application, the director shall
send to the applicant written notice of the action, together with a statement
of the findings and reasons therefor, by certified mail, before the 60th day
after the filing of the application. Failure of the director to act constitutes
rejection of the application.
(6) Upon approval of an
application for final certification of a facility, the director shall certify
the facility. Each certificate shall bear a separate serial number for each
device. Where one or more devices constitute an operational unit, the director
may certify the operational unit under one certificate.
SECTION 5.
ORS 469.225 is amended to read:
469.225. (1) Under the
procedures for a contested case under ORS chapter 183, the Director of the
State Department of Energy may order the revocation of the certificate issued
under ORS 469.215 if the director finds that:
(a) The certification
was obtained by fraud or misrepresentation; or
(b) The holder of the
certificate has failed [substantially]
to construct or [to make every reasonable
effort to] operate the facility in compliance with the plans,
specifications and procedures in [such]
the certificate.
(2) As soon as the order
of revocation under this section becomes final, the director shall notify the
Department of Revenue of [such]
the order of revocation.
(3) If the certificate is
issued for a facility that is not a renewable energy resource equipment
manufacturing facility and is ordered revoked pursuant to subsection (1)(a)
of this section, all prior tax credits provided to the holder of the
certificate by virtue of [such]
the certificate shall be forfeited and upon notification under subsection
(2) of this section the Department of Revenue immediately shall proceed to
collect those taxes not paid by the certificate holder as a result of the tax
credits provided to the holder under ORS 315.354.
(4) If the
certificate is issued for a renewable energy resource equipment manufacturing
facility and is ordered revoked, upon notification under subsection (2) of this
section the Department of Revenue immediately shall proceed to collect:
(a) In the case where no
portion of a certificate has been transferred under ORS 469.206, those taxes
not paid by the certificate holder as a result of the tax credits provided to
the certificate holder under ORS 315.354, from the certificate holder or a
successor in interest to the business interests of the certificate holder. All
prior tax credits provided to the holder of the certificate by virtue of the
certificate shall be forfeited.
(b) In the case where
all or a portion of a certificate has been transferred under ORS 469.206, the
maximum theoretical amount of the tax credits allowable under ORS 315.354, from
the transferor.
(5)(a) The Department of Revenue shall have the
benefit of all laws of this state pertaining to the collection of income and excise
taxes and may proceed to collect the amounts described in subsection (3) or
(4) of this section from the person that obtained certification from the State
Department of Energy or any successor in interest to the business interests of
that person. No assessment of [such
taxes] tax shall be necessary and no statute of limitation shall
preclude the collection of [such]
taxes described in this subsection.
(b) For purposes of
this subsection, a lender, bankruptcy trustee or other person that acquires an interest
through bankruptcy or through foreclosure of a security interest is not
considered to be a successor in interest to the business interests of the
person that obtained certification from the State Department of Energy.
[(4)] (6) If the certificate is issued for a facility that
is not a renewable energy resource equipment manufacturing facility and is
ordered revoked pursuant to subsection (1)(b) of this section, the certificate
holder shall be denied any further relief under ORS 315.354 in connection with
[such] the facility from and
after the date that the order of revocation becomes final.
(7) Notwithstanding
subsections (1) to (6) of this section, a certificate or portion of a
certificate held by a transferee under ORS 469.206 may not be considered
revoked for purposes of the transferee, the tax credit allowable to the
transferee under ORS 315.354 may not be reduced and a transferee is not liable
under subsections (3) to (5) of this section.
SECTION 6.
ORS 317.097 is amended to read:
317.097. (1) A credit
against taxes otherwise due under this chapter for the taxable year shall be
allowed to a lending institution in an amount equal to the difference between:
(a) The amount of
finance charge charged by the lending institution during the taxable year at an
annual rate less than the market rate for a loan that is made before January 1,
2020, that complies with the requirements of this section; and
(b) The amount of
finance charge that would have been charged during the taxable year by the
lending institution for the loan for housing construction, development,
acquisition or rehabilitation measured at the annual rate charged by the
lending institution for nonsubsidized loans made under like terms and
conditions at the time the loan for housing construction, development,
acquisition or rehabilitation is made.
(2) The maximum amount
of credit for the difference between the amounts described in subsection (1)(a)
and (b) of this section may not exceed four percent of the average unpaid
balance of the loan during the tax year for which the credit is claimed.
(3) Any tax credit
otherwise allowable under this section that is not used by the taxpayer in a
particular year may be carried forward and offset against the taxpayer’s tax
liability for the next succeeding tax year. Any credit remaining unused in 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, 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.
(4) In order to be
eligible for the tax credit allowed under subsection (1) of this section, the
loan shall be:
(a) Made to an
individual or individuals who own the dwelling, participate in an
owner-occupied community rehabilitation program and are certified by the local
government or its designated agent as having an income level at the time the
loan is made of less than 80 percent of the area median income;
(b)(A) Made to a qualified
borrower;
(B) Used to finance
construction, development, acquisition or rehabilitation of housing; and
(C) Accompanied by a
written certification by the Housing and Community Services Department that
the:
(i) Housing created by
the loan is or will be occupied by households earning less than 80 percent of
the area median income; and
(ii) Full amount of
savings from the reduced interest rate provided by the lending institution is
or will be passed on to the tenants in the form of reduced housing payments,
regardless of other subsidies provided to the housing project;
(c)(A) Made to a
qualified borrower;
(B) Used to finance
construction, development, acquisition, or acquisition and rehabilitation of
housing consisting of a manufactured dwelling park; and
(C) Accompanied by a
written certification by the Housing and Community Services Department that the
housing will continue to be operated as a manufactured dwelling park during the
period for which the tax credit is allowed; or
(d)(A) Made to a
qualified borrower;
(B) Used to finance
acquisition, or acquisition and rehabilitation, of housing consisting of a
preservation project; and
(C) Accompanied by a
written certification by the Housing and Community Services Department that the
housing preserved by the loan:
(i) Is or will be
occupied by households earning less than 80 percent of the area median income;
and
(ii) Has a rent
assistance contract with the United States Department of Housing and Urban
Development or the United States Department of Agriculture that will be
maintained by the qualified borrower.
(5) A loan made to
refinance a loan that meets the criteria stated in subsection (4) of this
section shall be treated the same as a loan that meets the criteria stated in
subsection (4) of this section.
(6) In order to be
eligible for the tax credit allowed under subsection (1) of this section, the
loan also shall be accompanied by a written certification by the Housing and
Community Services Department that:
(a) Specifies the
period, as determined by the Housing and Community Services Department, during
which the loan is eligible for the tax credit under subsection (1) of this
section; and
(b) States that the loan
is within the limitation imposed by subsection (7) of this section.
(7)(a) The Housing and
Community Services Department may certify loans that are eligible under
subsection (4) of this section if the total credits attributable to all loans
eligible for credits under subsection (1) of this section and then outstanding
do not exceed [$13 million] $17
million for any fiscal year. In making loan certifications, the Housing and
Community Services Department shall attempt to distribute the tax credits
statewide, but shall concentrate the tax credits in those areas of the state
that are determined by the State Housing Council to have the greatest need for
affordable housing.
(b) The certification
under subsection (6) of this section shall state the period for which the
credit will be allowed, which may not exceed 20 years.
(8) The applicant’s
receipt of a credit under section 42 of the Internal Revenue Code does not
affect the credit allowed under this section.
(9) A loan meeting the
requirements of subsections (4) and (6) of this section may be sold to a
qualified assignee with or without the lending institution’s retaining
servicing of the loan so long as a designated lending institution maintains
records annually verified by a loan servicer that establish the amount of tax
credit earned by the taxpayer throughout each year of eligibility.
(10) As used in this
section:
(a) “Annual rate” means
the yearly interest rate specified on the note, and not the annual percentage
rate, if any, disclosed to the applicant to comply with the federal Truth in
Lending Act.
(b) “Finance charge” means
the total of all interest, loan fees, interest on any loan fees financed by the
lending institution, and other charges related to the cost of obtaining credit.
(c) “Lending institution”
means any insured institution, as that term is defined in ORS 706.008, any
mortgage banking company that maintains an office in this state or any
community development corporation that is organized under the Oregon Nonprofit
Corporation Law.
(d) “Manufactured
dwelling park” has the meaning given that term in ORS 446.003.
(e) “Nonprofit
corporation” means a corporation that is exempt from income taxes under section
501(c)(3) or (4) of the Internal Revenue Code as amended and in effect on
December 31, 2006.
(f) “Preservation
project” means housing that was previously developed as affordable housing with
a contract for rent assistance from the United States Department of Housing and
Urban Development or the United States Department of Agriculture and that is
being acquired by a sponsoring entity.
(g) “Qualified assignee”
means any investor participating in the secondary market for real estate loans.
(h) “Qualified borrower”
means any borrower that is a sponsoring entity that has a controlling interest
in the real property that is financed by the loan described in subsection (4)
of this section. Such a controlling interest includes, but is not limited to, a
controlling interest in the general partner of a limited partnership that owns
the real property.
(i) “Sponsoring entity”
means a nonprofit corporation, nonprofit cooperative, state governmental
entity, local unit of government as defined in ORS 466.706, housing authority
or any other person, provided that the person has agreed to restrictive
covenants imposed by a nonprofit corporation, nonprofit cooperative, state governmental
entity, local unit of government or housing authority.
(11) Notwithstanding any
other provision of law, a lending institution that is a community development
corporation organized under the Oregon Nonprofit Corporation Law may transfer
any part or all of any tax credit arising under subsection (1) of this section
to one or more other lending institutions that are stockholders or members of
the community development corporation or that otherwise participate through the
community development corporation in the making of one or more loans that
generate the tax credit under subsection (1) of this section.
(12) The lending
institution shall file an annual statement with the Housing and Community
Services Department, specifying that it has conformed with all requirements
imposed by law to qualify for this tax credit.
(13) The Housing and
Community Services Department and the Department of Revenue may adopt rules to
carry out the provisions of this section.
SECTION 7. The
amendments to ORS 469.197, 469.200, 469.205, 469.215 and 469.225 by sections 1
to 5 of this 2008 Act apply to applications for preliminary certification
approved on or after January 1, 2008, and to tax years beginning on or after
January 1, 2008.
SECTION 8. The
amendments to ORS 317.097 by section 6 of this 2008 Act apply to tax years
beginning on or after January 1, 2009.
SECTION 9. If
House Bill 3618 becomes law, section 2, chapter 28, Oregon Laws 2008 (Enrolled
House Bill 3618), is amended to read:
Sec. 2.
Inheritance tax returns claiming a credit under ORS 118.140 are not due, and no
tax is owed by those estates, prior to [June
30,] September 1, 2008. No later than July 1, 2008, the Department
of Revenue shall adopt by rule procedures and filing deadlines necessary to
administer ORS 118.140 as it applies to estates of decedents dying on or after
January 1, 2007, and before the effective date of [this 2008 Act] chapter 28, Oregon Laws 2008 (Enrolled House Bill
3618). The department shall cancel any interest or penalty that would
otherwise result from noncompliance with ORS 118.140 by estates of decedents
dying on or after January 1, 2007, and before the effective date of [this 2008 Act] chapter 28,
Oregon Laws 2008 (Enrolled House Bill 3618).
SECTION 10. 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.
Approved by the Governor March 11, 2008
Filed in the office of Secretary of State March 11, 2008
Effective date May 23, 2008
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