75th OREGON LEGISLATIVE ASSEMBLY--2009 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 2165
 
                           A-Engrossed
 
                         House Bill 2472
                   Ordered by the House May 6
             Including House Amendments dated May 6
 
Sponsored by COMMITTEE ON REVENUE
 
 
                             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.
 
    { - Establishes calendar year limit on total cost of
facilities for which State Department of Energy may issue
preliminary certificates for business energy tax credit. - }
    { - Applies to applications for preliminary certification
received on or after January 1, 2010. - }
   { +  Prohibits State Department of Energy from issuing
preliminary certification to applicant seeking tax credit for
erection, construction, installation or acquisition of large
facility unless applicant meets specified criteria. Authorizes
Director of State Department of Energy to revoke certificate if
holder of certificate fails to comply with criteria.
  Prohibits Department of Revenue, if tax credit is transferred,
from paying interest on amounts claimed by transferee in amended
income tax return.
  Broadens definition of 'renewable energy resource equipment
manufacturing facility' to include place primarily used to
manufacture certain electric vehicles for provisions relating to
renewable energy resources.
  Decreases amount that certain facilities must cost to qualify
for preliminary certification.
  Authorizes State Department of Energy to treat certain multiple
applications for preliminary certification as single application
under specified circumstances. + }
  Takes effect on 91st day following adjournment sine die.
 
                        A BILL FOR AN ACT
Relating to business energy tax credits; creating new provisions;
  amending ORS 469.185, 469.200, 469.215 and 469.225; prescribing
  an effective date; and providing for revenue raising that
  requires approval by a three-fifths majority.
Be It Enacted by the People of the State of Oregon:
  SECTION 1.  { + Section 2 of this 2009 Act is added to and made
a part of ORS 469.185 to 469.225. + }
  SECTION 2.  { + (1) As used in this section, 'large facility '
means a facility with a projected cost of $5 million or more.
  (2) The State Department of Energy may not issue a preliminary
certification to an applicant under ORS 469.205 for the erection,
 
construction, installation or acquisition of a large facility
unless the applicant establishes that:
  (a) The applicant has applied for all licenses and permits
required by state or local law for the facility;
  (b) The applicant is not in arrears on any tax owed to the
state or to a local government; and
  (c) To the satisfaction of the department, the facility will be
in continuous operation for at least five years after the
facility is placed in operation.
  (3) In addition to the criteria established by the State
Department of Energy under ORS 469.197, the department may
consider issuing a preliminary certification to an applicant
under ORS 469.205 for the erection, construction, installation or
acquisition of a large facility based on the following criteria:
  (a) The number of jobs that would be created if the facility
was constructed;
  (b) The economic benefits of constructing the facility for the
state and for the area in which the facility would be
constructed;
  (c) The revenue impact of granting the certification, as
compared with the projected benefits of the construction and
operation of the facility; and
  (d) Whether construction of the facility is dependent upon
preliminary certification under ORS 469.185 to 469.225.
  (4) If a certificate is issued under ORS 469.215 for the
erection, construction, installation or acquisition of a large
facility, and tax credit based on the certificate is transferred
under ORS 469.206, the Department of Revenue may not pay any
interest on amounts claimed by a transferee by reason of the
application of the tax credit in an amended return filed by the
transferee.
  (5) The State Department of Energy may not issue a certificate
under ORS 469.215 for a large facility unless the applicant has
been issued all permits and licenses required by state or local
law for the facility. The department may condition the granting
of a certificate under ORS 469.215 for a large facility on the
applicant continuing to meet the requirements of subsection
(2)(b) and (c) of this section during the period that the
certificate is valid. + }
  SECTION 3. ORS 469.185 is amended to read:
  469.185. As used in ORS 469.185 to 469.225 and 469.878:
  (1) 'Alternative fuel vehicle' means a vehicle as defined by
the Director of the State Department of Energy by rule that is
used primarily in connection with the conduct of a trade or
business and that is manufactured or modified to use an
alternative fuel, including but not limited to electricity,
ethanol, methanol, gasohol and propane or natural gas, regardless
of energy consumption savings.
  (2) 'Car sharing facility' means the expenses of operating a
car sharing program, including but not limited to the fair market
value of parking spaces used to store the fleet of cars available
for a car sharing program, but does not include the costs of the
fleet of cars.
  (3) 'Car sharing program' means a program in which drivers pay
to become members in order to have joint access to a fleet of
cars from a common parking area on an hourly basis. 'Car sharing
program' does not include operations conducted by car rental
agencies.
  (4) 'Cost' means the capital costs and expenses necessarily
incurred in the acquisition, erection, construction and
installation of a facility, including site development costs and
expenses for a sustainable building practices facility.
  (5) 'Energy facility' means any capital investment for which
the first year energy savings yields a simple payback period of
greater than one year. An energy facility includes:
 
  (a) 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 necessarily acquired, erected, constructed or
installed by any person in connection with the conduct of a trade
or business and actually used in the processing or utilization of
renewable energy resources to:
  (A) Replace a substantial part or all of an existing use of
electricity, petroleum or natural gas;
  (B) Provide the initial use of energy where electricity,
petroleum or natural gas would have been used;
  (C) Generate electricity to replace an existing source of
electricity or to provide a new source of electricity for sale by
or use in the trade or business;
  (D) Perform a process that obtains energy resources from
material that would otherwise be solid waste as defined in ORS
459.005; or
  (E) Manufacture or distribute alternative fuels, including but
not limited to electricity, ethanol, methanol, gasohol or
biodiesel.
  (b) Any acquisition of, addition to, reconstruction of or
improvement of land or an existing structure, building,
installation, excavation, machinery, equipment or device
necessarily acquired, erected, constructed or installed by any
person in connection with the conduct of a trade or business in
order to substantially reduce the consumption of purchased
energy.
  (c) A necessary feature of a new commercial building or
multiple unit dwelling, as dwelling is defined by ORS 469.160,
that causes that building or dwelling to exceed an energy
performance standard in the state building code.
  (d) The replacement of an electric motor with another electric
motor that substantially reduces the consumption of electricity.
  (6) 'Facility' means an energy facility, recycling facility,
transportation facility, car sharing facility, sustainable
building practices facility, alternative fuel vehicle or
facilities necessary to operate alternative fuel vehicles,
including but not limited to an alternative fuel vehicle
refueling station, a high-efficiency combined heat and power
facility, a high-performance home, a homebuilder-installed
renewable energy system, or a renewable energy resource equipment
manufacturing facility.
  (7) 'High-efficiency combined heat and power facility ' means a
device or equipment that simultaneously produces heat and
electricity from a single source of fuel and that meets the
criteria established for a high-efficiency combined heat and
power facility under ORS 469.197.
  (8) 'High-performance home' means a new single-family dwelling
that:
  (a) Is designed and constructed to reduce net purchased energy
through use of both energy efficiency and on-site renewable
energy resources; and
  (b) Meets the criteria established for a high-performance home
under ORS 469.197.
  (9) 'Homebuilder-installed renewable energy system' means a
renewable energy resource system that:
  (a) Meets the criteria established for a renewable energy
resource system under ORS 469.197; and
  (b) Is installed in a new single-family dwelling by, or at the
direction of, the homebuilder constructing the dwelling.
  (10) 'Qualified transit pass contract' means a purchase
agreement entered into between a transportation provider and a
person, the terms of which obligate the person to purchase
transit passes on behalf or for the benefit of employees,
 
students, patients or other individuals over a specified period
of time.
  (11) 'Recycling facility' means equipment used by a trade or
business solely for recycling:
  (a) Including:
  (A) Equipment used solely for hauling and refining used oil;
  (B) New vehicles or modifications to existing vehicles used
solely to transport used recyclable materials that cannot be used
further in their present form or location such as glass, metal,
paper, aluminum, rubber and plastic;
  (C) Trailers, racks or bins that are used for hauling used
recyclable materials and are added to or attached to existing
waste collection vehicles; and
  (D) Any equipment used solely for processing recyclable
materials such as bailers, flatteners, crushers, separators and
scales.
  (b) But not including equipment used for transporting or
processing scrap materials that are recycled as a part of the
normal operation of a trade or business as defined by the
director.
  (12)(a) 'Renewable energy resource' includes, but is not
limited to:
  (A) Straw, forest slash, wood waste or other wastes from farm
or forest land, nonpetroleum plant or animal based biomass, ocean
wave energy, solar energy, wind power, water power or geothermal
energy; or
  (B) A hydroelectric generating facility that obtains all
applicable permits and complies with all state and federal
statutory requirements for the protection of fish and wildlife
and:
  (i) That does not exceed 10 megawatts of installed capacity; or
  (ii) Qualifies as a research, development or demonstration
facility.
  (b) 'Renewable energy resource' does not include a
hydroelectric generating facility that is not described in
paragraph (a) of this subsection.
  (13) 'Renewable energy resource equipment manufacturing
facility' means any structure, building, installation,
excavation, machinery, equipment or device, or an addition,
reconstruction or improvement to land or an existing structure,
building, installation, excavation, machinery, equipment or
device, that is necessarily acquired, constructed or installed by
a person in connection with the conduct of a trade or business,
that is used primarily to manufacture { + :
  (a) + } Equipment, machinery or other products designed to use
a renewable energy resource and that meets the criteria
established under ORS 469.197 { + ; or
  (b) Electric vehicles designed for use as modes of
transportation on public roads and highways or component parts of
electric vehicles, but not including component parts that may be
used in both electric and conventional vehicles + }.
  (14) 'Sustainable building practices facility' means a
commercial building in which building practices that reduce the
amount of energy, water or other resources needed for
construction and operation of the building are used. 'Sustainable
building practices facility' may be further defined by the State
Department of Energy by rule, including rules that establish
traditional building practice baselines in energy, water or other
resource usage for comparative purposes for use in determining
whether a facility is a sustainable building practices facility.
  (15) 'Transportation facility' means a transportation project
that reduces energy use during commuting to and from work or
school, during work-related travel, or during travel to obtain
medical or other services, and may be further defined by the
department by rule. 'Transportation facility' includes, but is
 
not limited to, a qualified transit pass contract or a
transportation services contract.
  (16) 'Transportation provider' means a public, private or
nonprofit entity that provides transportation services to members
of the public.
  (17) 'Transportation services contract' means a contract that
is related to a transportation facility, and may be further
defined by the department by rule.
  SECTION 4. ORS 469.200, as amended by section 2, chapter 29,
Oregon Laws 2008, is amended to read:
  469.200. (1) For a facility, the total cost 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 - }   { + $15 + } million, in the case of a
facility using or producing renewable energy resources or a
high-efficiency combined heat and power facility;
   { +  (b) $20 million, in the case of a facility that has an
installed capacity of 20 megawatts or less and:
  (A) That uses or produces renewable energy resources; or
  (B) That is a high-efficiency combined heat and power
facility; + }
    { - (b) - }   { + (c) + } $40 million, in the case of a
renewable energy resource equipment manufacturing facility; or
    { - (c) - }   { + (d) + } $10 million, in the case of any
other facility.
  (2) Notwithstanding subsection   { - (1)(b) - }
 { + (1)(c) + } 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).
  (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.
   { +  (4) If more than one application for preliminary
certification is made to the State Department of Energy for the
same site or by the same applicant, the department may treat the
applications as a single application for the purpose of the
limitations imposed by this section, and for the purpose of
determining whether the application is for a large facility as
defined in section 2 of this 2009 Act, if the department finds
that the applications are for facilities that are in such close
proximity, or so closely related, as to constitute a single
facility. + }
  SECTION 5. ORS 469.215, as amended by section 4, chapter 29,
Oregon Laws 2008, 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 may issue the certificate together
with such conditions as the director determines are appropriate
to promote the purposes of 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, the director may not certify an amount for
tax credit purposes   { - which - }  { +  that + } 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 6. ORS 469.225, as amended by section 5, chapter 29,
Oregon Laws 2008, 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 to construct or
operate the facility in compliance with the plans, specifications
and procedures in the certificate { + ; or
  (c) The holder of the certificate has failed to comply with
conditions imposed under section 2 (2) of this 2009 Act + }.
  (2) As soon as the order of revocation under this section
becomes final, the director shall notify the Department of
Revenue of 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 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 tax shall be necessary and no statute of
limitation shall preclude the collection of 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.
  (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 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 7.  { + Section 2 of this 2009 Act and the amendments
to ORS 469.185, 469.200, 469.215 and 469.225 by sections 3 to 6
of this 2009 Act apply to preliminary certifications issued on or
after the effective date of this 2009 Act. + }
  SECTION 8.  { + This 2009 Act takes effect on the 91st day
after the date on which the regular session of the Seventy-fifth
Legislative Assembly adjourns sine die. + }
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