77th OREGON LEGISLATIVE ASSEMBLY--2013 Regular Session
Enrolled
House Bill 2763
Sponsored by COMMITTEE ON TRANSPORTATION AND ECONOMIC DEVELOPMENT
CHAPTER ................
AN ACT
Relating to economic development; creating new provisions;
amending ORS 285C.650, 315.533 and 731.854; and prescribing an
effective date.
Be It Enacted by the People of the State of Oregon:
SECTION 1. ORS 315.533 is amended to read:
315.533. (1) As used in this section, 'applicable percentage'
means zero percent for each of the first two credit allowance
dates, seven percent for the third credit allowance date and
eight percent for the next four credit allowance dates.
(2) A person that makes a qualified equity investment shall, at
the time of investment, earn a vested credit against the taxes
otherwise due under ORS chapter 316 or, if the person is a
corporation, under ORS chapter 317 or 318.
(3)(a) The total amount of the tax credit available to a
taxpayer under this section shall equal 39 percent of the
purchase price of the qualified equity investment.
(b) The taxpayer that holds a qualified equity investment on a
particular credit allowance date of the qualified equity
investment may claim a portion of the tax credit against its tax
liability for the tax year that includes the credit allowance
date equal to the applicable percentage for that credit allowance
date multiplied by the purchase price of the qualified equity
investment.
(4) The credit allowed under this section may not exceed the
tax liability of the taxpayer for the tax year in which the
credit is claimed.
{ - (5) Any tax credit otherwise allowable under this section
that is not used by the taxpayer in a particular tax year may be
carried forward and offset against the taxpayer's tax liability
in any succeeding tax year. - }
{ + (5) Any tax credit otherwise allowable under this section
that is not used by the taxpayer in a particular tax year may be
carried forward and offset against the taxpayer's tax liability
for the next succeeding tax year. Any credit remaining unused in
the next succeeding tax year may be carried forward and used in
the second succeeding tax year. Any credit remaining unused in
the second succeeding tax year may be carried forward and used in
the third succeeding tax year. Any credit remaining unused in the
third succeeding tax year may be carried forward and used in the
fourth succeeding tax year. Any credit remaining unused in the
fourth succeeding tax year may be carried forward and used in the
Enrolled House Bill 2763 (HB 2763-C) Page 1
fifth succeeding tax year, but may not be used in any tax year
thereafter. + }
(6) The following conditions must exist for a taxpayer to be
eligible for the credit allowed under this section:
(a) A qualified community development entity that issues a debt
instrument may not make cash interest payments on the debt
instrument during the period commencing with its issuance and
ending on its final credit allowance date in excess of the sum of
the cash interest payments and the cumulative operating income,
as defined in the regulations promulgated under section 45D of
the Internal Revenue Code, of the qualified community development
entity for the same period. Neither this paragraph nor the
definition of 'long-term debt security' provided in ORS 315.529
in any way limits the holder's ability to accelerate payments on
the debt instrument in situations where the qualified community
development entity has defaulted on covenants designed to ensure
compliance with this section or section 45D of the Internal
Revenue Code.
(b) A business shall be considered a qualified active
low-income community business for the duration of a qualified
community development entity's investment in or loan to the
business, if it is reasonable to expect that at the time of the
qualified community development entity's investment in or loan to
a qualified active low-income community business, the business
will continue to satisfy the requirements for being a qualified
active low-income community business throughout the entire period
of the investment or loan.
(c) A qualified equity investment must be designated by the
issuer as a qualified equity investment and be certified by the
Oregon Business Development Department as not exceeding the
limitation in ORS 285C.653. The qualified community development
entity must keep sufficiently detailed books and records with
respect to the investments made with the proceeds of the
qualified equity investments to allow the direct tracing of
proceeds into qualified low-income community investments in
qualified active low-income community businesses in this state.
(d) The qualified community development entity shall report
annually to the department:
(A) The number of employment positions created and retained as
a result of qualified low-income community investments by the
qualified community development entity;
(B) The average annual salary of positions described in
subparagraph (A) of this paragraph; and
(C) The number of positions described in subparagraph (A) of
this paragraph that provide health benefits.
(e) The maximum amount of qualified low-income community
investments that may be made in a qualified active low-income
community business and all of its affiliates, with the proceeds
of qualified equity investments that have been certified under
ORS 285C.650, shall be { - $4 million - } { + $8 million + },
whether made by one or several qualified community development
entities.
(f) A qualified equity investment must be made before July 1,
2016. Nothing in this paragraph precludes an entity that makes a
qualified equity investment prior to July 1, 2016, from claiming
a tax credit relating to that qualified equity investment for
each applicable credit allowance date.
(7) A taxpayer claiming a credit under this section may not
claim any other credit under this chapter or ORS chapter 285C
Enrolled House Bill 2763 (HB 2763-C) Page 2
during the same tax year based on activities related to the same
qualified active low-income community business.
SECTION 1a. { + The amendments to ORS 315.533 by section 1 of
this 2013 Act apply to qualified low-income community investments
made on or after January 1, 2014. + }
SECTION 2. ORS 285C.650 is amended to read:
285C.650. (1) A qualified community development entity that
seeks to have an equity investment or long-term debt security
certified as a qualified equity investment and eligible for a tax
credit under ORS 315.533 shall apply to the Oregon Business
Development Department. The department shall establish by rule
application procedures for applications for certification. The
entity must submit an application on a form that the department
provides that includes:
(a) The entity's name, address, tax identification number and
evidence of the entity's certification as a qualified community
development entity.
(b) A copy of an allocation agreement executed by the entity,
or its controlling entity, and the Community Development
Financial Institutions Fund that includes the State of Oregon in
its service area.
(c) A certificate executed by an executive officer of the
entity attesting that the allocation agreement remains in effect
and has not been revoked or canceled by the Community Development
Financial Institutions Fund.
(d) A description of the proposed purchase price, structure and
purchaser of the equity investment or long-term debt security.
(e) The name and tax identification number of any person
eligible to claim a tax credit, under ORS 315.533, allowed as a
result of the certification of the qualified equity investment.
(f) Information regarding the proposed use of proceeds from the
issuance of the qualified equity investment.
(g) A nonrefundable application fee of $20,000. This fee shall
be paid to the department and shall be required for each
application submitted.
(2) Within 15 days after receipt of a completed application
containing the information necessary for the department to
certify a proposed equity investment, including the payment of
the application fee, the department shall grant or deny the
application in full or in part. If the department denies any part
of the application, the department shall inform the qualified
community development entity of the grounds for the denial. If
the qualified community development entity provides any
additional information required by the department or otherwise
completes its application within 15 days after the notice of
denial, the application shall be considered completed as of the
original date of submission. If the qualified community
development entity fails to provide the information or complete
its application within the 15-day period, the application remains
denied and must be resubmitted in full with a new submission
date.
(3) If the application is deemed complete, the department shall
certify the proposed equity investment or long-term debt security
as a qualified equity investment and eligible for a tax credit
under ORS 315.533, subject to the limitations in ORS 315.536. The
department shall provide written notice of the certification to
the qualified community development entity. The notice shall
include the names of those taxpayers who are eligible to utilize
the credits and their respective credit amounts. If the names of
the persons or entities that are eligible to utilize the credits
Enrolled House Bill 2763 (HB 2763-C) Page 3
change due to a transfer of a qualified equity investment or a
change in an allocation pursuant to ORS 315.536, the qualified
community development entity shall notify the department of the
change.
(4) { + (a) Except as provided in paragraph (b) of this
subsection, + } within 60 days after receiving notice of
certification, { - the - } { + a + } qualified community
development entity shall issue the qualified equity investment
and receive cash in the amount of the certified purchase price.
The qualified community development entity must provide the
department with evidence of the receipt of the cash investment
within 10 business days after receipt.
{ + (b) For a qualified equity investment described in ORS
285C.653 (2), a qualified community development entity shall
issue the qualified equity investment during the period beginning
July 1, 2012, and ending 60 days after receiving notice of
certification. If the qualified equity investment is issued prior
to the submission of an application for certification under this
section, the qualified community development entity must provide
the department with evidence of the qualified equity investment
and of receipt of the cash investment at the time of application
for certification.
(c) + } If { - the - } { + a + } qualified community
development entity does not receive the cash investment and issue
the qualified equity investment { - within 60 days - } { + on
or before the 60th day + } following receipt of the certification
notice, the certification shall lapse and the entity may not
issue the qualified equity investment without reapplying to the
department for certification. A certification that lapses reverts
to the department and may be reissued only in accordance with the
application process outlined in this section.
(5) The department shall certify qualified equity investments
in the order applications are received by the department.
Applications received on the same day shall be deemed to have
been received simultaneously. For applications received on the
same day and deemed complete, the department shall certify,
consistent with remaining tax credit capacity, qualified equity
investments in proportionate percentages based upon the ratio of
the amount of qualified equity investment requested in an
application to the total amount of qualified equity investments
requested in all applications received on the same day. If a
pending request cannot be fully certified because of the
limitation in ORS 285C.653, the department shall certify the
portion that may be certified unless the qualified community
development entity elects to withdraw its request rather than
receive partial credit.
(6) A qualified community development entity that is certified
under this section shall pay an annual evaluation fee of $1,000
to the department.
(7) The department shall establish by rule procedures to
administer the provisions of this section, including the
allocation of tax credits issued for qualified equity
investments.
SECTION 3. { + The amendments to ORS 285C.650 by section 2 of
this 2013 Act apply to qualified equity investments made on or
after July 1, 2012. + }
SECTION 4. ORS 731.854 is amended to read:
731.854. (1) When by or pursuant to the laws of any other state
or foreign country any taxes, licenses and other fees, in the
aggregate, and any fines, penalties, deposit requirements or
Enrolled House Bill 2763 (HB 2763-C) Page 4
other material obligations, prohibitions or restrictions are or
would be imposed upon insurers domiciled in this state, or upon
the insurance producers or representatives of such insurers,
which are in excess of such taxes, licenses and other fees, in
the aggregate, or which are in excess of the fines, penalties,
deposit requirements or other obligations, prohibitions, or
restrictions directly imposed upon similar insurers, or upon the
insurance producers or representatives of such insurers, of such
other state or country under the statutes of this state, so long
as such laws of such other state or country continue in force or
are so applied, the same taxes, licenses and other fees, in the
aggregate, or fines, penalties or deposit requirements or other
material obligations, prohibitions, or restrictions of whatever
kind shall be imposed by the Director of the Department of
Consumer and Business Services upon the insurers, or upon the
insurance producers or representatives of such insurers, of such
other state or country doing business or seeking to do business
in this state. Any tax, license or other fee or other obligation
imposed by any city, county, or other political subdivision or
agency of such other state or country on insurers domiciled in
this state or their insurance producers or representatives shall
be deemed to be imposed by such state or country within the
meaning of this subsection.
(2) Foreign reciprocal or interinsurance exchanges filing a
consolidated return for purposes of ORS chapter 317 shall prepare
and file a separate individual retaliatory tax calculation. The
excise tax for the consolidated group shall be allocated for
retaliatory tax purposes among the individual foreign insurers
writing Oregon premiums. The allocation, after excluding the
domestic share as determined by the Director of the Department of
Consumer and Business Services by rule, shall be in the
proportion that the premiums written in Oregon by a foreign
insurer of the group bears to the total premiums written in
Oregon by all foreign insurers in the group writing premiums in
Oregon.
(3) This section does not apply as to personal income taxes,
nor as to local ad valorem taxes on real or personal property nor
as to special purpose obligations or assessments heretofore
imposed by another state in connection with particular classes of
insurance, other than property insurance; except that deductions,
from premium taxes or other taxes otherwise payable, allowed on
account of real estate or personal property taxes paid shall be
taken into consideration by the director in determining the
propriety and extent of retaliatory action under this section.
(4) For the purpose of applying this section to an alien
insurer, its domicile shall be determined in accordance with ORS
731.092 and 731.096.
(5) For the purpose of applying this section to foreign and
alien insurers, the following specifically shall be treated as
taxes imposed by this state:
(a) The corporate excise tax imposed under ORS chapter
317 { + , without taking into consideration the amount of any
reduction due to the credit allowed under ORS 315.533 + }.
(b) The assessments imposed under ORS 731.804 made to support
the legislatively authorized budget of the Department of Consumer
and Business Services with respect to the functions of the
department under the Insurance Code.
(c) The assessments paid by insurers on behalf of their
insureds under ORS 656.612.
Enrolled House Bill 2763 (HB 2763-C) Page 5
SECTION 5. { + The amendments to ORS 731.854 by section 4 of
this 2013 Act apply to tax years beginning on or after January 1,
2013. + }
SECTION 6. { + (1) The Oregon Business Development Department
shall annually prepare a report that discloses all costs and fees
incurred by the department, or by any other state agency, in
administering, during the agency fiscal year ending during the
current calendar year, the tax credit allowed under ORS 315.533.
(2) The report required under this section shall also provide
information about qualified equity investments issued on or after
July 1, 2013, including, for the previous calendar year and for
tax years ending during the previous calendar year:
(a) The amount of tax credit allowed for the qualified equity
investments under ORS 315.533;
(b) The amount of tax credit claimed for the qualified equity
investments under ORS 315.533;
(c) The costs and expenses of forming the qualified community
development entities that issued the qualified equity
investments, including but not limited to fees paid for
professional services, including legal and accounting services,
related to the formation and operation of the entities; and
(d) Information with respect to qualified equity investments
and qualified low-income community investments that would be
reported as part of the institution level report and transaction
level reports submitted by qualified community development
entities pursuant to section 45D of the Internal Revenue Code.
(3) The Oregon Business Development Department shall submit the
report required under this section to the Oregon Department of
Administrative Services no later than 30 days following the
effective date of this 2013 Act and, beginning in 2014, no later
than September 30 of each year. The information shall then be
posted on the Oregon transparency website required under ORS
184.483 no later than December 31 of the same year.
(4) The information described in this section that is available
on the Oregon transparency website must be accessible in the
format and manner required by the Oregon Department of
Administrative Services.
(5) The Oregon Business Development Department shall collect
data sufficient for the purpose of preparing the report required
under this section.
(6) For purposes of this section, the Oregon Business
Development Department may not collect or report proprietary
information related to a taxpayer, taxpayers holding qualified
equity investments, qualified community development entities or
qualified active low-income community businesses, or information
about the specific terms of financial agreements pertaining to
any project. + }
SECTION 7. { + This 2013 Act takes effect on the 91st day
after the date on which the 2013 regular session of the
Seventy-seventh Legislative Assembly adjourns sine die. + }
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Enrolled House Bill 2763 (HB 2763-C) Page 6
Passed by House April 10, 2013
Repassed by House June 28, 2013
.............................................................
Ramona J. Line, Chief Clerk of House
.............................................................
Tina Kotek, Speaker of House
Passed by Senate June 28, 2013
.............................................................
Peter Courtney, President of Senate
Enrolled House Bill 2763 (HB 2763-C) Page 7
Received by Governor:
......M.,............., 2013
Approved:
......M.,............., 2013
.............................................................
John Kitzhaber, Governor
Filed in Office of Secretary of State:
......M.,............., 2013
.............................................................
Kate Brown, Secretary of State
Enrolled House Bill 2763 (HB 2763-C) Page 8