Bill Text: OR HB4038 | 2012 | Regular Session | Engrossed
Bill Title: Relating to tax credits; prescribing an effective date.
Sponsorship: Unknown
Status: (Failed) 2012-03-05 - In committee upon adjournment. [HB4038 Detail]
Download: Oregon-2012-HB4038-Engrossed.html
76th OREGON LEGISLATIVE ASSEMBLY--2012 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 134
A-Engrossed
House Bill 4038
Ordered by the House February 15
Including House Amendments dated February 15
Introduced and printed pursuant to House Rule 12.00. Presession
filed (at the request of House Interim 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.
{ - Modifies statutes related to income and excise tax
credits. Removes provisions requiring submission of jobs-related
data by applicants for energy tax credits. - }
{ + Provides that taxpayer for qualified research activities
may not claim credit for amount deducted. Imposes sunset on tax
credit for insurers providing workers' compensation coverage.
Provides that auction of tax credits for certified film
development contributions may occur no later than April 15
following tax year. For purposes of farmworker housing tax
credit, requires Housing and Community Services Department to
verify farmworker housing is compliant with certain conditions.
Requires information about farmworker housing tax credits to be
posted on Oregon transparency website maintained by Oregon
Department of Administrative Services. + }
Takes effect on 91st day following adjournment sine die.
A BILL FOR AN ACT
Relating to tax credits; creating new provisions; amending ORS
184.484, 315.164, 315.514, 315.516 and 317.154 and sections 20
and 28, chapter 913, Oregon Laws 2009, and section 2, chapter
199, Oregon Laws 2011; and prescribing an effective date.
Be It Enacted by the People of the State of Oregon:
SECTION 1. ORS 317.154 is amended to read:
317.154. (1) A credit against taxes otherwise due under this
chapter shall be allowed for qualified research expenses that
exceed 10 percent of Oregon sales.
(2) For purposes of this section:
(a) 'Oregon sales' shall be computed using the laws and
administrative rules for calculating the numerator of the Oregon
sales factor under ORS 314.665.
(b) 'Qualified research' has the meaning given the term under
section 41(d) of the Internal Revenue Code and shall consist only
of research conducted in Oregon.
(3) The credit under this section is equal to five percent of
the amount by which the qualified research expenses exceed 10
percent of Oregon sales.
(4) The credit under this section shall not exceed $10,000
times the number of percentage points by which the qualifying
research expenses exceed 10 percent of Oregon sales.
(5) The maximum credit under this section may not exceed $1
million.
{ + (6) A deduction may not be taken for the portion of
expenses or payments, otherwise allowable as a deduction, that is
equal to the amount of the credit claimed under this section. + }
{ - (6) - } { + (7) + } Any tax credit that is otherwise
allowable under this section and that is not used by the taxpayer
in that 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.
SECTION 2. { + The amendments to ORS 317.154 by section 1 of
this 2012 Act apply to tax years beginning on or after January 1,
2012. + }
SECTION 3. Section 20, chapter 913, Oregon Laws 2009, as
amended by section 4, chapter 730, Oregon Laws 2011, is amended
to read:
{ + Sec. 20. + } { + (1) + } A credit may not be claimed
under ORS 317.122 (1) for tax years beginning on or after January
1, 2018.
{ + (2) A credit may not be claimed under ORS 317.122 (2) for
tax years beginning on or after January 1, 2012. + }
SECTION 4. ORS 315.514 is amended to read:
315.514. (1) A credit against the taxes that are otherwise due
under ORS chapter 316 or, if the taxpayer is a corporation, under
ORS chapter 317 or 318, is allowed to a taxpayer for certified
film production development contributions made by the taxpayer
during the tax year to the Oregon Production Investment Fund
established under ORS 284.367.
(2)(a) The Department of Revenue shall, in cooperation with the
Oregon Film and Video Office, conduct an auction of tax credits
under this section. { + The auction may be conducted no later
than April 15 following the end of any tax year for which the
credit is allowed. + } The department may conduct the auction in
the manner that it determines is best suited to maximize the
return to the state on the sale of tax credit certifications and
shall announce a reserve bid prior to conducting the auction. The
reserve amount shall be at least 95 percent of the total amount
of the tax credit. Moneys necessary to reimburse the department
for the actual costs incurred by the department in administering
an auction, not to exceed 0.25 percent of auction proceeds, are
continuously appropriated to the department. The department shall
deposit net receipts from the auction required under this section
in the Oregon Production Investment Fund.
(b) The Oregon Film and Video Office shall adopt rules in order
to achieve the following goals:
(A) Subject to paragraph (a) of this subsection, generate
contributions for which tax credits of $6 million are certified
for each fiscal year;
(B) Maximize income and excise tax revenues that are retained
by the State of Oregon for state operations; and
(C) Provide the necessary financial incentives for taxpayers to
make contributions, taking into consideration the impact of
granting a credit upon a taxpayer's federal income tax liability.
(3) Contributions made under this section shall be deposited in
the Oregon Production Investment Fund.
(4)(a) Upon receipt of a contribution, the Oregon Film and
Video Office shall, except as provided in ORS 315.516, issue to
the taxpayer written certification of the amount certified for
tax credit under this section to the extent the amount certified
for tax credit, when added to all amounts previously certified
for tax credit under this section, does not exceed $6 million for
the fiscal year in which certification is made.
(b) The Oregon Film and Video Office and the department are not
liable, and a refund of a contributed amount need not be made, if
a taxpayer who has received tax credit certification is unable to
use all or a portion of the tax credit to offset the tax
liability of the taxpayer.
(5) To the extent the Oregon Film and Video Office does not
certify contributed amounts as eligible for a tax credit under
this section, the taxpayer may request a refund of the amount the
taxpayer contributed, and the office shall refund that amount.
(6)(a) Except as provided in paragraph (b) of this subsection,
a tax credit claimed under this section may not exceed the tax
liability of the taxpayer and may not be carried over to another
tax year.
(b) Any tax credit otherwise allowable under this section that
is not used by the taxpayer in a particular tax year may be
carried forward and offset against the taxpayer's tax liability
for the next succeeding tax year. Any credit remaining unused in
the next succeeding tax year may be carried forward and used in
the second succeeding tax year, and likewise, any credit not used
in that second succeeding tax year may be carried forward and
used in the third succeeding tax year but may not be carried
forward for any tax year thereafter.
(c) A taxpayer is not eligible for a tax credit under this
section if the first tax year for which the credit would
otherwise be allowed begins on or after January 1, 2018.
(7) If a tax credit is claimed under this section by a
nonresident or part-year resident taxpayer, the amount shall be
allowed without proration under ORS 316.117.
(8) If the amount of contribution for which a tax credit
certification is made is allowed as a deduction for federal tax
purposes, the amount of the contribution shall be added to
federal taxable income for Oregon tax purposes.
SECTION 5. ORS 315.516 is amended to read:
315.516. (1) { + In any fiscal year, the amount of tax credits
allowed under ORS 315.514 may be reduced or eliminated, and the
Legislative Assembly may, no later than 30 days prior to the end
of each fiscal year, + } in lieu of the issuance of
certifications for tax credit under ORS 315.514 by the Oregon
Film and Video Office,
{ - the Legislative Assembly may, no later than 30 days prior
to the end of each fiscal year, appropriate - } { + make an
appropriation + } to the Oregon Business Development Department
for deposit into the Oregon Production Investment Fund { - an
amount equal to the total amount that would otherwise be
certified for tax credits during the upcoming fiscal year, based
on the amount of contributions and accompanying applications for
credit received by the office during the fiscal year - } .
(2) If the Legislative Assembly makes the election allowed in
subsection (1) of this section { - : - } { + , + }
{ - (a) - } any contributions to the Oregon Production
Investment Fund made for the upcoming fiscal year and for which
an application for a credit under ORS 315.514 is
{ - pending - } { + denied + } shall, at the request of the
taxpayer, be refunded by the Oregon Film and Video Office { - ;
and - }
{ - (b) A credit under ORS 315.514 may not be claimed for any
contribution made during the current fiscal year - } .
SECTION 6. { + The amendments to ORS 315.514 and 315.516 by
sections 4 and 5 of this 2012 Act apply to tax credit
certifications issued by the Oregon Film and Video Office on or
after June 30, 2012. + }
SECTION 7. ORS 315.164 is amended to read:
315.164. (1) A taxpayer who is the owner or operator of
farmworker housing is allowed a credit against the taxes
otherwise due under ORS chapter 316, if the taxpayer is a
resident individual, or against the taxes otherwise due under ORS
chapter 317, if the taxpayer is a corporation. The total amount
of the credit shall be equal to 50 percent of the eligible costs
actually paid or incurred by the taxpayer to complete a
farmworker housing project, to the extent the eligible costs
actually paid or incurred by the taxpayer do not exceed the
estimate of eligible costs approved by the Housing and Community
Services Department under ORS 315.167.
(2) A taxpayer who is otherwise eligible to claim a credit
under this section may elect to transfer all or a portion of the
credit to a contributor in the manner provided in ORS 315.169.
(3)(a) The credit allowed under this section may be taken for
the tax year in which the farmworker housing project is completed
or in any of the nine tax years succeeding the tax year in which
the project is completed.
(b) The credit allowed in any one tax year may not exceed 20
percent of the amount determined under subsection (1) of this
section.
(4)(a) To claim a credit under this section, a taxpayer must
show in each year following the completion of a farmworker
housing project that the housing continues to be operated as
farmworker housing.
(b) A taxpayer need not make the showing required in paragraph
(a) of this subsection if the Housing and Community Services
Department waives the requirement after the taxpayer has
successfully met the requirement for the first five years after
completion of the housing project.
(c) The Housing and Community Services Department shall
determine by rule the factors necessary to grant a waiver. Such
factors may include a documented decline in a particular area for
farmworker housing.
(5) The credit shall apply only to a farmworker housing project
that is located within this state and physically begun on or
after January 1, 1990.
(6)(a) A credit may not be allowed under this section unless
the taxpayer claiming credit under this section:
(A) Obtains a letter of credit approval from the Housing and
Community Services Department pursuant to ORS 315.167; and
(B) Files with the Department of Revenue an annual
certification providing that all occupied units for which credit
is being claimed are occupied by farmworkers, including
farmworkers who are retired or disabled, and their immediate
families.
{ + (b) Prior to issuing a letter of credit approval under
ORS 315.167, the Housing and Community Services Department shall
verify with the Department of Consumer and Business Services that
the farmworker housing is in compliance with subsection (10)(a)
to (c) of this section. + }
{ - (b) - } { + (c) + } The certification described under
this subsection shall be made on the form and in the time and
manner prescribed by the Department of Revenue.
(7) Except as provided under subsection (8) of this section,
the credit allowed in any one year may not exceed the tax
liability of the taxpayer.
(8) Any tax credit otherwise allowable under this section that
is not used by the taxpayer in a particular tax year may be
carried forward and offset against the taxpayer's tax liability
for the next succeeding tax year. Any credit remaining unused in
the next succeeding tax year may be carried forward and used in
the second succeeding tax year, and likewise any credit not used
in that second succeeding tax year may be carried forward and
used in the third succeeding tax year, and any credit not used in
that third succeeding tax year may be carried forward and used in
the fourth succeeding tax year, and any credit not used in that
fourth succeeding tax year may be carried forward and used in the
fifth succeeding tax year, and any credit not used in that fifth
succeeding tax year may be carried forward and used in the sixth
succeeding tax year, and any credit not used in that sixth
succeeding tax year may be carried forward and used in the
seventh succeeding tax year, and any credit not used in that
seventh succeeding tax year may be carried forward and used in
the eighth succeeding tax year, and any credit not used in that
eighth succeeding tax year may be carried forward and used in the
ninth succeeding tax year, but may not be carried forward for any
tax year thereafter.
(9)(a) The credit provided by this section is not in lieu of
any depreciation or amortization deduction for the project to
which the taxpayer otherwise may be entitled under ORS chapter
316 or 317 for the year.
(b) The taxpayer's adjusted basis for determining gain or loss
may not be further decreased by any tax credits allowed under
this section.
(10) For a taxpayer to receive a credit under this section, the
farmworker housing must:
(a) Comply with all occupational safety or health laws, rules,
regulations and standards;
(b) If registration is required, be registered as a farmworker
camp with the Department of Consumer and Business Services under
ORS 658.750;
(c) Upon occupancy and if an indorsement is required, be
operated by a person who holds a valid indorsement as a
farmworker camp operator under ORS 658.730; and
(d) Continue to be operated as farmworker housing for a period
of at least 10 years after the completion of the farmworker
housing project, unless a waiver has been granted under
subsection (4) of this section.
(11)(a) Pursuant to the procedures for a contested case under
ORS chapter 183, the Department of Revenue may order the
disallowance of the credit allowed under this section if it
finds, by order, that:
(A) The credit was obtained by fraud or misrepresentation; or
(B) In the event that an owner or operator claims or claimed
the credit:
(i) The taxpayer has failed to continue to substantially comply
with the occupational safety or health laws, rules, regulations
or standards;
(ii) After occupancy and if registration is required, the
farmworker housing is not registered as a farmworker camp with
the Department of Consumer and Business Services under ORS
658.750;
(iii) After occupancy and if an indorsement is required, the
farmworker housing is not operated by a person who holds a valid
indorsement as a farmworker camp operator under ORS 658.730; or
(iv) The taxpayer has failed to make a showing that the housing
continues to be operated as farmworker housing as required under
subsection (4)(a) of this section and the taxpayer has not been
granted a waiver by the Housing and Community Services Department
under subsection (4)(b) of this section.
(b) If the tax credit is disallowed pursuant to this
subsection, notwithstanding ORS 314.410 or other law, all prior
tax relief provided to the taxpayer shall be forfeited and the
Department of Revenue shall proceed to collect those taxes not
paid by the taxpayer as a result of the prior granting of the
credit.
(c) If the tax credit is disallowed pursuant to this
subsection, the taxpayer shall be denied any further credit
provided under this section, in connection with the farmworker
housing project, as the case may be, from and after the date that
the order of disallowance becomes final.
(12) In the event that the farmworker housing is destroyed by
fire, flood, natural disaster or act of God before all of the
credit has been used, the taxpayer may nevertheless claim the
credit as if no destruction had taken place. In the event of
fire, if the fire chief of the fire protection district or unit
determines that the fire was caused by arson, as defined in ORS
164.315 and 164.325, by the taxpayer or by another at the
taxpayer's direction, then the fire chief shall notify the
Department of Revenue. Upon conviction of arson, the Department
of Revenue shall disallow the credit in accordance with
subsection (11) of this section.
(13)(a) A nonresident individual shall be allowed the credit
computed in the same manner and subject to the same limitations
as the credit allowed a resident by this section. However, the
credit shall be prorated using the proportion provided in ORS
316.117.
(b) If a change in the taxable year of a taxpayer occurs as
described in ORS 314.085, or if the Department of Revenue
terminates the taxpayer's taxable year under ORS 314.440, the
credit allowed by this section shall be prorated or computed in a
manner consistent with ORS 314.085.
(c) 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.
(14) The Department of Revenue may adopt rules for carrying out
the provisions of this section.
SECTION 8. Section 28, chapter 913, Oregon Laws 2009, is
amended to read:
{ + Sec. 28. + } Except as provided in ORS 315.164 (8), a
credit may not be claimed under ORS 315.164 for tax years
beginning on or after January 1, { - 2014 - } { + 2020 + }.
SECTION 9. ORS 184.484 is amended to read:
184.484. (1) For each statute authorizing a tax expenditure
that has a purpose connected to economic development and is
listed in subsection (2) of this section, the state agency
charged with certifying or otherwise administering the tax
expenditure shall submit a report to the Oregon Department of
Administrative Services. If no agency is authorized by statute,
or if the statute does not provide for certification or
administration of the tax expenditure, the Department of Revenue
shall submit the report.
(2) This section applies to ORS 285C.175, 285C.309, 285C.362,
307.123, 307.455, 307.462, { + 315.164, 315.169, + }315.507,
315.514, 316.698, 316.778, 317.124, 317.391 and 317.394 and to
ORS 315.354 except as applicable in ORS 469B.145 (2)(a)(L) or
(N).
(3) The following information, if it is already available in an
existing database maintained by the agency, must be included in
the report required under this section:
(a) The name of each taxpayer approved for the allowance of a
tax expenditure.
(b) The address of each taxpayer.
(c) The total amount of credit against tax liability, reduction
in taxable income or exemption from property taxation granted to
each taxpayer.
(d) Specific outcomes or results required by the tax
expenditure program and information about whether the taxpayer
meets those requirements. This information shall be based on data
already collected and analyzed by the agency in the course of
administering the tax expenditure. Statistics must be accompanied
by a description of the methodology employed in their generation.
(e) An explanation of the agency's certification decision for
each taxpayer, if applicable.
(f) Any additional information submitted by the taxpayer and
relied upon by the agency in its certification determination.
(g) Any other information that agency personnel deem valuable
as providing context for the information described in this
subsection.
(4) The information reported under subsection (3) of this
section may not include proprietary information or information
that is exempt from disclosure under ORS 192.410 to 192.505 or
314.835.
(5) No later than September 30 of each year, agencies described
in subsection (1) of this section shall submit to the Oregon
Department of Administrative Services the information required
under subsection (3) of this section as applicable to
applications for allowance of tax expenditures approved by the
agency during the agency fiscal year ending during the current
calendar 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.
(6) 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.
(7) The information described in this section shall be
furnished to the Oregon transparency website by posting reports
and providing links to existing information systems applications
in accordance with standards established by the Oregon Department
of Administrative Services.
SECTION 10. Section 2, chapter 199, Oregon Laws 2011, is
amended to read:
{ + Sec. 2. + } { - Section 1 of this 2011 Act - }
{ + ORS 184.484 + } applies to:
(1) Applications for tax expenditures pursuant to ORS 307.123,
{ + 315.164, 315.169, + } 315.354, 316.778 and 317.391 that are
approved or certified by state agencies in agency fiscal years
ending on or after June 30, 2011.
(2) Applications for tax expenditures pursuant to ORS 285C.175,
285C.309, 285C.362, 315.507 and 317.124 that are approved on or
after June 30, 2011.
(3) Applications for tax expenditures pursuant to ORS 307.455,
307.462, 315.514, 316.698 and 317.394 that are approved or
certified by state agencies in agency fiscal years ending on or
after June 30, 2013.
SECTION 11. { + This 2012 Act takes effect on the 91st day
after the date on which the 2012 regular session of the
Seventy-sixth Legislative Assembly adjourns sine die. + }
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