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OREGON BUSINESS DEVELOPMENT DEPARTMENT
DIVISION 600
BUSINESS ENERGY TAX CREDITS
FOR RENEWABLE ENERGY RESOURCE
EQUIPMENT MANUFACTURING BETC (MANUFACTURING BETC)
123-600-0100
Purpose and Scope
This division of administrative
rules applies to all applicants for the Business Energy Tax Credit for Renewable
Energy Resource Equipment Manufacturing (“Manufacturing BETC”) as provided
under Oregon Revised Statutes 285C.540 through 285C.559, and 315.341, 356,
Oregon Law 2011 Ch. 474 HB2523 and 2012 Ch. 45 HB4079. These rules apply to all
applications pending as of the effective date of these rules.
(1) Amount of Tax Credit. Qualified
Oregon facilities that manufacture renewable energy resource equipment may be eligible
for a tax credit equal to 50% of maximum eligible cost. Costs are limited up to
$2.5 million for a facility used to manufacture electric vehicles or component parts
of electric vehicles and up to $40 million in the case of any other eligible facility.
(2) Application Review. Application
for the Manufacturing BETC is subject to detailed technical and financial review
of the project. The Applicant is also required to sign a performance contract with
measures that include job creation requirements, job retention requirements and
other economic or operational benchmarks as determined by the Department.
(3) Certification of Cost for
Tax Credit. The Director shall issue a final certificate pursuant to ORS 285C.553
before the tax credit can be claimed. 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 285C.540 to 285C.559 and applicable rules
and standards adopted under ORS 285C.540 to 285C.559. The Director may consider
the status of a facility as a research, development or demonstration facility of
new renewable resource generating and conservation technologies in the determination.
(4) Use of Tax Credit. The tax
credit may be offset against Oregon income and corporation excise taxes owed pursuant
to ORS 315.341. An Applicant qualifying for the tax credit may transfer the tax
credit through the pass-through option in return for a discounted cash payment from
a qualified pass-through partner.
Stat. Auth.: ORS 285C.540 -
285C.559, ORS 315.341, OL 2011, Ch. 474 HB2523
Stats. Implemented: ORS 285C.540-559,
315.341, OL 2011, Ch. 474 HB2523, OL 2012, Ch. 45 HB 4079
Hist.: OBDD 8-2012, f. &
cert. ef. 6-1-12
123-600-0105
Definitions
The following definitions apply
unless the context requires otherwise:
(1) “Applicant”
means a person who applies for preliminary certification of a Manufacturing BETC
facility under this section including individuals, corporations, associations, firms,
partnerships, limited liability companies and joint stock companies.
(2) “Cost” means
the capital costs and expenses necessarily incurred in the erection, construction,
installation and acquisition of a facility.
(3) “Completed application”
means receipt of payments under OAR 123-600-0140 and all information required in
the application form to demonstrate substantive compliance with the provisions of
ORS 285C.540 to 285C.559 and any applicable rules or standards adopted by the Director,
and all supplemental attachments, exhibits and so forth that the Applicant furnishes
at the Department’s request under these rules for the Manufacturing BETC.
(4) “Completed Facility”
means a manufacturing facility that is operating in accordance with requirements
in the Preliminary Certificate and performance agreement between the Department
and the Applicant for which all costs have been paid or committed by a binding contract
or agreement.
(5) “Component parts
of electric vehicles” means component parts that are for exclusive use in
electric vehicles and may not be used in both electric and conventional vehicles.
A component part of electric vehicles does not include batteries.
(6) “Director” means the Director
of the Oregon Business Development Department or designees.
(7) “Department”
means the Oregon Business Development Department, aka: Business Oregon.
(8) “Electric vehicles”
means vehicles that are designed for use as Class I or Class II all-terrain vehicles,
as those terms are defined in ORS 801.190 and 801.193, and that are used for agricultural,
commercial, industrial or governmental purposes, or vehicles that are designed for
use as modes of transportation on public roads and highways. The Director of the
Oregon Business Development Department may further define “agricultural, commercial,
industrial or governmental purposes” of electric vehicles.
(9) “Facility operator”
means the person or people to whom the Applicant gives authority to manage a facility.
Such person or people shall be the Applicant’s agent for all reasons related
to the facility once its development begins.
(10) “Facility start”
means the earliest date on or after the date the application for preliminary certification
is received by the Department where a non-refundable deposit will be placed on
the facility equipment or; a purchase order will be placed for the equipment or;
a contract for the design of the facility will be executed or; a document that obligates
the Applicant to proceed with a facility will be executed; or any other type of
financial commitment towards the erection, construction, installation or acquisition
of the facility.
(11) “Federal grant”
means any grant received from the federal government in connection with a facility.
(12) “Final certification”
means the review and approval of the application for final certification leading
to issuance of a final certificate for a completed facility under ORS 285C.551.
(13) “Lease contract”
means a lease-purchase contract in which the lessee owns the facility at the end
of the lease and is eligible for the Manufacturing BETC, or a lease or lease-option
contract in which the lessor owns the facility through the life of the contract
and is eligible for the Manufacturing BETC.
(14) “Pass-through payment”
means a minimum cash payment equivalent to the net present value of the Manufacturing
BETC as determined under OAR 123-600-0135. This is also referred to as the “pass-through
rate.”
(15) “Pass-through option”
means the option that allows an Applicant a one time only transfer of all or a
portion of the facility’s tax credit eligibility to certain persons or businesses
in return for a cash payment.
(16) “Pass-through partner”
means a personal income tax payer, individual, C corporation or S corporation that
is transferred a tax credit certificate in return for a cash payment to an Applicant.
(17) “Preliminary certification”
means the review and approval of the application for preliminary certification leading
to issuance of a preliminary certificate for an eligible facility under ORS 285C.551.
(18) “Renewable energy
resource” means energy derived from sources including but not limited to:
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.
(19) “Renewable energy
resource equipment manufacturing facility” means any structure, building,
installation, excavation, device, machinery or equipment, or an addition, reconstruction
or improvement to land, to an existing structure, building, installation, excavation
or device or to existing machinery or equipment, that is necessarily acquired, constructed
or installed by a person in connection with the conduct of a trade or business and
that is used primarily to manufacture:
(a) Component parts of electric
vehicles.
(b) Electric vehicles.
(c) Equipment, machinery or
other products designed to use a renewable energy resource and that meets the criteria
established under ORS 285C.543 and these rules.
(d) Renewable energy storage
devices. [2011 c.474 §5]
(20) “Renewable energy
storage device” means a device that enables the storage of energy derived
from renewable energy resources. A renewable energy storage device a facility does
not need to be directly connected to a renewable energy resource, but a beneficial
relationship shall be demonstrated between the energy output of the resource or
resources and the charge and discharge capabilities of the facility. The storage
device may be designed to store energy for transmission lines provided that the
transmission lines serve, at least in part, renewable energy resources. A renewable
energy storage device includes, but is not limited to, batteries or similar devices
used to provide propulsive energy in electric vehicles.
(21) “Research, development,
or demonstration facility (RDD)” means a facility under ORS 285C.545 (3) and
subject to standards adopted by the Director in these rules that is not standard
practice and produces or is likely to produce new renewable resource generating
and conservation technologies or products in Oregon when commercialized.
Stat. Auth.: ORS 285C.540 -
285C.559, ORS 315.341, OL 2011, Ch. 474 HB2523
Stats. Implemented: ORS 285C.540-559,
315.341, OL 2011, Ch. 474 HB2523, OL 2012, Ch. 45 HB 4079
Hist.: OBDD 8-2012, f. &
cert. ef. 6-1-12
123-600-0110
Process Overview
(1) Application Stages. The
Department reviews an application for a Manufacturing BETC in two stages.
(a) The first stage is called
preliminary certification. Prior to submitting an application and fee payment, the
Applicant must contact the Department to initiate a pre-screening process. Once
accepted, the application is subject to in-depth review of the manufacturer’s
technology, financial model and plan, which may be conducted by a third party contractor
selected by the Department for the purpose of determining if a preliminary certificate
shall be issued. If the Department determines that the Applicant qualifies for a
Manufacturing BETC, the Department may issue a preliminary certificate. The preliminary
certificate may contain specific criteria and conditions for the facility to meet
in order to complete final certification based on the information provided in the
application for the BETC and type of facility that is described in the application.
In addition, the Department shall require the Applicant to enter into a performance
agreement or other similar agreement as a condition of approval.
(b) The second stage is called
final certification. During this stage the application is subject to verification
of completion of the facility in accordance with conditions and criteria imposed
in the preliminary certificate and performance agreement, and the determination
of final eligible costs for purpose of issuing the final tax certificate.
(2) Application. To begin the
review process for each stage as described in 123-600-0120 and 123-600-0130, or
to change the facility during the review process, an Applicant shall submit the
information on the application form approved by the Department and additional information
as requested by the Department.
(3) Receipt of Applications.
Applications shall be considered received on the date marked received by the Department,
unless the application is determined to be incomplete.
(4) Pass-through Option Commitment.
An Applicant planning to use a pass-through partner should indicate their intention
on the application for preliminary certification and shall select the pass-through
option on the application for final certification.
(5) Conditions for Approval.
The Director may impose conditions in approving a preliminary or final certificate
that the facility shall operate in accordance with the representations made by the
Applicant, and any applicable rules or standards adopted by the Director in accordance
with the provisions of ORS 285C.540 to 285C.559.
(6)
Separate and Distinct Facilities. The Director may issue only one Manufacturing
BETC for each separate and distinct facility under these rules. To determine if
a facility is separate and distinct, the Director will consider such factors as
phases of development, expansion of or additions to existing facilities or product
lines, increased production and number of jobs created or maintained by an Applicant.
Stat. Auth.: ORS 285C.540 - 285C.559, ORS
315.341, OL 2011, Ch. 474 HB2523
Stats. Implemented: ORS 285C.540-559,
315.341, OL 2011, Ch. 474 HB2523, OL 2012, Ch. 45 HB 4079
Hist.: OBDD 8-2012, f. &
cert. ef. 6-1-12
123-600-0120
Preliminary Certification
(1) Pre Screening. Persons interested
in applying for a Manufacturing BETC shall first contact the Department to initiate
a pre-screening process.
(2) Submission of Application.
Persons determined by the Department to have projects for proposed facilities eligible
for a Manufacturing BETC shall submit the application form approved by the Department
for application for preliminary certification along with the appropriate fee under
OAR 123-600-0140. The Applicant shall also provide additional information the Director
considers necessary to determine whether the proposed facility is in accordance
with the provisions of ORS 285C.540 to 285C.559 and these rules, including but not
limited to:
(a) The type of equipment, machinery
or other products being manufactured meet related performance and efficiency standards
applicable to the manufactured products;
(b) The economic viability of
the facility and any other information for consideration of such factors as phases
of development, expansion of or additions to existing facilities or product lines,
increased production and number of jobs created or maintained by the Applicant;
(c) The minimum levels of increased
employment in Oregon for the facility are proportionate to industry standards;
(d) The compensation paid and
benefits provided to employees meet or exceed the national average in annual compensation
for comparable employment;
(e) Details related to the technology
and financial plan that can be independently reviewed by a third party;
(f) The credit worthiness of
the Applicant and the likelihood of long-term operation and success of the facility;
and
(g) The Applicant’s decision
to locate or expand a facility in Oregon is based on the allowance of a tax credit
under ORS 315.341.
(3) Qualified Applicant. A qualified
Applicant shall meet one of the following criteria:
(a) The Applicant is a person
to whom a tax credit for the facility has been transferred; or
(b) The Applicant shall be the
owner, contract purchaser or lessee of the facility at the time of erection, construction,
installation or acquisition of the proposed facility, and:
(A) The Applicant is the owner,
contract purchaser or lessee of a trade or business that plans to utilize the facility
in connection with Oregon property; or
(B) The Applicant is the owner,
contract purchaser or lessee of a trade or business that plans to lease the facility
to a person that will utilize the facility in connection with Oregon property.
(C) The Applicant is the owner,
contract purchaser or lessee of a trade or business that plans to lease the facility
to a person that will utilize the facility in connection with Oregon property.
(4) Eligible Costs. Subject
to the facility cost limitations of OAR 123-600-0100(1) and the criteria established
under ORS 285C.543:
(a) Eligible costs include land
purchase costs, structures, buildings, installations, excavations, machinery, equipment
or devices, or any addition, reconstruction or improvements to land or existing
structures, buildings, installations, excavations, machinery, equipment or devices,
necessarily acquired, constructed or installed by a person in connection with the
conduct of a trade or business, that is used to manufacture the equipment, machinery
or other products used primarily for:
(A) Component parts of electric
vehicles; or
(B) Electric vehicles; or
(C) Renewable energy storage
devices; or
(D) Equipment, machinery or
other products designed to use a renewable energy resource.
(b) An application shall demonstrate
compliance with these provisions to be accepted, including clearly describing the
specific characteristics of the equipment, machinery or other products that demonstrate
why such equipment, machinery or other products will be used primarily for component
parts of electric vehicles or; electric vehicles; renewable energy storage devices
or; equipment, machinery or other products designed to use a renewable energy resource
that meets the criteria established under ORS 285C.543 and not for other commercial
purposes and therefore why the costs of such of such equipment, machinery or other
products are eligible costs.
(c) The Department may conduct
inspections to verify eligible costs.
(d) Eligible facility costs
are limited by costs for a facility, or portion thereof, that has previously received
a Business Energy Tax Credit.
(e) The sum of any payments
from federal grants and the Manufacturing BETC may not exceed total costs.
(f) Eligible costs do not include
fees or costs associated with the review of the application.
(g) Eligible costs cannot be
incurred prior to submitting an application for preliminary certification, except
as provided for under OAR 123-600-0120(7).
(h) Cost can include payments
for:
(A) Fees to finance, design
or engineer the facility, including but not limited to debt fees and equity fees;
(B) Title searches, escrow fees,
government fees, excluding fees required by OAR 330-091-0150, and shipping;
(C) All materials and supplies
needed for the erection, construction, installation or acquisition of the proposed
facility; and
(D) Work performed by employees
or independent contractors of the applicant based on the following conditions:
(i) Employees or contractors
must be certified, accredited, licensed, or otherwise qualified to do the work;
(ii) The work must be associated
with the erection, construction, installation or acquisition of the proposed facility
or in the case of a research development and demonstration facility, the work shall
be directly related to the research, development, demonstration, facility design,
monitoring, assessment, evaluation and reporting related to the product or technology;
(iii) Project management and
other similar costs may only account for up to 15 percent of the total eligible
costs; and
(iv) Costs for employee’s
or contractor’s work on the facility must be detailed and documented as to
specific tasks, hours worked, and compensation costs. Donated, in-kind or volunteer
labor is not eligible;
(E) Costs for legal counsel
that is directly related to the development of a qualifying facility (non-litigation
related) or directly linked to the research, development or demonstration facility;
and
(F) Other costs the Director
includes.
(i) Cost may not include:
(A) Interest;
(B) Litigation or other operational-related
legal fees and court costs;
(C) Costs to maintain and operate
a facility;
(D) Administrative costs to
apply for grants, loans, tax credits or other similar funding for a facility including,
but not limited to, the BETC charge, costs associated with the creation and development
of the CPA verification letter and costs associated with securing a pass-through
partner for the facility;
(E) Routine operational or maintenance
costs associated with the facility, including services, supplies and labor;
(F) Expenses that are directly or indirectly offset with federal
fee waivers; and
(G) Other costs the Director excludes.
(j) If a facility is built under
a lease, lease-option or lease-purchase contract, the lessee's cost to acquire the
facility is the value paid for the facility. If that amount is not known, the cost
is the sum of:
(A) Tax credits passed-through
by the lessor to the lessee;
(B) The amount paid when the
facility is transferred; and (C) The lease payments not including taxes, insurance,
interest, and operating costs.
(C) Payments to be made in the
future must be discounted to present value.
(5) Preliminary Certification
Review Process. Except as provided in OAR 123-600-0120(7), an application for preliminary
certification shall be received by the Department on or prior to the facility start
for the erection, construction, installation or acquisition of a facility.
(a) The application for preliminary
certification shall be considered received on the date marked received by the Department,
unless the application does not contain all information required in the application
form and the payment as required in OAR 123-600-0140.
(b) An application is incomplete
if it does not include information needed to demonstrate substantive compliance
with the provisions of ORS 285C.540 to 285C.559 and any applicable rules or standards
adopted by the Director. The Department shall provide the Applicant a written notice
relating to the incomplete application and the information needed to make the application
complete. If no action is taken within 30 days by the Applicant, the application
shall expire.
(c) After a completed application
is received, the Department shall notify the Applicant of the procedures for the
Department’s due diligence review.
(d) If the application complies
with the provisions of ORS 285C.540 to 285C.559, the Director may approve the preliminary
certificate. The preliminary certificate shall state the amount of eligible costs
for a Manufacturing BETC up to the maximum amount of certifiable costs under ORS
285C.545. It may differ from the amount requested for reasons explained and based
on these rules. Also, it shall state any conditions that shall be met before development,
final certification, or some other event can occur. The Director shall explain why
each condition is needed to comply with these rules.
(e) If it does not comply, the
Director may deny the application. No later than 60 days after the Director issues
an order denying the application, the Applicant may request reconsideration as provided
in these rules.
(f) An Applicant can re-submit
an application that is denied if features of the facility change, the Applicant
provides data the absence of which resulted in the denial, or other changes warrant.
An application for preliminary certification can be amended or withdrawn by the
Applicant before the Director issues a preliminary certificate. The Applicant may
be required to pay additional fee for expenses incurred by the Department in connection
with the additional review of the application for preliminary certification or amendment
to the preliminary certificate.
(6) Preliminary Certification
for Less than Total Eligible Costs. If under the provisions of ORS 285C.545(2),
the Department intends to certify less than the total or no amount of eligible costs
of renewable energy resource equipment Manufacturing BETC facility, the Department
shall notify the Applicant in writing of that intent before approving the preliminary
certificate.
(a) The Applicant shall have
30 calendar days from the date notification was issued to inform the Department
in writing whether it wishes to withdraw the application or suspend further consideration
of the application until a future date specified or submit additional information
in support of the application.
(b) If the Department has not
received notification or additional information in support of the application within
that period of time, the Director may certify less than the total or no amount of
eligible costs of the Manufacturing BETC facility.
(c) Once eligible costs are
certified and a preliminary certificate is issued under this section, the certified
eligible costs may be revised if conditions under ORS 285C.545(2) change or upon
notification from the Applicant or other information indicating that the scope of
the project or the facility has changed in such a way to impact the preliminary
certificate.
(7) Eligibility of Costs Before
Facility Start. The Director may approve a preliminary certificate for costs incurred
prior to the Department’s receipt of the application for preliminary certification
if the Applicant files a written request for a waiver in accordance with these rules.
(a) Special circumstances beyond
the Applicant's control made application for preliminary certification before facility
start impracticable. Such circumstances include process delays, facility funding
and energy supplies or markets; and
(b) The Department is in receipt
of the application for preliminary certification and receives a waiver request from
the Applicant within 90 days of the facility start. Under extraordinary circumstances
the Department may extend the waiver period provided the facility serves the aims
of the program.
(c) Failing to submit an application
for preliminary certification before signing contracts for the facility does not
constitute special circumstances supporting a waiver.
(8) Preliminary Certificate.
If the Department determines that the application for preliminary certification
qualifies the Applicant and the facility for a Manufacturing BETC, the Director
may issue a preliminary certificate.
(a) The preliminary certificate
may contain specific criteria and conditions for the facility to meet in order to
complete final certification based on the information provided in the application
for the BETC and type of facility that is described in the application. In addition,
the Department shall require the Applicant to enter into a performance agreement
or other similar agreement as a condition of approval. The Director may consider
a broad range of comparative data sources in determining criteria and conditions
for job creation, job maintenance and compensation in the preliminary certificate
or performance agreement, including but not limited to:
(A) National Compensation Survey
(NCS), US Department of Labor Bureau of Labor Statistics
(B) Quarterly Census of Employment
and Wages, US Department of Labor Bureau of Labor Statistics
(C) Oregon Labor Market Information
System including the Oregon Employment Department’s most current Covered Employment
and Wages Summary Report for Total Private Coverage.
(b) If the facility does not
proceed the Applicant shall inform the Department in writing if it does not proceed
with the facility or intends to proceed without the tax credit. In that case, the
Director shall cancel the preliminary certificate.
(9) Applicant’s Request
to Amend a Preliminary Certificate. An Applicant shall file a written request with
the Department prior to the completion of the facility to amend a preliminary certificate.
(a) The request shall describe
the change to the facility and reasons for the change. It may include changes in
cost, tax credit amount, facility design, and materials. The request may also include
changes in the jobs created, project financing, the Applicant, the location, or
other matters that demonstrate substantial change in the project’s scope.
The request shall be accompanied by the appropriate fee.
(b) If a request does not include
information needed to demonstrate substantive compliance with the provisions of
ORS 285C.540 to 285C.559 and any applicable rules or standards adopted by the Director
shall provide the Applicant a written notice relating to the information needed
to make the request complete. If the Applicant does not provide all of the requested
information to the Department within 30 days, the request shall expire and no changes
shall be made to the preliminary certificate.
(c)
After the Applicant files the change request, the Department shall decide if the
facility as modified complies with ORS 285C.540 to 285C.559 and these rules.
(A) If it complies, the Director may issue
an amended preliminary certificate which may contain new or amended criteria, conditions
and requirements.
(B) If it does not comply, the
Director shall issue an order that denies the change and provide written reasons
for the denial.
(10) Director’s Amendment
or Revocation of a Preliminary Certificate. The Director may issue an order altering,
conditioning, suspending or denying preliminary certification if the Director determines
that:
(a) The erection, construction,
installation or acquisition does not comply with the provisions of ORS 285C.540
to 285C.559 and applicable rules and standards; or
(b) The Applicant has previously
received preliminary or final certification for the same costs; or
(c) The Applicant is unable
to demonstrate that the facility would be economically viable without the allowance
of additional credits under ORS 315.341; or
(d) The Applicant was directly
involved in an act for which the Director has levied civil penalties or revoked,
canceled or suspended any certification under ORS 285C.540 to 285C.559; or
(e) The Applicant or the principal,
director, officer, owner, majority shareholder or member of the Applicant, or the
manager of the Applicant if the Applicant is a limited liability company, is in
arrears for payments owed to any government agency while in any capacity with direct
or indirect control over a business; or
(f) The facility undergoes changes
without the changes being approved under these rules;
(g) Any other reason allowed
by the amendments to ORS 285C.551(3) in Oregon Laws, 2011, Chapter 474, Section
11.
Stat. Auth.: ORS 285C.540 -
285C.559, ORS 315.341, OL 2011, Ch. 474 HB2523
Stats. Implemented: ORS 285C.540-559,
315.341, OL 2011, Ch. 474 HB2523, OL 2012, Ch. 45 HB 4079
Hist.: OBDD 8-2012, f. &
cert. ef. 6-1-12
123-600-0130
Final Certification
(1) Facility Completion. To
qualify for a final certificate, the facility shall be completed as described in
the preliminary certificate, and in accordance with the performance agreement and
these rules. Any changes to the preliminary certificate and/or application for preliminary
certification shall be made through the amendment process outlined in these rules
and shall be completed prior to the project completion date. Failure to obtain approval
through the amendment process may result in denial of the application for final
certification.
(2) Application and Review.
(a) Applicants with completed
facilities must have a valid preliminary certificate for a Manufacturing BETC in
accordance with ORS 285C.547(5) in order to complete final certification including
all transactions associated with the pass-through option described in 123-600-0135.
(b) The application shall be
considered received for the purposes of ORS 285C.557 on the date marked received
by the Department, unless the application is incomplete. If the application for
final certification is not complete, the date marked received by the Department
on the complete application containing all of the required information shall be
considered the received date.
(c) Review of the application
for final certification shall include a determination by the Director that the proposed
erection, construction, installation or acquisition is technically feasible and
should operate in accordance with the representations made by the Applicant, and
is in accordance with the provisions of ORS 285C.540 to 285C.559 and any applicable
rules or standards adopted by the Director, including but not limited to:
(A) Evidence in a form acceptable
to the Department that the conditions of the preliminary certification and performance
agreement have been complied with;
(B) Evidence of the costs of
the facility. If the actual cost of the facility is less than $50,000, copies of
receipts for purchase and installation of the facility; or if the actual cost of
the facility is $50,000 or more, certified to by a certified public accountant who
is not an employee of the Applicant. The certified public accountant shall:
(i) Complete a written review
of costs paid or incurred to be reported in the Final Application, related to the
facility as described in the Preliminary Application and Preliminary Certificate,
based on canceled checks, invoices, or receipts, a binding contract or agreement,
or other documentation as may be required under these rules and certify that such
costs were properly paid or incurred and represent eligible costs under these rules
indicating exceptions as applicable.
(ii) Conduct the review in the
form of an agreed-upon procedures engagement that is in accordance with AT Section
201, Agreed-Upon Procedure Engagements (Statements on Standards for Attestation
Engagements 10, as amended) of the American Institute of Certified Public Accountants.
(iii) Conduct any sampling of
costs in accordance with procedures in the Statement on Auditing Standards in the
AICPA Guidelines.
(iv) Review sufficient information
if an applicant has an outstanding binding contract or loan agreement, to become
satisfied that accounts directly related to the facility are not in default in order
to include such costs as eligible costs.
(C) The amount of the credit
under ORS 315.341 that is to be claimed and that the costs have not previously received
preliminary or final certification;
(D) Information sufficient to
demonstrate the number and type of jobs created and maintained by the operation
and maintenance of the facility over the five-year period beginning with the year
of preliminary certification under ORS 285C.551 and information on the benefits
of the facility with regard to overall economic activity in this state will be met;
(E) Information sufficient to
demonstrate that the facility shall remain in operation for at least five years,
unless the Director by rule specifies a shorter period of operation;
(F) Documentation of compliance
with applicable state and local laws and regulations and licensing and permitting
requirements as defined by the Department; and
(G) A statement that the Applicant
or the principal, director, officer, owner, majority shareholder or member of the
Applicant, or the manager of the Applicant if the Applicant is a limited liability
company, is not in arrears for payments owed to any government agency while in any
capacity with direct or indirect control over a business.
(H) Any other information determined
by the Department to be necessary prior to issuance of a final certificate, including
inspection of the facility by the Department.
(b) After an application for
final certification is received, the Department shall determine whether the application
is complete. An application is incomplete if it does not include information needed
to demonstrate substantive compliance with the provisions of ORS 285C.540 to 285C.559
and any applicable rules or standards and preliminary certification conditions adopted
by the Director. If it is not complete, the Applicant shall be provided a written
explanation describing deficiencies. If it is complete, the Department shall process
the application. Within 60 days after a completed application for final certification
is received the Department shall either approve or deny the application.
(c) If the Department approves
the application; the Director shall issue a certified amount letter, which shall
state the amount of certified costs, reduced as applicable by any federal grants
received, and the amount of the tax credit approved. The certified amount letter
may contain additional criteria and conditions that shall be met in order to retain
tax credit benefits or the tax credit certificate issued to the Applicant may be
subject to revocation. If the facility fails to meet any of the criteria, conditions
and requirements established in final certification, the Applicant shall notify
the Department within 30 days.
(d) When
an Applicant chooses to transfer the tax credit under ORS 285C.549, the Department
may hold the application for final certification until pass-through partner(s) information
is received by the Department.
(3) Final Certificate. A certificate issued
under ORS 285C.553 is required for purposes of obtaining tax credits in accordance
with ORS 315.341. Such certification shall be granted for a period not to exceed
five years. Unless transferred to a pass-through partner under ORS 285C.549, the
five-year period shall begin with the tax year of the Applicant during which the
completed application for final certification of the facility under ORS 285C.553
is received by the Department.
(a) If the original owner of
the certificate uses any portion of the credit, the certificate becomes nontransferable.
(b) After the Director issues
a final certificate, an Applicant shall notify the Department in writing within
30 days of any of the following conditions:
(A) The facility has been moved;
(B) Title to the facility has
been conveyed;
(C) The facility is subject
to or part of a bankruptcy proceeding;
(D) The facility is not operating;
or
(E) The term of a leased facility
has ended.
(4)(a) Basis for Denying Tax
Credit Benefits. The Department may deny final certification if any of the following
conditions exist:
(A) Final certification is not
complete before 1,825 days (5 years) after the preliminary certificate was issued.
(B) The Applicant does not provide
information about the facility in a reasonable time after the Department requests
it;
(C) The facility is significantly
different than the proposed facility for which the preliminary certificate was issued;
(D) The Applicant misrepresents
or fails to construct or operate the facility;
(E) The Applicant fails to demonstrate
that the facility described in the application is separate and distinct from previous
or current applications reviewed by the Department;
(F) The facility does not meet
all of the conditions and requirements contained in the preliminary certificate
or performance agreement; or
(G) The Applicant is unable
to demonstrate that the facility complies with all applicable provisions of ORS
Chapter 285C.540 to 285C.559 and these rules.
(b) If the Department does not
approve the application, the Department shall provide written notice of the action,
including a statement of the findings and reasons for the denial by regular and
certified mail.
(c) An application for final
certification that is denied can be submitted again. An application for final certification
can be amended or withdrawn by the Applicant. If an application is submitted again
or amended, the time for review of the application for final certification starts
over.
(d) If the Director does not
issue a certified amount letter for final certified cost or a final certificate
within 60 days after an application is filed, the application is denied pursuant
to ORS 285C.553 (4).
(5)(a) Basis for Revoking Tax
Credit Benefits. The Director shall revoke certificates as provided in ORS 285C.559
and 315.341 (4)(a) if the Director finds that:
(A) The certification was obtained
by fraud or misrepresentation. For the purposes of this section, “fraud or
misrepresentation” means any misrepresentation made by an Applicant for a
preliminary or final certification, including but not limited to, misrepresentations
as to the Applicant’s financial viability, facility construction and operation,
or any other information provided as part of an application for a preliminary or
final certification;
(B) The holder of the certificate
or the operator of the facility has failed to construct or operate the facility
in compliance with the plans, specifications and procedures in the certificate or
the performance agreement; or
(C) The facility is no longer
in operation.
(b) If all or a part of the
tax credit certificate has been transferred to a pass-through partner under ORS
285C.549, the certificate is not considered revoked as to the pass-through partner,
but the Applicant is liable for the amount of tax credits claimed or that could
be claimed.
(6)(a) Sale or Disposition of
the Facility After Final Certification. Pursuant to ORS 315.341(4)(a), upon receiving
notice that the facility has been sold or otherwise transferred, the Director shall
revoke the final certificate, as of the date of the disposition of the facility,
unless the Manufacturing BETC for the facility has already been transferred under
ORS 285C.549.
(b) The new owner or new or
renewed lessee of a facility may apply for a final certificate. The request shall
comply with ORS 285C.540 through 285C.559 and these rules and include information
to allow the Department to determine the amount of tax credit not claimed by the
former owner or former lessee. If the facility continues to comply with the requirements
set out in these rules and any applicable conditions imposed by the Department,
the Director shall issue a new final certificate consistent with the provisions
of ORS 315.341 (4)(a).
(7) Request for Reconsideration.
No later than 60 days after the Director issues an order on preliminary certification,
final certification, or canceling or revoking a preliminary or final certificate
under these rules, the Applicant may request reconsideration in writing.
(8) Inspections. After an application
is filed under ORS 285C.547 or 285C.553 or a tax credit is claimed under these rules,
the Department may inspect the facility. The Department shall schedule the inspection
during normal working hours, following reasonable notice to the facility operator.
Stat. Auth.: ORS 285C.540 -
285C.559, ORS 315.341, OL 2011, Ch. 474 HB2523
Stats. Implemented: ORS 285C.540-559,
315.341, OL 2011, Ch. 474 HB2523, OL 2012, Ch. 45 HB 4079
Hist.: OBDD 8-2012, f. &
cert. ef. 6-1-12
123-600-0135
Pass-through Transfer
of the Tax Credit
For purposes of ORS 285C.549
and the pass-through rate for discounting the face value of a certified Business
Energy Tax Credit to the Net Present Value that is the minimum amount the Applicant
shall receive as a cash payment from the Pass-through Partner(s) in exchange for
the Credit:
(1) Rate Formula. As set forth
by the Department on the first business day of each calendar quarter, the pass-through
rate, to be multiplied by the credit amount, equals “1 ÷ (1 + R + S
+ P)^5,” where:
(a) “R” is the U.S.
Prime Rate as published by The Wall Street Journal newspaper;
(b) “S” is a spread
factor greater than zero to account for special transactional and risk elements,
and initially set at 3.25 percentage points, but subject to adjustment by the Department
based on experience and changing circumstances;
(c) “P” is an estimate
of projected price inflation, as determined by the Department, but to be not less
than the average of the lower central tendency for core price inflation in the succeeding
two years from the latest economic projections of the Federal Reserve Board members
and Federal Reserve Bank presidents; and
(d) “5” means to
exponentially raise the preceding sum to the fifth power in accordance with the
five years over which the credit may be claimed.
(2) Modification of Formula.
In addition to modifications of the variables “R” and “S”
in subsection (1)(a) of this rule, the Department may alter the formula for purposes
of this rule, as announced at the start of the calendar quarter, in response to
any greatly changing situation with prevailing market rates of return or projected
price inflation, potentially pending a temporary or permanent rulemaking.
(3) Rate Option. The Applicant
may elect to use the quarterly pass-through rate as set in section (1) of this rule
for the calendar quarter, during which occurs either:
(a)
Preliminary Certification, or
(b) Transaction of the pass-through payment.
(4) For the Department to issue
a tax credit certificate to a pass through partner the Applicant must be in compliance
with the conditions and requirements of the Preliminary Certificate, the performance
agreement and these rules.
(5) A tax credit may be transferred
one time only, from the Applicant to an eligible pass through partner.
(6) Finding Pass-through Partners.
The Applicant is responsible for seeking a pass-through partner. The Department
cannot guarantee a pass-through partner for any completed project.
(a) The Applicant will notify
the Department if a third-party intermediary will be used to assist the Applicant
in seeking a pass-through partner.
(b) The Applicant will notify
the Department when a pass-through partner(s) is identified. The Department will
provide the necessary instructions and forms needed to complete verification of
the pass-through payment transaction in order to issue a tax credit certificate.
(7) Transferee’s Certification
Period. For a transferee holding a credit that has been transferred under ORS 285C.549,
the five-year period begins with the tax year of the transferee in which the transferee
pays for the credit.
(8) Expiration of Transferability.
The Director may issue a final certificate in the name of the Applicant for any
tax credit balance remaining sixty days prior to the expiration of the Preliminary
Certificate under ORS 285C.547(5).
Stat. Auth.: ORS 285C.540 -
285C.559, ORS 315.341, OL 2011, Ch. 474 HB2523
Stats. Implemented: ORS 285C.540-559,
315.341, OL 2011, Ch. 474 HB2523, OL 2012, Ch. 45 HB 4079
Hist.: OBDD 8-2012, f. &
cert. ef. 6-1-12
123-600-0140
Budget Limits and Payments
(1) Amount of Credits Allowed
for a Facility. During any calendar year, a Manufacturing BETC preliminary certificate
shall not be issued for more than:
(a) $40 million in maximum eligible
facility costs for a renewable energy resource equipment facility, not including
those used to manufacture electric vehicles;
(b) $2.5 million in maximum
eligible facility costs for a facility used to manufacture electric vehicles;
(2) Fees for Certification.
The Department has established the following schedule for payments to accompany
an application as required under 285C.555.
(a) Included with each application
for preliminary certification shall be an initial payment payable to the Department.
The payment is 0.0060 multiplied by the facility eligible cost and not to exceed
a payment amount of $75,000, and subject to additional expenses incurred by the
Department as described in this section.
(A) A refund shall not be granted
for any reduced eligible costs that are included in an amended certificate.
(B) An additional application
payment shall be paid as specified in (3)(a) of this rule if a request to amend
a certificate to increase the eligible cost.
(C) No facilities shall be exempt
from these requirements.
(b) Applications for preliminary
certification shall not be reviewed or considered complete if not accompanied by
the fee payment. Preliminary certificates shall only be issued if the application
is complete. In addition, the Applicant may be required to pay for expenses incurred
by the Department in connection with the application that exceed these payments
and which the Department determines are incurred in connection with processing the
application. The Applicant shall be advised of any additional application expenses
the Applicant shall pay before the expenses are incurred by the Department.
Stat. Auth.: ORS 285C.540 -
285C.559, ORS 315.341, OL 2011, Ch. 474 HB2523
Stats. Implemented: ORS 285C.540-559,
315.341, OL 2011, Ch. 474 HB2523, OL 2012, Ch. 45 HB 4079
Hist.: OBDD 8-2012, f. &
cert. ef. 6-1-12
123-600-0150
Prioritization System
for Manufacturing BETC Facilities
Applications in Excess of Biennial
Limits. In the event that the Department receives applications for preliminary certification
with a total amount of potential tax credits in excess of the limitations in ORS
285C.545, the Department shall allocate the potential tax credits according to the
order in which the applications are complete.
Stat. Auth.: ORS 285C.540 -
285C.559, ORS 315.341, OL 2011, Ch. 474 HB2523
Stats. Implemented: ORS 285C.540-559,
315.341, OL 2011, Ch. 474 HB2523, OL 2012, Ch. 45 HB 4079
Hist.: OBDD 8-2012, f. &
cert. ef. 6-1-12
123-600-0250
Research, Development,
or Demonstration Facility (RDD)
(1) Criteria. Eligible RDD facilities
shall comply with one or more of the following criteria:
(a) Research facilities that
include a test bench research, prototype or pilot scale construction of a theoretically
proved or primary researched new renewable resource generating or conservation technology;
(b) Development facilities that
include the manufacture or initiation of the capability to manufacture new products
for renewable resource generating or energy conservation in Oregon;
(c) Demonstration facilities
that are likely to resolve questions on how to apply new renewable resource generating
or more efficient energy technologies through pilot or production scale applications
of technology; and
(d) Facilities that are likely
to achieve Department’s goals as determined by the Director and shall demonstrate
a reasonable potential to result in benefits in Oregon for which the value is likely
to exceed the value of the tax credit, based on information filed with the application
for preliminary certification.
(2) Eligible costs. Eligible
costs for a RDD facility may include:
(a) Engineering, design and
administrative costs
(b) Costs inherent in a research,
development or demonstration facility that may not result directly in saved or produced
energy. Such costs may include:
(A) Facility design, monitoring,
assessment, evaluation and reporting. This includes but is not limited to: the development
of standards, specifications, policies and procedures facilitating technology transfer;
instruments, and controls.
(B) Other equipment needed to
monitor, assess or evaluate the facility and the impacts of the facility.
(c) The following costs related
to demonstration model(s) may be considered eligible:
(A) Materials for the demonstration
model(s).
(B) The manufacturing, construction,
assembly, and/or installation of the demonstration model(s).
(C) Testing and monitoring the
demonstration model(s).
(d) Other eligible costs as
determined by the Director.
Stat. Auth.: ORS 285C.540 -
285C.559, ORS 315.341, OL 2011, Ch. 474 HB2523
Stats. Implemented: ORS 285C.540-559,
315.341, OL 2011, Ch. 474 HB2523, OL 2012, Ch. 45 HB 4079
Hist.: OBDD 8-2012, f. &
cert. ef. 6-1-12
The official copy of an Oregon Administrative Rule is
contained in the Administrative Order filed at the Archives Division,
800 Summer St. NE, Salem, Oregon 97310. Any discrepancies with the
published version are satisfied in favor of the Administrative Order.
The Oregon Administrative Rules and the Oregon Bulletin are
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