OREGON LAWS 2026 Chap. 50 CHAPTER 50 AN ACT HB 4084 Relating to economic development; creating new provisions; amending ORS 285C.090, 285C.135, 285C.140, 285C.155, 285C.160, 285C.180, 285C.200, 285C.205 and 285C.210 and section 12, chapter 142, Oregon Laws 2026 (Enrolled Senate Bill 1507); and prescribing an effective date. Be It Enacted by the People of the State of Or- egon: SECTION 1. (1) The Joint Permitting Council is established within the office of the Governor. The council consists of the following members appointed by the Governor: (a) One representative of each of the follow- ing agencies: (A) The Department of Transportation. (B) The Department of Land Conservation and Development. (C) The State Department of Energy. (D) The Department of State Lands. (E) The Department of Environmental Qual- ity. (F) The Water Resources Department. (G) The State Department of Agriculture. (H) The Oregon Business Development De- partment. (I) The State Department of Fish and Wild- life. (J) The Oregon Department of Administra- tive Services. (K) The State Department of Geology and Mineral Industries. (b) Two members with knowledge and expe- rience in economic development. (2) The term of office of each member of the council is four years. A member serves at the pleasure of the Governor. Before the expiration of the term of a member, the Governor shall appoint a successor whose term begins on Jan- uary 1 of the following year. A member may be reappointed. If there is a vacancy for any cause, the Governor shall make an appointment to be- come immediately effective for the unexpired term. (3) A member of the council is not entitled to compensation or reimbursement for expenses. (4) The council shall elect one of its members as chairperson and another as vice chairperson, for the terms and with the duties and powers necessary for the performance of the functions of such offices as the council determines. (5) A majority of the members of the council constitutes a quorum for the transaction of business. (6) The council shall meet at times and places specified by the chairperson or a majority of the members of the council. (7) The council may employ staff, including but not limited to a permitting specialist. SECTION 2. (1) The Joint Permitting Council established in section 1 of this 2026 Act shall administer a fast track permitting program that allows eligible projects to obtain expedited regu- latory approval from state agencies. (2) The council shall establish eligibility cri- teria for the fast track permitting program. The criteria must require a project to: (a)(A) Exceed $100 million in capital invest- ment, if the project is located within the urban growth boundary of a metropolitan service dis- trict organized under ORS chapter 268; (B) Exceed $50 million in capital investment, if the project is not located within the urban growth boundary of a metropolitan service dis- trict organized under ORS chapter 268 or within a nonurban county as described in ORS 653.026; or (C) Exceed $25 million in capital investment, if the project is located within a nonurban county as described in ORS 653.026; (b) Require more than one regulatory ap- proval from one state agency, or more than one regulatory approval from more than one state agency; (c) Advance job creation or growth in gross domestic product through a target industry cluster, as defined by the Oregon Business De- velopment Department by rule; (d) Meet readiness criteria established by the council; (e) Demonstrate land use compatibility; (f) Not require renewals of existing permits; and (g) Meet other requirements established by the council. (3)(a) An applicant for the fast track per- mitting program shall submit a project applica- tion to the council. The council shall: (A) Review the application to determine if the project meets the eligibility criteria estab- lished under subsection (2) of this section and report the findings to the Governor; and (B) Forward the application to the Regional Solutions Program created under ORS 284.754. (b) The Regional Solutions Program shall review the project, for consistency with regional economic development priorities as established under ORS 284.754, Comprehensive Economic Development Strategies or other similar sources, and report to the Governor with a re- commendation about whether to advance the project. The report may include additional local or regional dynamics for the Governor to con- sider. (c) The Governor shall review each applica- tion forwarded by the council and the Regional Solutions Program and determine whether to approve the application. (d) The Governor may not approve an appli- cation if there are 15 projects currently in 1

Chap. 50 OREGON LAWS 2026 progress under the fast track permitting pro- gram. (4) If the Governor approves a project appli- cation for the fast track permitting program, the council shall: (a) Develop and approve a cooperative proj- ect plan for the project that: (A) Includes intermediate and final com- pletion dates for all state regulatory approvals; (B) Provides for a shorter timeline than ex- isting timelines for permitting or other relevant timelines for permitting established through policy, law or regulation; and (C) Is consistent with analyses completed by the regulating agencies identifying opportunities to streamline the approval process for the per- mit, eliminate any unnecessary steps or barri- ers, reduce the incidence of incomplete applications and eliminate any obsolete or un- necessary approval processes. (b) Identify a lead agency that will provide monthly updates on the project to the council. (c) Include in the plan any other elements deemed necessary by the council. (5) The council shall submit an annual report to the Governor and the Oregon Department of Administrative Services that describes the sta- tus of each project administered in the previous year under the fast track permitting program. SECTION 3. (1) The Governor shall appoint the members of the Joint Permitting Council under section 1 of this 2026 Act no later than July 1, 2026. (2) The Joint Permitting Council shall estab- lish eligibility criteria for the fast track permit- ting program, including readiness criteria, under section 2 of this 2026 Act no later than October 1, 2026. SECTION 4. Section 5 of this 2026 Act is added to and made a part of ORS chapter 183. SECTION 5. (1) This section applies to the following agencies and offices: (a) The Department of Transportation. (b) The Department of Land Conservation and Development. (c) The State Department of Energy. (d) The Department of State Lands. (e) The Department of Environmental Qual- ity. (f) The Water Resources Department. (g) The State Department of Agriculture. (h) The office of the State Historic Preser- vation Officer. (2) As used in this section, “permit” has the meaning given that term in ORS 183.700. (3) Not later than 120 days after the effective date of this 2026 Act, an agency shall publish a catalog of permits issued by the agency that are related to or have an impact on economic de- velopment projects. For each permit issued by the agency that is related to or has an impact on economic development projects, the catalog must include: (a) A description of the permit. (b) The duration of the permit. (c) The statutory authority, regulatory au- thority or other authority for issuing the per- mit. (d) The method by which the agency proc- esses incomplete applications for permits and, if readily available, the annual number of incom- plete applications an agency generally receives. (e) Any statutory, regulatory or other au- thority governing the time within which the agency must process applications for the permit. (f) The application fee for the permit, the statutory, regulatory or other authority for the application fee and when the amount of the ap- plication fee was last changed. (g) An analysis identifying opportunities to streamline the approval process for the permit, eliminate any unnecessary steps or barriers, re- duce the incidence of incomplete applications and eliminate any obsolete or unnecessary ap- proval processes. (h) The approximate number of applications for the permit currently pending at the agency and a statement of whether a backlog exists. (4) Not later than 120 days after the effective date of this 2026 Act, an agency shall report to the Governor on: (a) Permitting programs in the agency that are not meeting reasonable processing timelines. (b) Opportunities to streamline and improve permit processing and meet reasonable process- ing timelines. (c) Suggestions obtained from consultation with permit applicants on permit processing. (d) Opportunities to provide fee relief for de- layed permit processing. SECTION 6. Section 5 of this 2026 Act is re- pealed on January 2, 2027. SECTION 7. ORS 285C.090 is amended to read: 285C.090. (1) An enterprise zone must be located in a local area in which, on the basis of evidence provided by the cities, counties or ports desig- nating the enterprise zone, the Oregon Business Development Department determines that the area demonstrates a need for economic develop- ment due to: [(a) Fifty percent or more of the households have incomes below 80 percent of the median income of this state, as defined by the most recent federal decennial census;] [(b) The unemployment rate is at least 2.0 per- centage points greater than the comparable unemploy- ment rate for this entire state, as defined by the most recently available data published or officially pro- vided and verified by the United States Government, the Employment Department, the Portland State Uni- versity Population Research Center or special studies 2

OREGON LAWS 2026 Chap. 50 conducted under a contract with a regional academic institution; or] [(c) The Oregon Business Development Depart- ment determines on a case-by-case basis using evi- dence provided by the cities, counties or ports designating the enterprise zone that there exists a level of economic hardship at least as severe as that described in paragraph (a) or (b) of this subsection. The evidence must be based on the most recently available data from official sources and may include a contemporary decline of the population in the enter- prise zone, the percentage of persons in the enterprise zone below the poverty level relative to the percentage of the entire population of this state below the poverty level or the unemployment rate for the county or counties in which the enterprise zone is located.] (a) Evidence of economic transition or re- structuring, including but not limited to job losses, industry contraction, supply chain rea- lignment, automation impacts and shifts in re- gional economic specialization; (b) The presence of underutilized, vacant or redevelopment-ready industrial or employment land, including brownfields, legacy industrial sites and properties requiring modernization to support productive use; (c) Alignment with adopted local, regional or statewide economic development strategies, land-use plans, infrastructure plans, workforce strategies or climate and energy transition goals, where enterprise zone designation would materially advance implementation; (d) Demonstrated opportunity to: (A) Support emerging, traded sector or innovation-driven industries; (B) Retain, reinvest in or modernize existing industries or facilities; or (C) Make investments that improve produc- tivity, competitiveness, supply chain resilience or workforce quality; (e) Commitment by the zone sponsor to a performance-based development approach, in- cluding measurable objectives related to capital investment, wages, workforce development, re- tention or modernization outcomes, productivity improvement, redevelopment outcomes or other economic performance indicators established by the Oregon Business Development Department by rule; or (f) Other community-defined indicators of economic need or development potential sup- ported by objective evidence and consistent with department rules. (2)(a) An urban enterprise zone may consist of a total area of not more than 12 square miles in size. (b) A rural enterprise zone may consist of a total area of not more than 15 square miles in size. (c) For purposes of this subsection, the area of the zone must be calculated by excluding that por- tion of the zone that lies below the ordinary high water mark of a navigable body of water. (3) Except as provided in subsection (4) of this section: (a) An urban enterprise zone must have 12 miles or less, and a rural enterprise zone must have 15 miles or less, as the greatest distance between any two points within the zone; and (b) Unconnected areas of an enterprise zone may not be more than five miles apart. (4) Unconnected areas of a rural enterprise zone may not be more than 15 miles apart when an un- connected area is entirely within a sparsely popu- lated county, and the zone: (a) Must have 20 miles or less as the greatest distance between any two points within the zone, if only a portion of the zone is contained within a sparsely populated county; or (b) Must have 25 miles or less as the greatest distance between any two points within the zone, if the zone is entirely contained within a sparsely populated county. (5) This section does not apply to the designation or redesignation of a reservation enterprise zone or a reservation partnership zone. SECTION 8. ORS 285C.135 is amended to read: 285C.135. (1) To be an eligible business firm, a business firm must be engaged, or proposing to en- gage, within the enterprise zone, in: (a) The business of providing goods, products or services to businesses or other organizations through activities including, but not limited to, manufacturing, assembly, fabrication, processing, shipping or storage[.]; or (b) An industry sector identified by resolu- tion of the governing body of the zone sponsor as a priority industry under a local or regional economic development strategy. (2) A business firm is not an eligible business firm if the firm is: (a) Engaged within the enterprise zone in the business of providing goods, products or services to the general public for personal or household use. (b) Significantly engaged in a business activity within the enterprise zone that consists of retail sales or services, child care, housing, retail food service, health care, tourism, entertainment, finan- cial services, professional services, leasing space to others, property management, construction or other similar activities, even if for another business or or- ganization. (c) Significantly engaged in operating a fulfill- ment center within the enterprise zone from which deliveries are made to retail purchasers within, or in the region surrounding, the enterprise zone. (3)(a) If a business firm described in subsection (2) of this section engages in an activity described in subsection (1) of this section, the business firm is an eligible business firm if the activity is performed at a location that is separate from the activity of the firm that is described in subsection (2) of this sec- tion. Property at the location at which the firm conducts an activity described in subsection (2) of this section may not be exempt under ORS 285C.175. (b)(A) Upon written request of the zone sponsor demonstrating that the business activ- 3

Chap. 50 OREGON LAWS 2026 ity will provide substantial community benefit, innovation or alignment with local economic development goals, the Oregon Business Devel- opment Department may approve a waiver or authorize a pilot program allowing a business firm engaged in a business activity described in subsection (2) of this section to qualify as an eligible business firm. (B) The Oregon Business Development De- partment shall adopt rules that establish ap- proval criteria for waivers or pilot programs for purposes of this paragraph. [(4) Two or more business firms that otherwise meet the requirements of this section may elect to be treated as one eligible business firm if 100 percent of the equity interest in the business firms is owned by the same person or persons, or if one of the business firms owns 100 percent of the equity interest of the other or others.] [(5)] (4) Notwithstanding subsections (1) to (3) of this section, each of the following business firms is an eligible business firm under subsection (1) of this section: (a) A business firm engaged in the activity of providing a retail or financial service within the en- terprise zone if: (A) The activity serves customers by responding to orders or requests received only by telephone, computer, the Internet or similar means of telecom- munications; and (B) Not less than 90 percent of the customers or orders are located and originate in an area from which long distance telephone charges, in the ab- sence of a toll-free number, would apply if the order were placed by telephone. (b) A business firm that operates a facility within the enterprise zone that serves statewide, re- gional, national or global operations of the firm through administrative, design, financial, manage- ment, marketing or other activities, without regard to the relationship of these activities to any other- wise eligible activities within the enterprise zone. (c) A business firm that operates a hotel, motel or destination resort in the enterprise zone if the sponsor has elected under ORS 285C.070 to treat a business firm engaged in hotel, motel or destination resort operations in an enterprise zone as an eligible business firm. (d) A business firm that is engaged in electronic commerce if the enterprise zone has been designated for electronic commerce under ORS 285C.095. (5) Two or more business firms that other- wise meet the requirements of this section may elect to be treated as one eligible business firm if 100 percent of the equity interest in the busi- ness firms is owned by the same person or per- sons, or if one of the business firms owns 100 percent of the equity interest of the other or others. SECTION 9. ORS 285C.160 is amended to read: 285C.160. (1)(a) An eligible business firm seeking authorization under ORS 285C.140 and the sponsor of the enterprise zone in which the firm intends to invest may enter into a written agreement to extend the period during which the qualified property is exempt from taxation [under ORS 285C.175 if the firm complies with the terms of the agreement] be- yond the three years allowable under ORS 285C.175. (b) Notwithstanding paragraph (a) of this subsection, the exemption period may not be extended under this section for qualified prop- erty used in operating a data center. (2) The period for which the exemption for the qualified property is to [continue to be exempt] be extended: (a) Must be set forth in the agreement; and (b) May not exceed [two additional tax years for which a school support fee must be paid in accord- ance with ORS 285C.162.]: (A) Two additional tax years, subject to any applicable school support fee requirements un- der ORS 285C.162; or (B) If requested by the sponsoring jurisdic- tion, a longer period of no more than 10 years if, under rules adopted by the Oregon Business Development Department, the eligible business firm demonstrates that the project to which the agreement relates involves substantial capital investment, regional economic impact or align- ment with local development goals. (3) In order for an agreement [under this section] to extend the period of exemption under this section, the agreement must be executed on or before the date on which the firm is authorized, and: (a) If the enterprise zone is a rural enterprise zone or an urban enterprise zone located inside a metropolitan statistical area of fewer than 400,000 residents, the agreement must require that the firm: (A)(i) Annually compensate all new employees hired by the firm at an average rate of at least 150 percent of the county average annual wage for each assessment year during the tax exemption period, as determined at the time of authorization; or (ii) If the enterprise zone is located in a qualified rural county, annually compensate all new employ- ees hired by the firm at an average rate of at least 130 percent of the county average annual wage for each assessment year during the tax exemption pe- riod, as determined at the time of authorization; and (B) Meet any additional requirement that the sponsor may reasonably request. (b) Notwithstanding paragraph (a)(A) of this subsection, the average wage received by the newly hired employees must equal or exceed 100 percent of the average wage in the county. (c) If the enterprise zone is an urban enterprise zone located inside a metropolitan statistical area of 400,000 residents or more, the agreement must re- quire that the firm meet any additional requirement the sponsor may reasonably require. (4) If a firm enters into an agreement under this section that includes a compensation requirement under subsection (3)(a)(A) of this section and the firm subsequently submits one or more statements 4

OREGON LAWS 2026 Chap. 50 of continued intent under ORS 285C.165, notwith- standing the terms of the agreement made under this section, for each statement of continued intent sub- mitted, the county average annual wage under sub- section (3)(a)(A) of this section shall be adjusted to a level that is current with the statement. SECTION 10. ORS 285C.200 is amended to read: 285C.200. (1) The qualified property of an au- thorized business firm may be exempt from property taxation under ORS 285C.175 only if the firm meets the following qualifications: (a) The firm is an eligible business firm engaged in eligible business operations under ORS 285C.135 that are located inside the enterprise zone; (b) The firm owns or leases qualified property that is located inside the enterprise zone; (c) Except as otherwise provided in subsection (2) of this section and ORS 285C.203, the employ- ment of the firm, on or before the earlier of April 1 or the date on which the initial exemption claim is filed under ORS 285C.220, following the year in which the qualified property is first placed in service in the enterprise zone, is not less than the greater of: (A) 110 percent of the annual average employ- ment of the firm; or (B) The annual average employment of the firm plus one employee; (d) The firm does not diminish employment out- side the enterprise zone as provided in subsection [(4) or] (5) or (6) of this section; (e) The firm does not substantially curtail oper- ations within the enterprise zone as described in ORS 285C.210; and (f) The firm complies in all material respects with local, Oregon and federal laws applicable to the firm’s operations inside the enterprise zone since the application for authorization and throughout the pe- riod of exemption, as prescribed by rule. (2)(a) Notwithstanding subsection (1) of this section, the sponsor and the business firm may agree to flexible hiring timelines, including phased or delayed hiring, if the firm demon- strates to the sponsor’s satisfaction a clear plan for meeting employment or alternative per- formance criteria, including but not limited to job retention, improvements in productivity and revenue growth, over the course of the ex- emption period. (b) In lieu of meeting the employment quali- fications under subsection (1)(c) of this section, a sponsor may approve alternative performance criteria that support the objectives of the zone designation, including but not limited to job re- tention or wage growth. (c) The terms agreed to under this subsec- tion must be set forth in a written agreement. Failure to meet the terms of the agreement is a disqualifying event under ORS 285C.240. (d) This subsection does not apply with re- spect to qualified property of an authorized business firm used in operating a data center. [(2)] (3) Notwithstanding subsection (1)(c) or (e) of this section, an eligible business firm may meet the qualifications of this section if the firm has sat- isfied the following requirements: (a) The firm is authorized subject to ORS 285C.155 and the firm satisfies those requirements; and (b)(A) The firm completes an investment of $25 million or more in qualified property; or (B) The firm fulfills the requirements of ORS 285C.205 and the employment of the firm does not decrease below the annual average employment of the firm. [(3)] (4) An authorized business firm that en- gages in both eligible and ineligible operations in an enterprise zone and is an eligible business firm be- cause of ORS 285C.135 (3) meets the qualifications of this section if: (a) The eligible operations of the firm under ORS 285C.135 meet the qualifications of this section; and (b) The employees of the firm work a majority of their time in eligible operations within the enter- prise zone. [(4)] (5) A business firm does not meet the qual- ifications of this section if the firm or any other firm under common control closes or permanently cur- tails operations in another part of the state more than 30 miles from the nearest boundary of the en- terprise zone in which the firm seeks a property tax exemption. This subsection applies to the transfer of any of the business firm’s eligible operations to the enterprise zone from another part of the state, if the closure or permanent curtailment in the other part of the state diminished employment in the county and more local labor markets after authori- zation and on or before December 31 of the first tax year for which any qualified property of the firm in that zone would otherwise be exempt under ORS 285C.175. [(5)] (6) An authorized business firm that moves any of its employees from a site or sites within 30 miles from the nearest boundary of the enterprise zone after authorization may meet the qualifications under this section if the employment of the firm has been increased within the zone and at the site or sites from which the employees were transferred, no later than April 1 preceding the first tax year for which qualified property of the firm is exempt under ORS 285C.175, to not less than 110 percent of the annual average employment of the firm within the zone and the site or sites from which the employees were transferred, calculated over the 12 months preceding the date of application for authorization. [(6)] (7) For purposes of subsection (1)(f) of this section, the Oregon Business Development Depart- ment shall adopt rules that define the effect of non- compliance on an eligible business firm’s continuing exemption in an enterprise zone and that indicate what is necessary to establish the noncompliance in terms of materiality of the relevant violation, the fi- nality of applicable legal or regulatory proceedings and judgments involving the firm, the failure by the 5

Chap. 50 OREGON LAWS 2026 firm to perform or submit to remedial or curative actions and similar factors. [(7)] (8) As used in this section: (a) “Annual average employment of the firm” means the average employment of the firm, calcu- lated over the 12 months preceding the date of ap- plication for authorization. (b) Except as provided in subsection [(5)] (6) of this section, “employment of the firm” means: (A) The number of employees working for the firm a majority of their time in eligible operations at locations throughout the enterprise zone; or (B) In the case of a firm described in ORS 285C.135 [(5)(b)] (4)(b), the number of employees working a majority of their time at the facility in the enterprise zone for which authorization was ob- tained. SECTION 11. ORS 285C.140 is amended to read: 285C.140. (1)(a) Any eligible business firm seek- ing to have property exempt from property taxation under ORS 285C.175 shall, before the commencement of direct site preparation activities or the construc- tion, addition, modification or installation of quali- fied property in an enterprise zone, and before the hiring of eligible employees, apply for authorization under this section. (b) The application shall be made on a form pre- scribed by the Department of Revenue and the Ore- gon Business Development Department. (c) The application shall be filed with the spon- sor of the zone. A sponsor may require that the ap- plication filed with the sponsor be accompanied by a filing fee. If required, the filing fee may not exceed the greater of $200 or one-tenth of one percent of the value of the investment in qualified property that is proposed in the application for authorization. The filing fee may be required for the filing of applica- tions only after the sponsor adopts a policy, consist- ent with Oregon Business Development Department rules, authorizing the imposition of the filing fee. (2) The application shall contain the following information: (a) A description of the nature of the firm’s cur- rent and proposed business operations inside the boundary of the enterprise zone; (b) A description and estimated value of the qualified property to be constructed, added, modified or installed inside the boundary of the enterprise zone; (c) The number of employees of the firm that the firm employs within the enterprise zone, averaged over the previous 12 months, and an estimate of the number of employees that the firm will hire; (d) A commitment to meet all requirements of ORS 285C.200 and 285C.215, and to verify compli- ance with these requirements; (e) A commitment to satisfy all additional condi- tions for authorization that are imposed by the en- terprise zone sponsor under ORS 285C.150, 285C.155 or 285C.205 or pursuant to an agreement entered into under ORS 285C.160, and to verify compliance with these additional conditions; (f) A commitment to renew the application, con- sistent with ORS 285C.165, every two years while the zone exists if the firm has not filed a claim un- der ORS 285C.220 that is based on the application; and (g) Any other information considered necessary by the Department of Revenue and the Oregon Business Development Department. (3) After an application is submitted to a spon- sor, the business firm may revise or amend the ap- plication. An amendment or revision may not be made on or after January 1 of the first assessment year for which the qualified property associated with the application is exempt under ORS 285C.175. (4) If an application for authorization appears to be complete and the proposed investment appears to be eligible for authorization, the sponsor and the business firm shall conduct a preauthorization con- ference. The assessor of the county in which the property will be located shall be timely notified and have the option to participate in the conference. The conference shall: (a) Identify issues with the potential to affect compliance with relevant exemption requirements, including but not limited to enterprise zone bound- ary amendments; (b) Arrange for methods and procedures to es- tablish and verify compliance with applicable re- quirements; and (c) Identify the person who is obligated to notify the county assessor if requirements are not satisfied. (5) Upon completion of the preauthorization conference required under subsection (4) of this sec- tion, the sponsor shall prepare a written summary of the conference, attach the summary to the appli- cation and forward the application to the county as- sessor for review. (6) Following the preauthorization conference under subsection (4) of this section, the sponsor and the county assessor shall authorize the business firm by approving the application, if the sponsor and county assessor determine that: (a) The current or proposed operations of the business firm in the enterprise zone result in the firm being eligible under ORS 285C.135; and (b) The firm has made the commitments and provided the other information required under sub- section (2) of this section. (7) If the business firm seeking authorization is an eligible business firm described in ORS 285C.135 [(5)(b)] (4)(b), the sponsor must, as a condition of approving the application, make a formal finding that the business firm is an eligible business firm under ORS 285C.135 and that the size of the pro- posed investment, the employment at the facility of the firm or the nature of the activities to be under- taken by the firm within the enterprise zone will significantly enhance the local economy, promote the purposes for which the zone was created and in- crease employment within the zone. (8) The approval of both the sponsor and the county assessor under this section shall be prima facie evidence that the qualified property of the 6

OREGON LAWS 2026 Chap. 50 business firm will receive the property tax ex- emption under ORS 285C.175. In approving the ap- plication, the sponsor and county assessor shall provide proof of approval as directed by the Oregon Business Development Department. (9) If the sponsor or county assessor fails or re- fuses to authorize the business firm, the business firm may appeal to the Oregon Tax Court under ORS 305.404 to 305.560. The business firm shall provide copies of the firm’s appeal to the sponsor, county assessor, the Department of Revenue and the Oregon Business Development Department. (10) Authorization under this section does not ensure that property constructed, added, modified or installed by the authorized business firm will receive property tax exemption under ORS 285C.175. The sponsor and the county assessor are not liable in any way if the Department of Revenue or the county assessor later determines that an authorized busi- ness firm does not satisfy the requirements for an exemption on qualified property. (11) Notwithstanding subsection (1) of this sec- tion, if an eligible business firm has begun or com- pleted the construction, addition, modification or installation of property that meets the qualifications of ORS 285C.180, and the property has not yet been subject to property tax after having been placed in service, then, for purposes of ORS 285C.050 to 285C.250, the firm shall be authorized under this section if the firm files an application that is al- lowed under subsection (12) of this section and is otherwise authorized under this section. (12) Late submission of an application under this section is allowed if: (a) A rule permits late submissions of applica- tions under this section; or (b) The Department of Revenue waives filing deadline requirements under this section. The de- partment shall issue a letter to the eligible business firm and zone sponsor setting forth the waiver under this paragraph. SECTION 11a. Section 11b of this 2026 Act is added to and made a part of ORS 285C.050 to 285C.250. SECTION 11b. Notwithstanding any other provision of law, an eligible business firm may not be authorized under ORS 285C.140 with re- spect to property consisting of a data center project before the date that is 90 days following the date on which the 2027 regular session of the Legislative Assembly adjourns sine die. SECTION 11c. Section 11b of this 2026 Act is repealed on January 2, 2029. SECTION 12. ORS 285C.180 is amended to read: 285C.180. (1) The following types of property are qualified for exemption under ORS 285C.175: (a) A newly constructed building or structure. (b) A new addition to or modification of an ex- isting building or structure. (c) Any real property machinery or equipment or personal property, whether new, used or recondi- tioned, that is installed on property that is owned or leased by an authorized business firm, and: (A) Newly purchased or leased by the firm, un- less the property is described in ORS 285C.175 (4)(a); or (B) Newly transferred into the enterprise zone from outside the county within which the site of the firm is located and installed. (2) Property described in subsection (1) of this section is qualified under this section only if: (a) The property meets or exceeds the minimum cost requirements established under ORS 285C.185; (b) The property satisfies applicable usage, lease or location requirements established under ORS 285C.185; (c) The property was constructed, added, modi- fied or installed to further the production of income; (d) The property is owned or leased by an au- thorized business firm; (e) The location of the property corresponds to the location as set forth in the application for au- thorization of the business firm and consists of a single site or multiple sites adjacent to or having comparable proximity to each other, within the boundaries of the enterprise zone; (f) The property is the same general type of property as described in the application for authori- zation; and (g) In the case of an eligible business firm de- scribed in ORS 285C.135 [(5)(b)] (4)(b), the actual investment at the facility of the firm is consistent with the description set forth in the application for authorization. (3) Notwithstanding subsection (1) of this sec- tion, the following property is not qualified for ex- emption under ORS 285C.175: (a) Land. (b) Property that was not in use or occupancy for more than a 180-day period that ends during the preceding assessment year. (c) On-site developments that, consistent with ORS 307.010, are assessed as land. (d) Noninventory supplies, including but not limited to lubricants. (e) Any operator-driven item of machinery or equipment or any vehicle, if the item or vehicle moves by internal motorized power. An item or ve- hicle described in this paragraph includes but is not limited to an item or vehicle that moves within an enclosed space. (f) Any device or rolling stock that is pulled, pushed or carried by a vehicle that is suitable as a mode of transportation beyond the enterprise zone boundary. (4) Subsection (3)(b) of this section does not ap- ply to the first assessment year for which the prop- erty is exempt under ORS 285C.175. (5) For purposes of this section and ORS 285C.175, property includes any portion or incre- mental unit of property that is newly constructed or 7

Chap. 50 OREGON LAWS 2026 installed, or that is a new addition to or modification of an existing building or structure. SECTION 13. ORS 285C.155 is amended to read: 285C.155. For purposes of ORS 285C.200 [(2)] (3): (1) The sponsor of an enterprise zone, at the time authorization is sought by a business firm under ORS 285C.140, shall establish a minimum number of employees the firm must maintain in the enterprise zone throughout the exemption period. (2) The sponsor, at the time authorization is sought by a business firm under ORS 285C.140, may establish other reasonable conditions with which the firm must comply in order for qualified property of the firm to be exempt under ORS 285C.175. (3) Employment requirements and other condi- tions established by the sponsor under this section shall be set forth in a resolution adopted by the governing body of the sponsor at the time the spon- sor approves the application of the business firm for authorization under ORS 285C.140. (4) A resolution adopted pursuant to this section may be modified at the request of the business firm at any time prior to the start of the first tax year for which an exemption under ORS 285C.175 is claimed. SECTION 14. ORS 285C.205 is amended to read: 285C.205. The requirements of ORS 285C.200 [(2)(b)(B)] (3)(b)(B) are met if the qualified business firm does all of the following: (1) The firm demonstrates at least a 10 percent increase in productivity no later than 18 months following January 1 of the first assessment year for which an exemption under ORS 285C.175 is claimed. Unless further specified by the sponsor of the enter- prise zone through the resolution adopted under ORS 285C.155: (a) The increase must be in business operations of the firm that are using qualified property receiv- ing the exemption; (b) Productivity is measured by dividing physical units or quantity of output by the number of labor hours engaged in the operations that produced the physical units or quantity of output; and (c) The base level of productivity shall be estab- lished over a minimum 12-month period preceding the date on which the qualified property is placed in service. (2) The firm maintains or exceeds the 10 percent increase in productivity under subsection (1) of this section as an annual average rate for each subse- quent assessment year during the remainder of the exemption period. (3) On or before April 1 of each of the first three assessment years for which an exemption is claimed, the firm deposits into an account established by the sponsor an amount equal to 25 percent of the esti- mated tax savings arising from the exemption for that year. The sponsor may adopt additional specifi- cations or requirements applicable to this subsection in the resolution the sponsor adopts under ORS 285C.155. Consistent with this subsection and any additional specifications or requirements adopted by the sponsor: (a) For up to 30 months following the relevant April 1 date for which a deposit is made, the firm may draw from the account amounts equal to any expense incurred for training or retraining employ- ees to promote or facilitate productivity increases under this section, except that the total amount withdrawn from the account for that deposit may not exceed $3,500 per trained employee; (b) Any amount attributable to the deposit that remains in the account after the 30-month period in which firm withdrawals may be made under para- graph (a) of this subsection shall be transferred to a special fund for use by local publicly funded job training providers; and (c) No more than 18 months after the deposit, the estimated tax savings on which the deposit was based shall be reconciled with the actual tax savings arising from the exemption. The reconciliation shall be accomplished by the firm immediately making a further deposit into the account to cover any shortfall or by being reimbursed from the account for any surplus. A deposit or reimbursement made pursuant to this paragraph does not affect with- drawals or transfers that occur as a result of para- graph (a) or (b) of this subsection. SECTION 15. ORS 285C.210 is amended to read: 285C.210. (1) For purposes of ORS 285C.175, 285C.200 and 285C.240, except as provided in sub- section (3) of this section, operations of a business firm within the enterprise zone are substantially curtailed when: (a) Pursuant to the initial claim of exemption and satisfaction of ORS 285C.200 (1)(c), the number of employees of the firm: (A) Is reduced by more than 85 percent from the highest number of employees of the firm; or (B) Has been reduced by more than 50 percent from the highest number of employees of the firm over two consecutive annual filing periods under ORS 285C.220 (1); or (b) The annual average number of employees of the firm during the first assessment year for which the exemption under ORS 285C.175 is granted, or any subsequently allowed year of exemption, is re- duced below the greater of: (A) The annual average number of employees of the firm, averaged over the 12 months preceding the date of the application for authorization, plus one employee; or (B) 110 percent of the annual average number of employees of the firm, averaged over the 12 months preceding the date of the application for authori- zation. (2) For the purposes of this section: (a) Except as provided in paragraph (c)(A) of this subsection, the number of employees of the firm is the employment of the firm, as defined in ORS 285C.200 [(7)(b)] (8)(b), on the earlier of the date a claim for exemption is filed under ORS 285C.220 or April 1 of the year in which the exemption is ini- 8

OREGON LAWS 2026 Chap. 50 tially claimed under ORS 285C.175 and following each assessment year of the exemption, including after the last such assessment year. (b) Except as provided in paragraph (c)(B) of this subsection, the annual average number of employees of the firm is the number of employees of the firm averaged over the course of each assessment year in which an exemption under ORS 285C.175 is allowed, using employment figures for no fewer than four equivalent periods during the year. (c) For the first assessment year for which an authorized business firm that qualifies under ORS 285C.200 [(5)] (6) claims an exemption under ORS 285C.175, substantial curtailment under subsection (1)(a)(A) or (b) of this section shall be determined by: (A) Combining the number of employees of the firm and the number of employees at any applicable site of the firm outside the enterprise zone; and (B) Combining the annual average number of employees of the firm with the annual average num- ber of employees at any applicable site of the firm outside the enterprise zone. (3) Operations of a business firm are not sub- stantially curtailed under this section during a pe- riod of suspension as otherwise provided in ORS 285C.203. SECTION 16. If Senate Bill 1507 becomes law, section 12, chapter 142, Oregon Laws 2026 (Enrolled Senate Bill 1507), is amended to read: Sec. 12. [(1) A credit against taxes that are oth- erwise due under ORS chapter 316 or, if the taxpayer is a corporation, under ORS chapter 317 or 318 is allowed to a taxpayer for each new job in Oregon created by the taxpayer during the tax year.] (1) As used in this section: (a)(A) “Advanced manufacturing” means ac- tivities that: (i) Depend on the use and coordination of information, automation, computation, soft- ware, industrial sensors and networking; (ii) Make use of newly developed materials and processes enabled by the physical and bi- ological sciences, including but not limited to nanotechnology, chemistry and biology; (iii) Involve both new ways to manufacture existing products and the manufacture of new products emerging from new advanced technol- ogies; or (iv) As applied to biotechnology and life sci- ences activities, are related research, develop- ment, scale-up and enabling technology activities integral to the production of biolog- ical, medical or biobased products. (B) “Advanced manufacturing” does not in- clude activities that are primarily: (i) Routine assembly, packaging, labeling, sorting, warehousing, storage or distribution; (ii) Basic fabrication, machining or process- ing that does not incorporate advanced technol- ogies or materially transform products or production processes; (iii) Maintenance, repair or refurbishment of machinery, equipment or products; or (iv) Administrative, clerical, sales, market- ing or other nonproduction activities. (b) “Clean technology” means the manufac- ture or provision of, or research or development supporting the manufacture or provision of, products or services that enable energy to be produced from renewable sources, that reduce negative environmental impacts or that reduce energy consumption. (c) “High technology” means software, in- formation technology and semiconductor or re- lated device manufacturing. (d) “Qualified industry” means businesses that operate in any of the following sectors: (A) Advanced manufacturing; (B) Bioscience and biotechnology; (C) Clean technology; (D) Food and beverage processing; (E) Forestry and wood products; (F) High technology; or (G) Outdoor gear and apparel. (2) A credit against 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 that is engaged in a qualified industry as a primary business, for each new job in Oregon created by the taxpayer during the tax year in a qualified industry. [(2)(a)] (3)(a) The credit allowed under this sec- tion shall be in the amount of $1,000 for each net new job created by a taxpayer in the tax year, but a taxpayer may not be certified for and may not re- ceive a credit for more than 10 new jobs created per tax year. (b) In order to be considered in the determi- nation under this section of the eligibility and al- lowable credit amount for any taxpayer, an employment position must have compensation that is equal to or greater than 150 percent of the appli- cable minimum wage determined under ORS 653.025. (c) The number of net new jobs created by the taxpayer in a tax year shall be determined by com- paring the average annual covered employment of the taxpayer for the 12 months ending on June 30 of the calendar year in which the taxpayer’s tax year began and for which the credit is sought, with the 12 months ending on June 30 of the immediately preceding calendar year. [(3) Prior to claiming the credit allowed under this section, a taxpayer seeking to claim the credit is required to receive written certification of eligibility from the Oregon Business Development Department. In order to receive certification, a taxpayer must attest that the taxpayer has created new jobs sufficient to be eligible for the amount of credit sought, has met the wage requirements of subsection (2)(b) of this sec- tion and is otherwise in compliance with this section. The certification shall indicate the amount of the credit to which the taxpayer is entitled for the tax year.] 9

Chap. 50 OREGON LAWS 2026 (4) Prior to claiming the credit allowed under this section, a taxpayer seeking to claim the credit is required to receive written certification of eligibility from the Oregon Business Develop- ment Department. In order to receive certifica- tion, a taxpayer must attest that the taxpayer: (a) Is engaged as the taxpayer’s primary business in a qualified industry; (b) Has created new jobs sufficient to be eli- gible for the amount of credit sought; and (c) Has met the wage requirements of sub- section (3)(b) of this section and is otherwise in compliance with this section. (5) The certification shall indicate the amount of the credit to which the taxpayer is entitled for the tax year. [(4)] (6) The credit allowed under this section may not exceed the tax liability of the taxpayer for the tax year. [(5)] (7) Any tax credit otherwise allowable un- der 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 succeed- ing tax year may be carried forward and used in the third succeeding tax year but may not be carried forward for any other succeeding tax year. [(6)] (8) The Oregon Business Development De- partment shall provide information to the Depart- ment of Revenue about all taxpayers that are eligible for a tax credit under this section, if re- quired by ORS 315.058. [(7)] (9) Information received by the Oregon Business Development Department pursuant to this section may be used only for the purpose of certi- fication and administration of the credit. The Ore- gon Business Development Department may disclose this information to entities other than the Depart- ment of Revenue only if the information is suffi- ciently aggregated or anonymized to protect the identity and confidential information of taxpayers. [(8)] (10) The Director of the Oregon Business Development Department may order the suspension or revocation of a certification issued under this section, as provided in ORS 315.061. [(9) The Oregon Business Development Depart- ment shall by rule establish:] [(a) The form and content of and deadlines for applications for the credit allowed under this section.] [(b) Methodology for determining net new jobs created, as provided in subsection (2) of this section, in the instance of a merger, conversion, reorganiza- tion, consolidation or acquisition affecting a taxpayer.] (11) The Oregon Business Development De- partment shall by rule: (a) Establish the form and content of and deadlines for applications for the credit allowed under this section. (b) Establish methodology for determining net new jobs created, as provided in subsection (3) of this section, in the instance of a merger, conversion, reorganization, consolidation or ac- quisition affecting a taxpayer. (c) Further define the term “qualified indus- try” for purposes of this section. SECTION 17. This 2026 Act takes effect on the 91st day after the date on which the 2026 regular session of the Eighty-third Legislative Assembly adjourns sine die. Approved by the Governor March 31, 2026 Filed in the office of Secretary of State March 31, 2026 Effective date June 5, 2026 10

OREGON LAWS 2026 Chap. 142 CHAPTER 142 AN ACT SB 1507 Relating to revenue; creating new provisions; amending ORS 178.300, 178.375, 238A.005, 238A.125, 238A.150, 238A.170, 238A.230, 238A.370, 238A.400, 238A.410, 238A.415, 238A.430, 238A.435, 305.239, 305.494, 305.690, 305.842, 314.011, 314.306, 314.772, 315.004, 315.266, 316.012, 316.147, 316.157, 317.010, 317.097, 317A.100, 458.670, 657.010 and 657B.010; and prescribing an effective date. Be It Enacted by the People of the State of Or- egon: SECTION 1. Section 2 of this 2026 Act is added to and made a part of ORS chapter 316. SECTION 2. There shall be added to federal taxable income an amount equal to qualified passenger vehicle loan interest paid by the tax- payer and deducted on the taxpayer’s federal income tax return in the tax year, as provided in section 163(h)(4) of the Internal Revenue Code. NOTE: Section 2, shown in underlined text above, is the subject of a referendum petition. See endnote for further explanation. SECTION 3. ORS 315.266 is amended to read: 315.266. (1)(a) In addition to any other credit available for purposes of ORS chapter 316, an eligi- ble resident individual shall be allowed a credit against the tax otherwise due under ORS chapter 316 for the tax year in an amount equal to [nine] 14 percent of the earned income credit allowable to the individual for the same tax year under section 32 of the Internal Revenue Code. (b) Notwithstanding paragraph (a) of this sub- section, for a taxpayer with a dependent under the age of three at the close of the tax year, the credit allowed under this section shall be in an amount equal to [12] 17 percent of the earned income credit allowable to the individual for the same tax year under section 32 of the Internal Revenue Code. (2) A resident individual may claim a credit un- der this section, using either a Social Security num- ber or an individual taxpayer identification number, if, but for section 32(m) of the Internal Revenue Code, the individual would otherwise be eligible to claim a credit under section 32 of the Internal Re- venue Code. The credit allowed as provided in this subsection shall equal the percentage, as stated in subsection (1) of this section, of the amount that would be allowed on a federal return, based on the amount of the individual’s earned income and the other provisions of section 32 of the Internal Re- venue Code. (3) An eligible 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 subsection (1) or (2) of this section. However, the credit shall be prorated using the pro- portion provided in ORS 316.117. (4) If a change in the taxable year of a taxpayer occurs as described in ORS 314.085, or if the De- partment of Revenue terminates the taxpayer’s taxa- ble year under ORS 314.440, the credit allowed by this section shall be prorated or computed in a manner consistent with ORS 314.085. (5) If a change in the status of a taxpayer from resident to nonresident or from nonresident to resi- dent occurs, the credit allowed by this section shall be determined in a manner consistent with ORS 316.117. (6) If the amount allowable as a credit under this section, when added to the sum of the amounts al- lowable as payment of tax under ORS 316.187 or 316.583, other tax prepayment amounts and other refundable credit amounts, exceeds the taxes im- posed by ORS chapters 314 and 316 for the tax year after application of any nonrefundable credits allow- able for purposes of ORS chapter 316 for the tax year, the amount of the excess shall be refunded to the taxpayer as provided in ORS 316.502. (7) The Department of Revenue may adopt rules for purposes of this section, including but not lim- ited to rules relating to proof of eligibility, the fur- nishing of information regarding the federal earned income credit claimed by the taxpayer for the tax year and policies and guidelines for the determi- nation of the amount of credit allowed under sub- section (2) of this section. (8) Refunds attributable to the earned income credit allowed under this section do not bear inter- est. SECTION 4. Section 5 of this 2026 Act is added to and made a part of ORS chapter 316. SECTION 5. There shall be added to federal taxable income an amount equal to any gain from the exchange or sale of qualified small business stock that is received by the taxpayer and excluded from income on the taxpayer’s federal income tax return in the tax year, as provided in section 1202 of the Internal Revenue Code. SECTION 6. Section 7 of this 2026 Act is added to and made a part of ORS chapter 316. SECTION 7. (1) There shall be added to fed- eral taxable income for Oregon tax purposes the difference between the amount allowable as a deduction under section 168(k) of the Internal Revenue Code as applicable to the tax year of the taxpayer and the amount allowable as a de- duction under section 168(k) of the Internal Re- venue Code as amended and in effect on December 1, 2017, as applicable to the tax year of the taxpayer. (2) Amounts added to federal taxable income for Oregon tax purposes under subsection (1) of this section may thereafter be subtracted from 1

Chap. 142 OREGON LAWS 2026 federal taxable income for Oregon tax purposes in the tax year for which the amounts would have been allowed as a deduction on the taxpayer’s federal income tax return under the Internal Revenue Code as amended and in effect on December 1, 2017, as applicable to the tax year of the taxpayer. NOTE: Section 7, shown in underlined text above, is the subject of a referendum petition. See endnote for further explanation. SECTION 8. Section 9 of this 2026 Act is added to and made a part of ORS chapter 317. SECTION 9. (1) There shall be added to fed- eral taxable income for Oregon tax purposes the difference between the amount allowable as a deduction under section 168(k) of the Internal Revenue Code as applicable to the tax year of the taxpayer and the amount allowable as a de- duction under section 168(k) of the Internal Re- venue Code as amended and in effect on December 1, 2017, as applicable to the tax year of the taxpayer. (2) Amounts added to federal taxable income for Oregon tax purposes under subsection (1) of this section may thereafter be subtracted from federal taxable income for Oregon tax purposes in the tax year for which the amounts would have been allowed as a deduction on the taxpayer’s federal income tax return under the Internal Revenue Code as amended and in effect on December 1, 2017, as applicable to the tax year of the taxpayer. NOTE: Section 9, shown in underlined text above, is the subject of a referendum petition. See endnote for further explanation. SECTION 10. (1) Sections 2 and 5 of this 2026 Act and the amendments to ORS 315.266 by sec- tion 3 of this 2026 Act apply to tax years begin- ning on or after January 1, 2026. (2) Sections 7 and 9 of this 2026 Act apply to property that is placed in service in tax years beginning on or after January 1, 2026. SECTION 11. Section 12 of this 2026 Act is added to and made a part of ORS chapter 315. SECTION 12. (1) A credit against taxes that are otherwise due under ORS chapter 316 or, if the taxpayer is a corporation, under ORS chap- ter 317 or 318 is allowed to a taxpayer for each new job in Oregon created by the taxpayer dur- ing the tax year. (2)(a) The credit allowed under this section shall be in the amount of $1,000 for each net new job created by a taxpayer in the tax year, but a taxpayer may not be certified for and may not receive a credit for more than 10 new jobs cre- ated per tax year. (b) In order to be considered in the determi- nation under this section of the eligibility and allowable credit amount for any taxpayer, an employment position must have compensation that is equal to or greater than 150 percent of the applicable minimum wage determined under ORS 653.025. (c) The number of net new jobs created by the taxpayer in a tax year shall be determined by comparing the average annual covered em- ployment of the taxpayer for the 12 months ending on June 30 of the calendar year in which the taxpayer’s tax year began and for which the credit is sought, with the 12 months ending on June 30 of the immediately preceding calendar year. (3) Prior to claiming the credit allowed under this section, a taxpayer seeking to claim the credit is required to receive written certification of eligibility from the Oregon Business Develop- ment Department. In order to receive certifica- tion, a taxpayer must attest that the taxpayer has created new jobs sufficient to be eligible for the amount of credit sought, has met the wage requirements of subsection (2)(b) of this section and is otherwise in compliance with this section. The certification shall indicate the amount of the credit to which the taxpayer is entitled for the tax year. (4) The credit allowed under this section may not exceed the tax liability of the taxpayer for the 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 re- maining 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 other succeeding tax year. (6) The Oregon Business Development De- partment shall provide information to the De- partment of Revenue about all taxpayers that are eligible for a tax credit under this section, if required by ORS 315.058. (7) Information received by the Oregon Business Development Department pursuant to this section may be used only for the purpose of certification and administration of the credit. The Oregon Business Development Department may disclose this information to entities other than the Department of Revenue only if the in- formation is sufficiently aggregated or anonymized to protect the identity and confi- dential information of taxpayers. (8) The Director of the Oregon Business De- velopment Department may order the suspen- sion or revocation of a certification issued under this section, as provided in ORS 315.061. (9) The Oregon Business Development De- partment shall by rule establish: 2

OREGON LAWS 2026 Chap. 142 (a) The form and content of and deadlines for applications for the credit allowed under this section. (b) Methodology for determining net new jobs created, as provided in subsection (2) of this section, in the instance of a merger, conversion, reorganization, consolidation or acquisition af- fecting a taxpayer. SECTION 13. At the time of certification, the total amount of potential tax credits allowed under section 12 of this 2026 Act, for all taxpay- ers in this state, may not exceed $12.5 million for any tax year. If the Oregon Business Devel- opment Department receives applications for the credit sufficient to exceed this amount, the department shall by rule proportionately reduce the amount of certified credits among all tax- payers applying for the credit. SECTION 14. Section 12 of this 2026 Act ap- plies to tax years beginning on or after January 1, 2026, and before January 1, 2032. SECTION 15. ORS 314.772 is amended to read: 314.772. (1) Except as provided in ORS 314.766 (5)(b), the tax credits allowed or allowable to a C corporation for purposes of ORS chapter 317 or 318 shall not be allowed to an S corporation. The busi- ness tax credits allowed or allowable for purposes of ORS chapter 316 shall be allowed or are allowable to the shareholders of the S corporation. (2) In determining the tax imposed under ORS chapter 316, as provided under ORS 314.763, on in- come of the shareholder of an S corporation, there shall be taken into account the shareholder’s pro rata share of business tax credit (or item thereof) that would be allowed to the corporation (but for subsection (1) of this section) or recapture or recov- ery thereof. The credit (or item thereof), recapture or recovery shall be passed through to shareholders in pro rata shares as determined in the manner pre- scribed under section 1377(a) of the Internal Re- venue Code. (3) The character of any item included in a shareholder’s pro rata share under subsection (2) of this section shall be determined as if such item were realized directly from the source from which realized by the corporation, or incurred in the same manner as incurred by the corporation. (4) If the shareholder is a nonresident and there is a requirement applicable for the business tax credit that in the case of a nonresident the credit be allowed in the proportion provided in ORS 316.117, then that provision shall apply to the non- resident shareholder. (5) As used in this section, “business tax credit” means the following credits: ORS 315.104 (forestation and reforestation), ORS 315.124 (small forest option), ORS 315.133 (agricultural overtime pay), ORS 315.138 (fish screening, by-pass devices, fishways), ORS 315.141 (biomass production for biofuel), ORS 315.156 (crop gleaning), ORS 315.164 and 315.169 (agriculture workforce housing), ORS 315.176 (bovine manure), ORS 315.204 (dependent care assistance), ORS 315.208 (dependent care facilities), ORS 315.213 (contributions for child care), ORS 315.237 (employee and dependent scholarships), ORS 315.271 (individual development accounts), ORS 315.283 (affordable housing sales), ORS 315.304 (pollution control facil- ity), ORS 315.326 (renewable energy development contributions), ORS 315.331 (energy conservation projects), ORS 315.336 (transportation projects), ORS 315.341 (renewable energy resource equipment man- ufacturing facilities), ORS 315.354 and 469B.151 (en- ergy conservation facilities), ORS 315.506 (tribal taxes on reservation enterprise zones and reserva- tion partnership zones), ORS 315.507 (electronic commerce), ORS 315.514 (film production develop- ment contributions), ORS 315.518 (semiconductors), ORS 315.523 (employee training programs), ORS 315.533 (low income community jobs initiative), ORS 315.593 (short line railroads), ORS 315.640 (univer- sity venture development funds), ORS 315.643 (Op- portunity Grant Fund contributions), ORS 315.675 (Trust for Cultural Development Account contribu- tions), ORS 317.097 (loans for affordable housing), ORS 317.124 (long term enterprise zone facilities) and ORS 317.147 (loans for agriculture workforce housing) and section 9, chapter 774, Oregon Laws 2013 (alternative fuel vehicle contributions), and section 12 of this 2026 Act (new jobs). SECTION 16. ORS 178.300 is amended to read: 178.300. As used in ORS 178.300 to 178.360: (1) “Account” means an individual account es- tablished in accordance with ORS 178.300 to 178.360. (2) “Account owner” means the person who has the right to withdraw funds from the account. The account owner may also be the designated benefici- ary of the account. (3) “Board” means the Oregon 529 Savings Board established under ORS 178.310. (4) “Designated beneficiary” means, except as provided in ORS 178.350, the individual designated at the time the account is opened as having the right to receive a qualified withdrawal for the pay- ment of qualified higher education expenses, or if the designated beneficiary is replaced in accordance with ORS 178.350, the replacement. (5) “Financial institution” means a bank, a com- mercial bank, a national bank, a savings bank, a savings and loan, a thrift institution, a credit union, an insurance company, a trust company, a mutual fund, an investment firm or other similar entity au- thorized to do business in this state. (6) “Higher education institution” means an eli- gible education institution as defined in section 529(e)(5) of the Internal Revenue Code. (7) “Internal Revenue Code” means the federal Internal Revenue Code as amended and in effect on December 31, [2023] 2025. (8) “Member of the family” shall have the same meaning as contained in section 529(e) of the In- ternal Revenue Code. 3

Chap. 142 OREGON LAWS 2026 (9) “Network” means the Oregon 529 Savings Network established under ORS 178.305. (10) “Nonqualified withdrawal” means a with- drawal from an account that is not a qualified with- drawal. (11) “Qualified higher education expenses” means tuition and other permitted expenses as set forth in section 529(e) of the Internal Revenue Code for the enrollment or attendance of a designated beneficiary at a higher education institution, ex- penses associated with registered apprenticeship programs described in section 529(c)(8) of the In- ternal Revenue Code and amounts paid as principal or interest on a qualified education loan to the ex- tent allowed under section 529(c)(9) of the Internal Revenue Code. (12) “Qualified withdrawal” means a withdrawal made as prescribed under ORS 178.355 and made: (a) From an account to pay the qualified higher education expenses of the designated beneficiary; (b) As the result of the death or disability of the designated beneficiary; (c) As the result of a scholarship, allowance or payment described in section 135(d)(1)(A), (B) or (C) of the Internal Revenue Code that is received by the designated beneficiary, but only to the extent of the amount of the scholarship, allowance or payment; or (d) As a rollover or change in the designated beneficiary described in ORS 178.350. SECTION 17. ORS 178.375 is amended to read: 178.375. As used in this section and ORS 178.380 and 178.385: (1) “ABLE account” means an account estab- lished by an eligible individual, owned by the eligible individual and maintained under the qualified ABLE program established by the Oregon 529 Savings Board under ORS 178.380. (2) “ABLE Act” means the Stephen Beck, Jr., Achieving a Better Life Experience Act of 2014 (Di- vision B of P.L. 113-295). (3) “Designated beneficiary” has the same mean- ing as contained in section 529A of the Internal Re- venue Code. (4) “Eligible individual” has the same meaning as contained in section 529A of the Internal Revenue Code. (5) “Internal Revenue Code” means the federal Internal Revenue Code as amended and in effect on December 31, [2023] 2025. (6) “Qualified disability expense” has the same meaning as contained in section 529A of the Internal Revenue Code. SECTION 18. ORS 238A.005 is amended to read: 238A.005. For the purposes of this chapter: (1) “Active member” means a member of the pension program or the individual account program of the Oregon Public Service Retirement Plan who is actively employed in a qualifying position. (2) “Actuarial equivalent” means a payment or series of payments having the same value as the payment or series of payments replaced, computed on the basis of interest rate and mortality assump- tions adopted by the board. (3) “Board” means the Public Employees Retire- ment Board. (4) “Eligible employee” means a person who per- forms services for a participating public employer, including persons considered employees of a partic- ipating public employer under 26 U.S.C. 3121(d)(2), as in effect on January 1, [2024] 2026, and elected officials other than judges. “Eligible employee” does not include: (a) Persons engaged as independent contractors; (b) Aliens working under a training or educa- tional visa; (c) Persons provided sheltered employment or make-work by a public employer; (d) Persons categorized by a participating public employer as student employees; (e) Any person who is in custody in a state in- stitution; (f) Employees of foreign trade offices of the Ore- gon Business Development Department who live and perform services in foreign countries under the pro- visions of ORS 285A.075 (1)(g); (g) An employee actively participating in an al- ternative retirement program established under ORS 353.250 or an optional retirement plan established under ORS 341.551; (h) Employees of a public university listed in ORS 352.002 who are actively participating in an optional retirement plan offered under ORS 243.815; (i) Persons employed in positions classified as post-doctoral scholar positions by a public university listed in ORS 352.002, or by the Oregon Health and Science University, under ORS 350.370; (j) Any employee who belongs to a class of em- ployees that was not eligible on August 28, 2003, for membership in the system under the provisions of ORS chapter 238 or other law; (k) Any person who belongs to a class of em- ployees who are not eligible to become members of the Oregon Public Service Retirement Plan under the provisions of ORS 238A.070 (2); (L) Any person who is retired under ORS 238A.100 to 238A.250 or ORS chapter 238 and who continues to receive retirement benefits while em- ployed; and (m) Judges. (5) “Firefighter” means: (a) A person employed by a local government, as defined in ORS 174.116, whose primary job duties include the fighting of fires; (b) The State Fire Marshal, chief deputy state fire marshals and deputy state fire marshals; (c) An employee of the State Fire Marshal whose primary duties include fire investigation, fire pre- vention, fire safety, fire control or fire suppression; (d) An employee of the State Forestry Depart- ment who is certified by the State Forester as a professional wildland firefighter and whose primary duties include the abatement of uncontrolled fires as described in ORS 477.064; and 4

OREGON LAWS 2026 Chap. 142 (e) An employee of the Oregon Military Depart- ment whose primary duties include fighting struc- tural, aircraft, wildland or other fires. (6) “Fund” means the Public Employees Retire- ment Fund. (7)(a) “Hour of service” means: (A) An hour for which an eligible employee is directly or indirectly paid or entitled to payment by a participating public employer for performance of duties in a qualifying position; and (B) An hour of vacation, holiday, illness, inca- pacity, jury duty, military duty or authorized leave during which an employee does not perform duties but for which the employee is directly or indirectly paid or entitled to payment by a participating public employer for services in a qualifying position, as long as the hour is within the number of hours reg- ularly scheduled for the performance of duties dur- ing the period of vacation, holiday, illness, incapacity, jury duty, military duty or authorized leave. (b) “Hour of service” does not include any hour for which payment is made or due under a plan maintained solely for the purpose of complying with applicable unemployment compensation laws. (8) “Inactive member” means a member of the pension program or the individual account program of the Oregon Public Service Retirement Plan whose membership has not been terminated, who is not a retired member and who is not employed in a quali- fying position. (9) “Individual account program” means the de- fined contribution individual account program of the Oregon Public Service Retirement Plan established under ORS 238A.025. (10) “Institution of higher education” means a public university listed in ORS 352.002, the Oregon Health and Science University or a community col- lege, as defined in ORS 341.005. (11) “Member” means an eligible employee who has established membership in the pension program or the individual account program of the Oregon Public Service Retirement Plan and whose member- ship has not been terminated under ORS 238A.110 or 238A.310. (12) “Participating public employer” means a public employer as defined in ORS 238.005 that pro- vides retirement benefits for employees of the public employer under the system. (13) “Pension program” means the defined bene- fit pension program of the Oregon Public Service Retirement Plan established under ORS 238A.025. (14) “Police officer” means a police officer as described in ORS 238.005. (15) “Qualifying position” means one or more jobs with one or more participating public employers in which an eligible employee performs 600 or more hours of service in a full calendar year, or would perform 600 or more hours of service if the employee were employed for the full calendar year, excluding any service in a job for which benefits are not pro- vided under the Oregon Public Service Retirement Plan pursuant to ORS 238A.070 (2). (16) “Retired member” means a pension program member who is receiving a pension as provided in ORS 238A.180 to 238A.195. (17)(a) “Salary” means the remuneration paid to an active member in return for services to the par- ticipating public employer, including remuneration in the form of living quarters, board or other items of value, to the extent the remuneration is, or would be if the member were an Oregon resident, includable in the employee’s taxable income under Oregon law. “Salary” includes the additional amounts specified in paragraph (b) of this subsec- tion, but does not include the amounts specified in paragraph (c) of this subsection, regardless of whether those amounts are includable in taxable in- come. (b) “Salary” includes the following amounts: (A) Payments of employee and employer money into a deferred compensation plan that are made at the election of the employee. (B) Contributions to a tax-sheltered or deferred annuity that are made at the election of the em- ployee. (C) Any amount that is contributed to a cafeteria plan or qualified transportation fringe benefit plan by the employer at the election of the employee and that is not includable in the taxable income of the employee by reason of 26 U.S.C. 125 or 132(f)(4), as in effect on December 31, [2023] 2025. (D) Any amount that is contributed to a cash or deferred arrangement by the employer at the elec- tion of the employee and that is not included in the taxable income of the employee by reason of 26 U.S.C. 402(e)(3), as in effect on December 31, [2023] 2025. (E) Retroactive payments described in ORS 238.008. (F) The amount of an employee contribution to the individual account program that is paid by the employer and deducted from the compensation of the employee, as provided under ORS 238A.335 (1) and (2)(a). (G) The amount of an employee contribution to the individual account program that is not paid by the employer under ORS 238A.335. (H) Wages of a deceased member paid to a sur- viving spouse or dependent children under ORS 652.190. (c) “Salary” does not include the following amounts: (A) Travel or any other expenses incidental to employer’s business which is reimbursed by the em- ployer. (B) Payments made on account of an employee’s death. (C) Any lump sum payment for accumulated un- used sick leave, vacation leave or other paid leave. (D) Any severance payment, accelerated payment of an employment contract for a future period or advance against future wages. (E) Any retirement incentive, retirement bonus or retirement gratuitous payment. 5

Chap. 142 OREGON LAWS 2026 (F) Payment for a leave of absence after the date the employer and employee have agreed that no fu- ture services in a qualifying position will be per- formed. (G) Payments for instructional services rendered to public universities listed in ORS 352.002 or the Oregon Health and Science University when those services are in excess of full-time employment sub- ject to this chapter. A person employed under a contract for less than 12 months is subject to this subparagraph only for the months covered by the contract. (H) The amount of an employee contribution to the individual account program that is paid by the employer and is not deducted from the compensation of the employee, as provided under ORS 238A.335 (1) and (2)(b). (I) Compensation described and authorized under ORS 341.556 that is not paid by the community col- lege employing the faculty member. (J) Compensation described and authorized under ORS 352.232 that is not paid by the public university employing the officer or employee. (K) Compensation described and authorized un- der ORS 353.270 that is not paid by Oregon Health and Science University. (L) For years before 2020, any amount in excess of $200,000 for a calendar year. If any period over which salary is determined is less than 12 months, the $200,000 limitation for that period shall be multiplied by a fraction, the numerator of which is the number of months in the determination period and the denominator of which is 12. The board shall adopt rules adjusting this dollar limit to incorporate cost-of-living adjustments authorized by the Internal Revenue Service. (M) For years beginning on or after January 1, 2020, any amount in excess of $195,000 for a calen- dar year. If any period over which salary is deter- mined is less than 12 months, the $195,000 limitation for that period shall be multiplied by a fraction, the numerator of which is the number of months in the determination period and the denominator of which is 12. On January 1 of each year, the board shall adjust the dollar limit provided by this subparagraph to reflect any percentage changes in the Consumer Price Index for All Urban Consumers, West Region (All Items), as published by the Bureau of Labor Statistics of the United States Department of Labor. (18) “System” means the Public Employees Re- tirement System. (19) “Workers’ compensation benefits” means: (a) Payments made under ORS chapter 656; or (b) Payments provided in lieu of workers’ com- pensation benefits under ORS 656.027 (6). SECTION 19. ORS 238A.005, as amended by section 2, chapter 101, Oregon Laws 2024, is amended to read: 238A.005. For the purposes of this chapter: (1) “Active member” means a member of the pension program or the individual account program of the Oregon Public Service Retirement Plan who is actively employed in a qualifying position. (2) “Actuarial equivalent” means a payment or series of payments having the same value as the payment or series of payments replaced, computed on the basis of interest rate and mortality assump- tions adopted by the board. (3) “Board” means the Public Employees Retire- ment Board. (4) “Eligible employee” means a person who per- forms services for a participating public employer, including persons considered employees of a partic- ipating public employer under 26 U.S.C. 3121(d)(2), as in effect on January 1, [2024] 2026, and elected officials other than judges. “Eligible employee” does not include: (a) Persons engaged as independent contractors; (b) Aliens working under a training or educa- tional visa; (c) Persons provided sheltered employment or make-work by a public employer; (d) Persons categorized by a participating public employer as student employees; (e) Any person who is in custody in a state in- stitution; (f) Employees of foreign trade offices of the Ore- gon Business Development Department who live and perform services in foreign countries under the pro- visions of ORS 285A.075 (1)(g); (g) An employee actively participating in an al- ternative retirement program established under ORS 353.250 or an optional retirement plan established under ORS 341.551; (h) Employees of a public university listed in ORS 352.002 who are actively participating in an optional retirement plan offered under ORS 243.815; (i) Persons employed in positions classified as post-doctoral scholar positions by a public university listed in ORS 352.002, or by the Oregon Health and Science University, under ORS 350.370; (j) Any employee who belongs to a class of em- ployees that was not eligible on August 28, 2003, for membership in the system under the provisions of ORS chapter 238 or other law; (k) Any person who belongs to a class of em- ployees who are not eligible to become members of the Oregon Public Service Retirement Plan under the provisions of ORS 238A.070 (2); (L) Any person who is retired under ORS 238A.100 to 238A.250 or ORS chapter 238 and who continues to receive retirement benefits while em- ployed; and (m) Judges. (5) “Firefighter” means: (a) A person employed by a local government, as defined in ORS 174.116, whose primary job duties include the fighting of fires; (b) The State Fire Marshal, chief deputy state fire marshals and deputy state fire marshals; (c) An employee of the State Fire Marshal whose primary duties include fire investigation, fire pre- vention, fire safety, fire control or fire suppression; 6

OREGON LAWS 2026 Chap. 142 (d) An employee of the State Forestry Depart- ment who is certified by the State Forester as a professional wildland firefighter and whose primary duties include the abatement of uncontrolled fires as described in ORS 477.064; and (e) An employee of the Oregon Military Depart- ment whose primary duties include fighting struc- tural, aircraft, wildland or other fires. (6) “Fund” means the Public Employees Retire- ment Fund. (7)(a) “Hazardous position” means a position that does not meet the definition of a qualified public safety employee under section 72(t)(10)(B) of the In- ternal Revenue Code, but that: (A) Requires the person holding the position to work with or manage emergency or traumatic events in the regular course of work; or (B) Carries a high risk of physical harm. (b) “Hazardous position” includes and is limited to: (A) Employees of the Oregon State Hospital who have direct contact with patients; and (B) Telecommunicators, as defined in ORS 181A.355. (8)(a) “Hour of service” means: (A) An hour for which an eligible employee is directly or indirectly paid or entitled to payment by a participating public employer for performance of duties in a qualifying position; and (B) An hour of vacation, holiday, illness, inca- pacity, jury duty, military duty or authorized leave during which an employee does not perform duties but for which the employee is directly or indirectly paid or entitled to payment by a participating public employer for services in a qualifying position, as long as the hour is within the number of hours reg- ularly scheduled for the performance of duties dur- ing the period of vacation, holiday, illness, incapacity, jury duty, military duty or authorized leave. (b) “Hour of service” does not include any hour for which payment is made or due under a plan maintained solely for the purpose of complying with applicable unemployment compensation laws. (9) “Inactive member” means a member of the pension program or the individual account program of the Oregon Public Service Retirement Plan whose membership has not been terminated, who is not a retired member and who is not employed in a quali- fying position. (10) “Individual account program” means the de- fined contribution individual account program of the Oregon Public Service Retirement Plan established under ORS 238A.025. (11) “Institution of higher education” means a public university listed in ORS 352.002, the Oregon Health and Science University or a community col- lege, as defined in ORS 341.005. (12) “Member” means an eligible employee who has established membership in the pension program or the individual account program of the Oregon Public Service Retirement Plan and whose member- ship has not been terminated under ORS 238A.110 or 238A.310. (13) “Participating public employer” means a public employer as defined in ORS 238.005 that pro- vides retirement benefits for employees of the public employer under the system. (14) “Pension program” means the defined bene- fit pension program of the Oregon Public Service Retirement Plan established under ORS 238A.025. (15) “Police officer” means a police officer as described in ORS 238.005. (16) “Qualifying position” means one or more jobs with one or more participating public employers in which an eligible employee performs 600 or more hours of service in a full calendar year, or would perform 600 or more hours of service if the employee were employed for the full calendar year, excluding any service in a job for which benefits are not pro- vided under the Oregon Public Service Retirement Plan pursuant to ORS 238A.070 (2). (17) “Retired member” means a pension program member who is receiving a pension as provided in ORS 238A.180 to 238A.195. (18)(a) “Salary” means the remuneration paid to an active member in return for services to the par- ticipating public employer, including remuneration in the form of living quarters, board or other items of value, to the extent the remuneration is, or would be if the member were an Oregon resident, includable in the employee’s taxable income under Oregon law. “Salary” includes the additional amounts specified in paragraph (b) of this subsec- tion, but does not include the amounts specified in paragraph (c) of this subsection, regardless of whether those amounts are includable in taxable in- come. (b) “Salary” includes the following amounts: (A) Payments of employee and employer money into a deferred compensation plan that are made at the election of the employee. (B) Contributions to a tax-sheltered or deferred annuity that are made at the election of the em- ployee. (C) Any amount that is contributed to a cafeteria plan or qualified transportation fringe benefit plan by the employer at the election of the employee and that is not includable in the taxable income of the employee by reason of 26 U.S.C. 125 or 132(f)(4), as in effect on December 31, [2023] 2025. (D) Any amount that is contributed to a cash or deferred arrangement by the employer at the elec- tion of the employee and that is not included in the taxable income of the employee by reason of 26 U.S.C. 402(e)(3), as in effect on December 31, [2023] 2025. (E) Retroactive payments described in ORS 238.008. (F) The amount of an employee contribution to the individual account program that is paid by the employer and deducted from the compensation of the employee, as provided under ORS 238A.335 (1) and (2)(a). 7

Chap. 142 OREGON LAWS 2026 (G) The amount of an employee contribution to the individual account program that is not paid by the employer under ORS 238A.335. (H) Wages of a deceased member paid to a sur- viving spouse or dependent children under ORS 652.190. (c) “Salary” does not include the following amounts: (A) Travel or any other expenses incidental to employer’s business which is reimbursed by the em- ployer. (B) Payments made on account of an employee’s death. (C) Any lump sum payment for accumulated un- used sick leave, vacation leave or other paid leave. (D) Any severance payment, accelerated payment of an employment contract for a future period or advance against future wages. (E) Any retirement incentive, retirement bonus or retirement gratuitous payment. (F) Payment for a leave of absence after the date the employer and employee have agreed that no fu- ture services in a qualifying position will be per- formed. (G) Payments for instructional services rendered to public universities listed in ORS 352.002 or the Oregon Health and Science University when those services are in excess of full-time employment sub- ject to this chapter. A person employed under a contract for less than 12 months is subject to this subparagraph only for the months covered by the contract. (H) The amount of an employee contribution to the individual account program that is paid by the employer and is not deducted from the compensation of the employee, as provided under ORS 238A.335 (1) and (2)(b). (I) Compensation described and authorized under ORS 341.556 that is not paid by the community col- lege employing the faculty member. (J) Compensation described and authorized under ORS 352.232 that is not paid by the public university employing the officer or employee. (K) Compensation described and authorized un- der ORS 353.270 that is not paid by Oregon Health and Science University. (L) For years before 2020, any amount in excess of $200,000 for a calendar year. If any period over which salary is determined is less than 12 months, the $200,000 limitation for that period shall be multiplied by a fraction, the numerator of which is the number of months in the determination period and the denominator of which is 12. The board shall adopt rules adjusting this dollar limit to incorporate cost-of-living adjustments authorized by the Internal Revenue Service. (M) For years beginning on or after January 1, 2020, any amount in excess of $195,000 for a calen- dar year. If any period over which salary is deter- mined is less than 12 months, the $195,000 limitation for that period shall be multiplied by a fraction, the numerator of which is the number of months in the determination period and the denominator of which is 12. On January 1 of each year, the board shall adjust the dollar limit provided by this subparagraph to reflect any percentage changes in the Consumer Price Index for All Urban Consumers, West Region (All Items), as published by the Bureau of Labor Statistics of the United States Department of Labor. (19) “System” means the Public Employees Re- tirement System. (20) “Workers’ compensation benefits” means: (a) Payments made under ORS chapter 656; or (b) Payments provided in lieu of workers’ com- pensation benefits under ORS 656.027 (6). SECTION 20. ORS 238A.125 is amended to read: 238A.125. (1) Upon retiring at normal retirement age, a vested pension program member shall be paid an annual pension for the life of the member as fol- lows: (a) For service as a police officer or firefighter, 1.8 percent of final average salary multiplied by the number of years of retirement credit attributable to service as a police officer or firefighter. (b) For service as other than a police officer or firefighter, 1.5 percent of final average salary multi- plied by the number of years of retirement credit attributable to service as other than a police officer or firefighter. (2) Notwithstanding any provision of ORS 238A.100 to 238A.250, the annual benefit payable to a member under the pension program and under any other tax-qualified defined benefit plan maintained by the participating public employer may not exceed the applicable limitations set forth in 26 U.S.C. 415(b), as in effect on December 31, [2023] 2025. The Public Employees Retirement Board shall adopt rules for the administration of this limitation, in- cluding adjustments in the annual dollar limitation to reflect cost-of-living adjustments authorized by the Internal Revenue Service. (3) The board shall make no actuarial adjustment in a member’s pension calculated under this section by reason of the member’s retirement after normal retirement age. SECTION 21. ORS 238A.125, as amended by section 3, chapter 101, Oregon Laws 2024, is amended to read: 238A.125. (1) Upon retiring at normal retirement age, a vested pension program member shall be paid an annual pension for the life of the member as fol- lows: (a) For service as a police officer or firefighter, 1.8 percent of final average salary multiplied by the number of years of retirement credit attributable to service as a police officer or firefighter. (b) For service in a hazardous position, 1.8 per- cent of final average salary multiplied by the num- ber of years of retirement credit attributable to service in a hazardous position. (c) For service as other than a police officer or firefighter or in a hazardous position, 1.5 percent of final average salary multiplied by the number of years of retirement credit attributable to service as 8

OREGON LAWS 2026 Chap. 142 other than a police officer or firefighter or in a haz- ardous position. (2) Notwithstanding any provision of ORS 238A.100 to 238A.250, the annual benefit payable to a member under the pension program and under any other tax-qualified defined benefit plan maintained by the participating public employer may not exceed the applicable limitations set forth in 26 U.S.C. 415(b), as in effect on December 31, [2023] 2025. The Public Employees Retirement Board shall adopt rules for the administration of this limitation, in- cluding adjustments in the annual dollar limitation to reflect cost-of-living adjustments authorized by the Internal Revenue Service. (3) The board shall make no actuarial adjustment in a member’s pension calculated under this section by reason of the member’s retirement after normal retirement age. SECTION 22. ORS 238A.150 is amended to read: 238A.150. (1) Notwithstanding any other pro- vision of ORS 238A.100 to 238A.250, an eligible em- ployee who leaves a qualifying position for the purpose of performing service in the uniformed ser- vices, and who subsequently returns to employment with a participating public employer with reemploy- ment rights under federal law, is entitled to accrue retirement credit, credit toward the probationary period required by ORS 238A.100 and credit toward the vesting requirements of ORS 238A.115 under rules adopted by the Public Employees Retirement Board pursuant to subsection (2) of this section. (2) The board shall adopt rules establishing ben- efits and service credit for any period of service in the uniformed services by an employee described in subsection (1) of this section. For the purpose of adopting rules under this subsection, the board shall consider and take into account all federal law relat- ing to benefits and service credit for any period of service in the uniformed services, including 26 U.S.C. 414(u), as in effect on December 31, [2023] 2025. Benefits and service credit under rules adopted by the board pursuant to this subsection may not exceed benefits and service credit required under federal law for periods of service in the uniformed services. SECTION 23. ORS 238A.170 is amended to read: 238A.170. (1) An active member of the pension program who is 72 years of age or older must retire not later than April 1 of the calendar year following the calendar year in which the member terminates employment with all participating public employers. An inactive member of the pension program must retire not later than April 1 of the calendar year following the calendar year in which the member attains 72 years of age. (2) Notwithstanding any other provision of ORS 238A.100 to 238A.250, the entire interest of a mem- ber of the pension program must be distributed over a time period commencing no later than the required beginning date set forth in subsection (1) of this section, and must be distributed in a manner that satisfies all other minimum distribution require- ments of 26 U.S.C. 401(a)(9) and regulations imple- menting that section, as in effect on January 1, [2024] 2026. The Public Employees Retirement Board shall adopt rules implementing those minimum dis- tribution requirements. SECTION 24. ORS 238A.230 is amended to read: 238A.230. (1) If a member of the pension program who is vested dies before the member’s effective date of retirement, the Public Employees Retirement Board shall pay the death benefit provided for in this section to: (a) The spouse of the member to the extent not provided to a former spouse in accordance with a judgment or order under ORS 238.465; (b) The former spouse of the member as provided in a judgment or order under ORS 238.465; or (c) Any other person who is constitutionally re- quired to be treated in the same manner as a spouse for the purpose of retirement benefits. (2) The death benefit to be paid under this sub- section is for the life of the member’s spouse, former spouse or other person who is constitutionally re- quired to be treated in the same manner as a spouse, and is: (a) If the member dies before the earliest retire- ment date for the member under ORS 238A.165, the actuarial equivalent of 50 percent of the pension that would otherwise have been paid to the deceased member, which shall be calculated as if the member became an inactive member on the date of death and retired at the earliest retirement date for the mem- ber as described in ORS 238A.165; (b) If the member dies on or after the earliest retirement date for the member under ORS 238A.165 and before normal retirement age under ORS 238A.160, the actuarial equivalent of the pension that would otherwise have been paid to the deceased member, which shall be calculated as if the member retired under ORS 238A.185 and as if the member’s retirement date was the first of the month following the date of death of the member; or (c) If the member dies on or after reaching normal retirement age as described in ORS 238A.160, the actuarial equivalent of the pension that would otherwise have been paid to the deceased member, which shall be calculated under ORS 238A.125 as if the member’s retirement date was the first of the month following the date of death of the member. (3) The death benefit provided under this section is first effective on the first day of the month fol- lowing the date of death of the member. (4) The surviving spouse or other person who is constitutionally required to be treated in the same manner as a spouse for the purpose of retirement benefits may elect to delay payment of the death benefit, which shall be actuarially adjusted for age and interest when payments commence, but payment must commence no later than December 31 of the calendar year in which the member would have reached 72 years of age. If a person who delays pay- 9

Chap. 142 OREGON LAWS 2026 ment under this subsection dies before payments commence: (a) The person’s beneficiary shall receive, in a lump sum, the sum of the payments the person would have received had the person not elected to delay payment of the death benefit. (b) If the person who delays payment under this subsection has not designated a beneficiary, the person’s benefit shall be paid to a personal repre- sentative appointed for the person’s estate. (5) Notwithstanding any other provision of ORS 238A.100 to 238A.250, distributions of death benefits under the pension program must comply with the minimum distribution requirements of 26 U.S.C. 401(a)(9) and the regulations implementing that sec- tion, as in effect on January 1, [2024] 2026. The board shall adopt rules implementing those minimum distribution requirements. SECTION 25. ORS 238A.370 is amended to read: 238A.370. Notwithstanding any other provision of ORS 238A.300 to 238A.415, the annual addition to the employee and employer accounts of a member of the individual account program for a calendar year, together with the annual additions to the accounts of the member under any other defined contribution plan maintained by the participating public employer for a calendar year, may not exceed the lesser of $40,000, or 100 percent of the member’s compen- sation for that calendar year. For purposes of this section, “annual addition” has the meaning given that term in 26 U.S.C. 415(c)(2), as in effect on De- cember 31, [2023] 2025, and “compensation” has the meaning given the term “participant’s compensation” in 26 U.S.C. 415(c)(3), as in effect on December 31, [2023] 2025. The Public Employees Re- tirement Board shall adopt rules for the adminis- tration of this limitation, including adjustments in the annual dollar limitation to reflect cost-of-living adjustments authorized by the Internal Revenue Service. SECTION 26. ORS 238A.400 is amended to read: 238A.400. (1) Upon retirement on or after the earliest retirement date, as described in ORS 238A.165, a member of the individual account pro- gram shall receive in a lump sum the amounts in the member’s employee account, rollover account and employer account to the extent the member is vested in those accounts under ORS 238A.320. (2) In lieu of a lump sum payment under subsec- tion (1) of this section, a member of the individual account program may elect to receive the amounts in the member’s employee account and employer ac- count, to the extent the member is vested in those accounts under ORS 238A.320, in substantially equal installments paid over a period of 5, 10, 15 or 20 years, or over a period that is equal to the antic- ipated life span of the member as actuarially deter- mined by the Public Employees Retirement Board. Installments may be made on a monthly, quarterly or annual basis. In no event may the period selected by the member exceed the time allowed by the min- imum distribution requirements described in subsec- tion (5) of this section. The board shall by rule establish the manner in which installments will be adjusted to reflect investment gains and losses on the unpaid balance during the payout period elected by the member under this subsection. The board by rule may establish minimum monthly amounts pay- able under this subsection. The board may require that a lump sum payment, or an installment sched- ule different than the schedules provided for in this subsection, be used to pay the vested amounts in the member’s accounts if those amounts are not ade- quate to generate the minimum monthly amounts specified by the rule. (3) A member of the individual account program electing to receive installments under subsection (2) of this section must designate a beneficiary or bene- ficiaries. In the event the member dies before all amounts in the employee and vested employer ac- counts are paid, the remaining account balance shall be paid in a lump sum distribution to the beneficiary or beneficiaries designated by the member. (4) A member who is entitled to receive retire- ment benefits under ORS chapter 238 may receive vested amounts in the member’s employee account, rollover account and employer account in the man- ner provided by this section when the member re- tires for service under the provisions of ORS chapter 238. (5) Notwithstanding any other provision of ORS 238A.300 to 238A.415, the entire interest of a mem- ber of the individual account program must be dis- tributed over a time period commencing no later than the latest retirement date set forth in ORS 238A.170, and must be distributed in a manner that satisfies all other minimum distribution require- ments of 26 U.S.C. 401(a)(9) and regulations imple- menting that section, as in effect on January 1, [2024] 2026. The board shall adopt rules implement- ing those minimum distribution requirements. SECTION 27. ORS 238A.410 is amended to read: 238A.410. (1)(a) If a member of the individual account program dies before retirement, the amounts in the member’s employee account, rollover account and employer account, to the extent the member is vested in those accounts under ORS 238A.320, shall be paid in a lump sum to the beneficiary or benefi- ciaries designated by the member for the purposes of this section. (b) If a member of the individual account pro- gram dies before retirement, the amounts in the em- ployee pension stability account established for the member under ORS 238A.353 shall be applied by the Public Employees Retirement Board to pay the costs of any benefit payable under ORS 238.395 or 238A.230 that accrues on or after July 1, 2020. If the amounts in the employee pension stability account exceed the costs of the benefit payable under ORS 238.395 or 238A.230 that accrues on or after July 1, 2020, the excess amounts shall be paid in a lump sum to the beneficiary or beneficiaries designated by the member for the purposes of this section. 10

OREGON LAWS 2026 Chap. 142 (2) If a member of the individual account pro- gram is married at the time of death, or there exists at the time of death any other person who is consti- tutionally required to be treated in the same manner as a spouse for the purpose of retirement benefits, the spouse or other person shall be the beneficiary for purposes of the death benefit payable under this section unless the spouse or other person consents to the designation of a different beneficiary or bene- ficiaries before the designation has been made and the consent has not been revoked by the spouse or other person as of the time of the member’s death. Consent and revocation of consent must be in writ- ing, acknowledged by a notary public, and submitted to the Public Employees Retirement Board in ac- cordance with rules adopted by the board. If the member’s spouse is designated as the member’s ben- eficiary and the marriage of the member and spouse is subsequently dissolved, the former spouse shall be treated as predeceasing the member for purposes of this section, unless the member expressly designates the former spouse as beneficiary after the effective date of the dissolution or the former spouse is re- quired to be designated as a beneficiary under the provisions of ORS 238.465. (3) For purposes of this section and ORS 238A.400 (3), if a member fails to designate a benefi- ciary, or if the person or persons designated do not survive the member, the death benefit provided for in this section shall be paid to the following person or persons, in the following order of priority: (a) The member’s surviving spouse or other per- son who is constitutionally required to be treated in the same manner as a spouse; (b) The member’s surviving children, in equal shares; or (c) The member’s estate. (4) If a small estate affidavit has been filed under ORS 114.505 to 114.560, and the death benefit does not exceed the maximum amount of personal prop- erty for which a small estate affidavit may be filed under ORS 114.505 to 114.560, the board shall pay the death benefit to the person who filed the affida- vit, if the member’s estate is the designated benefi- ciary or is receiving the payment under subsection (3) of this section. (5) The entire amount of a deceased member’s vested accounts must be distributed by December 31 of the fifth calendar year after the year in which the member died. Notwithstanding any other provision of this chapter, distributions of death benefits under the individual account program must comply with the minimum distribution requirements of 26 U.S.C. 401(a)(9) and the regulations implementing that sec- tion, as in effect on January 1, [2024] 2026. The Public Employees Retirement Board shall adopt rules implementing those minimum distribution re- quirements. SECTION 28. ORS 238A.415 is amended to read: 238A.415. (1) Notwithstanding any other pro- vision of ORS 238A.300 to 238A.415, an eligible em- ployee who leaves a qualifying position for the purpose of performing service in the uniformed ser- vices, and who subsequently returns to employment with a participating public employer with reemploy- ment rights under federal law, is entitled to credit toward the probationary period required by ORS 238A.300, credit toward the vesting requirements of ORS 238A.320 and contributions under rules adopted by the Public Employees Retirement Board pursuant to subsection (2) of this section. (2) The board shall adopt rules establishing con- tributions and service credit for any period of ser- vice in the uniformed services by an employee described in subsection (1) of this section. For the purpose of adopting rules under this subsection, the board shall consider and take into account all fed- eral law relating to benefits and service credit for any period of service in the uniformed services, in- cluding 26 U.S.C. 414(u), as in effect on December 31, [2023] 2025. Contributions and service credit un- der rules adopted by the board pursuant to this sub- section may not exceed contributions and service credit required under federal law for periods of ser- vice in the uniformed services. SECTION 29. ORS 238A.430 is amended to read: 238A.430. (1) To the extent required by law, and except as otherwise provided by rules adopted by the Public Employees Retirement Board under subsec- tion (4) of this section, any portion of a distribution of benefits described in subsection (2) of this section shall, at the election of and in lieu of distribution to the distributee, be paid directly to an eligible retire- ment plan specified by the distributee. (2) The provisions of subsection (1) of this sec- tion apply to a distribution of any benefit under the pension program or the individual account program except: (a) A distribution that is one of a series of sub- stantially equal periodic payments made at least an- nually for the life or life expectancy of the distributee, or for the joint lives or life expectancies of the distributee and a designated beneficiary; (b) A distribution that is one of a series of sub- stantially equal periodic payments made at least an- nually for a specified period of 10 years or more; and (c) A distribution to the extent that the distrib- ution is required under 26 U.S.C. 401(a)(9). (3) The provisions of subsection (1) of this sec- tion apply to any portion of a distribution of benefits under the pension program or the individual account program even though the portion consists of after- tax employee contributions that are not includable in gross income. Any portion of a distribution that consists of after-tax employee contributions that are not includable in gross income may be transferred only to an individual retirement account or annuity described in 26 U.S.C. 408(a) or (b), or to a qualified defined contribution or defined benefit plan de- scribed in 26 U.S.C. 401(a) or 403(b) that agrees to account separately for amounts transferred, includ- ing accounting separately for the portion of the dis- tribution that is includable in gross income and the portion of the distribution that is not includable in 11

Chap. 142 OREGON LAWS 2026 gross income. The amount transferred shall be treated as consisting first of the portion of the dis- tribution that is includable in gross income, deter- mined without regard to 26 U.S.C. 402(c)(1). (4) The board shall adopt rules implementing the direct rollover requirements of 26 U.S.C. 401(a)(31) and the regulations implementing that section, and may adopt administrative exceptions to the direct rollover requirements to the extent permitted by 26 U.S.C. 401(a)(31) and the regulations implementing that section. (5) All references in this section to federal laws and regulations are to the laws and regulations in effect on December 31, [2023] 2025. (6) For purposes of this section: (a) “Distributee” means a member, a member’s surviving spouse or a member’s alternate payee un- der ORS 238.465. (b) “Eligible retirement plan” means: (A) An individual retirement account described in 26 U.S.C. 408(a); (B) An individual retirement annuity described in 26 U.S.C. 408(b), other than an endowment con- tract; (C) A qualified trust under 26 U.S.C. 401(a), that is a defined contribution or defined benefit plan and permits the acceptance of rollover contributions; (D) An annuity plan described in 26 U.S.C. 403(a); (E) An eligible deferred compensation plan de- scribed in 26 U.S.C. 457(b) that is maintained by an eligible governmental employer described in 26 U.S.C. 457(e)(1)(A) and that agrees to account sepa- rately for amounts transferred into such plan from the distributing plan; or (F) An annuity contract described in 26 U.S.C. 403(b). SECTION 30. ORS 238A.435 is amended to read: 238A.435. (1) If a benefit is payable under this chapter to a beneficiary by reason of the death of a member of the system, the beneficiary may elect to have all or part of the distribution of the death benefit paid in an eligible rollover distribution to an individual retirement plan described in 26 U.S.C. 408(a), or an individual retirement annuity, other than an endowment contract, described in 26 U.S.C. 408(b), if the plan or annuity is established for the purpose of receiving the eligible rollover distribution on behalf of the designated beneficiary. (2) Subsection (1) of this section applies to an eligible rollover distribution of death benefits to a beneficiary who is not treated as the spouse of the decedent for federal tax purposes and who is the decedent’s designated beneficiary for the purposes of the minimum required distribution requirements of 26 U.S.C. 401(a)(9). To the extent provided by rules of the Public Employees Retirement Board, a trust maintained for the benefit of one or more benefici- aries must be treated by the board in the same manner as a trust that is designated as a beneficiary for the purposes of the minimum required distrib- ution requirements of 26 U.S.C. 401(a)(9). (3) As used in this section, “eligible rollover dis- tribution” has the meaning given that term in 26 U.S.C. 402(c)(4), as in effect on December 31, [2023] 2025. SECTION 31. ORS 305.239 is amended to read: 305.239. (1) Notwithstanding ORS 9.320: (a) Any person who is qualified to practice law or public accountancy in this state, any person who has been granted active enrollment to practice be- fore the Internal Revenue Service and who is quali- fied to prepare tax returns in this state or any person who is the authorized employee of a taxpayer and is regularly employed by the taxpayer in tax matters may represent the taxpayer before a tax court magistrate or the Department of Revenue in any conference or proceeding with respect to the administration of any tax. (b) Any person who is licensed by the State Board of Tax Practitioners or who is exempt from such licensing requirement as provided for and lim- ited by ORS 673.610 may represent a taxpayer before a tax court magistrate or the department in any conference or proceeding with respect to the admin- istration of any tax on or measured by net income. (c) Any shareholder of an S corporation, as de- fined in section 1361 of the Internal Revenue Code, as amended and in effect on December 31, [2023] 2025, may represent the corporation in any proceed- ing before a tax court magistrate or the department in the same manner as if the shareholder were a partner and the S corporation were a partnership. The S corporation must designate in writing a tax matters shareholder authorized to represent the S corporation. (d) An individual who is licensed as a real estate broker or principal real estate broker under ORS 696.022 or is a state certified appraiser or state li- censed appraiser under ORS 674.310 or is a regis- tered appraiser under ORS 308.010 may represent a taxpayer before a tax court magistrate or the de- partment in any conference or proceeding with re- spect to the administration of any ad valorem property tax. (e) A general partner who has been designated by members of a partnership as their tax matters partner under ORS 305.242 may represent those partners in any conference or proceeding with re- spect to the administration of any tax on or meas- ured by net income. (f) Any person authorized under rules adopted by the department may represent a taxpayer before the department in any conference or proceeding with respect to any tax. Rules adopted under this para- graph, to the extent feasible, shall be consistent with federal law that governs representation before the Internal Revenue Service, as federal law is amended and in effect on December 31, [2023] 2025. (g) Any person authorized under rules adopted by the tax court may represent a taxpayer in a pro- ceeding before a tax court magistrate. (2) A person may not be recognized as repres- enting a taxpayer pursuant to this section unless 12

OREGON LAWS 2026 Chap. 142 there is first filed with the magistrate or department a written authorization, or unless it appears to the satisfaction of the magistrate or department that the representative does in fact have authority to repre- sent the taxpayer. A person recognized as an au- thorized representative under rules or procedures adopted by the tax court shall be considered an au- thorized representative by the department. (3) A taxpayer represented by someone other than an attorney is bound by all things done by the authorized representative, and may not thereafter claim any proceeding was legally defective because the taxpayer was not represented by an attorney. (4) Prior to the holding of a conference or pro- ceeding before the tax court magistrate or depart- ment, written notice shall be given by the magistrate or department to the taxpayer of the provisions of subsection (3) of this section. SECTION 32. ORS 305.494 is amended to read: 305.494. Notwithstanding ORS 9.320, any share- holder of an S corporation as defined in section 1361 of the Internal Revenue Code, as amended and in effect on December 31, [2023] 2025, may represent the corporation in any proceeding before the Oregon Tax Court in the same manner as if the shareholder were a partner and the S corporation were a part- nership. SECTION 33. ORS 305.690 is amended to read: 305.690. As used in ORS 305.690 to 305.753, un- less the context otherwise requires: (1) “Commission” means the Oregon Charitable Checkoff Commission. (2) “Department” means the Department of Re- venue. (3) “Internal Revenue Code” means the federal Internal Revenue Code as amended and in effect on December 31, [2023] 2025. SECTION 34. ORS 305.842 is amended to read: 305.842. As used in ORS 307.130, 307.147, 307.580, 308A.450, 310.140, 310.800 and 311.666, “Internal Re- venue Code” means the federal Internal Revenue Code as amended and in effect on December 31, [2023] 2025. SECTION 35. ORS 314.011 is amended to read: 314.011. (1) As used in this chapter, unless the context requires otherwise, “department” means the Department of Revenue. (2) As used in this chapter: (a) Any term has the same meaning as when used in a comparable context in the laws of the United States relating to federal income taxes, un- less a different meaning is clearly required or the term is specifically defined in this chapter. (b) Except where the Legislative Assembly has provided otherwise, a reference to the laws of the United States or to the Internal Revenue Code refers to the laws of the United States or to the Internal Revenue Code as they are amended and in effect: (A) On December 31, [2023] 2025; or (B) If related to the definition of taxable income, as applicable to the tax year of the taxpayer. (c) With respect to ORS 314.105, 314.256 (relating to proxy tax on lobbying expenditures), 314.260 (1)(b), 314.302, 314.306, 314.330, 314.360, 314.362, 314.385, 314.402, 314.410, 314.412, 314.525, 314.767 (7), 314.771 and 314.772 and other provisions of this chapter, ex- cept those described in paragraph (b) of this subsec- tion, any reference to the laws of the United States or to the Internal Revenue Code means the laws of the United States relating to income taxes or the Internal Revenue Code as they are amended on or before December 31, [2023] 2025, even when the amendments take effect or become operative after that date, except where the Legislative Assembly has specifically provided otherwise. (3) Insofar as is practicable in the administration of this chapter, the department shall apply and fol- low the administrative and judicial interpretations of the federal income tax law. When a provision of the federal income tax law is the subject of con- flicting opinions by two or more federal courts, the department shall follow the rule observed by the United States Commissioner of Internal Revenue until the conflict is resolved. Nothing contained in this section limits the right or duty of the depart- ment to audit the return of any taxpayer or to de- termine any fact relating to the tax liability of any taxpayer. (4) When portions of the Internal Revenue Code incorporated by reference as provided in subsection (2) of this section refer to rules or regulations pre- scribed by the Secretary of the Treasury, then such rules or regulations shall be regarded as rules adopted by the department under and in accordance with the provisions of this chapter, whenever they are prescribed or amended. (5)(a) When portions of the Internal Revenue Code incorporated by reference as provided in sub- section (2) of this section are later corrected by an Act or a Title within an Act of the United States Congress designated as an Act or Title making technical corrections, then notwithstanding the date that the Act or Title becomes law, those portions of the Internal Revenue Code, as so corrected, shall be the portions of the Internal Revenue Code incorpo- rated by reference as provided in subsection (2) of this section and shall take effect, unless otherwise indicated by the Act or Title (in which case the provisions shall take effect as indicated in the Act or Title), as if originally included in the provisions of the Act being technically corrected. If, on account of this subsection, any adjustment is required to an Oregon return that would otherwise be prevented by operation of law or rule, the adjustment shall be made, notwithstanding any law or rule to the con- trary, in the manner provided under ORS 314.135. (b) As used in this subsection, “Act or Title” in- cludes any subtitle, division or other part of an Act or Title. SECTION 36. ORS 314.306 is amended to read: 13

Chap. 142 OREGON LAWS 2026 314.306. (1) If a taxpayer excludes an amount from federal gross income by reason of the discharge of indebtedness of the taxpayer under section 108(a)(1)(A) of the Internal Revenue Code (relating to discharge of indebtedness in a bankruptcy de- clared under U.S.C. Title 11), then, with respect to that portion of the excluded amount that is appor- tioned to Oregon, the taxpayer shall apply the rules in 11 U.S.C. 346(j), as amended and in effect on De- cember 31, [2023] 2025. (2) If a taxpayer excludes an amount from federal gross income by reason of the discharge of indebt- edness of the taxpayer under section 108(a)(1)(B) or (C) of the Internal Revenue Code (relating to dis- charge of indebtedness in insolvency or discharge of qualified farm indebtedness), then, with respect to that portion of the excluded amount that is appor- tioned to Oregon, the following paragraphs shall ap- ply, in the following order: (a) If the taxpayer has made the election under section 108(b)(5) of the Internal Revenue Code to first reduce the basis of the depreciable property of the taxpayer, the election shall also be effective for Oregon tax purposes. A corresponding reduction in the basis of the depreciable property of the taxpayer shall be made for Oregon tax purposes. (b) The amount, if any, by which the following attributes are reduced under section 108(b)(1) of the Internal Revenue Code for federal tax purposes shall be added back for Oregon tax purposes: (A) Federal net operating loss. (B) Capital loss carryover. (C) Basis of the property of the taxpayer, ex- cluding amounts subject to the election under sec- tion 108(b)(5) of the Internal Revenue Code. (D) Passive activity loss carryover. (c) Excluding amounts subject to the election in section 108(b)(5) of the Internal Revenue Code: (A) Any Oregon net operating loss of an individ- ual or corporate taxpayer, including a net operating loss carryover to the taxpayer, shall be reduced by the amount of discharged indebtedness. (B) Any net capital loss for the taxable year of the discharge, and any capital loss carryover to the taxable year, shall be reduced by the amount of dis- charged indebtedness minus the total amount taken into account under subparagraph (A) of this para- graph. (C) The basis of the property of the taxpayer shall be reduced by the amount of discharged indebtedness minus the total amount taken into ac- count under subparagraphs (A) and (B) of this para- graph. (D) The passive activity loss carryover under section 469(b) of the Internal Revenue Code from the taxable year of the discharge shall be reduced by the amount of discharged indebtedness minus the total amount taken into account under subparagraphs (A), (B) and (C) of this paragraph. SECTION 37. ORS 315.004 is amended to read: 315.004. (1) Except when the context requires otherwise, the definitions contained in ORS chapters 314, 316, 317 and 318 are applicable in the construc- tion, interpretation and application of the personal and corporate income and excise tax credits con- tained in this chapter. (2)(a) For purposes of the tax credits contained in this chapter, any term has the same meaning as when used in a comparable context in the laws of the United States relating to federal income taxes, unless a different meaning is clearly required or the term is specifically defined for purposes of constru- ing, interpreting and applying the credit. (b) With respect to the tax credits contained in this chapter, any reference to the laws of the United States or to the Internal Revenue Code means the laws of the United States relating to income taxes or the Internal Revenue Code as they are amended on or before December 31, [2023] 2025, even when the amendments take effect or become operative af- ter that date. (3) Insofar as is practicable in the administration of this chapter, the Department of Revenue shall apply and follow the administrative and judicial in- terpretations of the federal income tax law. When a provision of the federal income tax law is the subject of conflicting opinions by two or more federal courts, the department shall follow the rule observed by the United States Commissioner of Internal Re- venue until the conflict is resolved. Nothing con- tained in this section limits the right or duty of the department to audit the return of any taxpayer or to determine any fact relating to the tax liability of any taxpayer. (4) When portions of the Internal Revenue Code incorporated by reference as provided in subsection (2) of this section refer to rules or regulations pre- scribed by the Secretary of the Treasury, then such rules or regulations shall be regarded as rules adopted by the department under and in accordance with the provisions of this chapter, whenever they are prescribed or amended. (5)(a) When portions of the Internal Revenue Code incorporated by reference as provided in sub- section (2) of this section are later corrected by an Act or a Title within an Act of the United States Congress designated as an Act or Title making technical corrections, then notwithstanding the date that the Act or Title becomes law, those portions of the Internal Revenue Code, as so corrected, shall be the portions of the Internal Revenue Code incorpo- rated by reference as provided in subsection (2) of this section and shall take effect, unless otherwise indicated by the Act or Title (in which case the provisions shall take effect as indicated in the Act or Title), as if originally included in the provisions of the Act being technically corrected. If, on account of this subsection, any adjustment is required to an Oregon return that would otherwise be prevented by operation of law or rule, the adjustment shall be made, notwithstanding any law or rule to the con- trary, in the manner provided under ORS 314.135. (b) As used in this subsection, “Act or Title” in- cludes any subtitle, division or other part of an Act or Title. 14

OREGON LAWS 2026 Chap. 142 SECTION 38. ORS 316.012 is amended to read: 316.012. Any term used in this chapter has the same meaning as when used in a comparable context in the laws of the United States relating to federal income taxes, unless a different meaning is clearly required or the term is specifically defined in this chapter. Except where the Legislative Assembly has provided otherwise, any reference in this chapter to the laws of the United States or to the Internal Re- venue Code refers to the laws of the United States or to the Internal Revenue Code as they are amended and in effect: (1) On December 31, [2023] 2025; or (2) If related to the definition of taxable income, as applicable to the tax year of the taxpayer. SECTION 39. ORS 316.147 is amended to read: 316.147. As used in ORS 316.147 to 316.149, un- less the context requires otherwise: (1) “Eligible taxpayer” includes any individual who must pay taxes otherwise imposed by this chapter and: (a) Who pays or incurs expenses for the care of a qualified individual, through a payment method determined by rule of the Department of Revenue; and (b) Who has a household income, for the taxable year, not to exceed the maximum amount of house- hold income allowed in ORS 310.640 (1989 Edition) for a homeowner or renter refund. (2) “Household income” means the aggregate in- come of the eligible taxpayer and the spouse of the taxpayer who reside in the household, that was re- ceived during a calendar year. “Household income” includes payments received by the eligible taxpayer or the spouse of the taxpayer under the federal So- cial Security Act for the benefit of a minor child or minor children who reside in the household. (3) “Income” means “adjusted gross income” as defined in the federal Internal Revenue Code, as amended and in effect on December 31, [2023] 2025, even when the amendments take effect or become operative after that date, relating to the measure- ment of taxable income of individuals, estates and trusts, with the following modifications: (a) There shall be added to adjusted gross income the following items of otherwise exempt income: (A) The gross amount of any otherwise exempt pension less return of investment, if any. (B) Child support received by the taxpayer. (C) Inheritances. (D) Gifts and grants, the sum of which are in excess of $500 per year. (E) Amounts received by a taxpayer or spouse of a taxpayer for support from a parent who is not a member of the taxpayer’s household. (F) Life insurance proceeds. (G) Accident and health insurance proceeds, ex- cept reimbursement of incurred medical expenses. (H) Personal injury damages. (I) Sick pay that is not included in federal ad- justed gross income. (J) Strike benefits excluded from federal gross income. (K) Worker’s compensation, except for re- imbursement of medical expense. (L) Military pay and benefits. (M) Veteran’s benefits. (N) Payments received under the federal Social Security Act that are excluded from federal gross income. (O) Welfare payments, except as follows: (i) Payments for medical care, drugs and medical supplies, if the payments are not made directly to the welfare recipient; (ii) In-home services authorized and approved by the Department of Human Services; and (iii) Direct or indirect reimbursement of ex- penses paid or incurred for participation in work or training programs. (P) Nontaxable dividends. (Q) Nontaxable interest not included in federal adjusted gross income. (R) Rental allowance paid to a minister that is excluded from federal gross income. (S) Income from sources without the United States that is excluded from federal gross income. (b) Adjusted gross income shall be increased due to the disallowance of the following deductions: (A) The amount of the net loss, in excess of $1,000, from all dispositions of tangible or intangible properties. (B) The amount of the net loss, in excess of $1,000, from the operation of a farm or farms. (C) The amount of the net loss, in excess of $1,000, from all operations of a trade or business, profession or other activity entered into for the pro- duction or collection of income. (D) The amount of the net loss, in excess of $1,000, from tangible or intangible property held for the production of rents, royalties or other income. (E) The amount of any net operating loss carryovers or carrybacks included in federal ad- justed gross income. (F) The amount, in excess of $5,000, of the com- bined deductions or other allowances for depreci- ation, amortization or depletion. (G) The amount added or subtracted, as required within the context of this section, for adjustments made under ORS 316.680 (2)(d) and 316.707 to 316.737. (c) “Income” does not include the following: (A) Any governmental grant that must be used by the taxpayer for rehabilitation of the homestead of the taxpayer. (B) Any refund of Oregon personal income taxes that were imposed under this chapter. (4) “Qualified individual” includes an individual at least 60 years of age on the date that the ex- penses described in subsection (1)(a) of this section are paid or incurred by the eligible taxpayer: (a) Whose household income does not exceed $7,500 for the calendar year in which the taxable year of the taxpayer begins; 15

Chap. 142 OREGON LAWS 2026 (b) Who is eligible for authorized services as de- fined in ORS 410.410 under Oregon Project Inde- pendence; (c) Who is certified by the Department of Human Services; and (d) Whose care or any portion thereof is not paid for under ORS chapter 414. SECTION 40. ORS 316.157 is amended to read: 316.157. (1) In the case of an eligible individual, there shall be allowed as a credit against the taxes otherwise due under this chapter for the taxable year an amount equal to the lesser of the tax liabil- ity of the taxpayer or nine percent of net pension income. (2) For purposes of this section: (a) “Eligible individual” means any individual who is receiving pension income and who has at- tained 62 years of age before the close of the taxable year. (b) “Household income” means the aggregate in- come of the taxpayer and the spouse of the taxpayer who reside in the household, that was received dur- ing the taxable year for which a credit is claimed, except that “household income” does not include Social Security benefits received by the taxpayer or the spouse of the taxpayer. (c) “Income” means “adjusted gross income” as defined in the federal Internal Revenue Code, as amended and in effect on December 31, [2023] 2025, even when the amendments take effect or become operative after that date, relating to the measure- ment of taxable income of individuals, estates and trusts, with the following modifications: (A) There shall be added to adjusted gross in- come the following items of otherwise exempt in- come: (i) The gross amount of any otherwise exempt pension less return of investment, if any. (ii) Child support received by the taxpayer. (iii) Inheritances. (iv) Gifts and grants, the sum of which are in excess of $500 per year. (v) Amounts received by a taxpayer or spouse of a taxpayer for support from a parent who is not a member of the taxpayer’s household. (vi) Life insurance proceeds. (vii) Accident and health insurance proceeds, except reimbursement of incurred medical expenses. (viii) Personal injury damages. (ix) Sick pay that is not included in federal ad- justed gross income. (x) Strike benefits excluded from federal gross income. (xi) Worker’s compensation, except for re- imbursement of medical expense. (xii) Military pay and benefits. (xiii) Veteran’s benefits. (xiv) Payments received under the federal Social Security Act that are excluded from federal gross income. (xv) Welfare payments, except as follows: (I) Payments for medical care, drugs and medical supplies, if the payments are not made directly to the welfare recipient; (II) In-home services authorized and approved by the Department of Human Services; and (III) Direct or indirect reimbursement of ex- penses paid or incurred for participation in work or training programs. (xvi) Nontaxable dividends. (xvii) Nontaxable interest not included in federal adjusted gross income. (xviii) Rental allowance paid to a minister that is excluded from federal gross income. (xix) Income from sources without the United States that is excluded from federal gross income. (B) Adjusted gross income shall be increased due to the disallowance of the following deductions: (i) The amount of the net loss, in excess of $1,000, from all dispositions of tangible or intangible properties. (ii) The amount of the net loss, in excess of $1,000, from the operation of a farm or farms. (iii) The amount of the net loss, in excess of $1,000, from all operations of a trade or business, profession or other activity entered into for the pro- duction or collection of income. (iv) The amount of the net loss, in excess of $1,000, from tangible or intangible property held for the production of rents, royalties or other income. (v) The amount of any net operating loss carryovers or carrybacks included in federal ad- justed gross income. (vi) The amount, in excess of $5,000, of the com- bined deductions or other allowances for depreci- ation, amortization or depletion. (vii) The amount added or subtracted, as re- quired within the context of this section, for adjust- ments made under ORS 316.680 (2)(d) and 316.707 to 316.737. (C) “Income” does not include the following: (i) Any governmental grant that must be used by the taxpayer for rehabilitation of the homestead of the taxpayer. (ii) Any refund of Oregon personal income taxes that were imposed under this chapter. (d) “Net pension income” means: (A) For eligible individuals filing a joint return, the lesser of the pension income of the eligible indi- viduals received during the taxable year or the ex- cess, if any, of $15,000 over the sum of the following amounts: (i) Any Social Security benefits received by the eligible individual, or by the spouse of the individ- ual, during the taxable year; and (ii) The excess, if any, of household income over $30,000. (B) For an eligible individual filing a return other than a joint return, the lesser of the pension income of the eligible individual received during the taxable year or the excess, if any, of $7,500 over the sum of the following amounts: (i) Any Social Security benefits received by the eligible individual during the taxable year; and 16

OREGON LAWS 2026 Chap. 142 (ii) The excess, if any, of household income over $15,000. (e) “Pension income” means income included in Oregon taxable income from: (A) Distributions from or pursuant to an em- ployee pension benefit plan, as defined in section 3(2) of the Employee Retirement Income Security Act of 1974, which satisfies the requirements of section 401 of the Internal Revenue Code; (B) Distributions from or pursuant to a public retirement system of this state or a political subdi- vision of this state, or a public retirement system created by an Act of this state or a political subdi- vision of this state, or the public retirement system of any other state or local government; (C) Distributions from or pursuant to a federal retirement system created by the federal government for any officer or employee of the United States, in- cluding any person retired from service in the United States Civil Service, the Armed Forces of the United States or any agency or subdivision thereof; (D) Distributions or withdrawals from or pursu- ant to an eligible deferred compensation plan which satisfies the requirements of section 457 of the In- ternal Revenue Code; (E) Distributions or withdrawals from or pursu- ant to an individual retirement account, annuity or trust or simplified employee pension which satisfies the requirements of section 408 of the Internal Re- venue Code; and (F) Distributions or withdrawals from or pursu- ant to an employee annuity, including custodial ac- counts treated as annuities, subject to section 403 (a) or (b) of the Internal Revenue Code. (f) “Social Security benefits” means Social Secu- rity benefits, as defined in section 86 of the Internal Revenue Code (Title II Social Security or tier 1 railroad retirement benefits). (3) If a change in the taxable year of the eligible individual occurs as described in ORS 314.085, or if the Department of Revenue terminates the tax year of the eligible individual under ORS 314.440, the credit allowed by this section shall be prorated or computed in a manner consistent with ORS 314.085. (4) If a change in the status of the eligible indi- vidual from resident to nonresident or from nonresi- dent to resident occurs, the credit allowed by this section shall be determined in a manner consistent with subsection (1) of this section. SECTION 41. ORS 317.010 is amended to read: 317.010. As used in this chapter, unless the con- text requires otherwise: (1) “Centrally assessed corporation” means every corporation the property of which is assessed by the Department of Revenue under ORS 308.505 to 308.674. (2) “Department” means the Department of Re- venue. (3)(a) “Consolidated federal return” means the return permitted or required to be filed by a group of affiliated corporations under section 1501 of the Internal Revenue Code. (b) “Consolidated state return” means the return required to be filed under ORS 317.710 (5). (4) “Doing business” means any transaction or transactions in the course of its activities conducted within the state by a national banking association, or any other corporation; provided, however, that a foreign corporation whose activities in this state are confined to purchases of personal property, and the storage thereof incident to shipment outside the state, shall not be deemed to be doing business un- less such foreign corporation is an affiliate of an- other foreign or domestic corporation which is doing business in Oregon. Whether or not corporations are affiliated shall be determined as provided in section 1504 of the Internal Revenue Code. (5) “Excise tax” means a tax measured by or ac- cording to net income imposed upon national bank- ing associations, all other banks, and financial, centrally assessed, mercantile, manufacturing and business corporations for the privilege of carrying on or doing business in this state. (6) “Financial institution” has the meaning given that term in ORS 314.610 except that it does not in- clude a credit union as defined in ORS 723.006, an interstate credit union as defined in ORS 723.001 or a federal credit union. (7) “Internal Revenue Code,” except where the Legislative Assembly has provided otherwise, refers to the laws of the United States or to the Internal Revenue Code as they are amended and in effect: (a) On December 31, [2023] 2025; or (b) If related to the definition of taxable income, as applicable to the tax year of the taxpayer. (8) “Oregon taxable income” means taxable in- come, less the deduction allowed under ORS 317.476, except as otherwise provided with respect to insur- ers in subsection (11) of this section and ORS 317.650 to 317.665. (9) “Oregon net loss” means taxable loss, except as otherwise provided with respect to insurers in subsection (11) of this section and ORS 317.650 to 317.665. (10) “Taxable income or loss” means the taxable income or loss determined, or in the case of a cor- poration for which no federal taxable income or loss is determined, as would be determined, under chap- ter 1, Subtitle A of the Internal Revenue Code and any other laws of the United States relating to the determination of taxable income or loss of corporate taxpayers, with the additions, subtractions, adjust- ments and other modifications as are specifically prescribed by this chapter except that in determin- ing taxable income or loss for any year, no deduction under ORS 317.476 or 317.478 and section 45b, chap- ter 293, Oregon Laws 1987, shall be allowed. If the corporation is a corporation to which ORS 314.280 or 314.605 to 314.675 (requiring or permitting appor- tionment of income from transactions or activities carried on both within and without the state) ap- plies, to derive taxable income or loss, the following shall occur: (a) From the amount otherwise determined under this subsection, subtract nonapportionable income, 17

Chap. 142 OREGON LAWS 2026 or add nonapportionable loss, whichever is applica- ble. (b) Multiply the amount determined under para- graph (a) of this subsection by the Oregon appor- tionment percentage defined under ORS 314.280, 314.650 or 314.667, whichever is applicable. The re- sulting product shall be Oregon apportioned income or loss. (c) To the amount determined as Oregon appor- tioned income or loss under paragraph (b) of this subsection, add nonapportionable income allocable entirely to Oregon under ORS 314.280 or 314.625 to 314.645, or subtract nonapportionable loss allocable entirely to Oregon under ORS 314.280 or 314.625 to 314.645. The resulting figure is “taxable income or loss” for those corporations carrying on taxable transactions or activities both within and without Oregon. (11) As used in ORS 317.650 to 317.665, “insurer” means any domestic, foreign or alien insurer as defined in ORS 731.082 and any interin- surance and reciprocal exchange and its attorney in fact with respect to its attorney in fact net income as a corporate attorney in fact acting as attorney in compliance with ORS 731.458, 731.462, 731.466 and 731.470 for the reciprocal or interinsurance ex- change. However, “insurer” does not include title insurers or health care service contractors operating pursuant to ORS 750.005 to 750.095. SECTION 42. ORS 317.097 is amended to read: 317.097. (1) As used in this section: (a) “Annual rate” means the yearly interest rate specified on the note, and not the annual percentage rate, if any, disclosed to the applicant to comply with the federal Truth in Lending Act. (b) “Bonds” means a bond, as defined in ORS 286A.001, if issued on behalf of the Housing and Community Services Department, or bonds, as de- fined in ORS 456.055, if issued by a housing author- ity. (c) “Finance charge” means the total of all in- terest, loan fees, interest on any loan fees financed by the lending institution, and other charges related to the cost of obtaining credit. (d) “Lending institution” means any insured in- stitution, as that term is defined in ORS 706.008, any mortgage banking company that maintains an office in this state or any community development corpo- ration that is organized under the Oregon Nonprofit Corporation Law. (e) “Limited equity cooperative” means a coop- erative corporation formed under ORS chapter 62 whose articles of incorporation, in addition to the other requirements of ORS chapter 62, prohibit members from selling their ownership interests: (A) To any person other than a low income per- son; or (B) For a sales price that exceeds the sum of: (i) The price the member paid for the ownership interest; (ii) The cost of any permanent improvements the member made to the housing unit during the member’s ownership; (iii) Any special assessments the member paid to the limited equity cooperative during the member’s ownership that were expended to make permanent improvements to the building in which the member’s housing unit is located; and (iv) A return on the amounts described in sub- subparagraphs (i) to (iii) of this subparagraph, com- puted from the year in which the respective amount was paid, that equals the greater of the result of adjusting each amount by the percentage increase, if any, in the Consumer Price Index for All Urban Consumers, West Region (All Items), as published by the Bureau of Labor Statistics of the United States Department of Labor, or of increasing each amount by three percent compounded annually. (f) “Manufactured dwelling park” has the mean- ing given that term in ORS 446.003. (g) “Nonprofit corporation” means a corporation that is exempt from income taxes under section 501(c)(3) or (4) of the Internal Revenue Code as amended and in effect on December 31, [2023] 2025. (h) “Preservation project” means housing that was previously developed as affordable housing with a contract for rent assistance from the United States Department of Housing and Urban Development or the United States Department of Agriculture and that is being acquired by a sponsoring entity. (i) “Qualified assignee” means any investor par- ticipating in the secondary market for real estate loans. (j) “Qualified borrower” means any borrower that is a sponsoring entity that has a controlling interest in the real property that is financed by a qualified loan. A controlling interest includes a con- trolling interest in the general partner of a limited partnership that owns the real property. (k) “Qualified loan” means: (A) A loan that meets the criteria stated in sub- section (5) of this section or that is made to refi- nance a loan that meets the criteria described in subsection (5) of this section; (B) The purchase by a lending institution of bonds, the proceeds of which are used to finance or refinance a loan that meets the criteria described in subsection (5) of this section; or (C) A qualified mortgage loan fund. (L) “Qualified mortgage loan fund” means a fund that: (A) Is operated by a lending institution described in subsection (12) of this section; (B) Makes mortgages to first-time home buyers; (C) Makes mortgages for homes subject to a land trust mortgage; and (D) Makes mortgages to households that, at the time of mortgage origination, have income that is 80 percent or less of area median income as defined in ORS 458.610. (m) “Sponsoring entity” means a nonprofit cor- poration, nonprofit cooperative, state governmental entity, local unit of government as defined in ORS 18

OREGON LAWS 2026 Chap. 142 466.706, housing authority or any other person, pro- vided that the person has agreed to restrictive cove- nants imposed by a nonprofit corporation, nonprofit cooperative, state governmental entity, local unit of government or housing authority. (2) The Department of Revenue shall allow a credit against taxes otherwise due under this chap- ter for the tax year to a lending institution that makes a qualified loan certified by the Housing and Community Services Department as provided in sub- section (7) of this section. The amount of the credit is equal to the difference between: (a) The amount of finance charge charged by the lending institution during the tax year at an annual rate less than the market rate for a qualified loan that complies with the requirements of this section; and (b) The amount of finance charge that would have been charged during the tax year by the lend- ing institution for the qualified loan for housing construction, development, acquisition or rehabili- tation measured at the annual rate charged by the lending institution for nonsubsidized loans made un- der like terms and conditions at the time the quali- fied loan for housing construction, development, acquisition or rehabilitation is made. (3) The maximum amount of credit for the dif- ference between the amounts described in subsection (2)(a) and (b) of this section may not exceed four percent of the average unpaid balance of the quali- fied loan during the tax year for which the credit is claimed. (4) Any tax credit allowed under this section that is not used by the taxpayer in a particular year may be carried forward and offset against the taxpayer’s tax liability for the next succeeding tax year. Any credit remaining unused in the next suc- ceeding 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 suc- ceeding 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 suc- ceeding tax year, but may not be carried forward for any tax year thereafter. (5) To be eligible for the tax credit allowable under this section, a lending institution must make a qualified loan by either purchasing bonds, the proceeds of which are used to finance or refinance a loan that meets the criteria stated in this subsec- tion, or making a loan directly to: (a) An individual or individuals who own a dwelling, participate in an owner-occupied commu- nity rehabilitation program and are certified by the local government or its designated agent as having an income level when the loan is made of 80 percent of the area median income or less; (b) A qualified borrower who: (A) Uses the loan proceeds to finance construc- tion, development, acquisition or rehabilitation of housing, including housing in the form of a limited equity cooperative; and (B) Provides a written certification executed by the Housing and Community Services Department that the: (i) Housing created by the loan is or will be oc- cupied by households earning 80 percent of the area median income or less; and (ii) Full amount of savings from the reduced in- terest rate provided by the lending institution is or will be passed on, in the form of reduced housing payments, to the tenants or to the holders of propri- etary leases in a limited equity cooperative; (c) Subject to subsection (14) of this section, a qualified borrower who: (A) Uses the loan proceeds to finance construc- tion, development, acquisition or rehabilitation of housing consisting of a manufactured dwelling park; and (B) Provides a written certification executed by the Housing and Community Services Department that the housing will continue to be operated as a manufactured dwelling park during the period for which the tax credit is allowed; (d) A qualified borrower who: (A) Uses the loan proceeds to finance acquisition or rehabilitation of housing consisting of a preser- vation project; and (B) Provides a written certification executed by the Housing and Community Services Department that the housing preserved by the loan: (i) Is or will be occupied by households earning 80 percent of the area median income or less; and (ii) Is the subject of a rent assistance contract with the United States Department of Housing and Urban Development or the United States Depart- ment of Agriculture that will be maintained by the qualified borrower; (e) A qualified borrower who: (A) Uses the loan proceeds to finance construc- tion, development, acquisition or rehabilitation of housing; and (B) Provides a written certification executed by the Housing and Community Services Department or the governmental party to the rent assistance contract that the housing preserved by the loan: (i) Is or will be occupied by households earning 80 percent of the area median income or less; and (ii) Is the subject of a rent assistance contract with the federal government or with a state or local government that will be maintained by the qualified borrower and that limits a tenant’s rent to no more than 30 percent of their income; (f) A qualified borrower who: (A) Uses the loan proceeds to finance preserva- tion or rehabilitation of housing; and (B) Provides a written certification executed by the Housing and Community Services Department that the housing preserved or rehabilitated by the loan: (i) Is or will be occupied by households earning 80 percent of the area median income or less; and 19

Chap. 142 OREGON LAWS 2026 (ii) Is currently characterized by financial or physical distress that threatens its ongoing viability as an affordable housing resource; or (g) A qualified mortgage loan fund. (6) A loan made to refinance a loan that meets the criteria stated in subsection (5) of this section must be treated the same as a loan that meets the criteria stated in subsection (5) of this section. (7) For a qualified loan to be eligible for the tax credit allowable under this section, the Housing and Community Services Department must execute a written certification for the qualified loan that: (a) States that the qualified loan is within the limitation imposed by subsection (8) of this section; and (b) Specifies the period, as determined by the Housing and Community Services Department, dur- ing which the tax credit is allowed for the qualified loan, not to exceed: (A) 30 years, for a qualified loan with a contract for rent assistance or financing resources from the United States Department of Agriculture, for new housing construction, acquisition of housing or a preservation project; or (B) 20 years, for any other type of qualified loan. (8) The Housing and Community Services De- partment may certify qualified loans that are eligible under subsection (5) of this section if the total cred- its attributable to all qualified loans eligible for credits under this section and then outstanding do not exceed $35 million for any fiscal year. In making loan certifications under subsection (7) of this sec- tion, the Housing and Community Services Depart- ment shall attempt to distribute the tax credits statewide, but shall concentrate the tax credits in those areas of the state that are determined by the Oregon Housing Stability Council to have the great- est need for affordable housing. (9) The tax credit provided for in this section may be taken whether or not: (a) The financial institution is eligible to take a federal income tax credit under section 42 of the In- ternal Revenue Code with respect to the project fi- nanced by the qualified loan; (b) The project receives financing from bonds, the interest on which is exempt from federal taxa- tion under section 103 of the Internal Revenue Code; or (c) The project receives moneys from the Elderly and Disabled Housing Fund under ORS 456.535. (10) For a qualified loan defined in subsection (1)(k)(B) of this section financed through the pur- chase of bonds, the interest of which is exempt from federal taxation under section 103 of the Internal Revenue Code, the amount of finance charge that would have been charged under subsection (2)(b) of this section is determined by reference to the fi- nance charge that would have been charged if the federally tax exempt bonds had been issued and the tax credit under this section did not apply. (11) A lending institution may sell a qualified loan for which a certification has been executed to a qualified assignee whether or not the lending in- stitution retains servicing of the qualified loan so long as a designated lending institution maintains records, annually verified by a loan servicer, that establish the amount of tax credit earned by the taxpayer throughout each year of eligibility. (12) Notwithstanding any other provision of law, a lending institution that is a community develop- ment corporation organized under the Oregon Non- profit Corporation Law may transfer all or part of a tax credit allowed under this section to one or more other lending institutions that are stockholders or members of the community development corporation or that otherwise participate through the community development corporation in the making of one or more qualified loans for which the tax credit under this section is allowed. (13) The lending institution shall file an annual statement with the Housing and Community Ser- vices Department, specifying that it has conformed with all requirements imposed by law to qualify for a tax credit under this section. (14) Notwithstanding subsection (1)(j) and (m) of this section, a qualified borrower on a loan to fi- nance the construction, development, acquisition or rehabilitation of a manufactured dwelling park un- der subsection (5)(c) of this section must be: (a) A nonprofit corporation, manufactured dwell- ing park nonprofit cooperative, state governmental entity, local unit of government as defined in ORS 466.706 or housing authority; or (b) A nonprofit corporation or housing authority that has a controlling interest in the real property that is financed by a qualified loan. A controlling interest includes a controlling interest in the gen- eral partner of a limited partnership that owns the real property. (15) The Department of Revenue may require that a lending institution that has earned the credit and a lending institution that intends to claim the credit jointly file a notice, as prescribed by the De- partment of Revenue. The notice must comply with ORS 315.056 (2) or 315.058 (2). (16) The Housing and Community Services De- partment shall provide information to the Depart- ment of Revenue about all certifications executed under this section, if required by ORS 315.058. (17) The Housing and Community Services De- partment and the Department of Revenue may adopt rules to carry out the provisions of this section. SECTION 43. ORS 317A.100, as amended by section 6, chapter 502, Oregon Laws 2025, is amended to read: 317A.100. As used in ORS 317A.100 to 317A.158: (1)(a) “Commercial activity” means: (A) The total amount realized by a person, aris- ing from transactions and activity in the regular course of the person’s trade or business, without de- duction for expenses incurred by the trade or busi- ness; (B) If received by a financial institution: 20

OREGON LAWS 2026 Chap. 142 (i) If the reporting person for a financial institu- tion is a holding company, all items of income re- ported on the FR Y-9 filed by the holding company; (ii) If the reporting person for a financial insti- tution is a bank organization, all items of income reported on the call report filed by the bank organ- ization; and (iii) If the reporting person for a financial insti- tution is a nonbank financial organization, all items of income reported in accordance with generally ac- cepted accounting principles; and (C)(i) If received by an insurer, as reported on the statement of premiums accompanying the annual statement required under ORS 731.574 to be filed with the Director of the Department of Consumer and Business Services, all gross direct life insurance premiums, gross direct accident and health insur- ance premiums and gross direct property and casu- alty insurance premiums; and (ii) The gross amount of surplus lines premiums received on Oregon home state risks as shown in the report required by ORS 735.465. (b) “Commercial activity” does not include: (A) Interest income except: (i) Interest on credit sales; or (ii) Interest income, including service charges, received by financial institutions; (B) Receipts from the sale, exchange or other disposition of an asset described in section 1221 or 1231 of the Internal Revenue Code, without regard to the length of time the person held the asset; (C) If received by an insurer, federally reinsured premiums or income from transactions between a reciprocal insurer and its attorney in fact operating under ORS 731.142; (D) Receipts from hedging transactions, to the extent that the transactions are entered into prima- rily to protect a financial position, including trans- actions intended to manage the risk of exposure to foreign currency fluctuations that affect assets, li- abilities, profits, losses, equity or investments in foreign operations, risk of exposure to interest rate fluctuations or risk of commodity price fluctuations; (E) Proceeds received attributable to the repay- ment, maturity or redemption of the principal of a loan, bond, mutual fund, certificate of deposit or marketable instrument; (F) The principal amount received under a re- purchase agreement or on account of any trans- action properly characterized as a loan to the person; (G) Contributions received by a trust, plan or other arrangement, any of which is described in section 501(a) of the Internal Revenue Code, or to which title 26, subtitle A, chapter 1, subchapter (D) of the Internal Revenue Code applies; (H) Compensation, whether current or deferred, and whether in cash or in kind, received or to be received by an employee, a former employee or the employee’s legal successor for services rendered to or for an employer, including reimbursements re- ceived by or for an individual for medical or educa- tion expenses, health insurance premiums or employee expenses or on account of a dependent care spending account, legal services plan, any cafe- teria plan described in section 125 of the Internal Revenue Code or any similar employee reimburse- ment; (I) Proceeds received from the issuance of the taxpayer’s own stock, options, warrants, puts or calls, or from the sale of the taxpayer’s treasury stock; (J) Proceeds received on the account of payments from insurance policies, including crop insurance policies, owned by the taxpayer, except those pro- ceeds received for the loss of commercial activity; (K) Gifts or charitable contributions received, membership dues received by trade, professional, homeowners’ or condominium associations, payments received for educational courses, meetings or meals, or similar payments to a trade, professional or other similar association, and fundraising receipts received by any person when any excess receipts are donated or used exclusively for charitable purposes; (L) Damages received as the result of litigation in excess of amounts that, if received without liti- gation, would be treated as commercial activity; (M) Property, money and other amounts received or acquired by an agent on behalf of another in ex- cess of the agent’s commission, fee or other re- muneration; (N) Tax refunds from any tax program, other tax benefit recoveries and reimbursements for the tax imposed under ORS 317A.100 to 317A.158 made by entities that are part of the same unitary group as provided under ORS 317A.106, and reimbursements made by entities that are not members of a unitary group that are required to be made for economic parity among multiple owners of an entity whose tax obligation under ORS 317A.100 to 317A.158 is re- quired to be reported and paid entirely by one owner, as provided in ORS 317A.106; (O) Pension reversions; (P) Contributions to capital; (Q) Receipts from the sale, transfer, exchange or other disposition of motor vehicle fuel or any other product used for the propulsion of motor vehicles; (R) In the case of receipts from the sale of ciga- rettes or tobacco products by a wholesale dealer, retail dealer, distributor, manufacturer or seller, an amount equal to the federal and state excise taxes paid by any person on or for such cigarettes or to- bacco products under subtitle E of the Internal Re- venue Code or ORS chapter 323; (S) In the case of receipts from the sale of malt beverages or wine, as defined in ORS 471.001, cider, as defined in ORS 471.023 or distilled liquor, as de- fined in ORS 471.001, by a person holding a license issued under ORS chapter 471, an amount equal to the federal and state excise taxes paid by any person on or for such malt beverages, wine or distilled liq- uor under subtitle E of the Internal Revenue Code or ORS chapter 471 or 473, and any amount paid to the Oregon Liquor and Cannabis Commission for sales of distilled spirits by an agent appointed under ORS 471.750; 21

Chap. 142 OREGON LAWS 2026 (T) In the case of receipts from the sale of marijuana items, as defined in ORS 475C.009, by a person holding a license issued under ORS 475C.005 to 475C.525, an amount equal to the federal and state excise taxes paid by any person on or for such marijuana items under subtitle E of the Internal Revenue Code or ORS 475C.670 to 475C.734 and any local retail taxes authorized under ORS 475C.453; (U) Local taxes collected by a restaurant or other food establishment on sales of meals, prepared food or beverages; (V) Tips or gratuities collected by a restaurant or other food establishment and passed on to em- ployees; (W) Receipts realized by a vehicle dealer certi- fied under ORS 822.020 or a person described in ORS 320.400 (8)(a)(B) from the sale or other transfer of a motor vehicle, as defined in ORS 801.360, to another vehicle dealer for the purpose of resale by the transferee vehicle dealer, but only if the sale or other transfer was based upon the transferee’s need to meet a specific customer’s preference for a motor vehicle or is an exchange of new vehicles between franchised motor vehicle dealerships; (X) Registration fees or taxes collected by a ve- hicle dealer certified under ORS 822.020 or a person described in ORS 320.400 (8)(a)(B) at the sale or other transfer of a motor vehicle, as defined in ORS 801.360, that are owed to a third party by the pur- chaser of the motor vehicle and passed to the third party by the dealer; (Y) Receipts from a financial institution for ser- vices provided to the financial institution in con- nection with the issuance, processing, servicing and management of loans or credit accounts, if the fi- nancial institution and the recipient of the receipts have at least 50 percent of their ownership interests owned or controlled, directly or constructively through related interests, by common owners; (Z) In the case of amounts retained as commis- sions by a holder of a license under ORS chapter 462, an amount equal to the amounts specified under ORS chapter 462 that must be paid to or collected by the Department of Revenue as a tax and the amounts specified under ORS chapter 462 to be used as purse money; (AA) Receipts of residential care facilities as de- fined in ORS 443.400 or in-home care agencies as defined in ORS 443.305, to the extent that the re- ceipts are derived from or received as compensation for providing services to a medical assistance or Medicare recipient; (BB) Dividends received; (CC) Distributive income received from a pass- through entity; (DD) Receipts from sales to a wholesaler in this state, if the seller receives certification at the time of sale from the wholesaler that the wholesaler will sell the purchased property outside this state; (EE) Receipts from the wholesale or retail sale of groceries, including receipts of a person that owns groceries at the time of sale and compensation of any consignee engaged in effecting the sale of gro- ceries on behalf the owner of the groceries, but only to the extent that the compensation relates to gro- cery sales; (FF) Receipts from transactions among members of a unitary group; (GG) Moneys, including public purpose charge moneys collected under ORS 757.612 and moneys collected to plan for and pursue cost-effective energy efficiency resources under ORS 757.054, that are collected from customers, passed to a utility and ap- proved by the Public Utility Commission and that support energy conservation, renewable resource ac- quisition and low-income assistance programs; (HH) Moneys collected by a utility from custom- ers for the payment of loans through on-bill financ- ing; (II) Surcharges collected under ORS 757.736; (JJ) Moneys passed to a utility by the Bonneville Power Administration for the purpose of effectuating the Regional Power Act Exchange credits or pursu- ant to any settlement associated with the exchange credit; (KK) Moneys collected or recovered, by entities listed in ORS 756.310, cable operators as defined in 47 U.S.C. 522(5), telecommunications carriers as de- fined in 47 U.S.C. 153(51) and providers of informa- tion services as defined in 47 U.S.C. 153(24), for fees payable under ORS 756.310, right-of-way fees, fran- chise fees, privilege taxes, federal taxes and local taxes; (LL) Charges assessed under ORS 759.685 and paid into the Residential Service Protection Fund; (MM) Universal service surcharge moneys col- lected or recovered and paid into the universal ser- vice fund established in ORS 759.425; (NN) Moneys collected for public purpose fund- ing as described in ORS 759.430; (OO) Moneys collected or recovered and paid into the federal universal service fund as determined by the Federal Communications Commission; (PP) In the case of a seller or provider of tele- communications services, the amount of tax imposed under ORS 403.200 for access to the emergency communications system that is collected from sub- scribers or consumers; (QQ) In the case of a transient lodging tax col- lector, the amount of tax imposed under ORS 320.305 and of any local transient lodging tax imposed upon the occupancy of transit lodging; (RR) In the case of a seller of bicycles, the amount of tax imposed under ORS 320.415 upon re- tail sales of bicycles; (SS) In the case of a qualified heavy equipment provider, the amount of tax imposed under ORS 307.872 upon the rental price of heavy equipment; (TT) Farmer sales to an agricultural cooperative in this state that is a cooperative organization de- scribed in section 1381 of the Internal Revenue Code; (UU) Revenue received by a business entity that is mandated by contract or subcontract to be dis- tributed to another person or entity if the revenue constitutes sales commissions that are paid to a 22

OREGON LAWS 2026 Chap. 142 person who is not an employee of the business en- tity, including, without limitation, a split-fee real estate commission; (VV) Receipts from the sale of fluid milk by dairy farmers that are not members of an agricul- tural cooperative; and (WW)(i) Cost paid by a dealer for items of pre- cious metal. (ii) As used in this subparagraph, “item of pre- cious metal” means an item of gold, silver, platinum, rhodium or palladium that has been put through a process of smelting or refining and that is in a state or condition that its value depends on its contents and not its form. (2) “Cost inputs” means: (a) The cost of goods sold as calculated in arriv- ing at federal taxable income under the Internal Re- venue Code; or (b) In the case of a taxpayer that is engaged in a farming operation, as defined in ORS 317A.102, and that does not report cost of goods sold for federal tax purposes, the taxpayer’s operating expenses exclud- ing labor costs. (3) “Doing business” means engaging in any ac- tivity, whether legal or illegal, that is conducted for, or results in, the receipt of commercial activity at any time during a calendar year. (4) “Excluded person” means any of the follow- ing: (a) Organizations described in sections 501(c) and 501(j) of the Internal Revenue Code, unless the ex- emption is denied under section 501(h), (i) or (m) or under section 502, 503 or 505 of the Internal Re- venue Code. (b) Organizations described in section 501(d) of the Internal Revenue Code, unless the exemption is denied under section 502 or 503 of the Internal Re- venue Code. (c) Organizations described in section 501(e) of the Internal Revenue Code. (d) Organizations described in section 501(f) of the Internal Revenue Code. (e) Charitable risk pools described in section 501(n) of the Internal Revenue Code. (f) Organizations described in section 521 of the Internal Revenue Code. (g) Qualified state tuition programs described in section 529 of the Internal Revenue Code. (h) Foreign or alien insurance companies, but only with respect to the underwriting profit derived from writing wet marine and transportation insur- ance subject to tax under ORS 731.824 and 731.828 or if an insurance company is subject to the retali- atory tax under ORS 731.854 and 731.859. (i) Governmental entities. (j) Any person with commercial activity that does not exceed $750,000 for the tax year, other than a person that is part of a unitary group as provided in ORS 317A.106 with commercial activity in excess of $750,000. (k) Hospitals subject to assessment under ORS 414.855, long term care facilities subject to assess- ment under ORS 409.801 or any entity subject to as- sessment under ORS 414.880 or section 3 or 5, chapter 538, Oregon Laws 2017. (L) Manufactured dwelling park nonprofit coop- eratives organized under ORS chapter 62. (5) “Financial institution” has the meaning given that term in ORS 314.610, except that “financial in- stitution” does not include a credit union. (6)(a) “FR Y-9” means the consolidated or parent-only financial statements that a holding com- pany is required to file with the Federal Reserve Board pursuant to 12 U.S.C. 1844. (b) In the case of a holding company required to file both consolidated and parent-only financial statements, “FR Y-9” means the consolidated finan- cial statements that the holding company is required to file. (7) “Governmental entity” means: (a) The United States and any of its unincor- porated agencies and instrumentalities. (b) Any incorporated agency or instrumentality of the United States wholly owned by the United States or by a corporation wholly owned by the United States. (c) The State of Oregon and any of its unincor- porated agencies and instrumentalities. (d) Any county, city, district or other political subdivision of the state. (e) A special government body as defined in ORS 174.117. (f) A federally recognized Indian tribe. (8) “Groceries” means food as defined in 7 U.S.C. 2012(k), but does not include cannabinoid edibles or marijuana seeds. (9)(a) “Hedging transaction” means a hedging transaction as defined in section 1221 of the Internal Revenue Code or a transaction accorded hedge ac- counting treatment under Financial Accounting Standards Board Statement No. 133. (b) “Hedging transaction” does not include a transaction in which an actual transfer of title of real or tangible property to another entity occurs. (10) “Insurer” has the meaning given that term in ORS 317.010. (11) “Internal Revenue Code,” except where the Legislative Assembly has provided otherwise, refers to the laws of the United States or to the Internal Revenue Code as they are amended and in effect on December 31, [2023] 2025. (12) “Labor costs” means total compensation of all employees, not to include compensation paid to any single employee in excess of $500,000. (13)(a) “Motor vehicle fuel or any other product used for the propulsion of motor vehicles” means: (A) Motor vehicle fuel as defined in ORS 319.010; and (B) Fuel the use of which in a motor vehicle is subject to taxation under ORS 319.530. (b) “Motor vehicle fuel or any other product used for the propulsion of motor vehicles” does not mean: (A) Electricity; or 23

Chap. 142 OREGON LAWS 2026 (B) Electric batteries or any other mechanical or physical component or accessory of a motor vehi- cle. (14) “Person” includes individuals, combinations of individuals of any form, receivers, assignees, trustees in bankruptcy, firms, companies, joint-stock companies, business trusts, estates, partnerships, limited liability partnerships, limited liability com- panies, associations, joint ventures, clubs, societies, entities organized as for-profit corporations under ORS chapter 60, C corporations, S corporations, qualified subchapter S subsidiaries, qualified sub- chapter S trusts, trusts, entities that are disregarded for federal income tax purposes and any other enti- ties. (15) “Retailer” means a person doing business by selling tangible personal property to a purchaser for a purpose other than: (a) Resale by the purchaser of the property as tangible personal property in the regular course of business; (b) Incorporation by the purchaser of the prop- erty in the course of regular business as an ingredi- ent or component of real or personal property; or (c) Consumption by the purchaser of the property in the production for sale of a new article of tangi- ble personal property. (16) “Taxable commercial activity” means com- mercial activity sourced to this state under ORS 317A.128, less any subtraction pursuant to ORS 317A.119. (17)(a) “Taxpayer” means any person or unitary group required to register, file or pay tax under ORS 317A.100 to 317A.158. (b) “Taxpayer” does not include excluded per- sons, except to the extent that a tax-exempt entity has unrelated business income as described in the Internal Revenue Code. (18) “Tax year” means, except as otherwise pro- vided in ORS 317A.103, a taxpayer’s annual ac- counting period used for federal income tax purposes under section 441 of the Internal Revenue Code. (19)(a) “Unitary business” means a business en- terprise in which there exists directly or indirectly between the members or parts of the enterprise a sharing or exchange of value as demonstrated by: (A) Centralized management or a common exec- utive force; (B) Centralized administrative services or func- tions resulting in economies of scale; or (C) Flow of goods, capital resources or services demonstrating functional integration. (b) “Unitary business” may include a business enterprise the activities of which: (A) Are in the same general line of business, such as manufacturing, wholesaling or retailing; or (B) Constitute steps in a vertically integrated process, such as the steps involved in the production of natural resources, which might include explora- tion, mining, refining and marketing. (20) “Unitary group” means a group of persons with more than 50 percent common ownership, ei- ther direct or indirect, that is engaged in business activities that constitute a unitary business. (21) “Wholesaler” means a person primarily do- ing business by merchant distribution of tangible personal property to retailers or to other whole- salers. SECTION 44. ORS 317A.100, as amended by section 20, chapter 4, Oregon Laws 2025, and section 6, chapter 502, Oregon Laws 2025, is amended to read: 317A.100. As used in ORS 317A.100 to 317A.158: (1)(a) “Commercial activity” means: (A) The total amount realized by a person, aris- ing from transactions and activity in the regular course of the person’s trade or business, without de- duction for expenses incurred by the trade or busi- ness; (B) If received by a financial institution: (i) If the reporting person for a financial institu- tion is a holding company, all items of income re- ported on the FR Y-9 filed by the holding company; (ii) If the reporting person for a financial insti- tution is a bank organization, all items of income reported on the call report filed by the bank organ- ization; and (iii) If the reporting person for a financial insti- tution is a nonbank financial organization, all items of income reported in accordance with generally ac- cepted accounting principles; and (C)(i) If received by an insurer, as reported on the statement of premiums accompanying the annual statement required under ORS 731.574 to be filed with the Director of the Department of Consumer and Business Services, all gross direct life insurance premiums, gross direct accident and health insur- ance premiums and gross direct property and casu- alty insurance premiums; and (ii) The gross amount of surplus lines premiums received on Oregon home state risks as shown in the report required by ORS 735.465. (b) “Commercial activity” does not include: (A) Interest income except: (i) Interest on credit sales; or (ii) Interest income, including service charges, received by financial institutions; (B) Receipts from the sale, exchange or other disposition of an asset described in section 1221 or 1231 of the Internal Revenue Code, without regard to the length of time the person held the asset; (C) If received by an insurer, federally reinsured premiums or income from transactions between a reciprocal insurer and its attorney in fact operating under ORS 731.142; (D) Receipts from hedging transactions, to the extent that the transactions are entered into prima- rily to protect a financial position, including trans- actions intended to manage the risk of exposure to foreign currency fluctuations that affect assets, li- abilities, profits, losses, equity or investments in foreign operations, risk of exposure to interest rate fluctuations or risk of commodity price fluctuations; 24

OREGON LAWS 2026 Chap. 142 (E) Proceeds received attributable to the repay- ment, maturity or redemption of the principal of a loan, bond, mutual fund, certificate of deposit or marketable instrument; (F) The principal amount received under a re- purchase agreement or on account of any trans- action properly characterized as a loan to the person; (G) Contributions received by a trust, plan or other arrangement, any of which is described in section 501(a) of the Internal Revenue Code, or to which title 26, subtitle A, chapter 1, subchapter (D) of the Internal Revenue Code applies; (H) Compensation, whether current or deferred, and whether in cash or in kind, received or to be received by an employee, a former employee or the employee’s legal successor for services rendered to or for an employer, including reimbursements re- ceived by or for an individual for medical or educa- tion expenses, health insurance premiums or employee expenses or on account of a dependent care spending account, legal services plan, any cafe- teria plan described in section 125 of the Internal Revenue Code or any similar employee reimburse- ment; (I) Proceeds received from the issuance of the taxpayer’s own stock, options, warrants, puts or calls, or from the sale of the taxpayer’s treasury stock; (J) Proceeds received on the account of payments from insurance policies, including crop insurance policies, owned by the taxpayer, except those pro- ceeds received for the loss of commercial activity; (K) Gifts or charitable contributions received, membership dues received by trade, professional, homeowners’ or condominium associations, payments received for educational courses, meetings or meals, or similar payments to a trade, professional or other similar association, and fundraising receipts received by any person when any excess receipts are donated or used exclusively for charitable purposes; (L) Damages received as the result of litigation in excess of amounts that, if received without liti- gation, would be treated as commercial activity; (M) Property, money and other amounts received or acquired by an agent on behalf of another in ex- cess of the agent’s commission, fee or other re- muneration; (N) Tax refunds from any tax program, other tax benefit recoveries and reimbursements for the tax imposed under ORS 317A.100 to 317A.158 made by entities that are part of the same unitary group as provided under ORS 317A.106, and reimbursements made by entities that are not members of a unitary group that are required to be made for economic parity among multiple owners of an entity whose tax obligation under ORS 317A.100 to 317A.158 is re- quired to be reported and paid entirely by one owner, as provided in ORS 317A.106; (O) Pension reversions; (P) Contributions to capital; (Q) Receipts from the sale, transfer, exchange or other disposition of motor vehicle fuel or any other product used for the propulsion of motor vehicles; (R) In the case of receipts from the sale of ciga- rettes or tobacco products by a wholesale dealer, retail dealer, distributor, manufacturer or seller, an amount equal to the federal and state excise taxes paid by any person on or for such cigarettes or to- bacco products under subtitle E of the Internal Re- venue Code or ORS chapter 323; (S) In the case of receipts from the sale of malt beverages or wine, as defined in ORS 471.001, cider, as defined in ORS 471.023 or distilled liquor, as de- fined in ORS 471.001, by a person holding a license issued under ORS chapter 471, an amount equal to the federal and state excise taxes paid by any person on or for such malt beverages, wine or distilled liq- uor under subtitle E of the Internal Revenue Code or ORS chapter 471 or 473, and any amount paid to the Oregon Liquor and Cannabis Commission for sales of distilled spirits by an agent appointed under ORS 471.750; (T) In the case of receipts from the sale of marijuana items, as defined in ORS 475C.009, by a person holding a license issued under ORS 475C.005 to 475C.525, an amount equal to the federal and state excise taxes paid by any person on or for such marijuana items under subtitle E of the Internal Revenue Code or ORS 475C.670 to 475C.734 and any local retail taxes authorized under ORS 475C.453; (U) Local taxes collected by a restaurant or other food establishment on sales of meals, prepared food or beverages; (V) Tips or gratuities collected by a restaurant or other food establishment and passed on to em- ployees; (W) Receipts realized by a vehicle dealer certi- fied under ORS 822.020 or a person described in ORS 320.400 (8)(a)(B) from the sale or other transfer of a motor vehicle, as defined in ORS 801.360, to another vehicle dealer for the purpose of resale by the transferee vehicle dealer, but only if the sale or other transfer was based upon the transferee’s need to meet a specific customer’s preference for a motor vehicle or is an exchange of new vehicles between franchised motor vehicle dealerships; (X) Registration fees or taxes collected by a ve- hicle dealer certified under ORS 822.020 or a person described in ORS 320.400 (8)(a)(B) at the sale or other transfer of a motor vehicle, as defined in ORS 801.360, that are owed to a third party by the pur- chaser of the motor vehicle and passed to the third party by the dealer; (Y) Receipts from a financial institution for ser- vices provided to the financial institution in con- nection with the issuance, processing, servicing and management of loans or credit accounts, if the fi- nancial institution and the recipient of the receipts have at least 50 percent of their ownership interests owned or controlled, directly or constructively through related interests, by common owners; (Z) In the case of amounts retained as commis- sions by a holder of a license under ORS chapter 25

Chap. 142 OREGON LAWS 2026 462, an amount equal to the amounts specified under ORS chapter 462 that must be paid to or collected by the Department of Revenue as a tax and the amounts specified under ORS chapter 462 to be used as purse money; (AA) Receipts of residential care facilities as de- fined in ORS 443.400 or in-home care agencies as defined in ORS 443.305, to the extent that the re- ceipts are derived from or received as compensation for providing services to a medical assistance or Medicare recipient; (BB) Dividends received; (CC) Distributive income received from a pass- through entity; (DD) Receipts from sales to a wholesaler in this state, if the seller receives certification at the time of sale from the wholesaler that the wholesaler will sell the purchased property outside this state; (EE) Receipts from the wholesale or retail sale of groceries, including receipts of a person that owns groceries at the time of sale and compensation of any consignee engaged in effecting the sale of gro- ceries on behalf the owner of the groceries, but only to the extent that the compensation relates to gro- cery sales; (FF) Receipts from transactions among members of a unitary group; (GG) Moneys, including public purpose charge moneys collected under ORS 757.612 and moneys collected to plan for and pursue cost-effective energy efficiency resources under ORS 757.054, that are collected from customers, passed to a utility and ap- proved by the Public Utility Commission and that support energy conservation, renewable resource ac- quisition and low-income assistance programs; (HH) Moneys collected by a utility from custom- ers for the payment of loans through on-bill financ- ing; (II) Surcharges collected under ORS 757.736; (JJ) Moneys passed to a utility by the Bonneville Power Administration for the purpose of effectuating the Regional Power Act Exchange credits or pursu- ant to any settlement associated with the exchange credit; (KK) Moneys collected or recovered, by entities listed in ORS 756.310, cable operators as defined in 47 U.S.C. 522(5), telecommunications carriers as de- fined in 47 U.S.C. 153(51) and providers of informa- tion services as defined in 47 U.S.C. 153(24), for fees payable under ORS 756.310, right-of-way fees, fran- chise fees, privilege taxes, federal taxes and local taxes; (LL) Charges assessed under ORS 759.685 and paid into the Residential Service Protection Fund; (MM) Universal service surcharge moneys col- lected or recovered and paid into the universal ser- vice fund established in ORS 759.425; (NN) Moneys collected for public purpose fund- ing as described in ORS 759.430; (OO) Moneys collected or recovered and paid into the federal universal service fund as determined by the Federal Communications Commission; (PP) In the case of a seller or provider of tele- communications services, the amount of tax imposed under ORS 403.200 for access to the emergency communications system that is collected from sub- scribers or consumers; (QQ) In the case of a transient lodging tax col- lector, the amount of tax imposed under ORS 320.305 and of any local transient lodging tax imposed upon the occupancy of transit lodging; (RR) In the case of a seller of bicycles, the amount of tax imposed under ORS 320.415 upon re- tail sales of bicycles; (SS) In the case of a qualified heavy equipment provider, the amount of tax imposed under ORS 307.872 upon the rental price of heavy equipment; (TT) Farmer sales to an agricultural cooperative in this state that is a cooperative organization de- scribed in section 1381 of the Internal Revenue Code; (UU) Revenue received by a business entity that is mandated by contract or subcontract to be dis- tributed to another person or entity if the revenue constitutes sales commissions that are paid to a person who is not an employee of the business en- tity, including, without limitation, a split-fee real estate commission; (VV) Receipts from the sale of fluid milk by dairy farmers that are not members of an agricul- tural cooperative; and (WW)(i) Cost paid by a dealer for items of pre- cious metal. (ii) As used in this subparagraph, “item of pre- cious metal” means an item of gold, silver, platinum, rhodium or palladium that has been put through a process of smelting or refining and that is in a state or condition that its value depends on its contents and not its form. (2) “Cost inputs” means: (a) The cost of goods sold as calculated in arriv- ing at federal taxable income under the Internal Re- venue Code; or (b) In the case of a taxpayer that is engaged in a farming operation, as defined in ORS 317A.102, and that does not report cost of goods sold for federal tax purposes, the taxpayer’s operating expenses exclud- ing labor costs. (3) “Doing business” means engaging in any ac- tivity, whether legal or illegal, that is conducted for, or results in, the receipt of commercial activity at any time during a calendar year. (4) “Excluded person” means any of the follow- ing: (a) Organizations described in sections 501(c) and 501(j) of the Internal Revenue Code, unless the ex- emption is denied under section 501(h), (i) or (m) or under section 502, 503 or 505 of the Internal Re- venue Code. (b) Organizations described in section 501(d) of the Internal Revenue Code, unless the exemption is denied under section 502 or 503 of the Internal Re- venue Code. (c) Organizations described in section 501(e) of the Internal Revenue Code. 26

OREGON LAWS 2026 Chap. 142 (d) Organizations described in section 501(f) of the Internal Revenue Code. (e) Charitable risk pools described in section 501(n) of the Internal Revenue Code. (f) Organizations described in section 521 of the Internal Revenue Code. (g) Qualified state tuition programs described in section 529 of the Internal Revenue Code. (h) Foreign or alien insurance companies, but only with respect to the underwriting profit derived from writing wet marine and transportation insur- ance subject to tax under ORS 731.824 and 731.828 or if an insurance company is subject to the retali- atory tax under ORS 731.854 and 731.859. (i) Governmental entities. (j) Any person with commercial activity that does not exceed $750,000 for the tax year, other than a person that is part of a unitary group as provided in ORS 317A.106 with commercial activity in excess of $750,000. (k) Long term care facilities subject to assess- ment under ORS 409.801. (L) Manufactured dwelling park nonprofit coop- eratives organized under ORS chapter 62. (5) “Financial institution” has the meaning given that term in ORS 314.610, except that “financial in- stitution” does not include a credit union. (6)(a) “FR Y-9” means the consolidated or parent-only financial statements that a holding com- pany is required to file with the Federal Reserve Board pursuant to 12 U.S.C. 1844. (b) In the case of a holding company required to file both consolidated and parent-only financial statements, “FR Y-9” means the consolidated finan- cial statements that the holding company is required to file. (7) “Governmental entity” means: (a) The United States and any of its unincor- porated agencies and instrumentalities. (b) Any incorporated agency or instrumentality of the United States wholly owned by the United States or by a corporation wholly owned by the United States. (c) The State of Oregon and any of its unincor- porated agencies and instrumentalities. (d) Any county, city, district or other political subdivision of the state. (e) A special government body as defined in ORS 174.117. (f) A federally recognized Indian tribe. (8) “Groceries” means food as defined in 7 U.S.C. 2012(k), but does not include cannabinoid edibles or marijuana seeds. (9)(a) “Hedging transaction” means a hedging transaction as defined in section 1221 of the Internal Revenue Code or a transaction accorded hedge ac- counting treatment under Financial Accounting Standards Board Statement No. 133. (b) “Hedging transaction” does not include a transaction in which an actual transfer of title of real or tangible property to another entity occurs. (10) “Insurer” has the meaning given that term in ORS 317.010. (11) “Internal Revenue Code,” except where the Legislative Assembly has provided otherwise, refers to the laws of the United States or to the Internal Revenue Code as they are amended and in effect on December 31, [2023] 2025. (12) “Labor costs” means total compensation of all employees, not to include compensation paid to any single employee in excess of $500,000. (13)(a) “Motor vehicle fuel or any other product used for the propulsion of motor vehicles” means: (A) Motor vehicle fuel as defined in ORS 319.010; and (B) Fuel the use of which in a motor vehicle is subject to taxation under ORS 319.530. (b) “Motor vehicle fuel or any other product used for the propulsion of motor vehicles” does not mean: (A) Electricity; or (B) Electric batteries or any other mechanical or physical component or accessory of a motor vehi- cle. (14) “Person” includes individuals, combinations of individuals of any form, receivers, assignees, trustees in bankruptcy, firms, companies, joint-stock companies, business trusts, estates, partnerships, limited liability partnerships, limited liability com- panies, associations, joint ventures, clubs, societies, entities organized as for-profit corporations under ORS chapter 60, C corporations, S corporations, qualified subchapter S subsidiaries, qualified sub- chapter S trusts, trusts, entities that are disregarded for federal income tax purposes and any other enti- ties. (15) “Retailer” means a person doing business by selling tangible personal property to a purchaser for a purpose other than: (a) Resale by the purchaser of the property as tangible personal property in the regular course of business; (b) Incorporation by the purchaser of the prop- erty in the course of regular business as an ingredi- ent or component of real or personal property; or (c) Consumption by the purchaser of the property in the production for sale of a new article of tangi- ble personal property. (16) “Taxable commercial activity” means com- mercial activity sourced to this state under ORS 317A.128, less any subtraction pursuant to ORS 317A.119. (17)(a) “Taxpayer” means any person or unitary group required to register, file or pay tax under ORS 317A.100 to 317A.158. (b) “Taxpayer” does not include excluded per- sons, except to the extent that a tax-exempt entity has unrelated business income as described in the Internal Revenue Code. (18) “Tax year” means, except as otherwise pro- vided in ORS 317A.103, a taxpayer’s annual ac- counting period used for federal income tax purposes under section 441 of the Internal Revenue Code. (19)(a) “Unitary business” means a business en- terprise in which there exists directly or indirectly 27

Chap. 142 OREGON LAWS 2026 between the members or parts of the enterprise a sharing or exchange of value as demonstrated by: (A) Centralized management or a common exec- utive force; (B) Centralized administrative services or func- tions resulting in economies of scale; or (C) Flow of goods, capital resources or services demonstrating functional integration. (b) “Unitary business” may include a business enterprise the activities of which: (A) Are in the same general line of business, such as manufacturing, wholesaling or retailing; or (B) Constitute steps in a vertically integrated process, such as the steps involved in the production of natural resources, which might include explora- tion, mining, refining and marketing. (20) “Unitary group” means a group of persons with more than 50 percent common ownership, ei- ther direct or indirect, that is engaged in business activities that constitute a unitary business. (21) “Wholesaler” means a person primarily do- ing business by merchant distribution of tangible personal property to retailers or to other whole- salers. SECTION 45. ORS 458.670 is amended to read: 458.670. As used in this section and ORS 458.675 to 458.700, unless the context requires otherwise: (1) “Account holder” means a resident of this state who: (a) Is 12 years of age or older; (b) Is a member of a lower income household; and (c) Has established an individual development account with a fiduciary organization. (2) “Fiduciary organization” means an organiza- tion selected under ORS 458.695 to administer state moneys directed to individual development accounts and that is: (a) A nonprofit, fund raising organization that is exempt from taxation under section 501(c)(3) of the Internal Revenue Code as amended and in effect on December 31, [2023] 2025; or (b) A federally recognized Oregon Indian tribe that is located, to a significant degree, within the boundaries of this state. (3) “Financial institution” means: (a) An organization regulated under ORS chap- ters 706 to 716 or 723; or (b) In the case of individual development ac- counts established for the purpose described in ORS 458.685 (1)(c), a financial institution as defined in ORS 178.300. (4) “Individual development account” means a contract between an account holder and a fiduciary organization, for the deposit of funds into a financial institution by the account holder and the deposit of matching funds into a designated account by the fiduciary organization, to allow the account holder to accumulate assets for use toward achieving a specific purpose approved by the fiduciary organiza- tion. (5) “Lower income household” means a house- hold having an income equal to or less than the greater of the following: (a) 80 percent of the median household income for the area as determined by the Housing and Community Services Department. In making the de- termination, the department shall give consideration to any data on area household income published by the United States Department of Housing and Urban Development. (b) 200 percent of the poverty guidelines as de- termined by the Housing and Community Services Department. In making the determination, the de- partment shall give consideration to poverty guide- lines published by the United States Department of Health and Human Services and may consider other income data periodically published by other federal or Oregon agencies. (6)(a) “Net worth” means a calculation based on the net value of assets of a household established by rule by the Housing and Community Services De- partment. (b) “Net worth” does not include: (A) Equity in one residence and in one vehicle. (B) Holdings in pension accounts valued at less than $120,000. (7) “Resident of this state” has the meaning given that term in ORS 316.027. SECTION 46. ORS 657.010 is amended to read: 657.010. As used in this chapter, unless the con- text requires otherwise: (1) “Base year” means the first four of the last five completed calendar quarters preceding the ben- efit year. (2) “Benefits” means the money allowances pay- able to unemployed persons under this chapter. (3) “Benefit year” means a period of 52 consec- utive weeks commencing with the first week with respect to which an individual files an initial valid claim for benefits, and thereafter the 52 consecutive weeks period beginning with the first week with re- spect to which the individual next files an initial valid claim after the termination of the individual’s last preceding benefit year except that the benefit year shall be 53 weeks if the filing of an initial valid claim would result in overlapping any quarter of the base year of a previously filed initial valid claim. (4) “Calendar quarter” means the period of three consecutive calendar months ending on March 31, June 30, September 30 or December 31, or the ap- proximate equivalent thereof, as the Director of the Employment Department may, by rule, prescribe. (5) “Client employer” means an employer that enters into a PEO relationship. (6) “Client worker” means an individual who performs services for compensation for the client of a professional employer organization. (7) “Contribution” or “contributions” means the money payments required by this chapter, or volun- tary payments permitted, to be made to the Unem- ployment Compensation Trust Fund. 28

OREGON LAWS 2026 Chap. 142 (8) “Covered employee” means a client worker for whom a PEO has assumed employer responsibil- ities under a PEO relationship. (9) “Educational institution,” including an insti- tution of higher education, means an institution: (a) In which participants, trainees or students are offered an organized course of study or training designed to transfer to them knowledge, skills, in- formation, doctrines, attitudes or abilities from, by or under the guidance of an instructor or teacher; (b) That is accredited, registered, approved, li- censed or issued a permit to operate as a school by the Department of Education or other government agency, or that offers courses for credit that are transferable to an approved, registered or accredited school; (c) In which the course or courses of study or training that it offers may be academic, technical, trade or preparation for gainful employment in a re- cognized occupation; and (d) In which the course or courses of study or training are offered on a regular and continuing ba- sis. (10) “Employment office” means a free public employment office or branch thereof, operated by this state or maintained as a part of a state- controlled system of public employment offices. (11) “Hospital” has the meaning given that term in ORS 442.015. (12) “Institution of higher education” means an educational institution that: (a) Admits as regular students only individuals having a certificate of graduation from a high school, or the recognized equivalent of such a cer- tificate; (b) Is legally authorized in this state to provide a program of education beyond high school; (c) Provides an educational program for which it awards a bachelor’s or higher degree, or provides a program that is acceptable for full credit toward such a degree, a program of post-graduate or post- doctoral studies, or a program of training to prepare students for gainful employment in a recognized oc- cupation; and (d) Is a public or other nonprofit institution. (13) “Instructional capacity” does not include services performed as an instructional assistant as defined in ORS 342.120. (14) “Internal Revenue Code” means the federal Internal Revenue Code, as amended and in effect on December 31, [2023] 2025. (15) “Labor dispute” means any concerted or de- liberate action by two or more individuals or by an employing unit resulting in either a strike or lock- out in which wages, hours, working conditions or terms of employment of the individuals are involved. (16) “Lockout” means any refusal by an employer to permit employees to work as a result of a dispute with the employees affecting wages, hours or other terms or conditions of their employment. (17) “Nonprofit employing unit” means an or- ganization, or group of organizations, described in section 501(c)(3) of the Internal Revenue Code that is exempt from income tax under section 501(a) of the Internal Revenue Code. (18) “PEO relationship” means an agreement be- tween a PEO and a client employer under which certain employer responsibilities for some or all of the client employer’s workers are allocated. (19)(a) “Professional employer organization” or “PEO” means a person required to be licensed under ORS 656.855 that enters into a PEO relationship with a client employer. (b) “Professional employer organization” or “PEO” does not mean a person that solely provides workers to a client on a temporary basis or a person that provides payroll processing or similar adminis- trative services without assuming employer respon- sibilities for client workers. (20) “State” includes, in addition to the states of the United States of America, the District of Co- lumbia and Puerto Rico. However, for all purposes of this chapter the Virgin Islands shall be considered a state on and after the day on which the United States Secretary of Labor first approves the Virgin Islands’ law under section 3304(a) of the Federal Unemployment Tax Act as amended by Public Law 94-566. (21) “Strike” means any concerted act of em- ployees in a lawful refusal under applicable state or federal law to perform work or services for an em- ployer. (22) “Taxes” means contributions. (23) “Temporary basis” means providing workers to a client: (a) For special situations, including but not lim- ited to employee absences, employee leaves, profes- sional skill shortages, seasonal workloads and special assignments and projects with the expecta- tion that the position will be terminated when the special situation ends. (b) As probationary new hires with a reasonable expectation of transitioning to permanent employ- ment with the client, if the client uses a preestab- lished probationary period in its overall employment selection program. (24) “Valid claim” means any claim for benefits made in accordance with ORS 657.260 if the individ- ual meets the wages-paid-for-employment require- ments of ORS 657.150. (25) “Week” means any period of seven consec- utive calendar days ending at midnight, as the di- rector may prescribe by rule. SECTION 47. ORS 657B.010 is amended to read: 657B.010. As used in this chapter: (1) “Alternate base year” means the last four completed calendar quarters preceding the benefit year. (2) “Average weekly wage” means the amount calculated by the Employment Department as the state average weekly covered wage under ORS 657.150 (4)(e) as determined not more than once per year. 29

Chap. 142 OREGON LAWS 2026 (3) “Base year” means the first four of the last five completed calendar quarters preceding the ben- efit year. (4) “Benefits” means family and medical leave insurance benefits. (5)(a) “Benefit year” means, except as provided in paragraph (b) of this subsection, a period of 52 consecutive weeks beginning on the Sunday imme- diately preceding the date on which family leave, medical leave or safe leave commences. (b) “Benefit year” means, in the event that the 52-week period described in paragraph (a) of this subsection would result in an overlap of any quarter of the base year of a previously filed valid claim, a period of 53 consecutive weeks beginning on the Sunday immediately preceding the date on which family leave, medical leave or safe leave commences. (6) “Child” means: (a) A biological child, adopted child, stepchild or foster child of a covered individual or of the covered individual’s spouse or domestic partner; (b) A person who is or was a legal ward of a covered individual or of the covered individual’s spouse or domestic partner; or (c) A person who is or was in a relationship of in loco parentis with a covered individual or with the covered individual’s spouse or domestic partner. (7) “Claimant” means an individual who has submitted an application or established a claim for benefits. (8) “Contribution” or “contributions” means the money payments made by any of the following under ORS 657B.150: (a) An employer; (b) An employee; (c) A self-employed individual; (d) A tribal government; or (e) An employee of a tribal government. (9) “Covered individual” means any one of the following who qualifies under ORS 657B.015 to re- ceive family and medical leave insurance benefits: (a) An eligible employee; (b) A self-employed individual; or (c) An employee of a tribal government. (10) “Domestic partner” means an individual joined in a domestic partnership. (11) “Domestic partnership” has the meaning given that term in ORS 106.310. (12) “Eligible employee” means: (a)(A) An employee who has earned at least $1,000 in wages during the base year; or (B) If an employee has not earned at least $1,000 in wages during the base year, an employee who has earned at least $1,000 in wages during the alternate base year; and (b) An employee to whom paid family and med- ical leave insurance benefits may be available under ORS 657B.015. (13) “Eligible employee’s average weekly wage” means an amount calculated by the Director of the Employment Department by dividing the total wages earned by an eligible employee during the base year by the number of weeks in the base year. (14)(a) “Employee” means: (A) An individual performing services for an em- ployer for remuneration or under any contract of hire, written or oral, express or implied. (B) A home care worker as defined in ORS 410.600. (b) “Employee” does not include: (A) An independent contractor as defined in ORS 670.600. (B) A participant in a work training program administered under a state or federal assistance program. (C) A participant in a work-study program that provides students in secondary or postsecondary ed- ucational institutions with employment opportunities for financial assistance or vocational training. (D) A railroad worker exempted under the fed- eral Railroad Unemployment Insurance Act. (E) A volunteer. (F) A judge as defined in ORS 260.005. (G) A member of the Legislative Assembly. (H) A holder of public office as defined in ORS 260.005. (15)(a) “Employer” means any person that em- ploys one or more employees working anywhere in this state or any agent or employee of such person to whom the duties of the person under this chapter have been delegated. (b) “Employer” includes: (A) A political subdivision of this state or any county, city, district, authority or public corpo- ration, or any instrumentality of a county, city, dis- trict, authority or public corporation, organized and existing under law or charter; (B) An individual; (C) Any type of organization, corporation, part- nership, limited liability company, association, trust, estate, joint stock company or insurance company; (D) Any successor in interest to an entity de- scribed in subparagraph (C) of this paragraph; (E) A trustee, trustee in bankruptcy or receiver; or (F) A trustee or legal representative of a de- ceased person. (c) “Employer” does not include the federal gov- ernment or a tribal government. (16) “Employment agency” has the meaning given that term in ORS 658.005. (17) “Family and medical leave insurance bene- fits” means the wage replacement benefits that are available to a covered individual under ORS 657B.050 or under the terms of an employer plan approved under ORS 657B.210, for family leave, medical leave or safe leave. (18)(a) “Family leave” means leave from work taken by a covered individual: (A) To care for and bond with a child during the first year after the child’s birth or during the first year after the placement of the child through foster care or adoption; (B) To effectuate the legal process required for placement of a foster child or the adoption of a child; or 30

OREGON LAWS 2026 Chap. 142 (C) To care for a family member with a serious health condition. (b) “Family leave” does not mean: (A) Leave described in ORS 659A.159 (1)(a) ex- cept for leave to care for a child who requires home care due to an illness, injury or condition that is a serious health condition; (B) Leave described in ORS 659A.159 (1)(b); or (C) Leave authorized under ORS 659A.093. (19) “Family member” means: (a) The spouse of a covered individual; (b) A child or the child’s spouse or domestic partner; (c) A parent or the parent’s spouse or domestic partner; (d) A sibling or stepsibling of a covered individ- ual or the sibling’s or stepsibling’s spouse or domes- tic partner; (e) A grandparent of a covered individual or the grandparent’s spouse or domestic partner; (f) A grandchild of a covered individual or the grandchild’s spouse or domestic partner; (g) The domestic partner of a covered individual; or (h) Any individual related by blood or affinity whose close association with a covered individual is the equivalent of a family relationship. (20) “Medical leave” means leave from work taken by a covered individual that is made necessary by the individual’s own serious health condition. (21) “Parent” means: (a) A biological parent, adoptive parent, stepparent or foster parent of a covered individual; (b) A person who was a foster parent of a cov- ered individual when the covered individual was a minor; (c) A person designated as the legal guardian of a covered individual at the time the covered indi- vidual was a minor or required a legal guardian; (d) A person with whom a covered individual was or is in a relationship of in loco parentis; or (e) A parent of a covered individual’s spouse or domestic partner who meets a description under paragraphs (a) to (d) of this subsection. (22) “Safe leave” means leave taken for any pur- pose described in ORS 659A.272. (23) “Self-employed individual” means: (a) An individual who has self-employment in- come as defined in section 1402(b) of the Internal Revenue Code as amended and in effect on Decem- ber 31, [2023] 2025; or (b) An independent contractor as defined in ORS 670.600. (24) “Serious health condition” means: (a) An illness, injury, impairment or physical or mental condition that requires inpatient care in a hospital, hospice or residential medical care facility; (b) An illness, disease or condition that in the medical judgment of the treating health care pro- vider poses an imminent danger of death, is terminal in prognosis with a reasonable possibility of death in the near future, or requires constant care; (c) Any period of disability due to pregnancy, or period of absence for prenatal care; or (d) Any period of absence for the donation of a body part, organ or tissue, including preoperative or diagnostic services, surgery, post-operative treatment and recovery. (25) “Third party administrator” means a third party that enters into an agreement with the Direc- tor of the Employment Department to implement and administer the paid family and medical leave pro- gram established under this chapter. (26) “Tribal government” means: (a) A tribal government as defined in ORS 181A.940; or (b) A federally recognized Indian tribe. (27)(a) “Wages” has the meaning given that term in ORS 657.105. (b) “Wages” does not mean contribution amounts paid to the Paid Family and Medical Leave Insur- ance Fund by an employer on behalf of an employee under ORS 657B.150 (5). SECTION 48. (1) Except as provided in sub- sections (2) and (3) of this section, the amend- ments to statutes by sections 16 to 47 of this 2026 Act apply to transactions or activities oc- curring on or after January 1, 2026, in tax years beginning on or after January 1, 2026. (2) The effective and applicable dates, and the exceptions, special rules and coordination with the Internal Revenue Code, as amended, relative to those dates, contained in federal law amending the Internal Revenue Code and en- acted before January 1, 2026, apply for Oregon personal income and corporate excise and in- come tax purposes, to the extent they can be made applicable, in the same manner as they are applied under the Internal Revenue Code and related federal law. (3)(a) If a deficiency is assessed against any taxpayer for a tax year beginning before Janu- ary 1, 2026, and the deficiency or any portion thereof is attributable to any retroactive treat- ment under the amendments to ORS 178.300, 178.375, 305.239, 305.494, 305.690, 305.842, 314.011, 314.306, 315.004, 316.012, 316.147, 316.157, 317.010, 317.097 and 317A.100 by sections 16, 17 and 31 to 44 of this 2026 Act, then any interest or penalty assessed under ORS chapter 305, 314, 315, 316, 317, 317A or 318 with respect to the deficiency or portion thereof shall be canceled. (b) If a refund is due any taxpayer for a tax year beginning before January 1, 2026, and the refund or any portion thereof is due the tax- payer on account of any retroactive treatment under the amendments to ORS 178.300, 178.375, 305.239, 305.494, 305.690, 305.842, 314.011, 314.306, 315.004, 316.012, 316.147, 316.157, 317.010, 317.097 and 317A.100 by sections 16, 17 and 31 to 44 of this 2026 Act for a tax year beginning before January 1, 2026, then notwithstanding ORS 305.270 or 314.415 or any other law, the refund or portion thereof shall be paid without interest. 31

Chap. 142 OREGON LAWS 2026 (c) Any changes required because of the amendments to ORS 178.300, 178.375, 305.239, 305.494, 305.690, 305.842, 314.011, 314.306, 315.004, 316.012, 316.147, 316.157, 317.010, 317.097 and 317A.100 by sections 16, 17 and 31 to 44 of this 2026 Act for a tax year beginning before January 1, 2026, shall be made by filing an amended re- turn within the time prescribed by law. (d) If a taxpayer fails to file an amended re- turn under paragraph (c) of this subsection, the Department of Revenue shall make any changes under paragraph (c) of this subsection on the return to which the changes relate within the period specified for issuing a notice of deficiency or claiming a refund as otherwise provided by law with respect to that return, or within one year after a return for a tax year beginning on or after January 1, 2026, and before January 1, 2027, is filed, whichever period expires later. SECTION 49. This 2026 Act takes effect on the 91st day after the date on which the 2026 regular session of the Eighty-third Legislative Assembly adjourns sine die. Approved by the Governor April 9, 2026 Filed in the office of Secretary of State April 9, 2026 Effective date June 5, 2026 NOTE: Specified parts of chapter 142, Oregon Laws 2026 (Enrolled Senate Bill 1507), are the subject of a referendum peti- tion filed with the Secretary of State on April 10, 2026, and ap- proved for circulation on April 14, 2026. Referendum petitioners have until the 90th day after adjournment sine die [June 4, 2026] to file signatures with the Secretary of State for verification. If the referendum petition is filed with the required number of sig- natures of electors, the parts that are the subject of the referen- dum petition, indicated as underlined text above, will be submitted to the people for their approval or rejection at the regular general election held on November 3, 2026. 32

OREGON LAWS 2026 Chap. 75 CHAPTER 75 AN ACT SB 1510 Relating to taxation; creating new provisions; amending ORS 284.368, 314.698, 317.267, 319.245, 673.605, 673.610, 673.615, 673.625, 673.637 and 673.685 and section 2, chapter 783, Oregon Laws 1979, section 32a, chapter 579, Oregon Laws 2019, section 50, chapter 525, Oregon Laws 2021, sections 3, 10 and 12, chapter 589, Oregon Laws 2021, and section 16, chapter 82, Oregon Laws 2022; and prescribing an effective date. Be It Enacted by the People of the State of Or- egon: SECTION 1. ORS 314.698 is amended to read: 314.698. For purposes of ORS 317.267, amounts of [global intangible low-taxed] net controlled for- eign corporation tested income described in sec- tion 951A of the Internal Revenue Code and included in gross income shall be treated in the same manner as a dividend. SECTION 2. ORS 317.267 is amended to read: 317.267. (1) To derive Oregon taxable income, there shall be added to federal taxable income: (a) Amounts received as dividends from corpo- rations deducted for federal purposes pursuant to section 243 or 245 of the Internal Revenue Code, except section 245(c) of the Internal Revenue Code; (b) Amounts deducted for income repatriated, deemed or otherwise, under section 965 of the In- ternal Revenue Code; (c) Amounts deducted as [global intangible low- taxed] net controlled foreign corporation tested income pursuant to section 250 of the Internal Re- venue Code; (d) Amounts paid as dividends by a public utility or telecommunications utility and deducted for fed- eral purposes pursuant to section 247 of the Internal Revenue Code; or (e) Dividends eliminated under Treasury Regu- lations adopted under section 1502 of the Internal Revenue Code that are paid by members of an affil- iated group that are eliminated from a consolidated federal return pursuant to ORS 317.715 (2). (2) To derive Oregon taxable income, after the modification prescribed under subsection (1) of this section, there shall be subtracted from federal taxa- ble income an amount equal to 70 percent of divi- dends (determined without regard to section 78 of the Internal Revenue Code) received or deemed re- ceived from corporations if such dividends are in- cluded in federal taxable income. However: (a) In the case of any dividend on debt-financed portfolio stock as described in section 246A of the Internal Revenue Code, the subtraction allowed un- der this subsection shall be reduced under the same conditions and in same amount as the dividends re- ceived deduction otherwise allowable for federal in- come tax purposes is reduced under section 246A of the Internal Revenue Code. (b) In the case of any dividend received from a 20 percent owned corporation, as defined in section 243(c) of the Internal Revenue Code, or [global in- tangible low-taxed] net controlled foreign corpo- ration tested income included in gross income pursuant to section 951A of the Internal Revenue Code, this subsection shall be applied by substituting “80 percent” for “70 percent.” (c) A dividend that is not treated as a dividend under section 243(d) of the Internal Revenue Code may not be treated as a dividend for purposes of this subsection. (d) If a dividends received deduction is not al- lowed for federal tax purposes because of section 246(a) or (c) of the Internal Revenue Code, a sub- traction may not be made under this subsection for received dividends that are described in section 246(a) or (c) of the Internal Revenue Code. (e) In the case of any dividend received from an alien, domestic or foreign insurer, as defined in ORS 731.082, that would be included in the taxpayer’s consolidated Oregon return but for the application of ORS 317.710 (5) or (7), this subsection shall be applied by substituting “100 percent” for “70 per- cent.” (f) A subtraction under this subsection is not al- lowed for any amount of foreign-source dividend in- come, as described in section 245A of the Internal Revenue Code, that is included in gross income. (3) There shall be excluded from the sales factor of any apportionment formula employed to attribute income to this state any amount subtracted from federal taxable income under subsection (2) of this section or deducted under section 245A of the In- ternal Revenue Code. The amount of any dividend or of any [global intangible low-taxed] net con- trolled foreign corporation tested income that is apportionable shall be determined as provided by the apportionment formula applicable to the taxpayer, as provided in ORS 314.280 and 314.605 to 314.675, but may not include any amount subtracted under subsection (2) of this section. SECTION 3. Section 32a, chapter 579, Oregon Laws 2019, is amended to read: Sec. 32a. The amendments to ORS 315.266 by section 31, chapter 579, Oregon Laws 2019, [of this 2019 Act] apply to tax years beginning on or after January 1, 2020[, and before January 1, 2026]. SECTION 4. Section 50, chapter 525, Oregon Laws 2021, is amended to read: Sec. 50. The amendments to ORS 315.266 by section 49, chapter 525, Oregon Laws 2021, [of this 2021 Act] apply to tax years beginning on or after January 1, 2022[, and before January 1, 2026]. SECTION 5. ORS 284.368 is amended to read: 284.368. (1) As used in this section: (a) “Actual Oregon expenses” means the costs paid in Oregon for principal photography, production or postproduction in Oregon of a film, or for media production services, including but not limited to the 1

Chap. 75 OREGON LAWS 2026 purchase or rental cost of equipment, food, lodging, real property and permits and payments made for salaries, wages and benefits for work in Oregon. (b) “Film” means a television movie or one or more episodes of a single television series, [or] a movie produced for release to theaters, video or the Internet or a commercial. “Film” does not include the production of [a commercial or] one or more segments of a newscast or sporting event. (c) “Filmmaker” means a person who owns a television or film production company. (d) “Local filmmaker” means a person who owns a television or film production company that has its principal place of business in this state. (e) “Local media production project” means, if made or performed by a local media production ser- vices company, a single interactive video game or a portion thereof, a commercial or postproduction services for a single film. (f) “Local media production services company” means a media production services company that has its principal place of business in this state. (g) “Media production services” includes postproduction services and interactive video game development. “Media production services” does not include the production of [a commercial or] one or more segments of a newscast or sporting event. (h) “Media production services company” means a person who is engaged in media production ser- vices. (i) “Portland metropolitan zone” means the area within a 30-mile radius of the center of the Burnside Bridge in Portland. (j) “Resident of this state” has the meaning given that term in ORS 316.027. (2)(a) The Oregon Business Development Depart- ment may reimburse a filmmaker or local media production services company for a portion of the ac- tual Oregon expenses incurred by the filmmaker or local media production services company. (b) Maximum reimbursement for a single film or a single local media production project shall be the total of: (A) 20 percent of payments made for employee salaries, wages and benefits for work done in Ore- gon; and (B) 25 percent of all other actual Oregon ex- penses. (c) Notwithstanding paragraph (b) of this sub- section, maximum reimbursement for a single film may not exceed 50 percent of total moneys received by the Oregon Production Investment Fund during the biennium in which the actual Oregon expenses are incurred. (d) To qualify for reimbursement under this sub- section, total actual Oregon expenses for a film or a local media production project must equal or ex- ceed $1 million. (3)(a) The department may reimburse a local filmmaker or local media production services com- pany for all or a portion of the actual Oregon ex- penses, up to $1 million, incurred by the local filmmaker or local media production services com- pany. (b) To qualify for reimbursement under this sub- section: (A) Total actual Oregon expenses paid for the film or media production services must be at least $75,000; (B) The local filmmaker or local media pro- duction services company must have spent 80 per- cent of the film’s payroll on employees who are residents of this state; and (C) The local filmmaker or local media pro- duction services company may have employed or contracted with a certified public accountant li- censed by the Oregon Board of Accountancy for the provision of payroll services. (4) In combination with the reimbursements al- lowed under subsections (2) and (3) of this section, the department may make an additional payment to a filmmaker for one of the following: (a) A travel and living expenses rebate of $200 per employee per day, for any day that a film is shot in Oregon but entirely outside the Portland metro- politan zone, not to exceed $10,000 per day or $50,000 per film; or (b) An increase of 10 percent of the amount oth- erwise allowable under subsections (2) and (3) of this section, if for at least six days and at least one day more than half of its total shoot days in Oregon the film is shot entirely outside the Portland metropol- itan zone. (5) Reimbursement under this section shall be made from moneys credited to or deposited in the Oregon Production Investment Fund during the bi- ennium in which the actual Oregon expenses were paid or any prior biennium. A reimbursement may not be made to the extent funds are not available in the fund to make the reimbursement. (6)(a) Total actual Oregon expenses supporting a claim for reimbursement under this section must be verified by the Oregon Film and Video Office. The filmmaker or local media production services com- pany must submit to the office proof of the actual Oregon expenses. The proof must include any doc- umentation that may be required by the office in its discretion to verify the actual Oregon expenses. (b) The office may charge the filmmaker or local media production services company for costs reason- ably incurred to verify the actual Oregon expenses, including but not limited to the cost for a review or audit of the supporting documentation by an ac- countant or auditor. The office may require the de- partment to deduct the costs incurred by the office in performing its review or audit from any re- imbursement made to the filmmaker or local media production services company under this section. (c) The office may adopt rules that establish a procedure for the submission and verification of ac- tual Oregon expenses. SECTION 6. The amendments to ORS 284.368 by section 5 of this 2026 Act apply to fiscal years beginning on or after July 1, 2026. 2

OREGON LAWS 2026 Chap. 75 SECTION 7. Section 2, chapter 783, Oregon Laws 1979, as amended by section 1, chapter 583, Oregon Laws 1987, section 7, chapter 748, Oregon Laws 1995, section 1, chapter 218, Oregon Laws 2003, section 1, chapter 548, Oregon Laws 2009, sec- tion 1, chapter 213, Oregon Laws 2013, and section 3, chapter 578, Oregon Laws 2019, is amended to read: Sec. 2. Cargo containers, as defined in ORS 307.835, are exempt from taxation for property tax years beginning on or after July 1, 1974, and before July 1, [2026] 2032. SECTION 8. ORS 319.245 is amended to read: 319.245. (1) As used in this section: (a) “Indian tribe” means a federally recognized Indian tribe in Oregon. (b) “Tribal entity” means an entity wholly owned by an Indian tribe. (c) “Tribal member entity” means an entity wholly owned and operated by an enrolled member of an Indian tribe. (2) The first sale, use or distribution of motor vehicle fuel in this state is exempt from the license tax imposed under ORS 319.020 (1)(b) if: (a) The motor vehicle fuel is purchased by an Indian tribe, tribal entity or tribal member entity directly or from a dealer that purchased the motor vehicle fuel in a transaction that would otherwise be subject to the tax; and (b) The motor vehicle fuel is delivered to a ser- vice station that is owned by an Indian tribe, tribal entity or tribal member entity and operated on the respective Indian tribe’s reservation or trust land. (3) In order to be eligible for the exemption un- der subsection (2) of this section, the Indian tribe must: (a) Impose a tax on the distribution of the motor vehicle fuel at the same rate as the license tax im- posed under ORS 319.020 (1)(b); and [(b) Expend the revenue from the tax imposed pursuant to paragraph (a) of this subsection solely for uses that are consistent with the requirements of Ar- ticle IX, section 3a, of the Oregon Constitution; and] [(c)] (b) Certify annually to the Department of Transportation that the Indian tribe is in compliance with this subsection. (4) A dealer described in subsection (2)(a) of this section shall report to the department such sales of motor vehicle fuel to Indian tribes, tribal entities and tribal member entities. (5) The department shall adopt rules prescribing the processes, forms and information that the forms must include for the certification required under subsection [(3)(c)] (3)(b) of this section and the re- ports required under subsection (4) of this section. SECTION 9. Section 3, chapter 589, Oregon Laws 2021, as amended by section 3, chapter 82, Or- egon Laws 2022, is amended to read: Sec. 3. (1) A pass-through entity may elect to be liable for and pay a pass-through business alterna- tive income tax if all members of the pass-through entity are: (a) Individuals subject to the personal income tax imposed under ORS chapter 316; or (b) Entities that are pass-through entities owned entirely by individuals subject to the personal in- come tax imposed under ORS chapter 316. (2) The election to pay the pass-through business alternative income tax is available if consent is given by all members of the electing pass-through entity who are members at the time the election is filed or is made by any officer, manager or member of the electing pass-through entity who is author- ized, under law or the entity’s organizational docu- ments, to make the election and who represents to having such authorization under penalties of per- jury. The election shall be made annually on or be- fore the due date, including extensions, of the pass-through entity’s return, in the form and manner prescribed by the Department of Revenue. The election may not be made retroactively. The mem- bers of a pass-through entity may revoke an election under this section for a tax year only on or before the due date of the pass-through entity’s return for that tax year, and only if the revocation is agreed to by all members who are members at the time of the revocation. (3)(a) In determining the sum of distributive pro- ceeds and computing the tax under this section, a member of a pass-through entity shall add back any amount of Oregon tax imposed under [this chapter] ORS chapter 314 and deducted by the pass-through entity at the entity level for federal income tax pur- poses under section 164 of the Internal Revenue Code. (b) Any amount that is added back under this subsection and that meets the conditions for the use of elective rates under ORS 316.043 may be treated as qualifying income under ORS 316.043, in a pro- portion determined by the department by rule. (4) Each pass-through entity that makes an elec- tion for a tax year pursuant to this section shall annually report to each of its members, for the tax year, the member’s share of distributive proceeds and share of tax paid under this section and eligible for the credit allowed under section 8, chapter 589, Oregon Laws 2021. (5) The tax imposed on a pass-through entity pursuant to this section shall be determined with respect to the sum of each member’s share of dis- tributive proceeds attributable to the pass-through entity for the tax year. (6) The rate of the tax imposed by and computed under this section is: (a) Nine percent of the first $250,000, or fraction thereof, of the sum of distributive proceeds; and (b) Nine and nine-tenths percent of any amount of distributive proceeds in excess of $250,000. (7) The amount of pass-through business alterna- tive income tax due from a pass-through entity in a tax year shall be exclusive of any amount of tax due and paid by the pass-through entity under [this chapter] ORS chapter 314, except as otherwise pro- 3

Chap. 75 OREGON LAWS 2026 vided in sections 2 to 6, chapter 589, Oregon Laws 2021. (8) Pass-through entities that have made an election under this section shall file an entity tax return. The return shall be accompanied by payment and shall be due on the date applicable to returns due under ORS chapter 316, as provided in ORS 314.385. (9) If a pass-through entity has made an overpayment of tax under this section, the pass-through entity may elect to have that overpayment credited against an installment of estimated tax for the subsequent tax year. The department shall administer this subsection in a manner consistent with the treatment of overpayment of income tax under ORS 316.583. SECTION 10. Section 10, chapter 589, Oregon Laws 2021, as amended by section 1, chapter 399, Oregon Laws 2023, is amended to read: Sec. 10. (1) Sections 3 and 8, chapter 589, Ore- gon Laws 2021, apply to tax years beginning on or after January 1, 2022, and before January 1, [2026] 2028. (2) The amendments to section 3, chapter 589, Oregon Laws 2021, by section 9 of this 2026 Act apply to overpayments made before January 31, 2028. SECTION 11. Section 12, chapter 589, Oregon Laws 2021, as amended by section 2, chapter 399, Oregon Laws 2023, is amended to read: Sec. 12. The repeal of sections 3 and 8, chapter 589, Oregon Laws 2021, by section 11, chapter 589, Oregon Laws 2021, applies to any tax year that be- gins on or after January 1, 2022, and before January 1, [2026] 2028, and to which section 164(b)(6) of the Internal Revenue Code is not applicable. SECTION 12. Section 16, chapter 82, Oregon Laws 2022, as amended by section 5, chapter 52, Or- egon Laws 2024, is amended to read: Sec. 16. (1) The amendments to ORS 284.368 by section 1, chapter 82, Oregon Laws 2022, apply to fiscal years beginning on or after July 1, 2022. (2) The amendments to sections 3 and 5, chapter 589, Oregon Laws 2021, by sections 3 and 4, chapter 82, Oregon Laws 2022, apply to tax years beginning on or after January 1, 2022, [and before January 1, 2026,] and to estimated payments due on and after June 15, 2022. (3) The amendments to section 2, chapter 527, Oregon Laws 2021, by section 8, chapter 82, Oregon Laws 2022, apply to applications for precertification under section 4, chapter 527, Oregon Laws 2021, and applications for exemption under section 5, chapter 527, Oregon Laws 2021, without precertification, filed on or after June 3, 2022. (4) [Section 10, chapter 82, Oregon Laws 2022,] ORS 317A.123 applies to tax years beginning on or after January 1, 2022, and before January 1, 2026. (5) [Sections 13 and 15, chapter 82, Oregon Laws 2022,] ORS 316.031 and 317.346 apply to tax years beginning on or after January 1, 2023, and before January 1, 2029, and to any tax year to which a net operating loss arising in those tax years is carried back. SECTION 13. ORS 673.605 is amended to read: 673.605. As used in ORS 673.605 to 673.740 unless the context requires otherwise: (1) “Board” means the State Board of Tax Prac- titioners created by ORS 673.725. (2) “Enrolled agent” means an individual au- thorized by and in good standing with the United States Department of the Treasury to represent taxpayers before the Internal Revenue Service under 31 C.F.R. part 10. [(2)(a)] (3)(a) “Facilitator” means a person that individually or in conjunction or cooperation with another person processes, receives or accepts for delivery an application for a refund anticipation loan or a check in payment of refund anticipation loan proceeds or in any other manner materially facili- tates the making of a refund anticipation loan. (b) “Facilitator” does not mean a financial insti- tution as defined in ORS 706.008, a person who has been issued a license under ORS chapter 725, an af- filiate that is a servicer for a financial institution or for a person issued a license under ORS chapter 725, a person issued a license as a certified public accountant or public accountant by the Oregon Board of Accountancy, or any person that acts solely as an intermediary and does not deal with a tax- payer in the making of a refund anticipation loan. [(3)] (4) “Lender” means a person that makes a refund anticipation loan with the person’s own funds or a line of credit or other funding from a financial institution as defined in ORS 706.008, but does not include a financial institution as defined in ORS 706.008. [(4)] (5) “Refund anticipation loan” means a loan that the lender arranges to be repaid directly from the proceeds of the taxpayer’s federal or state per- sonal income tax refund. [(5)(a)] (6)(a) “Refund anticipation loan fee” means the charges, fees or other consideration charged or imposed by the lender or facilitator for the making of a refund anticipation loan. (b) “Refund anticipation loan fee” does not mean any charge, fee or other consideration usually charged or imposed by the facilitator in the ordinary course of business for nonloan services, including fees for tax return preparation and fees for elec- tronic filing of tax returns. [(6)] (7) “Registered tax aide” means any person who is registered under ORS 673.605 to 673.740 as a registered tax aide. [(7)] (8) “Tax consultant” means a person who is licensed under ORS 673.605 to 673.740 to prepare or advise or assist in the preparation of personal in- come tax returns for another and for valuable con- sideration. [(8)] (9) “Taxpayer” means an individual who files a federal or Oregon personal income tax return. 4

OREGON LAWS 2026 Chap. 75 [(9)] (10) “Tax preparer” means any person who is licensed under ORS 673.605 to 673.740 as a tax preparer. SECTION 14. ORS 673.610 is amended to read: 673.610. ORS 673.605 to 673.740 do not apply to: (1) Any full- or part-time employee hired to fill a permanent position, who in connection with the duties as an employee has the incidental duty of preparing income tax returns for the business of the employer only. (2) Any attorney at law rendering services in the performance of the duties of an attorney at law. (3) While acting as such, any fiduciary, or the regular employees thereof, acting on behalf of the fiduciary estate, the testator, trustor, grantor, or beneficiaries thereof. (4) A certified public accountant who holds an active license issued by any state, a public account- ant holding a valid license issued under ORS 673.100 or a public accounting firm registered in any state. (5) Any employee of a certified public account- ant, public accountant or registered public account- ing firm described in subsection (4) of this section. (6) Any person employed by a local, state or fed- eral governmental agency but only in performance of official duties. (7) An enrolled agent. (8) Any employee of an enrolled agent, while acting within the scope of that employment and under the supervision of the enrolled agent. SECTION 15. ORS 673.615 is amended to read: 673.615. Except as otherwise provided in ORS 673.605 to 673.740: (1) A person may not prepare or advise or assist in the preparation of personal income tax returns for another and for valuable consideration or represent that the person is so engaged unless the person is licensed as a tax consultant under ORS 673.605 to 673.740. (2) A tax preparer may prepare or advise or as- sist in the preparation of tax returns only under the supervision of a tax consultant, or a person de- scribed in ORS 673.610 [(2) or (4)] (2), (4) or (7), and subject to such conditions and limitations as the State Board of Tax Practitioners by rule may im- pose. (3) A registered tax aide may assist a tax con- sultant in the preparation of tax returns only under the supervision of a tax consultant and subject to such conditions and limitations as the board by rule may impose. (4) A person may not be a facilitator of a refund anticipation loan without first being issued a license as a tax consultant or tax preparer under ORS 673.640. (5) A tax consultant may employ and supervise no more than two registered tax aides at the same time under the conditions and limitations prescribed by the board by rule. SECTION 16. ORS 673.625 is amended to read: 673.625. (1) Every applicant for a license as a tax consultant and every applicant for licensing as a tax preparer must: (a) Be 18 years of age or older; (b) Possess a high school diploma or a modified diploma or have passed an equivalency examination; (c) Present evidence satisfactory to the State Board of Tax Practitioners that the applicant has successfully completed at least 80 hours in basic personal income tax law, theory and practice at a school training session or educational institution approved by the board; and (d) Possess a preparer tax identification number issued by the Internal Revenue Service. (2) In addition to the requirements of subsection (1) of this section, every applicant for licensing as a tax preparer must pass to the satisfaction of the board an examination. The examination must be constructed in a manner that in the judgment of the board measures the applicant’s knowledge of Oregon and federal personal income tax law, theory and practice. (3) In addition to the requirements of subsection (1) of this section, every applicant for licensing as a tax consultant must: (a) Present evidence satisfactory to the board of active employment, as described in ORS 673.615 (2), as a tax preparer or employment in this or another state in a capacity that is, in the judgment of the board equivalent to that of a tax preparer or tax consultant, for not less than a cumulative total of 1,100 hours during at least two of the last five years. The board shall consider certification by a tax con- sultant or person described in ORS 673.610 [(2) or (4)] (2), (4) or (7) that the applicant was employed as a tax preparer under supervision for the period indicated in the certificate to be satisfactory evi- dence of the applicant’s employment as a tax preparer for the period indicated. If an applicant has worked less than a cumulative total of 1,100 hours in at least two of the last five years, the board may consider the number of hours employed, the number of years employed, the number of tax re- turns prepared and whether the work involved con- tributed directly to the professional competence of the individual in determining if a tax preparer or tax consultant has met the work experience require- ment. (b) Pass to the satisfaction of the board an ex- amination that is constructed in a manner that in the judgment of the board measures the applicant’s knowledge of Oregon and federal personal income tax law, theory and practice. The examination for a tax consultant’s license must be of a more exacting nature and require higher standards of knowledge of personal income tax law, theory and practice than the examination for a tax preparer’s license. (4) If, in the judgment of the board, an applicant has, in combination, the education and experience to qualify for a tax consultant’s or preparer’s license, but does not meet or cannot present evidence of strict compliance with the requirements of subsec- tion (1)(c) or subsection (3)(a) of this section, the 5

Chap. 75 OREGON LAWS 2026 board may allow some of the applicant’s education or experience to substitute one for the other. How- ever, this subsection does not allow a waiver of, or substitution for, any qualifications needed for a tax consultant’s or preparer’s license other than those described in subsection (1)(c) or subsection (3)(a) of this section. SECTION 17. ORS 673.637 is amended to read: 673.637. (1) The State Board of Tax Practitioners may issue a license to an applicant for a license as a tax consultant or as a tax preparer who: (a) Presents evidence satisfactory to the board that the applicant is licensed as a tax consultant or preparer in a state that has requirements for licens- ing substantially similar to the requirements for li- censing in this state; and (b) Has passed to the satisfaction of the board an examination covering Oregon personal income tax law, theory and practice, the provisions of ORS 673.605 to 673.740 and the code of professional con- duct prescribed by the board. [(2) Notwithstanding ORS 673.625 (1) and (3), but as otherwise provided in ORS 673.605 to 673.740, the board shall license as a tax consultant any person who is, on the date of the application for a tax consultant’s license, enrolled to practice before the Internal Revenue Service pursuant to 31 C.F.R. part 10 if the person has passed to the satisfaction of the board an examination covering Oregon personal in- come tax law, theory and practice, the provisions of ORS 673.605 to 673.740 and the code of professional conduct prescribed by the board.] [(3)] (2) Except as otherwise provided in this section, an examination is not required for licensing under this section. [(4)] (3) Any person desiring to be licensed under this section shall make written application to the board and shall pay to the board at the time re- quired by the board the examination and license fees provided by rule of the board. (4) The board shall register as an enrolled agent any individual who: (a) Is an enrolled agent; (b) Applies for registration in the manner provided by the board by rule; and (c) Pays the registration fee established un- der ORS 673.685. (5) The board may not require an enrolled agent registered under this section to pass any examination administered or required by the board, or to complete continuing education un- der ORS 673.655, as a condition of initial regis- tration or renewal. (6) An enrolled agent who is not licensed as a tax consultant or tax preparer under ORS 673.640 may not prepare, advise or assist in the preparation of personal income tax returns for another and for valuable consideration in this state unless the enrolled agent is registered with the board under this section. (7) The board may refuse to issue or renew, or may suspend or revoke, a registration as an enrolled agent under this section on any grounds described in ORS 673.700 that apply to tax consultants if the board determines the grounds are reasonably applicable to the con- duct of an enrolled agent. (8) A registered enrolled agent has the au- thority to represent taxpayers before the De- partment of Revenue to the same extent as a licensed Oregon tax consultant. SECTION 18. ORS 673.685 is amended to read: 673.685. (1) The State Board of Tax Practitioners shall adopt by rule fees for: (a) Application for examination for a tax consultant’s license. (b) Application for examination for a tax preparer’s license. (c) Issuance or renewal of a tax consultant’s li- cense. (d) Issuance or renewal of a tax preparer’s li- cense. (e) Issuance or renewal of a registered tax aide’s certificate. (f) Issuance or renewal of a tax consultant’s in- active license. (g) Issuance or renewal of a tax preparer’s inac- tive license. (h) Reactivation of a tax consultant’s inactive li- cense or reactivation of a tax preparer’s inactive li- cense. (i) Restoration of lapsed license. (j) Issuance or replacement of a duplicate license or certificate. (k) Registration or registration renewal for a sole proprietorship, partnership, corporation or other legal entity. (L) Issuance or renewal of a combined tax consultant’s or tax preparer’s license and registra- tion for a sole proprietorship, partnership, corpo- ration or other legal entity. Eligibility for a combined license shall be determined under rules adopted by the board. (m) Annual registration of a branch office of a sole proprietorship, partnership, corporation or other legal entity. (n) Issuance or renewal of a registration for an enrolled agent as described in ORS 673.637. (2) The fees established by the State Board of Tax Practitioners under this section are subject to the prior approval of the Oregon Department of Ad- ministrative Services. The fees may not exceed the cost of administering the regulatory program of the State Board of Tax Practitioners pertaining to the purposes for which the fees are established, as au- thorized by the Legislative Assembly within the board’s budget, as that budget may be modified by the Emergency Board. SECTION 19. This 2026 Act takes effect on the 91st day after the date on which the 2026 regular session of the Eighty-third Legislative Assembly adjourns sine die. 6

OREGON LAWS 2026 Chap. 75 Approved by the Governor March 31, 2026 Filed in the office of Secretary of State March 31, 2026 Effective date June 5, 2026 7