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83rd OREGON LEGISLATIVE ASSEMBLY--2025 Regular Session
Senate Bill 90
Printed pursuant to Senate Interim Rule 213.28 by order of the President of the Senate in conformance with pre-
session filing rules, indicating neither advocacy nor opposition on the part of the President (at the request
of Senate Interim Committee on Energy and Environment)
SUMMARY
The following summary is not prepared by the sponsors of the measure and is not a part of the body thereof subject
to consideration by the Legislative Assembly. It is an editor’s brief statement of the essential features of the
measure as introduced. The statement includes a measure digest written in compliance with applicable readability
standards.
Digest: The Act makes a tax credit for airplanes that switch to unleaded gas. The Act says the
State Aviation Board may award grants to airports that sell unleaded gas for airplanes and for
projects that prevent and reduce noise. Adds two members to the board who vote and one more from
DEQ who does not vote. Becomes law 91 days from sine die. (Flesch Readability Score: 82.0).
Creates an income tax credit for owners of aircraft that incur qualifying expenses to enable an
aircraft that is powered by leaded aviation gasoline to be certified to instead be powered by un-
leaded aviation gasoline. Applies to tax years beginning on or after January 1, 2026, and before
January 1, 2032.
Increases State Aviation Board from seven to nine voting members by requiring the appointment
of two members who are residents of communities that are affected by general aviation airport
traffic or traffic at a commercial airport at which there is significant general aviation activity.
Makes the Director of the Department of Environmental Quality, or the director’s designee, an ex
officio nonvoting member of the board.
Provides grants for airport development to allow the sale of unleaded aviation fuel at airports
and prevent and mitigate noise around airports.
Takes effect on the 91st day following adjournment sine die.
A BILL FOR AN ACT
Relating to aviation; creating new provisions; amending ORS 314.772, 318.031, 319.010, 319.023,
835.102 and 835.104; and prescribing an effective date.
Be It Enacted by the People of the State of Oregon:
TAX CREDIT
SECTION 1.
Section 2 of this 2025 Act is added to and made a part of ORS chapter 315.
SECTION 2. (1) As used in this section:
(a) “Aircraft” means every contrivance now known, or hereafter invented, used or de-
signed for navigation of or flight in the air, operated or propelled by the use of aircraft fuel.
(b) “Aircraft fuel” means any gasoline and any other inflammable or combustible gas or
liquid by whatever name such gasoline, gas or liquid is known or sold, usable as fuel for the
operation of aircraft, except gas or liquid, the chief use of which, as determined by the De-
partment of Transportation, is for purposes other than the propulsion of aircraft.
(c) “Leaded aircraft fuel” means aircraft fuel that contains tetraethyl lead additives.
(d) “Qualifying aircraft” means an aircraft that has been powered by leaded aircraft fuel
and for which a supplemental type certificate or any other authorization that approves the
completed modification of the aircraft to be powered by unleaded aircraft fuel has been is-
sued by the Federal Aviation Administration.
(e) “Supplemental type certificate” means a type certificate issued by the Federal Avi-
NOTE: Matter in boldfaced type in an amended section is new; matter [ italic and bracketed] is existing law to be omitted.
New sections are in boldfaced type.
LC 1916
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ation Administration to a taxpayer that has modified an aeronautical product from its ori-
ginal design with Federal Aviation Administration approval.
(f) “Unleaded aircraft fuel” means aircraft fuel that does not contain tetraethyl lead ad-
ditives.
(2) A credit against taxes that are otherwise due under ORS chapter 316 or, if the tax-
payer is a corporation, under ORS chapter 317 or 318, is allowed to a taxpayer who is the
owner of an aircraft registered with the Oregon Department of Aviation or the Federal Avi-
ation Administration and who modifies the aircraft so that it is a qualifying aircraft. The
credit shall be allowed for the tax year in which the qualifying aircraft is registered with the
Oregon Department of Aviation or the Federal Aviation Administration.
(3) The credit allowed under this section shall be equal to 50 percent of the taxpayer’s
expenses to modify the taxpayer’s aircraft so that it is a qualifying aircraft. The total credit
allowed may not exceed $500 per aircraft.
(4) For each tax year for which a credit is claimed under this section, the taxpayer shall
maintain records sufficient to prove the taxpayer’s eligibility for the credit allowed under
this section. A taxpayer shall maintain the records required under this subsection for at
least five years.
(5) The credit allowed under this section may not exceed the tax liability of the taxpayer
for the tax year.
(6) Any tax credit otherwise allowable under this section that is not used by the taxpayer
in a particular tax year may be carried forward and offset against the taxpayer’s tax liability
for the next succeeding tax year. Any credit remaining unused in the next succeeding tax
year may be carried forward and used in the second succeeding tax year, and likewise any
credit not used in that second succeeding tax year may be carried forward and used in the
third succeeding tax year, but may not be carried forward for any tax year thereafter.
(7) A nonresident taxpayer shall be allowed the credit under this section. The credit shall
be computed in the same manner and be subject to the same limitations as the credit
granted to a resident taxpayer. However, the credit shall be prorated using the proportion
provided in ORS 316.117.
(8) If a change in the taxable year of the taxpayer occurs as described in ORS 314.085,
or if the Department of Revenue terminates the taxpayer’s taxable year under ORS 314.440,
the credit allowed by this section shall be prorated or computed in a manner consistent with
ORS 314.085.
(9) If a change in the status of a taxpayer from resident to nonresident or from nonres-
ident to resident occurs, the credit allowed by this section shall be determined in a manner
consistent with ORS 316.117.
(10) Spouses in a marriage who file separate returns for a taxable year may each claim
a share of the tax credit that would have been allowed on a joint return in proportion to the
adjusted gross income of each.
SECTION 3.
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
business 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
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income 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 recovery thereof. The credit (or item thereof), re-
capture or recovery shall be passed through to shareholders in pro rata shares as determined in the
manner prescribed under section 1377(a) of the Internal Revenue 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 nonresident 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 fa-
cilities), ORS 315.213 (contributions for child care), ORS 315.237 (employee and dependent scholar-
ships), ORS 315.271 (individual development accounts), ORS 315.283 (affordable housing sales), ORS
315.304 (pollution control facility), 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 manufacturing facilities), ORS 315.354 and 469B.151 (energy
conservation facilities), ORS 315.506 (tribal taxes on reservation enterprise zones and reservation
partnership zones), ORS 315.507 (electronic commerce), ORS 315.514 (film production development
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
(university venture development funds), ORS 315.643 (Opportunity Grant Fund contributions), ORS
315.675 (Trust for Cultural Development Account contributions), ORS 317.097 (loans for affordable
housing), ORS 317.124 (long term enterprise zone facilities), ORS 317.147 (loans for agriculture
workforce housing), ORS 317.152 (qualified research expenses) and ORS 317.154 (alternative qualified
research expenses) and section 9, chapter 774, Oregon Laws 2013 (alternative fuel vehicle contribu-
tions), and section 2 of this 2025 Act (unleaded fuel in aircraft) .
SECTION 4.
ORS 318.031 is amended to read:
318.031. It being the intention of the Legislative Assembly that this chapter and ORS chapter
317 shall be administered as uniformly as possible (allowance being made for the difference in im-
position of the taxes), ORS 305.140 and 305.150, ORS chapter 314 and the following sections are in-
corporated into and made a part of this chapter: ORS 315.104, 315.124, 315.133, 315.141, 315.156,
315.176, 315.204, 315.208, 315.213, 315.283, 315.304, 315.326, 315.331, 315.336, 315.506, 315.507, 315.523,
315.533, 315.593 and 315.643 and section 2 of this 2025 Act (all only to the extent applicable to a
corporation) and ORS chapter 317.
SECTION 5. Section 2 of this 2025 Act applies to tax years beginning on or after January
1, 2026, and before January 1, 2032.
STATE AVIATION BOARD
SECTION 6. ORS 835.102 is amended to read:
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835.102. (1) There is established the State Aviation Board consisting of [ seven] ten members.
Nine voting members shall be appointed by the Governor, subject to confirmation by the Senate
pursuant to ORS 171.562 and 171.565. The Director of the Department of Environmental Qual-
ity, or director’s designee, shall serve as an ex officio nonvoting member of the board. The
Governor shall appoint the nine voting members of the board in compliance with all of the follow-
ing:
(a) Members shall be appointed with consideration of the different geographic regions of the
state, with one member being a resident of the area east of the Cascade Range.
(b) Not more than four members shall belong to the same political party. Party affiliation shall
be determined by the appropriate entry on official election registration cards.
(c) Two members shall be residents of communities that are affected by general aviation
airport traffic or traffic at a commercial airport at which there is significant general aviation
activity, as determined by the Oregon Department of Aviation. In appointing these members,
the Governor shall give priority to individuals who:
(A) Are not trained pilots, as determined by the department;
(B) Are familiar with airport infrastructure, aviation and the duties of the board; and
(C) Reside in a community that is significantly impacted by noise or lead emissions near
a high-traffic airport with significant general aviation activity, as determined by the depart-
ment.
(2) The board membership shall represent diverse aviation interests from both the private and
public sectors.
(3) The term of office of each voting member is four years. Before the expiration of the term
of a member, the Governor shall appoint a successor whose term begins on July 1 next following.
A member is eligible for reappointment. In case of a vacancy for any cause, the Governor shall ap-
point a person to fill the office for the unexpired term.
(4) A voting member of the board is entitled to compensation and expenses as provided by ORS
292.495.
SECTION 7.
Notwithstanding the term of office specified in ORS 835.102, of the two ad-
ditional members added to the State Aviation Board by the amendments to ORS 835.102 by
section 6 of this 2025 Act:
(1) One shall serve for a term ending June 30, 2027.
(2) One shall serve for a term ending June 30, 2028.
SECTION 8.
Section 7 of this 2025 Act is repealed on January 2, 2029.
SECTION 9. ORS 835.104 is amended to read:
835.104. (1) The Governor shall appoint one voting member of the State Aviation Board as
chairperson and another voting member as vice chairperson. The chairperson and vice chairperson
shall have such terms, duties and powers as the board determines are necessary for the performance
of such offices.
(2) A majority of the members of the board constitutes a quorum for the transaction of business.
(3) The board shall meet at least once a quarter, at a time and place determined by the members
of the board. The board shall also meet at such other times and places as are specified by the call
of the chairperson or of a majority of the board.
(4) No vacancy shall impair the right of the remaining board members to exercise all the powers
of the board, except that four members of the board shall constitute a quorum for the conduct of
business of the board, and, in case the board members are unable to agree, the Governor shall have
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the right to vote as a member of the board.
(5) The board may provide an official seal.
STATE AGENCY DUTIES
SECTION 10.
Sections 11 and 12 of this 2025 Act are added to and made a part of ORS
chapter 836.
SECTION 11. (1) The Oregon Department of Aviation shall evaluate, educate and provide
technical assistance to airports regarding the adverse impacts of aircraft noise on health,
safety and welfare.
(2) The department shall prioritize the activities described in this section at airports with
significant general aviation activity that are located in densely populated residential areas
or have a significant number of flights over such areas.
SECTION 12. The Oregon Department of Aviation, in collaboration with the Department
of Environmental Quality, shall educate airports with significant general aviation activity,
as defined by the department, regarding:
(1) The need to expedite the transition from leaded aircraft fuel to unleaded aircraft fuel;
and
(2) Grants available to support the transition from leaded aircraft fuel to unleaded air-
craft fuel under ORS 319.023 and, if available, other sources.
GRANTS
SECTION 13. ORS 319.010 is amended to read:
319.010. As used in ORS 319.010 to 319.430, unless the context requires otherwise:
(1) “Aircraft” means every contrivance now known, or hereafter invented, used or designed for
navigation of or flight in the air, operated or propelled by the use of aircraft fuel.
(2) “Aircraft fuel” means any gasoline and any other inflammable or combustible gas or liquid
by whatever name such gasoline, gas or liquid is known or sold, usable as fuel for the operation of
aircraft, except gas or liquid, the chief use of which, as determined by the Department of Trans-
portation is for purposes other than the propulsion of aircraft.
(3) “Airport” means any area of land or water, except a restricted landing area, which is de-
signed for the landing and takeoff of aircraft.
(4) “Broker” means and includes every person other than a dealer engaged in business as a
broker, jobber or wholesale merchant dealing in motor vehicle fuel or aircraft fuel.
(5) “Bulk transfer” means any change in ownership of motor vehicle fuel or aircraft fuel con-
tained in a terminal storage facility or any physical movement of motor vehicle fuel or aircraft fuel
between terminal storage facilities by pipeline or marine transport.
(6) “Dealer” means any person who:
(a) Imports or causes to be imported motor vehicle fuels or aircraft fuels for sale, use or dis-
tribution in, and after the same reaches the State of Oregon, but “dealer” does not include any
person who imports into this state motor vehicle fuel in quantities of 500 gallons or less purchased
from a supplier who is licensed as a dealer under ORS 319.010 to 319.430 and who assumes liability
for the payment of the applicable license tax to this state;
(b) Produces, refines, manufactures or compounds motor vehicle fuels or aircraft fuels in the
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State of Oregon for use, distribution or sale in this state;
(c) Acquires in this state for sale, use or distribution in this state motor vehicle fuels or aircraft
fuels with respect to which there has been no license tax previously incurred; or
(d) Acquires title to or possession of motor vehicle fuels or aircraft fuels in this state and ex-
ports the product out of this state.
(7) “Department” means the Department of Transportation.
(8) “Distribution” means, in addition to its ordinary meaning, the delivery of motor vehicle fuel
or aircraft fuel by a dealer to any service station or into any tank, storage facility or series of tanks
or storage facilities connected by pipelines, from which motor vehicle fuel or aircraft fuel is with-
drawn directly for sale or for delivery into the fuel tanks of motor vehicles whether or not the
service station, tank or storage facility is owned, operated or controlled by the dealer.
(9) “First sale, use or distribution of motor vehicle fuel or aircraft fuel” means the first with-
drawal, other than by bulk transfer, of motor vehicle fuel or aircraft fuel from terminal storage fa-
cilities for sale, use or distribution. “First sale, use or distribution of motor vehicle fuel or aircraft
fuel” also means the first sale, use or distribution of motor vehicle fuel or aircraft fuel after import
into this state if the motor vehicle fuel or aircraft fuel is delivered other than to the terminal stor-
age facilities of a licensed dealer.
(10) “Highway” means every way, thoroughfare and place, of whatever nature, open for use of
the public for the purpose of vehicular travel.
(11) “Leaded aircraft fuel” means aircraft fuel that contains tetraethyl lead additives.
[(11)] (12) “Motor vehicle” means all vehicles, engines or machines, movable or immovable, op-
erated or propelled by the use of motor vehicle fuel.
[(12)] (13) “Motor vehicle fuel” means and includes gasoline and any other inflammable or
combustible gas or liquid, by whatever name such gasoline, gas or liquid is known or sold, usable
as fuel for the operation of motor vehicles, except gas or liquid, the chief use of which, as deter-
mined by the department, is for purposes other than the propulsion of motor vehicles upon the
highways of this state.
[(13)] (14) “Person” includes every natural person, association, firm, partnership, corporation or
the United States.
[(14)] (15) “Restricted landing area” means any area of land or water, or both, which is used
or made available for the landing and takeoff of aircraft, the use of which, except in case of emer-
gency, is provided from time to time by the department.
[(15)] (16) “Service station” means and includes any place operated for the purpose of retailing
and delivering motor vehicle fuel into the fuel tanks of motor vehicles or aircraft fuel into the fuel
tanks of aircraft.
[(16)] (17) “Terminal storage facility” means any fuel storage facility that has marine or pipeline
access.
(18) “Unleaded aircraft fuel” means aircraft fuel that does not contain tetraethyl lead
additives.
SECTION 14.
ORS 319.023, as amended by section 1, chapter 82, Oregon Laws 2024, is amended
to read:
319.023. (1) The following amounts shall be distributed in the manner prescribed in this section:
(a) Any amount of tax on aircraft fuel usable in aircraft operated by turbine engines that is
computed on a basis in excess of one cent per gallon and any amount of tax on all other aircraft fuel
that is computed on a basis in excess of nine cents per gallon, under ORS 319.020 (2); and
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(b) Any amount of tax on aircraft fuel usable in aircraft operated by turbine engines in excess
of one cent per gallon and any amount of tax on all other aircraft fuel in excess of nine cents per
gallon, that is deducted before the refunding of tax under ORS 319.330 (1).
(2)(a) Applications for distributions under subsection (5) of this section may not be approved
unless the applicant demonstrates a commitment to contribute at least five percent of the costs of
the project to which the application relates. The Oregon Department of Aviation shall adopt rules
for purposes of this paragraph.
(b) The department may adopt rules that:
(A) Set higher minimum contribution commitment requirements; or
(B) Establish maximum grant amounts.
(3)(a) The State Aviation Board shall establish a review committee composed of one member
from each of the area commissions on transportation chartered by the Oregon Transportation Com-
mission.
(b) The review committee shall meet as necessary to review applications for distributions of
amounts pursuant to this section. In reviewing applications, the review committee shall consider:
(A) Whether a proposed project:
(i) Reduces transportation costs for Oregon businesses or improves access to jobs and sources
of labor in this state;
(ii) Results in an economic benefit to this state;
(iii) Connects elements of Oregon’s aviation system in a way that will measurably improve
utilization and efficiency of the system;
(iv) Is ready for construction or implementation; and
(v) Has a useful life expectancy that offers maximum benefit to this state; and
(B) How much of the cost of the proposed project can be borne by the applicant from sources
other than Oregon Department of Aviation funds or the Connect Oregon Fund.
(c) The review committee shall recommend applications to the State Aviation Board for ap-
proval.
(4)(a) Five percent of the amounts described in subsection (1) of this section are appropriated
to the Oregon Department of Aviation for the costs of the department and the State Aviation Board
in administering this section.
(b) The remaining 95 percent of the amounts described in subsection (1) of this section shall be
distributed pursuant to subsections [ (5) and (6) ] (5), (6) and (7) of this section.
(5)(a) [ Seventy-five] Sixty-five percent of the amounts described in subsection (4)(b) of this sec-
tion shall be distributed for the following purposes:
(A) To assist airports in Oregon with match requirements for Federal Aviation Administration
grants.
(B) To make grants for emergency preparedness and infrastructure projects, in accordance with
the Oregon Resilience Plan or the Oregon Aviation Plan.
(C) To make grants for:
(i) Services critical or essential to aviation, including, but not limited to, fuel, sewer, water and
weather equipment;
(ii) Aviation-related business development, including, but not limited to, hangars, parking for
business aircraft and related facilities; or
(iii) Airport development for local economic benefit, including, but not limited to, signs and
marketing.
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(D)(i) To assist commercial air service to rural Oregon.
(ii) The Oregon Department of Aviation may adopt a definition of “rural Oregon” for purposes
of this subparagraph.
(b) The State Aviation Board may establish by rule priorities for the distributions made pursuant
to this subsection.
(6) Twenty-five percent of the amounts described in subsection (4)(b) of this section shall be
distributed to state-owned airports for the purposes of:
(a) Safety improvements recommended by the State Aviation Board and local community air-
ports.
(b) Infrastructure projects at public use airports.
(7) Subject to subsection (8) of this section, 10 percent of the amounts described in sub-
section (4)(b) of this section shall be distributed in the following order of priority:
(a) Funding airport development to allow the sale of unleaded aircraft fuel at airports.
The State Aviation Board shall prioritize awarding grants to airports with significant general
aviation traffic in urban and suburban areas where surrounding communities may be dis-
proportionately impacted by such traffic.
(b) Subsidizing the sale of unleaded aircraft fuel at general aviation airports or a com-
mercial airport at which there is significant aviation activity, as determined by the board.
(c) Implementing the use of noise monitoring devices, technologies or systems that
evaluate noise levels from the operation of aircraft and other aviation activities at or near
airports.
(d) Preventing and mitigating the adverse impacts of aircraft noise in communities sur-
rounding airports.
(e) Providing for electric aircraft charging infrastructure.
(8) Before the State Aviation Board may award a grant under subsection (7) of this sec-
tion, the applicant must demonstrate to the board that the airport has completed all of the
following:
(a) Adopted a plan, to be executed in accordance with any federal guidelines, for phasing
out sales of leaded aircraft fuel; and
(b) Established a voluntary noise abatement plan that complies with the requirements
of section 16 of this 2025 Act.
(9) The limitation on awarding grants described in subsection (8) of this section does not
apply to international airports.
[(7)(a)] (10)(a) Not later than September 15 of each year, the State Aviation Board shall submit
the reports described in paragraph (b) of this subsection, in the manner provided in ORS 192.245, to
the interim committees, as applicable, of the Legislative Assembly related to air transportation.
(b) The reports required under this subsection shall describe in detail the projects for which
applications have been submitted and approved, the airports affected, the names of the applicants
and the persons who will perform the work proposed in the applications, the progress of projects for
which applications have been approved and any other information the board considers necessary for
a comprehensive analysis of the implementation of this section.
SECTION 15.
Section 16 of this 2025 Act is added to and made a part of ORS chapter 835.
SECTION 16. (1) The State Aviation Board shall develop guidelines for establishing a
noise abatement plan for airports. The goal is to reduce and mitigate aircraft noise to pre-
vent significant adverse impacts to the health, safety and welfare of individuals residing near
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an airport.
(2) Noise abatement plan guidelines must include elements that will aid airports in re-
ducing aircraft noise including but not limited to the following:
(a) A curfew on when flights may depart from the airport;
(b) Limiting the number of flights that may depart from the airport during specified pe-
riods of time; and
(c) Regulating the frequency of touch and go flights during which an aircraft touches
down on a runway and then immediately accelerates and takes off again without stopping.
(3) An applicant for a grant under ORS 319.023 (7) shall:
(a) Create, in consultation with flight schools and pilots that regularly use the airport,
a noise abatement plan that complies with the guidelines established by the board under this
section and submit the plan to the board;
(b) Post the noise abatement plan at the airport in the manner required by the board;
(c) Consult with the airport’s flight schools, fuel operators and pilots who commonly fly
out of the airport on a regular basis and inform the parties of the noise abatement plan and
how the parties might comply with the plan;
(d) Post on the airport’s website an internal communications plan detailing how the air-
port intends to ensure that the noise abatement plan is understood and available to all air-
craft operators at the airport; and
(e) Submit the noise abatement plan to the Federal Aviation Administration.
(4) The board shall publish noise abatement plans submitted to the board by applicants
seeking a grant under ORS 319.023 (7) on the board’s website.
CAPTIONS
SECTION 17.
The unit captions used in this 2025 Act are provided only for the conven-
ience of the reader and do not become part of the statutory law of this state or express any
legislative intent in the enactment of this 2025 Act.
EFFECTIVE DATE
SECTION 18. This 2025 Act takes effect on the 91st day after the date on which the 2025
regular session of the Eighty-third Legislative Assembly adjourns sine die.
[9]