Chapter 475 Oregon Laws 2001

AN ACT

HB 2521

Relating to scholarships.

Be It Enacted by the People of the State of Oregon:

SECTION 1. Sections 2 and 4 to 6 of this 2001 Act are added to and made a part of ORS 348.505 to 348.695.

SECTION 2. (1) The Oregon Student Assistance Commission shall develop and adopt rules that provide the minimum criteria that an employer must meet in order for the employer’s scholarship program for employees and dependents to be certified as eligible for the employee and dependent scholarship program tax credit provided under section 6 of this 2001 Act. The commission shall adopt rules to determine:

(a) The types of educational programs, institutions and expenses related to the programs and institutions for which scholarships may be offered to employees and dependents, and scholarship moneys expended on their behalf;

(b) The types of employees and dependents to whom scholarships must be offered;

(c) The minimum and maximum annual dollar amounts of a scholarship that would be a qualified scholarship under section 8 of this 2001 Act;

(d) The minimum annual number of hours of instruction that a scholarship beneficiary must commit to in order to be eligible for a scholarship; and

(e) Such other requirements as the commission may provide.

(2) An employer must employ at least four full-time equivalent employees but no more than 250 employees in order to be certified as eligible for the employee and dependent scholarship program tax credit under section 6 of this 2001 Act.

SECTION 3. The Oregon Student Assistance Commission shall first adopt rules under section 2 of this 2001 Act on or before March 15, 2002, and may amend the rules at any time thereafter.

SECTION 4. An employer seeking to claim the tax credit provided under section 8 of this 2001 Act must apply to the Oregon Student Assistance Commission for both employee and dependent scholarship program certification under section 5 of this 2001 Act and tax credit certification under section 6 of this 2001 Act.

SECTION 5. (1) An application for employee and dependent scholarship program certification shall be filed by the employer establishing the program. The application shall be filed with the Oregon Student Assistance Commission at least three months prior to the close of the first tax year for which a tax credit under section 8 of this 2001 Act will be claimed.

(2) The application shall be filed on a form prescribed by the commission and shall contain the information required by the commission, including:

(a) The date on which the proposed employee and dependent scholarship program will first be available to the employer’s employees and their dependents;

(b) The total number of employees of the employer;

(c) The total number of employees who will be eligible, or whose dependents will be eligible, to participate in the program;

(d) The criteria to be used by the employer in determining the eligibility of an employee or an employee’s dependent for a scholarship under the program; and

(e) The annual limit, if any, on the amount of funds to be used for scholarships under the program.

(3) The commission shall certify an application that describes an employee and dependent scholarship program that is in compliance with the rules adopted by the commission under section 2 of this 2001 Act, if made by an employer that meets the employment requirements of section 2 of this 2001 Act.

(4) The commission shall certify or reject an application within 60 days of receipt of the application and shall notify the employer of the commission’s determination.

(5) An employer whose application has been rejected by the commission shall be afforded an opportunity to amend the application to address the commission’s objections to the original application.

(6) In the case of an employer whose proposed employee and dependent scholarship program has been certified by the commission, the commission shall send a letter of program certification to the employer. The letter of program certification shall set forth or incorporate by reference the statements made in the application being certified.

(7) A letter of program certification issued under this section shall remain valid until the employer changes the terms of eligibility for a scholarship under the program, changes the minimum or maximum amount of a scholarship under the program or ceases to be an employer.

SECTION 6. (1) An application for tax credit certification shall be filed by an employer that has obtained program certification under section 5 of this 2001 Act or that has applied for program certification and is awaiting such certification by the Oregon Student Assistance Commission.

(2) The application for tax credit certification shall be filed by the employer with the commission. The application shall be filed at the time prescribed by the commission, but no later than October 1 of the calendar year in which begins the tax year for which a credit under section 8 of this 2001 Act will be claimed.

(3) The application shall be filed on a form prescribed by the commission and shall contain the information required by the commission, including the amount of scholarship moneys the employer has provided or intends to provide to employees or dependents during the calendar year for which tax credit certification is being sought and the number of employees employed by the employer for the calendar year.

(4) The commission shall consider applications in the chronological order in which the applications are received and shall approve applications to the extent the amount set forth in the application, when added to the total amount already certified by the commission for the calendar year under this section, does not exceed $1 million.

(5) An employer may not receive tax credit certification:

(a) For an amount that is greater than $1 million;

(b) If the employer employs fewer than four full-time equivalent employees for the calendar year; or

(c) If the employer employs more than 250 employees for the calendar year.

(6) The commission shall send written notice of the amount of the tax credit certification, or written notice that no amount is being certified, to the employer and to the Department of Revenue within 60 days of the date an application is filed under this section.

(7) The employer shall keep the written certification in the employer’s records for at least five years and shall furnish the certification to the Department of Revenue if requested.

SECTION 7. Section 8 of this 2001 Act is added to and made a part of ORS chapter 315.

SECTION 8. (1) As used in this section, “qualified scholarship” means a scholarship that meets the criteria set forth or incorporated into the letter of employee and dependent scholarship program certification issued by the Oregon Student Assistance Commission under section 5 of this 2001 Act.

(2) A credit against the taxes otherwise due under ORS chapter 316 is allowed to a resident employer (or, if the taxpayer is a corporation that is an employer, under ORS chapter 317 or 318) that has received:

(a) Program certification from the Oregon Student Assistance Commission under section 5 of this 2001 Act; and

(b) Tax credit certification under section 6 of this 2001 Act for the calendar year in which the tax year of the taxpayer begins.

(3) The amount of the credit allowed to a taxpayer under this section shall equal 50 percent of the amount of qualified scholarship funds actually paid to or on behalf of qualified scholarship recipients during the tax year.

(4) The credit allowed under this section may not exceed the tax liability of the taxpayer for the tax year.

(5) The credit allowed to a taxpayer for a tax year under this section may not exceed $50,000.

(6) Any tax credit otherwise allowable 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 succeeding tax year may be carried forward and used in the second succeeding tax year, and likewise any credit not used in that second succeeding tax year may be carried forward and used in the third succeeding tax year, and any credit not used in that third succeeding tax year may be carried forward and used in the fourth succeeding tax year, and any credit not used in that fourth succeeding tax year may be carried forward and used in the fifth succeeding tax year, but may not be carried forward for any tax year thereafter.

(7) In the case of a credit allowed under this section for purposes of ORS chapter 316:

(a) A nonresident shall be allowed the credit under this section in the proportion provided in ORS 316.117.

(b) If a change in the status of a taxpayer from resident to nonresident or from nonresident to resident occurs, the credit allowed by this section shall be determined in a manner consistent with ORS 316.117.

(c) If a change in the taxable year of a taxpayer occurs as described in ORS 314.085, or if the Department of Revenue terminates the taxpayer’s taxable year under ORS 314.440, the credit allowed under this section shall be prorated or computed in a manner consistent with ORS 314.085.

(8) The credit shall be claimed on the form and in the time and manner in which the department shall prescribe. If the taxpayer is required to do so by the department, the taxpayer shall file a copy of the letter of tax credit certification issued by the commission with the taxpayer’s return for the tax year in which a credit under this section is claimed.

SECTION 9. Section 6 of this 2001 Act applies to tax years beginning on or after January 1, 2002.

Approved by the Governor June 19, 2001

Filed in the office of Secretary of State June 19, 2001

Effective date January 1, 2002

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