71st OREGON LEGISLATIVE ASSEMBLY--2001 Regular Session
 
NOTE:  Matter within  { +  braces and plus signs + } in an
amended section is new. Matter within  { -  braces and minus
signs - } is existing law to be omitted. New sections are within
 { +  braces and plus signs + } .
 
LC 1777
 
                         House Bill 2032
 
Ordered printed by the Speaker pursuant to House Rule 12.00A (5).
  Presession filed (at the request of House Interim Revenue
  Committee for Oregon Catholic Conference)
 
 
                             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.
 
  Changes percentage of federal earned income credit allowable as
credit against Oregon personal income tax. Requires refund of
amount of Oregon earned income credit in excess of taxpayer's tax
liability. Limits refunds in certain instances.
  Applies to tax years beginning on or after January 1, 2003.
 
                        A BILL FOR AN ACT
Relating to taxation; creating new provisions; and amending ORS
  315.266.
Be It Enacted by the People of the State of Oregon:
  SECTION 1. ORS 315.266 is amended to read:
  315.266. (1) In addition to any other credit available for
purposes of ORS chapter 316, an eligible 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   { - five - }
 { +  ___ + } percent of the earned income credit allowable to
the individual for the same tax year under section 32 of the
Internal Revenue Code.
  (2) 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) of
this section. However, the credit shall be prorated using the
proportion provided in ORS 316.117.
  (3) If a change in the taxable year of a taxpayer occurs as
described in ORS 314.085, or if the Department of Revenue
terminates the taxpayer's taxable year under ORS 314.440, the
credit allowed by this section shall be prorated or computed in a
manner consistent with ORS 314.085.
  (4) 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.
    { - (5) The credit allowed under this section shall not
exceed the tax liability of the taxpayer and may not be carried
forward to a succeeding tax year. - }
   { +  (5)(a) If the amount allowable as an earned income credit
under this section, when added to the sum of the amounts
allowable as payment of tax under ORS 316.187 (withholding), ORS
316.583 (estimated tax), other tax prepayment amounts and other
refundable credit amounts, exceeds the taxes imposed by ORS
chapters 314 and 316 for the tax year (reduced by the
nonrefundable credits allowable for purposes of ORS chapter 316
for the tax year), the amount of the excess shall be refunded as
provided in this subsection.
  (b) Except that refunds attributable to the earned income
credit shall be made from the moneys transferred under paragraph
(c) of this subsection, any refund described in paragraph (a) of
this subsection shall be paid from the Department of Revenue
suspense account established under ORS 293.445.
  (c) Moneys necessary to make refunds attributable to the earned
income credit shall be transferred to the Department of Revenue
suspense account described in paragraph (b) of this subsection
from the appropriation made by the Legislative Assembly to fund
the earned income credit.
  (d) On or before September 15 of the second fiscal year of each
biennium, the Department of Revenue shall estimate the amount of
money needed to make refunds attributable to the earned income
credit in the biennium. If the estimated sum of refunds is
greater than the amount appropriated for the biennium to make
refunds under this subsection, amounts payable from transfers
under paragraph (c) of this subsection shall be proportionally
reduced so that the state does not accrue a debt in excess of the
amounts so transferred. No claim for payment or refund shall
accrue to a taxpayer in excess of the amount determined under
this paragraph. + }
  (6) The Department of Revenue may adopt rules for purposes of
this section, including but not limited to rules relating to
proof of eligibility and the furnishing of information regarding
the federal earned income credit claimed by the taxpayer for the
tax year.
  (7) Refunds attributable to the earned income credit allowed
under this section shall not bear interest.
  SECTION 2.  { + The amendments to ORS 315.266 by section 1 of
this 2001 Act apply to tax years beginning on or after January 1,
2003. + }
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