71st OREGON LEGISLATIVE ASSEMBLY--2001 Regular Session
 
SA to HB 2206
 
LC 1230/HB 2206-5
 
                      SENATE AMENDMENTS TO
                         HOUSE BILL 2206
 
                     By COMMITTEE ON REVENUE
 
                             May 30
 
  On page 1 of the printed bill, line 2, delete 'and'.
  In line 3, after '311.205,' insert '316.143, 316.680, ' and
after '1981' insert '; repealing ORS 314.290 and 317.326; and
prescribing an effective date'.
  On page 5, after line 34, insert:
  '  { +  SECTION 12. + } ORS 316.143 is amended to read:
  ' 316.143. (1) A resident or nonresident individual certified
as eligible under ORS 442.563, licensed under ORS chapter 677,
who is engaged in the practice of medicine, and who has a rural
practice that amounts to 60 percent of the individual's practice,
shall be allowed an annual credit against taxes otherwise due
under this chapter in the sum of $5,000 during the time in which
the individual retains such practice and membership if the
individual is actively practicing in and is a member of the
medical staff of one of the following hospitals:
  ' (a) A type A hospital designated as such by the Office of
Rural Health;
  '  { - (b) A type B hospital designated as such by the Office
of Rural Health, so long as the type B hospital is not within the
boundaries of a metropolitan statistical area, or if the hospital
is located within the boundaries of a metropolitan statistical
area, is located 30 or more highway miles from the closest
hospital within the major population center in the metropolitan
statistical area; - }
  '  { +  (b) A type B hospital designated as such by the Office
of Rural Health if the hospital is:
  ' (A) Not within the boundaries of a metropolitan statistical
area;
  ' (B) Located 30 or more highway miles from the closest
hospital within the major population center in a metropolitan
statistical area; or
  ' (C) Located in a county with a population of less than
75,000; + }
  ' (c) A type C rural hospital, if the Office of Rural Health
makes the findings required by ORS 316.146; or
  ' (d) A rural critical access hospital.
  ' (2) A nonresident shall be allowed the credit under this
section in the proportion provided in ORS 316.117. 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.
  ' (3) For purposes of this section, an 'individual's practice'
shall be determined on the basis of actual time spent in practice
each week in hours or days, whichever is considered by the Office
of Rural Health to be more appropriate. In the case of a
shareholder of a corporation or a member of a partnership, only
the time of the individual shareholder or partner shall be
considered and the full amount of the credit shall be allowed to
 
each shareholder or partner who qualifies in an individual
capacity.
  ' (4) As used in this section:
  ' (a) 'Type A hospital,' 'type B hospital' and 'type C
hospital' have the meaning for those terms provided in ORS
442.470.
  ' (b) 'Rural critical access hospital' means a facility that
meets the criteria set forth in 42 U.S.C. 1395i-4 (c)(2)(B) and
that has been designated a critical access hospital by the Office
of Rural Health and the Health Division.
  '  { +  SECTION 13. + }  { + The amendments to ORS 316.143 by
section 12 of this 2001 Act apply to tax years beginning on or
after January 1, 2002. + }
  '  { +  SECTION 14. + }  { + Section 15 of this 2001 Act is
added to and made a part of ORS chapter 316. + }
  '  { +  SECTION 15. + }  { + (1) If gain is deferred upon the
voluntary or involuntary disposition of property in an exchange
that qualifies for deferral under section 1031 or 1033 of the
Internal Revenue Code, and the property acquired in the exchange
has a situs outside of this state, upon the sale or other
disposition of the acquired property in a transaction in which
gain or loss is recognized for federal tax purposes but is not
taken into account in computing federal taxable income for Oregon
tax purposes, there shall be added to federal taxable income the
difference between:
  ' (a) The adjusted basis of the acquired property on the date
the exchange under section 1031 or 1033 of the Internal Revenue
Code was completed; and
  ' (b) The lesser of:
  ' (A) The fair market value of the acquired property on the
date the exchange under section 1031 or 1033 of the Internal
Revenue Code was completed; or
  ' (B) The fair market value of the acquired property on the
date gain or loss from the sale or other disposition of the
acquired property is recognized for federal tax purposes.
  ' (2) If the adjusted basis described in subsection (1)(a) of
this section is larger than either value described in subsection
(1)(b) of this section, the difference computed under subsection
(1) of this section shall be subtracted from federal taxable
income instead of being added to federal taxable income.
  ' (3) The Department of Revenue may require taxpayers owning
property acquired in an exchange under section 1031 or 1033 of
the Internal Revenue Code that has a situs outside of this state
to file an annual report on the acquired property, and may adopt
rules to implement reporting requirements under this section. + }
  '  { +  SECTION 16. + }  { + Section 17 of this 2001 Act is
added to and made a part of ORS chapter 317. + }
  '  { +  SECTION 17. + }  { + (1) If gain is deferred upon the
voluntary or involuntary disposition of property in an exchange
that qualifies for deferral under section 1031 or 1033 of the
Internal Revenue Code, and the property acquired in the exchange
has a situs outside of this state, upon the sale or other
disposition of the acquired property in a transaction in which
gain or loss is recognized for federal tax purposes but is not
taken into account in computing taxable income for Oregon tax
purposes, there shall be added to taxable income the difference
between:
  ' (a) The adjusted basis of the acquired property on the date
the exchange under section 1031 or 1033 of the Internal Revenue
Code was completed; and
  ' (b) The lesser of:
  ' (A) The fair market value of the acquired property on the
date the exchange under section 1031 or 1033 of the Internal
Revenue Code was completed; or
 
 
  ' (B) The fair market value of the acquired property on the
date gain or loss from the sale or other disposition of the
acquired property is recognized for federal tax purposes.
  ' (2) If the adjusted basis described in subsection (1)(a) of
this section is larger than either value described in subsection
(1)(b) of this section, the difference computed under subsection
(1) of this section shall be subtracted from taxable income
instead of being added to taxable income.
  ' (3) The Department of Revenue may require taxpayers owning
property acquired in an exchange under section 1031 or 1033 of
the Internal Revenue Code that has a situs outside of this state
to file an annual report on the acquired property, and may adopt
rules to implement reporting requirements under this section. + }
  '  { +  SECTION 18. + } ORS 316.680, as amended by section 12,
chapter 746, Oregon Laws 1999, is amended to read:
  ' 316.680. (1) There shall be subtracted from federal taxable
income:
  ' (a) The interest or dividends on obligations of the United
States and its territories and possessions or of any authority,
commission or instrumentality of the United States to the extent
includable in gross income for federal income tax purposes but
exempt from state income taxes under the laws of the United
States. However, the amount subtracted under this paragraph shall
be reduced by any interest on indebtedness incurred to carry the
obligations or securities described in this paragraph, and by any
expenses incurred in the production of interest or dividend
income described in this paragraph to the extent that such
expenses, including amortizable bond premiums, are deductible in
determining federal taxable income.
  ' (b) The amount of any federal income taxes accrued by the
taxpayer during the taxable year as described in ORS 316.685,
less the amount of any refunds of federal taxes previously
accrued for which a tax benefit was received.
  ' (c)(A) If the taxpayer does not qualify for the subtraction
under subparagraph (B) of this paragraph, compensation (other
than pension or retirement pay) received for active service
performed by a member of the Armed Forces of the United States in
an amount not to exceed $3,000 per annum.
  ' (B) For the tax year of initial draft or enlistment into the
Armed Forces of the United States or for the tax year of
discharge from or termination of full-time active duty for the
Armed Forces of the United States, compensation (other than
pension or retirement pay or pay for service when on military
reserve duty) paid by the Armed Forces of the United States for
services performed outside this state, if the taxpayer is on
active duty as a full-time officer, enlistee or draftee, with the
Armed Forces of the United States.
  '  { - (d) For taxable years open to audit on October 5, 1973,
the amount of any deferred income which was added to federal
taxable income for state tax purposes under subsection (2)(e) of
this section in a prior taxable year and which is now added to
federal taxable income. For purposes of this paragraph, the
amount subtracted shall not exceed the amount of gain now
reported on the federal return. If the gain is a capital gain or
subject to capital gain treatment, the adjustments under this
paragraph shall be similar to the adjustments made under
subsection (2)(e) of this section in the prior year. - }
  '  { - (e) - }  { +  (d) + } Amounts allowable under sections
2621(a)(2) and 2622(b) of the Internal Revenue Code to the extent
that the taxpayer does not elect under section 642(g) of the
Internal Revenue Code to reduce federal taxable income by those
amounts.
  '  { - (f) - }  { +  (e) + } Any supplemental payments made to
JOBS Plus Program participants under ORS 411.892.
  '  { - (g)(A) - }  { +  (f)(A) + } Federal pension income that
is attributable to federal employment occurring before October 1,
1991. Federal pension income that is attributable to federal
employment occurring before October 1, 1991, shall be determined
by multiplying the total amount of federal pension income for the
tax year by the ratio of the number of months of federal
creditable service occurring before October 1, 1991, over the
total number of months of federal creditable service.
  ' (B) The subtraction allowed under this paragraph applies only
to federal pension income received at a time when:
  ' (i) Benefit increases provided under chapter 569, Oregon Laws
1995, are in effect; or
  ' (ii) Public Employees Retirement System benefits received for
service prior to October 1, 1991, are exempt from state income
tax.
  ' (C) As used in this paragraph:
  ' (i) 'Federal creditable service' means those periods of time
for which a federal employee earned a federal pension.
  ' (ii) 'Federal pension' means any form of retirement allowance
provided by the federal government, its agencies or its
instrumentalities to retirees of the federal government or their
beneficiaries.
  '  { - (h) - }  { +  (g) + } Any amount included in federal
taxable income for the tax year that is attributable to the
conversion of a regular individual retirement account into a Roth
individual retirement account described in section 408A of the
Internal Revenue Code, to the extent that:
  ' (A) The amount was subject to the income tax of another state
or the District of Columbia in a prior tax year; and
  ' (B) The taxpayer was a resident of the other state or the
District of Columbia for that prior tax year.
  '  { - (i) - }  { +  (h) + } Any amounts awarded to the
taxpayer by the Public Safety Memorial Fund Board under ORS
243.954 to 243.970 to the extent that the taxpayer has not taken
the amount as a deduction in determining the taxpayer's federal
taxable income for the tax year.
  '  { - (j) - }  { +  (i) + } The amount contributed to a
qualified tuition savings program account established under ORS
348.841 to 348.873, except that a subtraction under this
paragraph may not exceed:
  ' (A) $2,000 for the tax year; or
  ' (B) In the case of a married individual filing separately,
$1,000 for the tax year.
  ' (2) There shall be added to federal taxable income:
  ' (a) Interest or dividends, exempt from federal income tax, on
obligations or securities of any foreign state or of a political
subdivision or authority of any foreign state. However, the
amount added under this paragraph shall be reduced by any
interest on indebtedness incurred to carry the obligations or
securities described in this paragraph and by any expenses
incurred in the production of interest or dividend income
described in this paragraph.
  ' (b) Interest or dividends on obligations of any authority,
commission, instrumentality and territorial possession of the
United States which by the laws of the United States are exempt
from federal income tax but not from state income taxes. However,
the amount added under this paragraph shall be reduced by any
interest on indebtedness incurred to carry the obligations or
securities described in this paragraph and by any expenses
incurred in the production of interest or dividend income
described in this paragraph.
  ' (c) The amount of any federal estate taxes allocable to
income in respect of a decedent not taxable by Oregon.
  ' (d) The amount of any allowance for depletion in excess of
the taxpayer's adjusted basis in the property depleted, deducted
on the taxpayer's federal income tax return for the taxable year,
pursuant to sections 613, 613A, 614, 616 and 617 of the Internal
Revenue Code.
  '  { - (e) The amount of any gain which is deferred for tax
recognition purposes upon the voluntary or involuntary conversion
or exchange of tangible real or personal property as provided
under ORS 314.290. - }
  '  { - (f) - }  { +  (e) + } For taxable years beginning on or
after January 1, 1985, the dollar amount deducted under section
151 of the Internal Revenue Code for personal exemptions for the
taxable year.
  '  { - (g) - }  { +  (f) + } The amount taken as a deduction on
the taxpayer's federal return for unused qualified business
credits under section 196 of the Internal Revenue Code.
  '  { - (h) - }  { +  (g) + } The amount of any increased
benefits paid to a taxpayer under chapter 569, Oregon Laws 1995,
under the provisions of chapter 796, Oregon Laws 1991, and under
section 26, chapter 815, Oregon Laws 1991, that is not includable
in the taxpayer's federal taxable income under the Internal
Revenue Code.
  '  { - (i) - }  { +  (h) + } The amount of any long term care
insurance premiums paid or incurred by the taxpayer during the
tax year if:
  ' (A) The amount is taken into account as a deduction on the
taxpayer's federal return for the tax year; and
  ' (B) The taxpayer claims the credit allowed under ORS 315.610
for the tax year.
  '  { - (j) - }  { +  (i) + } Any amount taken as a deduction
under section 1341 of the Internal Revenue Code in computing
federal taxable income for the tax year, if the taxpayer has
claimed a credit for claim of right income repayment adjustment
under ORS 315.068.
  ' (3) Discount and gain or loss on retirement or disposition of
obligations described under subsection (2)(a) of this section
issued on or after January 1, 1985, shall be treated for purposes
of this chapter in the same manner as under sections 1271 to 1283
and other pertinent sections of the Internal Revenue Code as if
the obligations, although issued by a foreign state or a
political subdivision of a foreign state, were not tax exempt
under the Internal Revenue Code.
  '  { +  SECTION 19. + }  { + ORS 314.290 and 317.326 are
repealed. + }
  '  { +  SECTION 20. + }  { + Sections 15 and 17 of this 2001
Act, the amendments to ORS 316.680 by section 18 of this 2001 Act
and the repeal of ORS 314.290 and 317.326 by section 19 of this
2001 Act apply to:
  ' (1) Tax years beginning on or after January 1, 1998; and
  ' (2) Any tax year for which an amended return may be filed or
a notice of deficiency issued on or after the effective date of
this 2001 Act. + }
  '  { +  SECTION 21. + }  { + This 2001 Act takes effect on the
91st day after the date on which the regular session of the
Seventy-first Legislative Assembly adjourns sine die. + } ' .
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