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 1745
 
                         House Bill 2293
 
Ordered printed by the Speaker pursuant to House Rule 12.00A (5).
  Presession filed (at the request of Governor John A. Kitzhaber,
  M.D., for Office of the Governor)
 
 
                             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 earned income credit against personal income taxes to
refundable credit. Limits credit to taxpayers with one or more
dependent children and federal adjusted gross income that does
not exceed $8,000, or $16,000 if taxpayer files joint return.
  Applies to tax years beginning on or after January 1, 2002.
 
                        A BILL FOR AN ACT
Relating to earned income tax credits; creating new provisions;
  amending ORS 315.266; and appropriating money.
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 - }  { +  taxpayer + } 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 - }  { +  taxpayer + }
for the same tax year under section 32 of the Internal Revenue
Code { +  if, for the tax year:
  (a) The taxpayer has at least one dependent described in
section 151(c)(1)(B) of the Internal Revenue Code; and
  (b) The taxpayer has federal adjusted gross income that does
not exceed $8,000, or $16,000 in the case of a taxpayer filing a
joint return for the tax year + }.
  (2) An eligible nonresident   { - individual - }  { +
taxpayer + } 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) { + (a) + }   { - 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. - }  { +  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 any 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 section.
  (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 established under ORS 293.445 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 shall estimate the amount needed to make
refunds attributable to the earned income credit for the
biennium. If the estimated amount is greater than the amount
appropriated for that purpose for the biennium, refunds payable
from transfers under paragraph (c) of this subsection shall be
proportionally reduced to avoid an accrual of debt by the state.
A taxpayer may not claim a refund 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,
2002. + }
  SECTION 3.  { + In addition to and not in lieu of any other
appropriation, there is appropriated to the Department of
Revenue, for the biennium beginning July 1, 2001, out of the
General Fund, the amount of $___ for the purpose of making the
refunds attributable to the earned income credit described in ORS
315.266. + }
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