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 1912
B-Engrossed
House Bill 2332
Ordered by the Senate June 26
Including House Amendments dated May 21 and Senate Amendments
dated June 26
Ordered printed by the Speaker pursuant to House Rule 12.00A (5).
Presession filed (at the request of Representative Bill Witt
and Representative-elect Steve March)
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.
Provides $1,000 credit against personal income taxes for
taxpayer providing certain unreimbursed assistance to relative
for tax years beginning on or after January 1, 2003, and before
January 1, 2005. Increases credit to $1,500 for tax years
beginning on or after January 1, 2005. Defines types of
assistance eligible for credit. Limits credit to taxpayers with
taxable incomes that do not exceed $40,000. Phases out credit for
taxpayers with income above $40,000. Adjusts qualifying income
for inflation.
{ + Provides that trust land of Indian tribe is reservation
enterprise zone under specified circumstances. Provides tax
credit for eligible business operating new business facility in
reservation enterprise zone. + }
Takes effect on 91st day following adjournment sine die.
A BILL FOR AN ACT
Relating to taxation; creating new provisions; amending ORS
314.752 and 318.031; and prescribing an effective date.
Be It Enacted by the People of the State of Oregon:
SECTION 1. { + Section 2 of this 2001 Act is added to and made
a part of ORS chapter 315. + }
SECTION 2. { + (1) As used in this section:
(a) 'Activities of daily living' means dressing, grooming,
bathing, feeding, toileting or walking.
(b) 'Physical, mental or developmental disability' means a
condition that:
(A) Causes the person with the condition to be considered a
disabled person under ORS 174.107;
(B) Significantly interferes with the person's ability to
engage in one or more activities of daily living without
assistance; and
(C) Consists of a long-term or chronic condition from which the
person's recovery is not expected.
(c) 'Relative' means a spouse, child, father, mother, sibling
or other ancestor or descendant who is related by blood, marriage
or adoption.
(2) An individual taxpayer shall be allowed a credit against
the tax due under ORS chapter 316 if:
(a) The taxpayer provides unreimbursed daily care to a relative
that consists of providing assistance to the relative with two or
more activities of daily living for more than six months of the
tax year;
(b) The relative receiving the assistance does not reside in a
nursing home, assisted living facility or other residence where
assistance with activities of daily living is provided by the
facility staff;
(c) The reason the taxpayer is providing care is due to the
physical, mental or developmental disability of the recipient of
the care; and
(d) The taxpayer has federal adjusted gross income that does
not exceed $40,000 for the tax year for which the credit is
claimed.
(3)(a) For tax years beginning on or after January 1, 2004, the
maximum amount of federal adjusted gross income a taxpayer may
earn in order to qualify for a credit under this section shall be
adjusted by multiplying $40,000 by the ratio of the U.S. City
Average Consumer Price Index for the average of the monthly
indexes for the second quarter of the calendar year over the
average of the monthly indexes for the second quarter of the
calendar year 2003.
(b) As used in this subsection, 'U.S. City Average Consumer
Price Index' means the U.S. City Average Consumer Price Index for
All Urban Consumers (All Items) as published by the Bureau of
Labor Statistics of the United States Department of Labor.
(c) If any adjustment determined under paragraph (a) of this
subsection is not a multiple of $50, the adjustment shall be
rounded to the nearest multiple of $50.
(4) The amount of the credit provided under this section shall
equal:
(a) $1,000 for tax years beginning on or after January 1, 2003,
and before January 1, 2005.
(b) $1,500 for tax years beginning on or after January 1, 2005.
(5) Notwithstanding subsections (2)(d) and (4) of this section,
a taxpayer shall be allowed a credit under this section that
equals the amount provided in subsection (4) of this section
reduced by $0.50 for every $1 that the taxpayer's federal
adjusted gross income exceeds the greater of $40,000 or the
amount determined under subsection (3) of this section.
(6) The credit allowed in a tax year may not exceed the tax
liability of the taxpayer and may not be carried forward to a
succeeding tax year.
(7) A nonresident shall be allowed the credit under this
section in the proportion provided in ORS 316.117.
(8) 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.
(9) Only one taxpayer shall be eligible for the credit provided
under this section for the assistance provided to a relative
during a tax year.
(10) 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.
(11) The Department of Revenue may prescribe form and
substantiation requirements to be met in order to claim the
credit provided under this section. + }
SECTION 3. { + Section 2 of this 2001 Act applies to tax years
beginning on or after January 1, 2003. + }
SECTION 4. { + Sections 5 to 9 of this 2001 Act are added to
and made a part of ORS chapter 285B. + }
SECTION 5. { + As used in sections 5 to 9 of this 2001 Act:
(1) 'Eligible business' means a business that:
(a) Is engaged within a reservation enterprise zone in the
manufacture or provision of goods, products or services to other
businesses or to the general public, through activities
including, but not limited to, manufacturing, assembly,
fabrication, processing, shipping, storage, retail sales or
services, child care, housing, retail food service, health care,
tourism, entertainment, financial services, professional
services, energy development, construction or similar activities;
and
(b) Occupies or owns a new business facility within a
reservation enterprise zone.
(2) 'New business facility':
(a) Means a physical asset within a reservation enterprise zone
that satisfies the following requirements:
(A) The facility is used by a business in the operation of a
revenue-producing enterprise, except that the revenue-producing
enterprise must consist of activity other than leasing the
facility to another person; and
(B) The facility is acquired by or leased to a business on or
after January 1, 2002, including a facility, the title or
possession of which is transferred to the business on or after
January 1, 2002, or a facility, the construction, erection or
installation of which is completed on or after January 1, 2002;
(b) Subject to paragraph (c) of this subsection, includes a
facility acquired or leased from a person that used the facility
in a revenue-producing enterprise within the boundaries of the
same Indian reservation immediately prior to the transfer of
title or possession of the facility to the business; and
(c) Does not include:
(A) A facility that is used in a revenue-producing enterprise
that is the same or substantially identical to the
revenue-producing enterprise in which the facility was previously
used within the boundaries of the same Indian reservation; or
(B) Any property that merely replaces existing property and
that does not expand the capacity of the revenue-producing
enterprise in which the facility is to be used.
(3) 'Reservation enterprise zone' means a zone designated by
section 7 of this 2001 Act.
(4) 'Tribal government' means the governing body of an Indian
tribe, if the governing body has the authority to levy, impose
and collect taxes within the boundaries of the reservation of the
tribe.
(5) 'Tribal tax' means any specific tax that is or may be
levied or imposed by a tribal government upon a business and that
is measured with reference to a specific level or quantity of
that business's income, operations, use or ownership of property.
' Tribal tax' includes, but is not limited to, an income or
excise tax, an ad valorem property tax, a gross receipts tax or a
sales and use tax. + }
SECTION 6. { + The Legislative Assembly finds that the welfare
of the residents of the rural Indian reservations of this state
is acutely dependent upon the growth, development and expansion
of employment and business opportunities within reservation
boundaries. Geographic and other obstacles have made it difficult
for rural Indian reservations to attract and retain private
business investment. The tax systems of this state, by subjecting
businesses located within reservation boundaries to state
taxation in addition to any taxation imposed by the reservations
themselves, has heightened the economic isolation of this state's
rural reservations and impeded the efforts of Indian tribes to
develop sufficient tax bases to fund essential governmental
services on their reservations. The Legislative Assembly further
finds that it is in the best interests of this state to create
equality that will enable rural Indian reservations to attract
and retain private business investment. The Legislative Assembly
declares that it is the purpose of sections 5 to 9 of this 2001
Act to remove the tax disincentives that currently inhibit
private business and industry from locating and operating
enterprises within the boundaries of the rural Indian
reservations of this state. + }
SECTION 7. { + (1) Trust land of an Indian tribe that meets
all of the following requirements is designated as a reservation
enterprise zone for the purposes of sections 5 to 9 of this 2001
Act:
(a) The Indian tribe is a federally recognized Indian tribe;
(b) The reservation of the Indian tribe is entirely within the
boundaries of this state;
(c) The land for which zone designation is sought is land held
in trust by the United States for the benefit of the Indian tribe
and is located entirely within the boundaries of the reservation;
(d) As of January 1, 2002, the population density of the
reservation, as measured by the most recent federal decennial
census, does not exceed 15 persons per square mile;
(e) Fifty percent or more of the households within the
boundaries of the reservation have incomes below 80 percent of
the median income of this state, as defined by the most recent
federal decennial census; and
(f) The unemployment rate within the reservation for all
enrolled members of the tribe is at least 2.0 percentage points
greater than the comparable unemployment rate for this state, as
defined by the most recently available data published or
officially provided and verified by the United States Government,
the Employment Department, the Portland State University Center
for Population Research and Census or a special study conducted
under a contract with a regional academic institution.
(2) At the request of a tribal government, the Economic and
Community Development Department shall determine if trust land is
designated as a reservation enterprise zone under this
section. + }
SECTION 8. { + (1) A credit against the taxes that are
otherwise due under ORS chapter 316 or, if the taxpayer is a
corporation, under ORS chapter 317 or 318, is allowed to an
eligible business operating a new business facility in a
reservation enterprise zone.
(2) The amount of the credit allowed to the eligible business
shall equal:
(a) The amount of tribal property tax imposed on a new business
facility of an eligible business that is paid or incurred by the
eligible business during the income or corporate excise tax year
of the eligible business; or
(b) If the eligible business has not previously conducted
business operations within the reservation enterprise zone, the
amount of tribal tax paid or incurred by the eligible business
during the income or corporate excise tax year of the eligible
business.
(3) The credit allowed to the eligible business may not exceed
the tax liability of the eligible business for the tax year and
may not be carried over to another tax year.
(4) A credit is allowable under this section only to the extent
the tribal tax on which the credit is based is imposed on
businesses not owned by Indians on a uniform basis within the
territory over which the tribal government has the authority to
levy, impose and collect taxes.
(5) The credit shall be claimed on a form prescribed by the
Department of Revenue containing the information required by the
department, including information sufficient for the department
to determine that the taxpayer is an eligible business and that
the facility operated by the business is a new business facility.
(6) 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.
(7) 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.
(8) 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.
(9) An eligible business claiming a credit under this section
shall maintain records sufficient to authenticate the allowance
of the credit claimed under this section and shall furnish the
department with these records upon the request of the department.
(10) A credit claimed by an eligible business may not be
disallowed solely because the eligible business conducts business
operations both within and outside of a reservation enterprise
zone. + }
SECTION 9. { + (1) A reservation enterprise zone shall be
considered to be a nonurban enterprise zone for purposes of ORS
285B.650 to 285B.728. The tribal government of the reservation
shall be considered to be the sponsor of the reservation
enterprise zone.
(2) Reservation enterprise zones may not be taken into account
in determining the number of nonurban enterprise zones allowable
in this state under ORS 285B.650 to 285B.728, and are not subject
to numerical limitation under ORS 285B.650 to 285B.728.
(3) In order for property within a reservation enterprise zone
to be exempt under ORS 285B.698, the business firm and property
must meet all of the requirements applicable to business firms
and property in any nonurban enterprise zone. + }
SECTION 10. ORS 314.752 is amended to read:
314.752. (1) Except as provided in ORS 314.740 (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 314.734, on 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), recapture 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 that 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 a tax
credit granted to personal income taxpayers to encourage certain
investment, to create employment, economic opportunity or
incentive or for charitable, educational, scientific, literary or
public purposes that is listed under this subsection as a
business tax credit or is designated as a business tax credit by
law or by the Department of Revenue by rule and includes but is
not limited to the following credits: ORS 315.104 (forestation
and reforestation), ORS 315.134 (fish habitat improvement), ORS
315.138 (fish screening, by-pass devices, fishways), ORS 315.156
(crop gleaning), ORS 315.164 (farmworker housing), ORS 315.204
(dependent care assistance), ORS 315.208 (dependent care
facilities), ORS 315.234 (child development program
contributions), ORS 315.254 (youth apprenticeship sponsorship),
ORS 315.304 (pollution control facility), ORS 315.324 (plastics
recycling), ORS 315.354 and ORS 469.207 (energy conservation
facilities), ORS 315.504 (Oregon Capital Corporation), ORS
315.604 (bone marrow transplant expenses) and ORS 317.115
(fueling stations necessary to operate an alternative fuel
vehicle) { + and section 8 of this 2001 Act (tribal taxes on
reservation enterprise zones) + }.
SECTION 11. ORS 318.031 is amended to read:
318.031. It being the intention of the Legislative Assembly
that this chapter and the Corporation Excise Tax Law of 1929
shall be administered as uniformly as possible (allowance being
made for the difference in imposition of the taxes and the
operative date of this chapter), the provisions of ORS 305.140
and 305.150 and ORS chapter 314 and of the following sections of
ORS chapter 315 or 317, as amended on or before August 3, 1955,
and as they may thereafter be amended, are incorporated into this
chapter by this reference and made a part hereof: ORS 315.104,
315.134, 315.156, 315.204, 315.208, 315.234, 315.254, 315.304,
315.504 and 315.604 (all only to the extent applicable for a
corporation) and ORS 317.010, 317.013, 317.018 to 317.022,
317.030, 317.035, 317.038, 317.080, 317.152 to 317.154, 317.259
to 317.303, 317.310 to 317.386, 317.476 to 317.485, 317.510 to
317.635 and 317.705 to 317.725 and section 40, chapter 835,
Oregon Laws 1997, and section 4, chapter 358, Oregon Laws
1999 { + , and section 8 of this 2001 Act + }.
SECTION 12. { + Sections 5 to 9 of this 2001 Act and the
amendments to ORS 314.752 and 318.031 by sections 10 and 11 of
this 2001 Act apply to tax years beginning on or after January 1,
2002. + }
SECTION 13. { + 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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