71st OREGON LEGISLATIVE ASSEMBLY--2001 Regular Session
HA to HB 2676
LC 1551/HB 2676-2
HOUSE AMENDMENTS TO
HOUSE BILL 2676
By COMMITTEE ON SCHOOL FUNDING AND TAX FAIRNESS/REVENUE
April 4
In line 2 of the printed bill, delete 'amending' and insert '
creating new provisions; amending ORS 314.752, 315.204 and
318.031 and'.
In line 3, before the period insert '; appropriating money; and
prescribing an effective date'.
In line 8, delete '2004' and insert '2007'.
After line 14, insert:
' { + SECTION 3. + } { + As used in sections 3 to 8 of this
2001 Act:
' (1) 'Child care provider' means a provider, for compensation,
of care, supervision or guidance to a child on a regular basis in
a center or in a home other than the child's home. 'Child care
provider' does not include a person who is the child's parent,
guardian or custodian.
' (2) 'Community agency' means a nonprofit agency that is:
' (a) Located in a region, established under section 5 of this
2001 Act, in which it provides services related to child care,
children and families, community development or similar services;
and
' (b) Eligible to receive contributions that qualify as
deductions under section 170 of the Internal Revenue Code.
' (3) 'Qualified contribution' means a contribution made by a
taxpayer to the Child Care Division of the Employment Department
or a selected community agency for the purpose of promoting child
care, and for which an application is submitted for a tax credit
certificate under section 5 of this 2001 Act.
' (4) 'Tax credit certificate' means a certificate issued by
the Child Care Division to a taxpayer to qualify the taxpayer for
a tax credit under section 10 of this 2001 Act. + }
' { + SECTION 4. + } { + (1) The Child Care Division of the
Employment Department, in collaboration with an advisory
committee established by the Child Care Division, shall establish
a program to:
' (a) Allocate tax credit certificates to taxpayers that make
qualified contributions to the Child Care Division or a selected
community agency; and
' (b) Distribute to child care providers moneys from qualified
contributions and other contributions.
' (2) The purposes of the program are to:
' (a) Encourage taxpayers to make contributions to the Child
Care Division or a selected community agency by providing a
financial return on qualified contributions and by soliciting
other contributions.
' (b) Achieve specific and measurable goals for targeted
communities and populations by strategically allocating tax
credit certificates.
' (c) Set standards for the child care industry concerning the
cost of providing quality, affordable child care.
' (d) Strengthen the viability and continuity of child care
providers while making child care more affordable for low and
moderate income families. + }
' { + SECTION 5. + } { + (1) For the purpose of implementing
the program established under section 4 of this 2001 Act, the
Child Care Division of the Employment Department, in
collaboration with an advisory committee established by the Child
Care Division, shall:
' (a) Establish regions in this state by rule in a manner that
facilitates the planning of the program, the allocation of tax
credit certificates to taxpayers and the distribution to child
care providers of moneys from contributions made to the Child
Care Division and selected community agencies.
' (b) Identify for each region contribution and child care
goals that are consistent with the purposes provided in section 4
(2) of this 2001 Act. The goals identified under this paragraph
shall take into account the resources and needs of the region.
' (c) Develop by rule the application process a community
agency must complete to represent a region, and any process for
the renewal of such representation.
' (d) Select a community agency in each region.
' (e) Enter into an agreement with each community agency
selected to represent a region to have the community agency
perform the functions specified in section 7 of this 2001 Act.
' (f) Determine the total value in tax credit certificates
available to taxpayers in each region, based on goals identified
under paragraph (b) of this subsection, and transmit those
determinations to the selected community agencies by February 1
of each year. The total value in tax credit certificates
available to all selected community agencies in this state may
not exceed $500,000 per calendar year.
' (g) Determine the total value of moneys to be available to
each selected community agency to distribute to providers based
on goals identified under paragraph (b) of this subsection, and
distribute those moneys to the selected community agencies by
June 30 of the year following the year the application is made
pursuant to section 6b of this 2001 Act. The total value of
moneys available to all selected community agencies in this state
may not exceed the amount of contributions received from
taxpayers during the tax year minus any reasonable administrative
costs incurred by the Child Care Division and the selected
community agencies.
' (2) If a taxpayer makes a contribution to the Child Care
Division or a selected community agency for child care but does
not want to receive the tax credit available under section 10 of
this 2001 Act, the taxpayer may receive only deductions and
credits otherwise allowed for a charitable contribution. A
contribution described in this subsection shall be deposited in
the Child Care Support Account established under section 6a of
this 2001 Act.
' (3)(a) If a taxpayer makes a contribution to the Child Care
Division or to a selected community agency and wants to receive
the tax credit available under section 10 of this 2001 Act, the
taxpayer shall submit an application for a tax credit certificate
with the contribution. If the contribution is made to a selected
community agency, the selected community agency shall forward the
application and contribution to the Child Care Division.
' (b) The application for a tax credit certificate shall be
available to taxpayers from the Child Care Division and from
selected community agencies in a form prescribed by the Child
Care Division. The application must be submitted by December 31
of each year and contain such information as the division
requires.
' (c) The Child Care Division shall consider applications for
tax credit certificates in the chronological order in which the
applications are received by the division and shall approve
applications in an amount that does not exceed the limitations
imposed by subsection (1)(f) of this section.
' (d) The Child Care Division may not issue a tax credit
certificate to a taxpayer to the extent the claim for credit in
the application, when added to the total amount of claims for
credit previously certified by the Child Care Division for
distribution, exceeds the value of tax credit certificates
available to the Child Care Division for the calendar year.
' (e) The Child Care Division shall send a copy of all tax
credit certificates issued under this section to the Department
of Revenue.
' (f) Contributions made under this subsection shall be
deposited in the Child Care Support Account established under
section 6a of this 2001 Act.
' (4) A taxpayer that receives a notice of denial of a tax
credit certificate or that receives a tax credit certificate
issued for an amount that is less than the amount contributed may
request a refund for the amount contributed within 90 days of the
Child Care Division's denial or issuance of the certificate. The
Child Care Division must send notice of a denial or changed
amount and refund the amount for which a tax credit will not be
granted within 30 days after receiving the request. The refund
shall be made from the Child Care Support Account.
' (5) The Child Care Division may establish by rule any other
provisions required to implement the program established under
sections 3 to 8 of this 2001 Act. + }
' { + SECTION 6. + } { + (1) In selecting a community agency
for a region under section 5 of this 2001 Act, the Child Care
Division of the Employment Department shall consider:
' (a) A prospective agency's financial soundness, net worth,
cash flow and accounting capacity to manage the tax credit
program;
' (b) A prospective agency's demonstrated ability to serve low
and moderate income families;
' (c) The degree to which the governing board of the
prospective agency is representative of the region in which the
agency is located, has a low turnover rate of board members, has
experience with financial matters and has a demonstrated history
of collaboration with other community agencies; and
' (d) The experience and expertise of the executive or managing
officer and staff of the prospective agency in child care
business management and small business development.
' (2) The division shall select the community agency that, in
the judgment of the division and based on the criteria set forth
in subsection (1) of this section, will best serve the interests
of the region for which it is selected. + }
' { + SECTION 6a. + } { + (1) The Child Care Support Account
is established in the General Fund.
' (2) Moneys in the Child Care Support Account are continuously
appropriated to the Child Care Division of the Employment
Department for the purpose of making distributions to selected
community agencies under section 6b of this 2001 Act, for making
refunds under section 5 (4) of this 2001 Act and for the expenses
of the Child Care Division in administering sections 3 to 8 of
this 2001 Act. + }
' { + SECTION 6b. + } { + (1) On or before April 1 following
each calendar year, the Child Care Division of the Employment
Department shall distribute revenues in the Child Care Support
Account that are derived from contributions made in the calendar
year to the community agencies selected under section 6 of this
2001 Act in the proportion that the Child Care Division
determines best promotes the provision of child care in this
state.
' (2) Moneys distributed to selected community agencies shall
be disbursed to child care providers, consistent with rules
adopted by the Child Care Division relating to the disbursement
of moneys by selected community agencies. Rules adopted by the
Child Care Division under this subsection shall consider the
factors described in section 7 (3)(h) of this 2001 Act. + }
' { + SECTION 7. + } { + (1) Each community agency selected
under section 5 of this 2001 Act shall encourage taxpayers to
make contributions for child care and shall disburse moneys
distributed to the community agency to child care providers
located in the region that the selected community agency
represents, pursuant to section 6b of this 2001 Act and rules
adopted thereunder.
' (2) A selected community agency shall encourage taxpayers to
make contributions for child care by promoting the program
established under section 4 of this 2001 Act and by soliciting
other contributions.
' (3) A selected community agency must:
' (a) Coordinate an application process by which persons may
apply to be participating providers;
' (b) Enter into agreements with participating providers under
which the duties and responsibilities of participating providers
and the community agency are stated;
' (c) Provide or coordinate required training for participating
providers;
' (d) Monitor participating providers, through visits to
providers and otherwise;
' (e) Oversee the process by which a participating provider
verifies the income of a family and establishes the total child
care fee charged to a family;
' (f) Report on participating provider compliance with section
8 of this 2001 Act and other applicable requirements to
contributors and the Child Care Division of the Employment
Department;
' (g) Establish a maximum family income level for the region
for purposes of the child care fee limitation to which
participating providers are subject under section 8 (1)(i) of
this 2001 Act;
' (h) Determine, consistently with rules adopted by the Child
Care Division, the amount of moneys to be disbursed to a
participating provider based on the incomes of the families the
provider serves, the child care fees the provider charges and the
actual cost to the provider of providing quality, affordable
child care; and
' (i) Forward applications and moneys it receives from
taxpayers as contributions to the Child Care Division.
' (4)(a) By the end of each calendar year, a selected community
agency must distribute to participating child care providers all
moneys that are available to the agency as a result of the
determination made by the Child Care Division under section 5
(1)(g) of this 2001 Act. Each selected community agency shall
distribute a substantial portion of the moneys to participating
child care providers that are home-based businesses.
' (b) Distributions shall be based on the actual costs of
providing quality, affordable child care in the region for which
distributions are being made, including training costs, operating
costs and wages.
' (5) For the purpose of making distributions to child care
providers, a selected community agency shall identify child care
providers in the region it represents that meet the requirements
of section 8 of this 2001 Act. The selected community agency may
develop a process through which child care providers apply to
receive distributions of moneys from contributions made by
taxpayers. + }
' { + SECTION 8. + } { + (1) Each selected community agency
shall select participating child care providers that meet the
following requirements:
' (a) If a home-based business, the provider must have been
providing child care services for at least 18 months prior to
selection. If a center, the provider must have been providing
child care services for at least two years prior to selection.
' (b) If a home-based business, the provider must enter into an
agreement with the community agency to continue to provide child
care services for at least an additional two years.
' (c) If a home-based business, the provider must serve at
least two families that have incomes that are 80 percent or less
of the median income for the region. If a center, at least 25
percent of the families the provider serves must have incomes
that are 80 percent or less of the median income for the region.
' (d) The provider must accept children for whom child care is
paid for through an Adult and Family Services Division subsidy.
' (e) The provider and the employees of the provider must
provide high quality child care.
' (f) The provider, if the provider is an individual, and the
employees of the provider must have adequate training and must
attend required training established by the Child Care Division.
' (g) The provider must maintain adequate liability insurance,
financial records and parent policies and contracts, and permit
the selected community agency to conduct visits.
' (h) If a home-based business, the provider must be registered
with the Child Care Division. If a center, the provider must be
certified by the Child Care Division.
' (i) For care provided to children of families whose income
does not exceed the level established by the selected community
agency under section 7 (3)(g) of this 2001 Act, the provider must
agree to limit the total child care fees charged to a family to a
percentage established by the Child Care Division by rule.
' (2) In selecting participating child care providers, selected
community agencies must give preference to providers that provide
child care to low and moderate income families. + }
' { + SECTION 9. + } { + Section 10 of this 2001 Act is
added to and made a part of ORS chapter 315. + }
' { + SECTION 10. + } { + (1) A credit against the taxes
otherwise due under ORS chapter 316 or, if the taxpayer is a
corporation, under ORS chapter 317 or 318 is allowed to a
taxpayer for certified contributions made to the Child Care
Division or a selected community agency under section 5 of this
2001 Act.
' (2) The amount of a tax credit available to a taxpayer for a
tax year under this section shall equal the amount stated in the
tax credit certificate received under section 5 of this 2001 Act.
' (3) The credit allowed under this section may not exceed the
tax liability of the taxpayer for the tax year in which the
credit is claimed.
' (4) A taxpayer shall include the tax credit certificate
received under section 5 of this 2001 Act with the return filed
with the Department of Revenue for the tax year to which the tax
credit certificate applies.
' (5) The credit allowed under this section is in addition to,
and not in lieu of, any credit or deduction allowed under this
chapter or ORS chapter 316, 317 or 318 for charitable
contributions and contributions made in relation to child care.
' (6) A credit under this section may be claimed by a
nonresident or part-year resident without proration.
' (7) Any tax credit otherwise allowable under this section
that is not used by the taxpayer in a particular tax 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, but may not be carried forward
for any tax year thereafter.
' (8) The definitions in section 3 of this 2001 Act apply to
this section. + }
' { + SECTION 11. + } 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 10 of this 2001 Act (contributions for
child care) + }.
' { + SECTION 12. + } 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 { + and section 10 of this 2001 Act + }
(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.
' { + SECTION 13. + } { + Section 10 of this 2001 Act
applies to tax years beginning on or after January 1, 2002, and
before January 1, 2007. + }
' { + SECTION 14. + } ORS 315.204 is amended to read:
' 315.204. (1) A credit against the taxes otherwise due under
ORS chapter 316 (or, if the taxpayer is a corporation, under ORS
chapter 317 or 318) shall be allowed to a resident employer or to
a corporation that is an employer for amounts paid or incurred
during the taxable year by the employer for dependent care
assistance actually provided to an employee if the assistance is
furnished pursuant to a program which meets the requirements of
section 129(d) of the Internal Revenue Code { + and if the
employer has received a certificate as provided in subsection (2)
of this section + }. { +
' (2)(a) Each employer that elects to receive a credit allowed
under subsection (1) of this section must submit an application
to the Child Care Division of the Employment Department each year
the employer wishes to receive the credit. The Child Care
Division shall prescribe by rule the form of the application and
the information required to be given on the application.
' (b) The Child Care Division shall issue a certificate to each
employer that submits an application under this subsection. + }
' { - (2) - } { + (3) + } The amount of the credit allowed
under subsection (1) of this section shall be 50 percent of the
amount so paid or incurred by the employer during the taxable
year but shall not exceed $2,500 of dependent care assistance
actually provided to the employee.
' { - (3)(a) - } { + (4)(a) + } A credit against the taxes
otherwise due under ORS chapter 316 (or, if the taxpayer is a
corporation, under ORS chapter 317 or 318) shall be allowed to a
resident employer, or to a corporation that is an employer, based
upon amounts paid or incurred by the employer during the taxable
year to provide information and referral services to assist
employees of the employer employed within this state to obtain
dependent care.
' (b) The amount of the credit allowed under this subsection
shall be 50 percent of the amounts paid or incurred during the
taxable year.
' { - (4) - } { + (5) + } No amount paid or incurred during
the taxable year of an employer in providing dependent care
assistance to any employee shall qualify for the credit allowed
under subsection (1) of this section if the amount was paid or
incurred to an individual described in section 129(c)(1) or (2)
of the Internal Revenue Code.
' { - (5) - } { + (6) + } No amount paid or incurred by an
employer to provide dependent care assistance to an employee
shall qualify for the credit allowed under subsection (1) of this
section if the amount paid or incurred is paid or incurred
pursuant to a salary reduction plan or is not paid or incurred
for services performed within this state.
' { - (6) - } { + (7) + } If the credit allowed under
subsection (1) or
{ - (3) - } { + (4) + } of this section is claimed, the
amount of any deduction allowed or allowable under ORS chapter
316, 317 or 318 for the amount that qualifies for the credit (or
upon which the credit is based) shall be reduced by the dollar
amount of the credit allowed. The election to claim a credit
allowed under this section shall be made at the time of filing
the tax return in accordance with any rules adopted by the
Department of Revenue.
' { - (7) - } { + (8) + } The amount upon which the credit
allowed under subsection (1) of this section is based shall not
be included in the gross income of the employee to whom the
dependent care assistance is provided. However, the amount
excluded from the income of an employee under this section shall
not exceed the limitations provided in section 129(b) of the
Internal Revenue Code. For purposes of ORS 316.162, with respect
to an employee to whom dependent care assistance is provided,
'wages' does not include any amount excluded under this
subsection. Amounts excluded under this subsection shall not
qualify as expenses for which a credit is allowed to the employee
under ORS 316.078.
' { - (8) - } { + (9) + } A nonresident shall be allowed the
credit allowed under subsection (1) or { - (3) - } { +
(4) + } of this section. The credit shall be computed in the same
manner and be subject to the same limitations as the credit
granted to a resident.
' { - (9) - } { + (10) + }If a change in the taxable year
of the taxpayer occurs as described in ORS 314.085, or if the
department 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.
' { - (10) - } { + (11) + } 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.
' { - (11) - } { + (12) + } Any tax credit otherwise
allowable under this section which 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 such 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.
' { - (12) - } { + (13) + } For purposes of the credit
allowed under subsection (1) or { - (3) - } { + (4) + } of
this section:
' (a) The definitions and special rules contained in section
129(e) of the Internal Revenue Code shall apply to the extent
applicable.
' (b) 'Employer' means an employer carrying on a business,
trade, occupation or profession in this state.
' { - (13) - } { + (14) + } In the case of an on-site
facility, in accordance with any rules adopted by the department,
the amount upon which the credit allowed under subsection (1) of
this section is based, with respect to any dependent, shall be
based upon utilization and the value of the services provided.
' { + SECTION 15. + } { + The amendments to ORS 315.204 by
section 14 of this 2001 Act apply to dependent care assistance
credits taken in tax years beginning on or after January 1,
2002. + }
' { + SECTION 16. + } { + 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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