71st OREGON LEGISLATIVE ASSEMBLY--2001 Regular Session
Enrolled
House Bill 2777
Sponsored by COMMITTEE ON SCHOOL FUNDING AND TAX FAIRNESS/REVENUE
CHAPTER ................
AN ACT
Relating to Oregon tax law; creating new provisions; amending ORS
273.563, 305.220, 305.740, 305.794, 307.110, 307.120, 307.182,
307.242, 307.537, 308.815, 308A.703, 309.110, 310.055, 310.165,
310.630, 311.160, 311.223, 311.390, 311.506, 314.518, 315.262,
315.266, 316.099, 316.109, 316.127, 317.356, 317.850, 318.031,
321.267, 321.415, 321.487, 323.320, 323.455, 341.085, 456.661
and 527.710 and section 4, chapter 405, Oregon Laws 1981,
section 3, chapter 337, Oregon Laws 1995, section 6, chapter
299, Oregon Laws 1997, and section 14, chapter 1000, Oregon
Laws 1999; and repealing ORS 307.550, 307.560, 308.522, 308.670
and 321.731.
Be It Enacted by the People of the State of Oregon:
SECTION 1. ORS 273.563 is amended to read:
273.563. As used in ORS 273.563 to 273.591 { - and 307.550
and 307.560 - } , unless the context requires otherwise:
(1) 'Agency' means a local, state or federal agency, board,
commission or department.
(2) 'Board' means the State Land Board.
(3) 'Candidate natural area' means a natural resource area that
may be considered for registration or dedication.
(4) 'Commodity' means timber, minerals, livestock, agricultural
products or any other product of the land which is an important
economic resource.
(5) 'Council' means the Natural Heritage Advisory Council
established in ORS 273.571.
(6) 'Data bank' means the Natural Heritage Program element
inventory of element classification, data analysis, priority
setting, owner and other data provided in ORS 273.576 (1)(a).
(7) 'Dedicate' means the formal recognition and protection of a
natural area for natural heritage conservation purposes.
(8) 'Elements' means both the natural heritage resources and
the special species.
(9) 'Instrument' means any written document intended to convey
an interest in real property under ORS 93.710, or an agreement
between parties according to the Natural Heritage Program or the
Oregon Natural Heritage Plan.
(10) 'Natural area' means a unit of land or water or both that
may be considered for dedication under ORS 273.563 to 273.591 and
that has substantially retained its natural character, or, if
altered in character, shall in addition to its natural heritage
resource values, be valuable as habitat for plant and animal
Enrolled House Bill 2777 (HB 2777-INTRO) Page 1
species or for the study and appreciation of the natural
features.
(11) 'Natural heritage conservation area' means an area
dedicated under the provisions of ORS 273.586.
(12) 'Natural heritage resources' means the terrestrial
ecosystem types, aquatic ecosystem types and unique geologic
types as defined in the Oregon Natural Heritage Plan or a unit of
land or water that contains a natural resource.
(13) 'Plan' means the Oregon Natural Heritage Plan established
under ORS 273.576, which governs the Natural Heritage Program in
selecting areas for natural heritage conservation.
(14) 'Program' means the Natural Heritage Program as
established in ORS 273.566.
(15) 'Register' means the Oregon Register of Natural Heritage
Areas established under ORS 273.581.
(16) 'Special species' means those species of plants and
animals determined by the council to be significant in value in a
natural heritage conservation area and defined in the Oregon
Natural Heritage Plan.
{ + NOTE: + } Deletes references to repealed provisions. (See
section 16 of this 2001 Act.)
SECTION 2. ORS 305.220 is amended to read:
305.220. (1) Unless specifically provided otherwise by statute
or by rule of the Director of the Department of Revenue adopted
pursuant to subsection (3) of this section, every deficiency or
delinquency arising under any law administered by the Department
of Revenue shall bear simple interest at the rate of five-sixths
of one percent per month or fraction thereof.
(2) Unless specifically provided otherwise by statute or by
rule of the director adopted pursuant to subsection (3) of this
section, every refund arising under any law administered by the
department { - of Revenue - } shall:
{ - (a) Bear interest at the rate of one percent per month,
or fraction thereof, for interest periods beginning prior to June
1, 1983. - }
{ - (b) - } { + (a) + } Bear { + simple + } interest at
the rate of one and one-half percent per month, or fraction
thereof, for interest periods beginning { - on or after June 1,
1983, and - } prior to January 1, 1988, unless an adjustment was
made under subsection (3) of this section in which case the
adjusted interest rate shall be used for the period for which the
adjustment was made.
{ - (c) - } { + (b) + } Subject to subsections (3) and (5)
of this section and ORS 305.222, bear { + simple + } interest at
the rate of five-sixths of one percent per month, or fraction
thereof, for interest periods beginning on or after January 1,
1988.
(3)(a) If the director determines that the rates of interest
for deficiencies, delinquencies and refunds established in
subsections (1) and (2) of this section are at least one
percentage point more or less than the prevailing rates of
interest established by the Internal Revenue Service for
underpayments arising under the federal tax laws to which one
percentage point has been added, the director may adopt, by rule,
adjusted interest rates. The director shall not adopt adjusted
interest rates more than once in a calendar year. Notice of
intent to adopt adjusted interest rates shall be given in the
manner provided in ORS 183.335, not less than three months before
the proposed effective date of the adjusted rates.
Enrolled House Bill 2777 (HB 2777-INTRO) Page 2
(b) In establishing the adjusted interest rates to be adopted
under this subsection:
(A) The director shall take into consideration the current
interest rates established by the Internal Revenue Service for
underpayments arising under the federal tax laws.
(B) To any interest amount determined by taking into
consideration the current interest rates established by the
Internal Revenue Service for underpayments under subparagraph (A)
of this paragraph, which interest amount shall be expressed at a
rate per month or fraction thereof, there shall be added
one-twelfth of one percent.
(4) { - (a) If the director adopts an adjusted interest rate
for deficiencies and delinquencies for any interest period
beginning prior to June 1, 1983, the director shall adopt an
adjusted interest rate for refunds that is six percentage points
below the adjusted interest rate for deficiencies and
delinquencies for the same period. - }
{ - (b) - } If the director adopts an adjusted interest rate
for deficiencies and delinquencies { - for an interest period
beginning on or after June 1, 1983 - } , the director shall adopt
an adjusted interest rate for refunds that is equal to the
adjusted interest rate for deficiencies and delinquencies.
(5) Any change in the rate of interest applicable to
deficiencies, delinquencies or refunds resulting from the
adoption of adjusted interest rates by the director under this
section shall apply to deficiencies, delinquencies and refunds
outstanding on the effective date of the rule, or arising on or
after that date, but only with respect to interest periods
beginning on or after that date.
(6) If the rate of interest on a deficiency, a delinquency or a
refund is governed by this section, and if a fraction of a month
is involved in making the computation of interest on the
deficiency, delinquency or refund, then for the fractional month,
the simple interest otherwise provided shall be computed on a
daily basis.
{ + NOTE: + } Eliminates obsolete language; makes terminology
consistent.
SECTION 3. { + The amendments to ORS 305.220 by section 2 of
this 2001 Act apply to interest periods beginning on or after
June 1, 1983. + }
{ + NOTE: + } See section 2 of this 2001 Act.
SECTION 4. ORS 305.220, as amended by section 2 of this 2001
Act, is amended to read:
305.220. (1) Unless specifically provided otherwise by statute
or by rule of the Director of the Department of Revenue adopted
pursuant to subsection (3) of this section, every deficiency or
delinquency arising under any law administered by the Department
of Revenue shall bear simple interest at the rate of five-sixths
of one percent per month or fraction thereof.
(2) Unless specifically provided otherwise by statute or by
rule of the director adopted pursuant to subsection (3) of this
section, every refund arising under any law administered by the
department shall { + , + } { - : - }
{ - (a) Bear simple interest at the rate of one and one-half
percent per month, or fraction thereof, for interest periods
beginning prior to January 1, 1988, unless an adjustment was made
under subsection (3) of this section in which case the adjusted
interest rate shall be used for the period for which the
adjustment was made. - }
Enrolled House Bill 2777 (HB 2777-INTRO) Page 3
{ - (b) - } subject to subsections (3) and (5) of this
section and ORS 305.222, bear simple interest at the rate of
five-sixths of one percent per month, or fraction thereof { - ,
for interest periods beginning on or after January 1, 1988 - } .
(3)(a) If the director determines that the rates of interest
for deficiencies, delinquencies and refunds established in
subsections (1) and (2) of this section are at least one
percentage point more or less than the prevailing rates of
interest established by the Internal Revenue Service for
underpayments arising under the federal tax laws to which one
percentage point has been added, the director may adopt, by rule,
adjusted interest rates. The director shall not adopt adjusted
interest rates more than once in a calendar year. Notice of
intent to adopt adjusted interest rates shall be given in the
manner provided in ORS 183.335, not less than three months before
the proposed effective date of the adjusted rates.
(b) In establishing the adjusted interest rates to be adopted
under this subsection:
(A) The director shall take into consideration the current
interest rates established by the Internal Revenue Service for
underpayments arising under the federal tax laws.
(B) To any interest amount determined by taking into
consideration the current interest rates established by the
Internal Revenue Service for underpayments under subparagraph (A)
of this paragraph, which interest amount shall be expressed at a
rate per month or fraction thereof, there shall be added
one-twelfth of one percent.
(4) If the director adopts an adjusted interest rate for
deficiencies and delinquencies, the director shall adopt an
adjusted interest rate for refunds that is equal to the adjusted
interest rate for deficiencies and delinquencies.
(5) Any change in the rate of interest applicable to
deficiencies, delinquencies or refunds resulting from the
adoption of adjusted interest rates by the director under this
section shall apply to deficiencies, delinquencies and refunds
outstanding on the effective date of the rule, or arising on or
after that date, but only with respect to interest periods
beginning on or after that date.
(6) If the rate of interest on a deficiency, a delinquency or a
refund is governed by this section, and if a fraction of a month
is involved in making the computation of interest on the
deficiency, delinquency or refund, then for the fractional month,
the simple interest otherwise provided shall be computed on a
daily basis.
{ + NOTE: + } Eliminates obsolete language.
SECTION 5. { + The amendments to ORS 305.220 by section 4 of
this 2001 Act apply to interest periods beginning on or after
January 1, 1988. + }
{ + NOTE: + } See section 4 of this 2001 Act.
SECTION 6. ORS 305.740 is amended to read:
305.740. (1) Prior to the end of 1990 and prior to the end of
each even-numbered calendar year thereafter, and subject to
subsection (2) of this section, the Oregon Charitable Checkoff
Commission shall examine the list of entities included on the
Oregon personal income tax return for the tax year beginning in
the calendar year immediately preceding and shall determine if
each entity listed is qualified under ORS 305.710 and 305.720 to
be listed on the { - Oregon individual income tax - } return
to receive contributions by means of checkoff for the ensuing
biennial years.
Enrolled House Bill 2777 (HB 2777-INTRO) Page 4
(2)(a) The Department of Revenue shall determine for each tax
year if each entity listed for checkoff on the { - Oregon
tax - } return for the preceding tax year meets the criteria
under ORS 305.720 (5) and shall notify the commission, if and
when appropriate. In determining the amount received in
contributions from checkoffs for an entity for a particular tax
year:
(A) For purposes of meeting the $50,000 minimum contribution,
the amount received in contributions from checkoffs in the amount
shown in the department's financial statement for the fiscal year
shall be counted.
(B) The amount of receipts shall not be reduced by the amount
of administrative expense referred to in ORS 305.747.
(b) The determination of the department made under paragraph
(a) of this subsection is final and may not be appealed.
Notwithstanding subsection (1) of this section, an entity that
has not met the criteria of ORS 305.720 (5) shall not be listed
on the
{ - Oregon tax - } return for checkoff.
(3)(a) If the commission, for any reason other than that
contributions by means of checkoff did not reach the amount
required under ORS 305.720 (5), determines that an entity
included on the list certified under ORS 305.715 (2) for the
prior biennial years is not qualified to be included, or that an
entity making application is not qualified to be included, or is
not included because of determinations under ORS 305.710, on the
list for the ensuing biennial years, the commission shall so
order.
(b) The commission shall serve upon the entity, either by
personal service or by certified mail, return receipt requested,
the order issued under paragraph (a) of this subsection. The
order shall comply with the applicable notice requirements of ORS
183.415.
(c) The entity or person or persons to whom the order is
directed shall have 20 days from the date of personal service or
mailing of the notice in which to make written application to the
commission for a contested case hearing to be held in accordance
with ORS 183.415 to 183.500 before the commission or the designee
of the commission. In any hearing before the designee of the
commission, the designee is authorized to issue the final order
in the matter.
(d) Upon failure to request a contested case hearing within the
time specified, the order shall become final.
(e) Appeal may be taken from a final order as specified under
ORS 183.480 to 183.497.
(f) A final order issued by the commission, the designee of the
commission, the Court of Appeals or the Oregon Supreme Court
determining that an entity be included on the list certified
under ORS 305.715 (2) may require only that the entity be
included on the list next certified after the effective date of
the final order.
{ + NOTE: + } Makes terminology consistent.
SECTION 7. ORS 305.794 is amended to read:
305.794. In addition to and not in lieu of any other
appropriation, amounts certified by the Department of Revenue to
the State Treasurer { + under ORS 305.792 + } are appropriated
from the General Fund to the State School Fund for the purposes
for which State School Fund moneys may be used.
{ + NOTE: + } Clarifies reference.
SECTION 8. ORS 307.110 is amended to read:
Enrolled House Bill 2777 (HB 2777-INTRO) Page 5
307.110. (1) Except as provided in ORS 307.120, all real and
personal property of this state or any institution or department
thereof or of any county or city, town or other municipal
corporation or political subdivision of this state, held under a
lease or other interest or estate less than a fee simple, by any
person whose real property, if any, is taxable, except employees
of the state, municipality or political subdivision as an
incident to such employment, shall be subject to assessment and
taxation for the assessed or specially assessed value thereof
uniformly with real property of nonexempt ownerships.
(2) Each leased or rented premises not exempt under ORS 307.120
and subject to assessment and taxation under this section which
is located on property used as an airport and owned by and
serving a municipality or port shall be separately assessed and
taxed.
(3) Nothing contained in this section shall be construed as
subjecting to assessment and taxation any publicly owned property
described in subsection (1) of this section that is:
(a) Leased for student housing by a school or college to
students attending such a school or college.
(b) Leased to or rented by persons, other than sublessees or
subrenters, for agricultural or grazing purposes and for other
than a cash rental or a percentage of the crop.
(c) Utilized by persons under a land use permit issued by the
Department of Transportation for which the department's use
restrictions are such that only an administrative processing fee
is able to be charged.
(d) County fairgrounds and the buildings thereon, in a county
holding annual county fairs, managed by the county fair board
under ORS 565.230, if utilized, in addition to county fair use,
for any of the purposes described in ORS 565.230 (2), or for
horse stalls or storage for recreational vehicles or farm
machinery or equipment.
(e) The properties and grounds managed and operated by the
Oregon State Fair and Exposition Center under ORS 565.015, if
utilized, in addition to the purpose of holding the Oregon State
Fair, for horse stalls or for storage for recreational vehicles
or farm machinery or equipment.
(f) For tax years beginning on or after July 1, 1969, and
before July 1, 2002, state property that is used by the State
System of Higher Education or the Oregon Health Sciences
University to provide parking for employees or students.
(g) Property of a housing authority created under ORS chapter
456 which is leased or rented to persons of lower income for
housing pursuant to the public and governmental purposes of the
housing authority. For purposes of this paragraph, 'persons of
lower income' has the meaning given the phrase under ORS 456.055.
{ - (h) Property within a shipyard capable of dry-docking
ocean-going vessels of 200,000 deadweight tons or more and
utilized or leased by a sole contractor for the purpose of ship
repair, layup, conversion or construction. The public shipyard
owner shall notify the county assessor of the date of the lease
or other possessory interest agreement with the sole shipyard
contractor. Property subleased by the sole shipyard contractor,
or utilized by another person pursuant to a possessory interest
agreement with the sole shipyard contractor, is not exempt under
this paragraph. - }
{ - (i) - } { + (h) + } Property of a health district if:
Enrolled House Bill 2777 (HB 2777-INTRO) Page 6
(A) The property is leased or rented for the purpose of
providing facilities for health care practitioners practicing
within the county; and
(B) The county is a frontier rural practice county under rules
adopted by the Office of Rural Health.
(4) Property determined to be an eligible project for tax
exemption under ORS 285B.383 and 307.123 that was acquired with
revenue bonds issued under ORS 285B.320 to 285B.377 and that is
leased by this state, any institution or department thereof or
any county, city, town or other municipal corporation or
political subdivision of this state to an eligible applicant
shall be assessed and taxed in accordance with ORS 307.123.
(5) The provisions of law for liens and the payment and
collection of taxes levied against real property of nonexempt
ownerships shall apply to all real property subject to the
provisions of this section. Taxes remaining unpaid upon the
termination of a lease or other interest or estate less than a
fee simple, shall remain a lien against the real or personal
property.
(6) If the state enters into a lease of property with, or
grants an interest or other estate less than a fee simple in
property to, a person whose real property, if any, is taxable,
then within 30 days after the date of the lease, or within 30
days after the date the interest or estate less than a fee simple
is created, the state shall file a copy of the lease or other
instrument creating or evidencing the interest or estate with the
county assessor. This section applies notwithstanding that the
property may otherwise be entitled to an exemption under this
section, ORS 307.120 or as otherwise provided by law.
{ + NOTE: + } Removes temporary provisions from permanent
law. (See sections 9 to 11 of this 2001 Act.)
SECTION 9. ORS 307.120 is amended to read:
307.120. (1) Real property owned or leased by any municipality
and real and personal property owned or leased by any dock
commission of any city or by any port organized under the laws of
this state is exempt from taxation to the extent to which such
property is:
(a) Leased, subleased, rented or preferentially assigned for
the purpose of the berthing of ships, barges or other watercraft
(exclusive of property leased, subleased, rented or
preferentially assigned primarily for the purpose of the berthing
of floating homes, as defined in ORS 830.700), the discharging,
loading or handling of cargo therefrom or for storage of such
cargo directly incidental to transshipment, or the cleaning or
decontaminating of agricultural commodity cargo, to the extent
the property does not further alter or process an agricultural
commodity;
(b) Held under lease or rental agreement executed for any
purpose prior to July 5, 1947, except that this exemption shall
continue only during the term of the lease or rental agreement in
effect on that date; or
(c) Used as an airport owned by and serving a municipality or
port of less than 300,000 inhabitants as determined by the latest
decennial census. Property owned or leased by the municipality or
port, located within or contiguous to the airport is 'used as an
airport' within the meaning of this subsection if the proceeds of
the lease, sublease or rental are used by the municipality or
port exclusively for purposes of the maintenance and operation of
the airport.
Enrolled House Bill 2777 (HB 2777-INTRO) Page 7
(2) Those persons having on January 1 of any year a lease,
sublease, rent or preferential assignment or other possessory
interest in property exempt from taxation under subsection (1)(a)
of this section, except dock area property { - or property
described under ORS 307.110 (3)(h) - } , shall make payments in
lieu of taxes to any school district in which the exempt property
is located as provided in subsection (3) of this section. The
annual payment in lieu of taxes shall be one quarter of one
percent (.0025) of the assessed value of the exempt property and
the payment shall be made to the county treasurer on or before
May 1 of each year.
(3)(a) On or before December 31 preceding any year for which a
lease, sublease, rental or preferential assignment or other
possessory interest in property is to be held, or within 30 days
after acquisition of such an interest, whichever is later, any
person described in subsection (2) of this section shall file
with the county assessor a request for computation of the payment
in lieu of tax for the exempt property in which the person has a
possessory interest. The person shall also provide any
information necessary to complete the computation that may be
requested by the assessor. The request shall be made on a form
prescribed by the Department of Revenue.
(b) On or before April 1 of each assessment year the county
assessor shall compute the in lieu tax for the property subject
to subsection (2) of this section for which a request for
computation has been filed under paragraph (a) of this subsection
and shall notify each person who has filed such a request:
(A) That the person is required to pay the amount in lieu of
taxes to the county treasurer on behalf of the school district;
(B) Of the assessed value of the property subject to the
payment in lieu of taxes; and
(C) Of the amount due, the due date of the payment in lieu of
taxes and of the consequences of late payment or nonpayment.
(c) On or before July 15 of each tax year the county treasurer
shall distribute to the school districts the amounts received for
the respective districts under subsection (2) of this section. If
the exempt property is located in more than one school district,
the amount received shall be apportioned to the school districts
on the basis of the ratio that each school district's permanent
limit on the rate of ad valorem property taxes bears to the total
permanent limit on the rate of ad valorem property taxes
applicable to all of the school districts in which the property
is located.
(4) If a person described in subsection (2) of this section
fails to request a computation or make a payment in lieu of taxes
as provided in this section, the property shall not be exempt for
the tax year but shall be assessed and taxed as other property
similarly situated is assessed and taxed.
(5) Upon granting of a lease, sublease, rental, preferential
assignment or other possessory interest in property described in
subsection (1)(a) of this section, except dock area property, the
municipality, dock commission or port shall provide the county
assessor with the name and address of the lessee, sublessee,
renter, preferential assignee or person granted the possessory
interest.
(6)(a) Not later than 15 days prior to the date that a request
is required to be made under subsection (3)(a) of this section,
the municipality, dock commission or port granting a lease,
sublease, rental, preferential assignment or other possessory
interest in its exempt property for which in lieu tax payments
Enrolled House Bill 2777 (HB 2777-INTRO) Page 8
are imposed under subsection (2) of this section, shall notify
the person granted the interest:
(A) Of the obligation to file with the county assessor a
request for appraisal and computation of in lieu tax no later
than December 31 or within 30 days after the interest is granted,
whichever is later.
(B) Of the obligation to pay the in lieu tax, in the amount of
one-quarter of one percent (.0025) of the assessed value of the
exempt property held, to the county treasurer before May 1
following the date of the request.
(C) That, if the request is not made within the time
prescribed, or if the in lieu tax is not paid, or both, that the
property shall not be exempt from taxation but shall be assessed
and taxed in the same manner as other property similarly situated
is assessed and taxed.
(b) Failure of a municipality, dock commission or port to give
the notice as prescribed under this subsection shall not relieve
any person from the requirements of this section.
(7) As used in this section:
(a) 'Dock' means a structure extended from the shore or area
adjacent to deep water for the purpose of permitting the mooring
of ships, barges or other watercraft.
(b) 'Dock area' means that part of the dock situated
immediately adjacent to the mooring berth of ships, barges or
other watercraft which is used primarily for the loading and
unloading of waterborne cargo, but which shall not encompass any
area other than that area from which cargo is hoisted or moved
aboard a vessel, or to which cargo is set down when unloaded from
a vessel when utilizing shipboard or dockside machinery.
(c) 'Dock area property' means all real property situated in
the dock area, and includes all structures, machinery or
equipment affixed to that property.
(d) 'School district' means a common or union high school
district, but does not include a county education bond district,
an education service district, a community college service
district or a community college district.
{ + NOTE: + } Removes temporary provisions from permanent
law. (See sections 8, 10 and 11 of this 2001 Act.)
SECTION 10. { + (1) Property within a shipyard capable of
dry-docking oceangoing vessels of 200,000 deadweight tons or more
and utilized or leased by a sole contractor for the purpose of
ship repair, layup, conversion or construction is exempt from ad
valorem property taxation.
(2) The public shipyard owner shall notify the county assessor
of the date of the lease or other possessory interest agreement
with the sole shipyard contractor.
(3) Property subleased by the sole shipyard contractor, or
utilized by another person pursuant to a possessory interest
agreement with the sole shipyard contractor, is not exempt under
this section.
(4) Persons having on January 1 of any year a lease, sublease,
rent or preferential assignment or other possessory interest in
property that is exempt from taxation under this section are not
required to make the payments in lieu of taxes described in ORS
307.120 (2). + }
{ + NOTE: + } Places temporary provisions into separate
section. (See sections 8, 9 and 11 of this 2001 Act.)
SECTION 11. Section 3, chapter 337, Oregon Laws 1995, is
amended to read:
Enrolled House Bill 2777 (HB 2777-INTRO) Page 9
{ + Sec. 3. + } { - The amendments to ORS 307.110 and
307.120 by sections 1 and 2 of this Act apply - } { + Section
10 of this 2001 Act applies + } to property tax years beginning
on or after July 1, 1995, and before July 1, 2010.
{ + NOTE: + }Applies timelines to provisions now separated
from permanent law. (See sections 8 to 10 of this 2001 Act.)
SECTION 12. ORS 307.182 is amended to read:
307.182. Notwithstanding ORS 307.060, there shall be exempt
from property taxation real property used and occupied by
commercial recreation facility operators under permits issued
pursuant to the Acts of June 4, 1897 (16 U.S.C. 551) { - , - }
{ + and + } March 4, 1915 (16 U.S.C. 497), as amended,
{ - and March 30, 1948 (48 U.S.C. 341), - } but the
improvements thereon are subject to ad valorem taxation as
provided in ORS 307.030.
{ + NOTE: + } Eliminates reference to federal law that
applies only to Alaska.
SECTION 13. Section 4, chapter 405, Oregon Laws 1981, as
amended by section 1, chapter 169, Oregon Laws 1985, and section
4, chapter 748, Oregon Laws 1995, is amended to read:
{ + Sec. 4. + } ORS 307.182 { - , the amendments to ORS
307.060 by section 2, chapter 405, Oregon Laws 1981, and the
repeal of section 2, chapter 656, Oregon Laws 1975, by section 3,
chapter 405, Oregon Laws 1981, apply for - } { + applies to + }
tax years beginning on or after July 1, 1981, and prior to July
1, 2002.
{ + NOTE: + } Corrects applicability provision statutory
references.
SECTION 14. ORS 307.242 is amended to read:
307.242. (1) Upon compliance with this section, whenever a
corporation, as defined in ORS 307.375, is receiving or has
received any federal or state financial assistance, such as a
loan, mortgage insurance, aid to construction, rent supplement or
otherwise, under the following federal or state laws, the
property owned or being purchased by that corporation in actual
use for corporate purposes or in the process of construction for
use for corporate purposes on January 1 of the assessment year is
exempt from ad valorem taxation:
(a) Section 202 of Title II of the National Housing Act (12
U.S.C. 1701q).
(b) Section 236 of the National Housing Act (12 U.S.C.
{ - 1715z (1) - } { + 1715z-1 + }).
(c) Section 231 of Title II of the National Housing Act (12
U.S.C. 1715v).
(d) Section 101 of Title I of the National Housing Act (12
U.S.C. 1701s) or section 8 of Title II of the National Housing
Act (42 U.S.C. 1437f), providing rent supplement or housing
assistance payments.
(e) ORS 456.515 to 456.725 and 458.505 to 458.515.
(2) A corporation claiming the exemption under subsection (1)
of this section shall file with the county assessor, on forms
prescribed by the Department of Revenue and supplied by the
assessor, a written claim therefor in duplicate on or before
April 1 of each assessment year for which the exemption is
claimed. If the claim for any year is not filed within the time
specified, except as provided under ORS 307.475 and subsection
(3) of this section, the exemption shall not be allowed on the
assessment roll for that year. In addition to any other matters
prescribed by the Department of Revenue to be contained in or
accompany the claim, the claim shall:
Enrolled House Bill 2777 (HB 2777-INTRO) Page 10
(a) Declare or be accompanied by a declaration that the
corporation meets the requirements of ORS 307.375 and that the
property meets the requirements of ORS 307.243 (1);
(b) Describe or be accompanied by a description of the federal
financial assistance the corporation is receiving or has
received;
(c) Contain or be accompanied by a statement showing in detail
the sources and amounts of all income received by the corporation
and the basis for rental amounts charged for occupancy of the
facilities; and
(d) Be signed by the taxpayer subject to the penalties for
false swearing.
(3) Notwithstanding subsection (2) of this section:
(a) If the property qualifies for exemption on or after March 1
and before July 1, the claim may be filed within 30 days after
the date of qualification.
(b) A statement may be filed under this section at any time
prior to December 31 of the assessment year for which exemption
is first desired. However, any statement filed after the time for
filing the statement specified in subsection (2) of this section,
unless filed under paragraph (a) of this subsection, must be
accompanied by a late filing fee of the greater of $200 or
one-tenth of one percent of the real market value of the property
to which the statement pertains, as determined as of January 1 of
the assessment year by the assessor for this purpose. If the
statement is not accompanied by the late filing fee or if the
late filing fee is not otherwise paid, no exemption shall be
allowed for the year based upon a statement filed pursuant to
this subsection. A statement may be filed under this section
notwithstanding that there are no grounds for hardship as
required for late filing under ORS 307.475. The value of the
property used to determine the late filing fee under this section
is appealable in the same manner as other acts of the county
assessor. Any filing fee collected under this section shall be
deposited to the county general fund to be made available for
county general governmental expenses.
(4) The assessor shall act upon the claim and shall approve or
reject it, noting the action of the assessor upon both the
original and the duplicate copies. The duplicate copy therefor
shall be returned to the claimant.
(5) The Department of Revenue shall furnish to a county
assessor, upon the request of the county assessor, a statement
certifying the qualification or nonqualification of a corporation
under ORS 307.375 and this section based upon the corporation's
claim under this section.
(6) Residents of a facility of a corporation exempt from
taxation under this section shall not be entitled to the tax
benefits of ORS 307.370 to 307.385.
{ + NOTE: + } Corrects citation to federal law.
SECTION 15. ORS 307.537 is amended to read:
307.537. { - (1) ORS 307.517 applies to applications for
exemption filed after January 1, 1990, in years beginning on or
after January 1, 1990. - }
{ - (2) ORS 307.518 applies to applications for exemption
filed on or after July 1, 1992, in tax years beginning on or
after July 1, 1992. - }
{ - (3) - } The amendments to ORS 307.521 (1) by section 5,
chapter 930, Oregon Laws 1991, changing the period of the
exemption provided under ORS 307.515 to 307.523 from 10 to 20
years, apply to property granted exemption pursuant to
Enrolled House Bill 2777 (HB 2777-INTRO) Page 11
{ - application - } { + applications + } filed on or after
September 29, 1991.
{ + NOTE: + } Deletes outdated provisions.
SECTION 16. { + ORS 307.550 and 307.560 are repealed. + }
{ + NOTE: + } Repeals outdated provisions.
SECTION 17. { + ORS 308.522 is repealed. + }
{ + NOTE: + } Repeals outdated provision.
SECTION 18. { + ORS 308.670 is repealed. + }
{ + NOTE: + } Repeals outdated provision.
SECTION 19. ORS 308.815 is amended to read:
308.815. (1) The Department of Revenue shall examine and
determine as to the correctness of the return and taxes on the
association's gross revenue forwarded pursuant to ORS 308.810 and
if found correct shall thereupon remit the tax so received to the
treasurers of the counties in which the association has electric
transmission and distribution lines in proportion to the number
of wire miles in each of such counties.
(2) If the taxes so received by the treasurers of the
respective counties are measured by gross revenue they shall be
credited as follows:
(a) For payments due July 1, 1992:
(A) 60 percent to the county school fund.
(B) 40 percent to the general fund of the county.
(b) For payments due July 1, 1993:
(A) 55.6 percent to the county school fund.
(B) 44.4 percent to the general fund of the county.
(c) For payments due July 1, 1994:
(A) 50 percent to the county school fund.
(B) 50 percent to the general fund of the county.
(d) For payments due July 1, 1995:
(A) 42.9 percent to the county school fund.
(B) 57.1 percent to the general fund of the county.
(e) For payments due July 1, 1996, and thereafter:
(A) 33.3 percent to the county school fund.
(B) { - 67.7 - } { + 66.7 + } percent to the general fund
of the county.
(3) If the amount of the taxes was determined under ORS 308.807
(2) they shall be deposited in the unsegregated tax collections
account and distributed according to the percentage distribution
schedule in ORS 311.390.
(4) If the return or taxes are found to be incorrect, the
department shall notify the association of the error, and refund
any overpayment or demand payment of any deficiency.
{ + NOTE: + } Corrects formula.
SECTION 20. { + ORS 308A.300 to 308A.330 and 308A.350 to
308A.383 are added to and made a part of ORS chapter 308A. + }
{ + NOTE: + } Adds series to appropriate chapter.
SECTION 21. ORS 308A.703 is amended to read:
308A.703. (1) This section applies to land upon the land's
disqualification from special assessment under any of the
following sections:
(a) Exclusive farm use zone farmland under ORS 308A.113;
(b) Nonexclusive farm use zone farmland under ORS 308A.116;
(c) Western Oregon designated forestland under ORS 321.359;
(d) Eastern Oregon designated forestland under ORS 321.820;
(e) Western Oregon Small Tract Optional Tax classification
under ORS 321.760; or
(f) Wildlife habitat open space use assessment under ORS
215.808.
Enrolled House Bill 2777 (HB 2777-INTRO) Page 12
(2) Following a disqualification listed in subsection (1) of
this section, an additional tax shall be added to the tax
extended against the land on the next assessment and tax roll, to
be collected and distributed in the same manner as other ad
valorem property tax moneys. The additional tax shall be equal to
the difference between the taxes assessed against the land and
the taxes that would otherwise have been assessed against the
land, for each of the number of years determined under subsection
(3) of this section.
(3) The number of years for which additional taxes shall be
calculated shall equal the lesser of the number of consecutive
years the land had qualified for the special assessment program
for which disqualification has occurred or:
(a) Ten years, in the case of exclusive farm use zone farmland,
but only if the land, immediately following disqualification,
remains outside an urban growth boundary;
(b) Ten years, in the case of wildlife habitat open space use
assessment land within an exclusive farm use zone, but only if
the land, immediately following disqualification, remains outside
an urban growth boundary; or
(c) Five years, in the case of:
(A) Nonexclusive farm use zone farmland;
(B) Western Oregon designated forestland;
(C) Eastern Oregon designated forestland;
(D) Western Oregon Small Tract Optional Tax classified
forestland;
(E) Exclusive farm use zone farmland that is not described in
paragraph (a) of this subsection; or
(F) Wildlife habitat open space use special assessment land
that is not described in paragraph (b) of this subsection.
(4) The additional taxes described in this section shall be
deemed assessed and imposed in the year to which the additional
taxes relate.
(5) If the disqualification of the land is the result of the
sale or transfer of the land to an ownership making the land
exempt from ad valorem property taxation, the lien for additional
taxes shall attach as of the day preceding the sale or transfer.
(6) The amount determined to be due under this section may be
paid to the tax collector prior to the time of the next general
property tax roll, pursuant to the provisions of ORS 311.370.
(7) If additional taxes are imposed under this section as a
result of the { - disqualification - } { + declassification
+ }of Western Oregon Small Tract Optional Tax classified
forestland, the following amounts shall be added to and
considered a part of the additional taxes otherwise due under
this section, to be collected in the same manner in which
additional taxes are collected:
(a) The amount of privilege taxes that would have been payable
under ORS 321.257 to 321.322, during the five years immediately
preceding the extension of additional taxes on the tax roll; and
(b) Interest on the amounts of taxes added pursuant to
paragraph (a) of this subsection at the rate of six percent a
year from the date at which such increased taxes would have been
payable if the forestland had been valued without regard to ORS
321.720.
(8) The Department of Revenue shall provide the amounts
described in subsection (7) of this section to the county
assessor.
{ + NOTE: + } Clarifies terminology.
SECTION 22. ORS 309.110 is amended to read:
Enrolled House Bill 2777 (HB 2777-INTRO) Page 13
309.110. (1) The disposition of every petition before a board
of property tax appeals and the board's determination thereon
shall be recorded by formal order and entered in the record of
the board. A copy of the order as to each petition shall be sent,
by mail, to the petitioner at the post-office address given in
the petition. When a copy of a board's order is personally
delivered to the petitioner, the requirement to mail a copy of
the order is waived. A copy of each order shall be delivered to
the assessor and the officer in charge of the roll on the same
day that the order is mailed or delivered to the petitioner. The
orders of a board shall specify what changes shall be made in the
tax roll, if any, and shall direct the officer in charge of the
roll to make them. The district attorney shall be available to
aid a board in the preparation of its orders.
(2) Notwithstanding subsection (1) of this section, if a
petition is filed with the board that is resolved by stipulation
under ORS 308.242 prior to the date the board convenes, the
stipulation shall be entered into the record of the board. The
requirements for mailing and delivery under subsection (1) of
this section do not apply to a stipulation entered into the
record under this subsection.
(3)(a) A board may issue amended orders to correct clerical
errors or errors of jurisdiction appearing in its original
orders.
(b) A board may authorize a board member or clerk of the board
to amend board orders on behalf of the board for the purpose of
correcting clerical errors.
{ - (c) As used in this subsection: - }
{ - (A) 'Clerical error' means an error in the order that
either arises from an error in the minutes of a board or that is
a failure to correctly reflect the minutes of a board, and that,
had it been discovered prior to the order being issued would have
been corrected as a matter of course, and the information
necessary to make the correction is contained in the minutes of a
board. Such errors include, but are not limited to, arithmetic
and copying errors and omission or misstatement of identification
of property. - }
{ - (B) 'Error of jurisdiction' means an error in the order
resulting from the board's failure to correctly apply the board's
authority as granted under ORS 309.026. - }
(4) Amended orders correcting an error of jurisdiction may be
issued only during a board's session, or by call of the
chairperson.
(5) An amended order correcting a clerical error or an error of
jurisdiction must be made on or before June 30 of the year in
which the original order was issued by the board.
(6) The provisions of subsection (1) of this section shall
apply to amended orders, unless the context requires otherwise.
Amended orders shall be mailed to the petitioner and delivered to
the assessor and the officer in charge of the roll not later than
five days after the adjournment of a board's meetings or five
days after the date the order is amended, whichever is later.
(7) The order of a board, other than an order relating to an
application to excuse liability for the penalty imposed under ORS
308.295, may be appealed to the magistrate division of the Oregon
Tax Court.
{ + (8) As used in this section:
(a) 'Clerical error' means an error in an order that either
arises from an error in the minutes of a board or is a failure to
correctly reflect the minutes of a board and that, had it been
Enrolled House Bill 2777 (HB 2777-INTRO) Page 14
discovered prior to the order being issued, would have been
corrected as a matter of course. In order to be a clerical error,
the information necessary to make the correction must be
contained in the minutes of the board. Such errors include, but
are not limited to, arithmetic and copying errors and omission or
misstatement of identification of property.
(b) 'Error of jurisdiction' means an error in an order
resulting from a board's failure to correctly apply the board's
authority as granted under ORS 309.026. + }
{ + NOTE: + } Applies definitions to entire section; corrects
syntax.
SECTION 23. ORS 310.055 is amended to read:
310.055. (1) As used in the property tax laws of this state, '
operating taxes' means ad valorem property taxes that are subject
to a permanent rate limit under section 11, Article XI of the
Oregon Constitution, or statutory rate limit under ORS 310.236
(4) or 310.237, if applicable.
(2) For the tax year beginning July 1, 1997, operating taxes
consist of the sum of the following (or such lesser amount as is
certified to the assessor under ORS 310.206 (4)(b):
(a) The total amount of ad valorem property taxes as provided
in ORS 310.200 to 310.242, except that the amount under this
paragraph does not include:
(A) Local option taxes;
(B) Ad valorem property taxes used to repay taxing district
bond or pension and disability plan obligations described in
section 11 (5), Article XI of the Oregon Constitution;
(C) Ad valorem property taxes that would otherwise be subject
to this paragraph, except that the taxes are of a taxing district
other than a city, county or school district, and are used to
support a hospital facility;
(D) Ad valorem property taxes that would otherwise be subject
to this paragraph, except that the levy of the taxes was approved
by voters prior to December 5, 1996, that met the voter
participation requirements in section 11 (8), Article XI of the
Oregon Constitution, and that are first imposed in the tax year
beginning July 1, 1996, or July 1, 1997;
(E) Serial or one-year levies described in ORS 280.040 to
280.140 (1995 Edition) that replace levies that were imposed in
the tax year beginning July 1, 1996, that were approved by voters
in an election held after December 4, 1996, and that are first
imposed for the tax year beginning July 1, 1997, if the rate or
the amount of the levy is not greater than the rate or the amount
of the replaced levy;
(F) Taxes imposed to pay principal and interest on exempt
bonded indebtedness; and
(G) Urban renewal increment taxes; and
(b) The total amount of the following ad valorem property
taxes, without reduction under ORS 310.200 to 310.242:
(A) Ad valorem property taxes of a taxing district other than a
city, county or school district that are used to support a
hospital facility;
(B) Ad valorem property taxes approved by voters prior to
December 5, 1996, that met the voter participation requirements
in section 11 (8), Article XI of the Oregon Constitution, and
that are first imposed in the tax year beginning July 1, 1996, or
July 1, 1997; and
(C) Serial or one-year levies described in ORS 280.040 to
280.140 (1995 Edition) that replace levies that were imposed in
the tax year beginning July 1, 1996, that were approved by voters
Enrolled House Bill 2777 (HB 2777-INTRO) Page 15
after December 4, 1996, and that are first imposed for the tax
year beginning July 1, 1997, if the rate or the amount of the
levy is not greater than the rate or the amount of the replaced
levy.
(3) For tax years beginning on or after July 1, 1998, { + each
taxing district is authorized to levy the full amount of the
operating taxes of the district on all taxable property within
the boundaries of the district. + } Operating taxes consist of:
(a) Ad valorem property taxes imposed at the rate established
as the permanent rate limit or statutory rate limit, if
applicable, for the taxing district or such lesser rate as the
taxing district certifies to the assessor under ORS 310.060; or
(b) If the district is imposing operating property taxes for
the first time, ad valorem property taxes imposed at the rate
established in the manner provided for by law as the permanent
rate limit for the district or such lesser rate as the taxing
district may determine.
SECTION 24. ORS 310.165 is amended to read:
310.165. (1) For any unit of property partially exempt from tax
under ORS 307.250, 307.370, 308.459 { - , 308.670 - } or
358.485 or any other law, the assessor shall determine the
maximum amount of taxes on property to be imposed on such
property under ORS 310.150, by using the lesser of the real
market value or the taxable value of the property after the
exemption has been applied.
(2) For any land that is specially assessed for ad valorem tax
purposes under ORS { - 308.670, - } 308A.050 to 308A.128,
308A.250 to 308A.259, 308A.315, 321.257 to 321.390, 321.705 to
321.765 or 321.805 to 321.825, the assessor shall determine the
maximum amount of taxes on property to be imposed on such
property under ORS 310.150 by using the lesser of the real market
value or the specially assessed value of the property.
(3) In the case of any unit of property of which a part of the
unit is exempt from taxation, and that part may be identified
both as to value and physical description, the real market value
of the unit shall not include the value of the exempt part of the
unit.
(4) If any unit of property described in subsection (1) or (2)
of this section for which the maximum amount of taxes imposed has
been determined under this section is subject to imposition of
additional taxes due to disqualification from special assessment
or partial exemption, the determination of the maximum amount of
additional taxes that may be imposed due to disqualification
shall be made on the basis of the real market value of the
property for the year to which the additional taxes relate.
{ + NOTE: + } Deletes references to repealed provision. (See
section 18 of this 2001 Act.)
SECTION 25. ORS 310.630 is amended to read:
310.630. As used in ORS 310.630 to 310.706:
{ + (1) 'Contract rent' means rental paid to the landlord for
the right to occupy a homestead, including the right to use the
personal property located therein. 'Contract rent' does not
include rental paid for the right to occupy a homestead that is
exempt from taxation, unless payments in lieu of taxes of 10
percent or more of the rental exclusive of fuel and utilities are
made on behalf of the homestead. 'Contract rent' does not include
advanced rental payments for another period and rental deposits,
whether or not expressly set out in the rental agreement, or
payments made to a nonprofit home for the elderly described in
ORS 307.375. If a landlord and tenant have not dealt with each
Enrolled House Bill 2777 (HB 2777-INTRO) Page 16
other at arm's length, and the Department of Revenue is satisfied
that the contract rent charged was excessive, it may adjust the
contract rent to a reasonable amount for purposes of ORS 310.630
to 310.706. + }
{ - (1) - } { + (2) + } 'Department' means the Department
of Revenue.
{ - (2) - } { + (3) + } 'Fuel and utility payments'
{ - include - } { + includes + } payments for heat, lights,
water, sewer and garbage made solely to secure those commodities
or services for the homestead of the taxpayer. { - ' Payments
for heat' mean those payments made to secure the commodities or
services to be used as the principal source of heat for the
homestead of the taxpayer and includes payments for natural gas,
oil, firewood, coal, sawdust, electricity, steam or other
materials that are capable of use as a primary source of heat for
the homestead. - } 'Fuel and utility payments' { - do - }
{ + does + } not include telephone service.
{ - (3) - } { + (4) + } 'Gross rent' means contract rent
paid plus the fuel and utility payments made for the homestead in
addition to the contract rent, during the calendar year for which
the claim is filed.
{ - (4) - } { + (5) + } 'Homestead' means the taxable
principal dwelling located in Oregon, either real or personal
property, rented by the taxpayer, and the taxable land area of
the tax lot upon which it is built.
{ - (5) - } { + (6) + } 'Household' means the taxpayer, the
spouse of the taxpayer and all other persons residing in the
homestead during any part of the calendar year for which a claim
is filed.
{ - (6) - } { + (7) + } 'Household income' means the
aggregate income of the taxpayer and the spouse of the taxpayer
who reside in the household, that was received during the
calendar year for which the claim is filed. 'Household income'
includes payments received by the taxpayer or the spouse of the
taxpayer under the federal Social Security Act for the benefit of
a minor child or minor children who are members of the household.
{ - (7) - } { + (8) + } 'Income' means 'adjusted gross
income' as defined in the federal Internal Revenue Code, as
amended and in effect on December 31, 1998, even where the
amendments take effect or become operative after that date,
relating to the measurement of taxable income of individuals,
estates and trusts, with the following modifications:
(a) There shall be added to adjusted gross income the following
items of otherwise exempt income:
(A) The gross amount of any otherwise exempt pension less
return of investment, if any.
(B) Child support received by the taxpayer.
(C) Inheritances.
(D) Gifts and grants, the sum of which are in excess of $500
per year.
(E) Amounts received by a taxpayer or spouse of a taxpayer for
support from a parent who is not a member of the taxpayer's
household.
(F) Life insurance proceeds.
(G) Accident and health insurance proceeds, except
reimbursement of incurred medical expenses.
(H) Personal injury damages.
(I) Sick pay which is not included in federal adjusted gross
income.
(J) Strike benefits excluded from federal gross income.
Enrolled House Bill 2777 (HB 2777-INTRO) Page 17
(K) Worker's compensation, except for reimbursement of medical
expense.
(L) Military pay and benefits.
(M) Veteran's benefits.
(N) Payments received under the federal Social Security Act
which are excluded from federal gross income.
(O) Welfare payments, except as follows:
(i) Payments for medical care, drugs and medical supplies, if
the payments are not made directly to the welfare recipient;
(ii) In-home services authorized and approved by the Department
of Human Services, or by any of its divisions; and
(iii) Direct or indirect reimbursement of expenses paid or
incurred for participation in work or training programs.
(P) Nontaxable dividends.
(Q) Nontaxable interest not included in federal adjusted gross
income.
(R) Rental allowance paid to a minister that is excluded from
federal gross income.
(S) Income from sources without the United States that is
excluded from federal gross income.
(b) Adjusted gross income shall be increased due to the
disallowance of the following deductions:
(A) The amount of the net loss, in excess of $1,000, from all
dispositions of tangible or intangible properties.
(B) The amount of the net loss, in excess of $1,000, from the
operation of a farm or farms.
(C) The amount of the net loss, in excess of $1,000, from all
operations of a trade or business, profession or other activity
entered into for the production or collection of income.
(D) The amount of the net loss, in excess of $1,000, from
tangible or intangible property held for the production of rents,
royalties or other income.
(E) The amount of any net operating loss carryovers or
carrybacks included in federal adjusted gross income.
(F) The amount, in excess of $5,000, of the combined deductions
or other allowances for depreciation, amortization or depletion.
(G) The amount added or subtracted, as required within the
context of this section, for adjustments made under ORS 316.680
(2)(d) and 316.707 to 316.737.
(c) 'Income' does not include any of the following:
(A) Any governmental grant which must be used by the taxpayer
for rehabilitation of the homestead of the taxpayer.
(B) The amount of any payments made pursuant to ORS 310.630 to
310.706.
(C) Any refund of Oregon personal income taxes that were
imposed under ORS chapter 316.
{ - (8) 'Contract rent' means rental paid to the landlord for
the right to occupy a homestead, including the right to use the
personal property located therein. 'Contract rent' does not
include rental paid for the right to occupy a homestead that is
exempt from taxation, unless payments in lieu of taxes of 10
percent or more of the rental exclusive of fuel and utilities are
made on behalf of the homestead. 'Contract rent' does not include
advanced rental payments for another period and rental deposits,
whether or not expressly set out in the rental agreement, or
payments made to a nonprofit home for the elderly described in
ORS 307.375. If a landlord and tenant have not dealt with each
other at arm's length, and the department is satisfied that the
contract rent charged was excessive, it may adjust the contract
Enrolled House Bill 2777 (HB 2777-INTRO) Page 18
rent to a reasonable amount for purposes of ORS 310.630 to
310.706. - }
{ + (9) 'Payments for heat' means those payments made to
secure the commodities or services to be used as the principal
source of heat for the homestead of the taxpayer and includes
payments for natural gas, oil, firewood, coal, sawdust,
electricity, steam or other materials that are capable of use as
a primary source of heat for the homestead. + }
{ - (9) - } { + (10) + } 'Statement of gross rent' means a
declaration by the applicant, under penalties of false swearing,
that the amount of contract rent and fuel and utility payments
designated is the actual amount both incurred and paid during the
year for which elderly rental assistance is claimed.
{ - (10) - } { + (11) + } 'Taxpayer' means an individual
who is a resident of this state on December 31 of the year for
which elderly rental assistance is claimed and whose homestead,
as of the same December 31 and during all or a portion of the
year ending on the same December 31, is rented and while rented
is the subject, directly or indirectly, of property tax levied by
this state or a political subdivision or of payments made in lieu
of taxes.
{ + NOTE: + } Alphabetizes definitions to conform with
legislative form and style; corrects syntax.
SECTION 26. ORS 311.160 is amended to read:
311.160. (1)(a) Where a final order is entered in any appeal
described in ORS 308.020 (1) or the expiration of the appeal
period has occurred, the officer or officers in possession of the
assessment and tax rolls shall make the corrections stated in the
decision of the court. Any additional taxes collected because the
final total value is greater than that entered in the rolls under
ORS 308.020 (1) shall be deposited in a special account with the
county treasurer. The county treasurer shall notify the county
assessor of the amount in the special account for each property
described in ORS 308.020 (1), and the assessor shall apportion
the amount among the taxing districts in the code area in which
the property is located on the basis of their tax rates as
compared to the total of such tax rates for the tax year for
which the amount, or portion of the amount, is attributable. The
treasurer shall pay each district the district's apportioned
amount.
(b)(A) Where a final order is entered in any appeal described
in ORS 308.020 (2) or the expiration of the appeal period has
occurred, the officer or officers in possession of the assessment
and tax rolls shall make the corrections stated in the decision
of the court.
(B) Subject to subparagraph (C) of this paragraph, at the
option of the county treasurer, any additional taxes, or portion
thereof, collected because the final total value for the initial
tax year or for a tax year occurring during the appeal period is
greater than that entered in the rolls under ORS 308.020 (2)
shall be deposited { - , distributed and offset - } { + and
distributed + } as provided under paragraph (a) of this
subsection or deposited in a refund reserve account maintained
under ORS 311.807.
(C) If, at the time of collection, the amount of the additional
taxes exceeds the amount of anticipated annual refunds for the
fiscal year of collection, the excess amount shall be deposited
and distributed { - and offset - } as provided under paragraph
(a) of this subsection.
Enrolled House Bill 2777 (HB 2777-INTRO) Page 19
(2) Interest shall accrue on the additional taxes collected
pursuant to subsection (1) of this section as if the property had
been properly assessed in the year that any portion of the value
was placed on the tax roll in the manner and at the interest
rates provided in ORS 311.505.
(3) If the owner of the property, the value of which is subject
to ORS 308.020, so desires, the owner may tender to the county
treasurer an estimate of the additional taxes which may
ultimately be assessed against the property. The county treasurer
shall provide a special account for such deposits and shall
invest the deposits during the time the matter is in litigation.
The interest earned on the account shall be credited to it.
(4) Upon the termination of the controversy, the principal
amount in the account necessary to pay the taxes as provided in
subsection (1) of this section shall be retained together with
its portion of the interest earned on the investment of the
moneys during the period held by the county treasurer and shall
be distributed as provided in subsection (1) of this section.
Moneys in the account in excess of that required to be retained
shall be refunded to the owner. Notwithstanding ORS 311.812, the
owner of the property shall not be entitled to any interest in
excess of that earned on the sum of the principal which is
refunded to the owner during the time the money was held by the
county treasurer.
(5) This section does not apply to appeals arising from tax
years beginning on or after July 1, 1997.
{ + NOTE: + } Deletes outdated language.
SECTION 27. ORS 311.223 is amended to read:
311.223. (1) If the person or party notified as provided in ORS
311.219 does not appear or if the person or party appears and
fails to show any good and sufficient cause why the assessment
shall not be made, the assessor shall proceed to correct the
assessment or tax roll or rolls from which the property was
omitted. The assessor shall add the property thereto, with the
proper valuation, and extend thereon taxes at the consolidated
rate under ORS 310.147 that is applicable in the code area in
which the property was located for each year as to which it was
omitted. To carry out the correction of a tax roll or rolls the
assessor shall send a written statement to the tax collector
instructing the tax collector to make the necessary changes on
the tax roll. The statement shall contain all of the information
needed by the tax collector to make the changes in the roll and
it shall be dated and signed by the assessor or the deputy of the
assessor. The tax collector shall then correct the tax roll.
(2) Immediately after the assessor corrects the assessment or
tax roll the assessor shall file in the office of the assessor a
statement of the facts or evidence on which the assessor based
the correction and notify the taxpayer by written notice, sent by
certified mail to the taxpayer's last-known address, of the date
and amount of the correction.
(3) To enable the assessor to comply with this
{ - subsection - } { + section + }, the assessor is invested
with all the powers of the county clerk under the law in force
during the years for which correction may be made under ORS
311.216 to 311.232 and thereafter.
(4) Any person aggrieved by an assessment made under ORS
311.216 to 311.232 may appeal to the tax court within 90 days
after the correction of the roll by giving notice to the assessor
or the Department of Revenue, whichever is applicable, and
otherwise proceeding in the manner provided for appeals from the
Enrolled House Bill 2777 (HB 2777-INTRO) Page 20
board of property tax appeals. No appeal of the value assigned
under this section may be made to the board of property tax
appeals under ORS 309.100.
{ + NOTE: + } Corrects terminology.
SECTION 28. ORS 311.390 is amended to read:
311.390. (1) When the tax collector receives the assessor's
certificate pursuant to ORS 311.115, the tax collector shall
prepare and file with the county treasurer a percentage schedule
of the ratio of taxes on property, as defined in ORS 310.140, and
other amounts to be collected, after reductions necessary to
comply with section 11b, Article XI of the Oregon Constitution,
after making adjustments in accordance with ORS 311.105 (1)(c),
for each governmental unit as shown in such certificate, compared
to the total of each of those amounts. Such schedule shall be
approved by the county accountant, if one exists in the county,
or by the county clerk before filing. Except as provided in
{ - subsection (2) - } { + subsections (2) and (3) + } of
this section, the distribution of collections by the tax
collector shall be made on the basis of the ratios computed
pursuant to this section. The ratios computed pursuant to this
section for a given fiscal year shall be used for the
distribution of all taxes on property or penalties imposed,
collected and received for that fiscal year regardless of the
actual date of receipt. Interest earned on moneys in the
unsegregated tax collections account shall be distributed
according to the ratio applicable to the year in which the moneys
are distributed.
(2) If, after the ratios are computed pursuant to this section,
the amount of a levy or other tax on property is changed, or a
levy or other tax on property is filed with the assessor pursuant
to ORS 310.060 { - which - } { + that + } had not been
included in the tax distribution schedule for that year, the tax
collector { - : - }
{ - (a) - } shall revise the percentages provided in
subsection (1) of this section to reflect the corrected or added
levy or tax { - , - } and shall adjust the amounts previously
distributed and to be distributed thereafter to reflect the
revision in percentages { + . + } { - ; or - }
{ - (b) - } { + (3) + } If, in the opinion of the tax
collector, it is not feasible to make { - such revision - }
{ + the revisions described in subsection (2) of this
section + }, the tax collector shall treat the amount of the
change in levy or tax or the additional levy or tax as a separate
tax collection and segregate the moneys collected for the
particular district or districts in the periodic statement of tax
collections given to the county treasurer pursuant to ORS
311.395.
{ - (3) - } { + (4) + } If the percentage schedule is
revised, a copy shall be filed with the county treasurer after
approval by the county accountant, if one exists in the county,
or by the county clerk.
{ - (4) - } { + (5) + } If, after the ratios are computed
under this section, a levy or tax is changed or a levy or tax is
filed with the assessor pursuant to ORS 310.060, that was not
included in the tax distribution schedule for that year, future
distributions of interest shall be based on the revised
percentages that reflect the corrected or added levy or tax. No
adjustments shall be made for previously distributed interest.
{ + NOTE: + } Conforms structure to legislative form and
style; corrects grammar.
Enrolled House Bill 2777 (HB 2777-INTRO) Page 21
SECTION 29. ORS 311.506 is amended to read:
311.506. During each biennial regular session, the Legislative
Assembly shall review the rate of interest, as specified under
ORS 311.505 (2) { - or section 10, chapter 796, Oregon Laws
1989, - } that is charged and collected on property taxes that
are due and unpaid.
{ + NOTE: + } Eliminates reference to repealed law.
SECTION 30. ORS 314.518 is amended to read:
314.518. (1) A corporation required to make a payment of
estimated tax under ORS 314.505 to 314.525 shall make the payment
by means of electronic funds transfer if:
(a) For payment periods beginning on or after July 1, 1999, and
before July 1, 2000, the corporation's annual total amount of
estimated tax liability exceeds $1 million.
(b) For payment periods beginning on or after July 1, 2000, and
before July 1, 2001, the corporation's annual total amount of
estimated tax liability exceeds $200,000.
(c) For payment periods beginning on or after July 1, 2001, and
before July 1, 2002, the corporation's annual total amount of
estimated tax liability exceeds $50,000.
(d) For { - the payment period - } { + payment periods + }
beginning { + on or after + } July 1, 2002, the corporation is
required to make federal estimated tax payments electronically.
(2) The Department of Revenue may accept electronically filed
payments voluntarily submitted by a corporation that is not
required to pay by means of electronic funds transfer.
(3) As used in this section, 'electronic funds transfer ' has
the meaning given that term in ORS 293.525.
{ + NOTE: + } Corrects applicability provision.
SECTION 31. { + ORS 315.167 is added to and made a part of ORS
chapter 315. + }
{ + NOTE: + } Adds statute to appropriate chapter.
SECTION 32. ORS 315.262 is amended to read:
315.262. (1) As used in this section:
(a) 'Child care' means care provided to a qualifying child of
the taxpayer for the purpose of allowing the taxpayer to be
gainfully employed, to seek employment or to attend school on a
full-time or part-time basis, except that the term does not
include care provided by:
(A) The child's parent or guardian, unless the care is provided
by the parent in a licensed or registered child care facility; or
(B) A child of the taxpayer who has not yet attained 19 years
of age at the close of the tax year.
(b) 'Child care expenses' means the costs associated with
providing child care to a qualifying child of a qualified
taxpayer.
(c) 'Earned income' has the meaning given that term in section
32 of the Internal Revenue Code.
(d) 'Qualified taxpayer' means a taxpayer:
(A) With at least $6,000 of earned income for the tax year;
(B) With federal adjusted gross income for the tax year that
does not exceed 250 percent of the federal poverty level; and
(C) Who does not have more than the maximum amount of
disqualified income under section 32(i) of the Internal Revenue
Code that is allowed to a taxpayer entitled to the earned income
tax credit for federal tax purposes.
(e) 'Qualifying child' means a child of the taxpayer who is
under 13 years of age, or who is a disabled child, as that term
is defined in ORS 316.099.
Enrolled House Bill 2777 (HB 2777-INTRO) Page 22
(2) A qualified taxpayer shall be allowed a credit against the
taxes otherwise due under ORS chapter 316 equal to the applicable
percentage of the qualified taxpayer's child care expenses
(rounded to the nearest $50).
(3) The applicable percentage to be used in calculating the
amount of the credit provided in this section shall be determined
in accordance with the following table:
_________________________________________________________________
____NOTE_TO_GOPHER_CUSTOMERS:__________________________________
THE FOLLOWING TABULAR TEXT MAY BE IRREGULAR.
FOR COMPLETE INFORMATION PLEASE SEE THE PRINTED MEASURE.
_______________________________________________________________
Applicable Federal Adjusted
Percentage Gross Income as Percent
of Federal Poverty Level
____NOTE_TO_GOPHER_CUSTOMERS:__________________________________
THE FOLLOWING TABULAR TEXT MAY BE IRREGULAR.
FOR COMPLETE INFORMATION PLEASE SEE THE PRINTED MEASURE.
_______________________________________________________________
40 200 or less
36 Greater than 200 and less than
or equal to 210
32 Greater than 210 and less than
or equal to 220
24 Greater than 220 and less than
or equal to 230
16 Greater than 230 and less than
or equal to 240
8 Greater than 240 and less than
or equal to 250
0 Greater than 250 percent
of federal poverty level
____________________________________________________________
END OF POSSIBLE IRREGULAR TABULAR TEXT
____________________________________________________________
_________________________________________________________________
(4) The credit shall be claimed on such form and containing
such information as may be prescribed by the Department of
Revenue.
(5) In the case of a credit allowed under this section:
(a) A nonresident shall be allowed the credit under this
section in the proportion provided in ORS 316.117.
(b) 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.
(c) 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.
(d) In the case of a qualified taxpayer who is married, a
credit shall be allowed under this section only if:
(A) The taxpayer files a joint return;
Enrolled House Bill 2777 (HB 2777-INTRO) Page 23
(B) The taxpayer files a separate return and is legally
separated or subject to a separate maintenance agreement; or
(C) The taxpayer files a separate return and the taxpayer and
the taxpayer's spouse reside in separate households on the last
day of the tax year with the intent of remaining in separate
households in the future.
(6) The credit allowed under this section { - shall - } { +
may + } not exceed the tax liability of the taxpayer and may not
be carried forward to a succeeding tax year.
(7)(a) For tax years beginning on or after January 1, 1999, the
minimum amount of earned income a taxpayer must earn in order to
be a qualified taxpayer shall be adjusted by multiplying $6,000
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 of the
second quarter of the calendar year 1998.
(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.
{ + NOTE: + } Corrects grammar.
SECTION 33. 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 - } { +
may + } not exceed the tax liability of the taxpayer and may not
be carried forward to a succeeding tax year.
(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.
{ + NOTE: + } Corrects grammar.
SECTION 34. Section 14, chapter 1000, Oregon Laws 1999, is
amended to read:
{ + Sec. 14. + } (1) Notwithstanding { - section 10 of this
1999 Act - } { + ORS 316.848 + }, if the Legislative Revenue
Enrolled House Bill 2777 (HB 2777-INTRO) Page 24
{ - Office - } { + Officer + } reports under section 13
(2) { + , chapter 1000, Oregon Laws 1999, + } { - of this 1999
Act - } that the revenue impact of tax deductions under
{ - section 10 (1) of this 1999 Act - } { + ORS 316.848
(1) + } for the biennium ending June 30, 2001, is likely to
exceed $250,000, a deduction { - shall - } { + may + } not be
allowed under { - section 10 of this 1999 Act - } { + ORS
316.848 + } for any deposits made on or after January 1, 2001,
and on or before December 31, 2002.
(2) Notwithstanding { - section 12 of this 1999 Act - } { +
ORS 315.271 + }, if the Legislative Revenue { - Office - }
{ + Officer + } reports under section 13 (3) { + , chapter
1000, Oregon Laws 1999, + } { - of this 1999 Act - } that the
revenue impact of tax credits under { - section 12 (1) of this
1999 Act - } { + ORS 315.271 + } for the biennium ending June
30, 2001, is likely to exceed $500,000, a credit { - shall - }
{ + may + } not be allowed under { - section 12 of this 1999
Act - } { + ORS 315.271 + } for donations made on or after
January 1, 2001, and on or before December 31, 2002.
{ + NOTE: + } Corrects name reference; corrects grammar.
SECTION 35. ORS 316.099 is amended to read:
316.099. (1) As used in this section, unless the context
requires otherwise:
(a) 'Early intervention services' means programs of treatment
and habilitation designed to address a child's developmental
deficits in sensory, motor, communication, self-help and
socialization areas.
(b) 'Disabled child' means a child from the age of
identification of the disability to the age of 18 who has been
determined eligible for early intervention services or is
diagnosed for the purposes of special education as being
{ - autistic, - } mentally retarded, multidisabled, visually
impaired, hearing impaired, deaf-blind, orthopedically impaired
or other health impaired or as having { + autism, + } emotional
disturbance or traumatic brain injury, in accordance with State
Board of Education rules.
(c) 'Special education' means specially designed instruction to
meet the unique needs of a disabled child, including regular
classroom instruction, instruction in physical education, home
instruction and instruction in hospitals, institutions and
special schools.
(2) The State Board of Education shall adopt rules further
defining 'disabled child' for purposes of this section. A
diagnosis obtained for the purposes of entitlement to special
education or early intervention services shall serve as the basis
for a claim for the additional credit allowed under subsection
(3) of this section.
(3) In addition to the personal exemption credit allowed by
this chapter for state personal income tax purposes for a
dependent child of the taxpayer, there shall be allowed an
additional personal exemption credit for a disabled child if the
child is a disabled child at the close of the tax year. The
amount of the credit shall be equal to the amount allowed as the
personal exemption credit for the dependent child for state
personal income tax purposes for the tax year.
(4) Each taxpayer qualifying for the additional personal
exemption credit allowed by this section may claim the credit on
the personal income tax return. However, the claim shall be
substantiated by any proof of entitlement to the credit as may be
required by the state board by rule.
Enrolled House Bill 2777 (HB 2777-INTRO) Page 25
{ + NOTE: + } Changes terms to reflect modern usage.
SECTION 36. ORS 316.109 is amended to read:
316.109. (1) { - For taxable years beginning on and after
January 1, 1979, - } If gain on the sale of residential property
is taxed under this chapter { + , + } the adjusted basis of the
property for purposes of this chapter shall be the same as its
adjusted basis for federal income tax purposes.
(2) A credit against the tax otherwise due under this chapter
shall be allowed to the taxpayer for the amount of any taxes
imposed on the taxpayer by another state of the United States, a
foreign country or the District of Columbia which tax is
attributable to gain { - which - } { + that + } is subject to
tax as described in subsection (1) of this section.
(3) The amount of the credit allowed under subsection (2) of
this section { - shall - } { + may + } not exceed the amount
of the gain taxed by the other taxing jurisdiction multiplied by
eight percent.
(4) The Department of Revenue shall provide by rule the
procedure for obtaining credit provided by subsection (2) of this
section and the proof required. The requirement of proof may be
waived partially, conditionally or absolutely, as provided under
ORS 315.063.
(5) { - No - } { + Any + } credit allowed under subsection
(2) of this section { - shall - } { + may not + } be applied
in calculating tax due under this chapter if the tax upon which
the credit is based has been claimed as a deduction for Oregon
personal income tax purposes, unless the tax is restored to
income on the Oregon return.
{ + NOTE: + } Eliminates obsolete date; conforms grammar to
legislative form and style.
SECTION 37. ORS 316.127 is amended to read:
316.127. (1) The adjusted gross income of a nonresident derived
from sources within this state is the sum of the following:
(a) The net amount of items of income, gain, loss and deduction
entering into the nonresident's federal adjusted gross income
that are derived from or connected with sources in this state
including (A) any distributive share of partnership income and
deductions and (B) any share of estate or trust income and
deductions; and
(b) The portion of the modifications, additions or subtractions
to federal taxable income provided in this chapter and other laws
of this state that relate to adjusted gross income derived from
sources in this state for personal income tax purposes, including
any modifications attributable to the nonresident as a partner.
(2) Items of income, gain, loss and deduction derived from or
connected with sources within this state are those items
attributable to:
(a) The ownership or disposition of any interest in real or
tangible personal property in this state;
(b) A business, trade, profession or occupation carried on in
this state; and
(c) A taxable lottery prize awarded by the Oregon State
Lottery, including a taxable lottery prize awarded by a
multistate lottery association of which the Oregon State Lottery
is a member if the ticket upon which the prize is awarded was
sold in this state.
(3) Income from intangible personal property, including
annuities, dividends, interest and gains from the disposition of
intangible personal property, constitutes income derived from
sources within this state only to the extent that such income is
Enrolled House Bill 2777 (HB 2777-INTRO) Page 26
from property employed in a business, trade, profession or
occupation carried on in this state.
(4) Deductions with respect to capital losses, net long-term
capital gains, and net operating losses shall be based solely on
income, gains, losses and deductions derived from or connected
with sources in this state, under regulations to be prescribed by
the Department of Revenue, but otherwise shall be determined in
the same manner as the corresponding federal deductions.
(5) Notwithstanding subsection (3) of this section { - , - }
{ + :
(a) + } The income of an S corporation for federal income tax
purposes derived from or connected with sources in this state
{ - does constitute - } { + constitutes + } income derived
from sources within this state for a nonresident individual who
is a shareholder of
{ - such a - } { + the S + } corporation { - , - }
{ + ; + } and { +
(b) + } A net operating loss of { - such - } { + an S + }
corporation derived from or connected with sources in this state
{ - does constitute - } { + constitutes + } a loss or
deduction connected with sources in this state for { - such - }
a nonresident individual { + who is a shareholder of the S
corporation + }.
(6) If a business, trade, profession or occupation is carried
on partly within and partly without this state, the determination
of net income derived from or connected with sources within this
state shall be made by apportionment and allocation under ORS
314.605 to 314.675.
(7) Compensation paid by the United States for service in the
Armed Forces of the United States performed by a nonresident does
not constitute income derived from sources within this state.
(8) Compensation paid by the United States to a nonresident for
services performed by the nonresident as an employee of the
United States at a hydroelectric facility does not constitute
income derived from sources within this state if the
hydroelectric facility:
(a) Is owned by the United States;
(b) Is located on the Columbia River; and
(c) Contains portions located within both this state and
another state.
(9)(a) Retirement income received by a nonresident does not
constitute income derived from sources within this state unless
the individual is domiciled in this state.
(b) As used in this section, 'retirement income' means
retirement income as that term is defined in { - section 114,
Title 4 of the United States Code - } { + 4 U.S.C. 114 + }, as
amended and in effect for the tax period.
{ + NOTE: + } Reorganizes subsection structure to clarify
meaning; corrects grammar; conforms citation to legislative form
and style.
SECTION 38. { + ORS 316.146 is added to and made a part of ORS
chapter 316. + }
{ + NOTE: + } Adds statute to appropriate chapter.
SECTION 39. Section 6, chapter 299, Oregon Laws 1997, is
amended to read:
{ + Sec. 6. + } { - Sections 1 to 4 of this Act and the
amendments to ORS 314.505 by section 5 of this Act shall - }
{ + ORS 314.505, 314.518 and 316.198 do + }not alter the
authority under ORS 293.525 of a state agency to require by rule
that certain payments be made by electronic funds transfer.
Enrolled House Bill 2777 (HB 2777-INTRO) Page 27
{ + NOTE: + } Conforms provisions to legislative form and
style.
SECTION 40. { + ORS 317.057 is added to and made a part of ORS
chapter 317. + }
{ + NOTE: + } Adds statute to appropriate chapter.
SECTION 41. ORS 317.356 is amended to read:
317.356. (1) Upon the taxable sale, exchange or disposition of
any asset { - in a tax year beginning on or after January 1,
1983 - } , federal taxable income shall be increased or decreased
by an amount { - which - } { + that + } will reflect one or
more of the following:
(a) The difference in basis { - which - } { + that + }
results from the difference in depreciation, depletion or other
cost recovery, or expense claimed under section 179 of the
Internal Revenue Code, allowed or allowable on the Oregon return
and that allowed or allowable on the federal return for that
asset;
(b) The difference in basis { - which - } { + that + }
results when a taxpayer has taken a federal credit { - ,
which - } { + that + } requires as a condition of the use of
the federal credit the reduction of the basis of an asset, and
the federal credit is not allowable for Oregon purposes;
(c) The difference in basis as a result of any deferral of gain
{ - which - } { + that + } has been granted under federal tax
law but not under Oregon law or granted under Oregon law but not
granted under federal law;
(d) The difference in basis under federal and Oregon tax law at
the time the asset was acquired; or
(e) For certain health care service contractors for which
federal tax exempt status was denied by section 501(m) of the
Internal Revenue Code, any adjustment to the basis of an asset
for purposes of calculating federal taxable gain or loss on sale,
exchange or other disposition as permitted by the Tax Reform Act
of 1986.
(2) There shall be added to or subtracted from federal taxable
income any amount necessary to carry out the purposes of
subsection (1) of this section.
{ + NOTE: + } Eliminates obsolete date; corrects grammar.
SECTION 42. ORS 317.850 is amended to read:
317.850. { - (1) - } The net revenue from the tax imposed by
this chapter, after deduction of refunds, shall be paid over to
the State Treasurer and held in the General Fund as miscellaneous
receipts available generally to meet any expense or obligation of
the State of Oregon lawfully incurred. A working balance of
unreceipted revenue from the tax imposed by this chapter may be
retained for the payment of refunds, but such working balance
shall not at the close of any fiscal year exceed the sum of
$500,000.
{ - (2) The amendment of this section by the Forty-seventh
Legislative Assembly shall first apply to the state levy of taxes
for the fiscal year 1953-54. - }
{ + NOTE: + } Eliminates obsolete date.
SECTION 43. 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 { + , + }
Enrolled House Bill 2777 (HB 2777-INTRO) Page 28
{ - 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 - } { + of this chapter + }: 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.
{ + NOTE: + } Clarifies citation.
SECTION 44. ORS 321.267 is amended to read:
321.267. (1) The following timber and forestland are not
subject to ORS 321.257 to 321.390:
(a) Timber and forestland assessed by the Department of Revenue
pursuant to ORS 308.505 to 308.665, 308.805 to 308.820 and
308.990.
(b) Except as provided in ORS 321.347, timber and land
classified under ORS 321.705 to 321.765.
(c) Timber on land that is exempt from ad valorem taxation.
(d) Except as provided in ORS 321.347, land and Christmas trees
which are grown or growing on that land which has been prepared
by intensive cultivation and tilling and on which all unwanted
plant growth is controlled continuously for the exclusive purpose
of growing such Christmas trees.
(e) Except as provided in ORS 321.274, land and hardwood
timber, including but not limited to hybrid cottonwood, which
are:
(A) Grown or growing on land which has been prepared by
intensive cultivation methods and which is cleared of competing
vegetation for at least three years after tree planting;
(B) Of a species marketable as fiber for inclusion in the '
furnish' for manufacturing paper products;
(C) Harvested on a rotation cycle within 10 years after
planting; and
(D) Subject to intensive agricultural practices such as
fertilization, insect and disease control, cultivation and
irrigation.
(f)(A) Timber on land that, at the time of harvest, is assessed
under ORS 308.146 (1) to (3) or specially assessed under ORS
{ - 308.370 - } { + 308A.050 to 308A.128 + } or 308A.300 to
308A.330, if the land was assessed under ORS 308.146 (1) to (3)
or 308.232 or was specially assessed under ORS { - 308.370 - }
{ + 308A.050 to 308A.128 + } or 308A.300 to 308A.330 for at
least five property tax years preceding the date the timber was
harvested from the land.
(B) For purposes of this paragraph and ORS 321.273 (3) and (4),
land that has been forestland assessed under ORS 321.354 for any
of the five property tax years preceding the date the timber was
harvested from the land shall be considered to be forestland
assessed under ORS 321.354.
(2) The tax imposed by ORS 321.273 shall be in addition to that
levied by ORS 321.005 to 321.185 and 321.560 to 321.600.
(3) Nothing contained in ORS 321.257 to 321.390 shall prevent:
(a) The collection of ad valorem property taxes which became a
lien prior to January 1, 1978.
(b) The collection of taxes levied by ORS 321.005 to 321.185
and 321.560 to 321.600.
Enrolled House Bill 2777 (HB 2777-INTRO) Page 29
(c) Except as provided in section 45, chapter 892, Oregon Laws
1977, the collection of amounts payable upon declassification
described under ORS 321.705 to 321.765.
{ + NOTE: + } Corrects references to repealed provision.
SECTION 45. ORS 321.415 is amended to read:
321.415. (1) Lands assessed by the Department of Revenue
pursuant to ORS 308.505 to 308.665 or 308.805 to 308.820 and the
timber thereon shall not be subject to the provisions of ORS
321.405 to 321.515.
(2) The tax imposed under the provisions of ORS 321.405 to
321.515 shall be additional to that levied under the provisions
of ORS 321.005 to 321.185 and 321.560 to 321.600.
(3) Timber on timberland which is exempt from the ad valorem
real property tax shall be exempt from the privilege tax imposed
by ORS 321.405 to 321.515.
(4) Land used exclusively for growing cultured Christmas trees,
and the cultured Christmas trees growing thereon, as defined in
ORS 215.203, shall not be subject to the provisions of ORS
321.405 to 321.515 and 321.805 to 321.825.
(5) Except as provided in ORS 321.426, land and hardwood
timber, including but not limited to hybrid cottonwood, shall not
be subject to the provisions of ORS 321.405 to 321.515 and
321.805 to 321.825 if the land and timber are:
(a) Grown or growing on land which has been prepared by
intensive cultivation methods and which is cleared of competing
vegetation for at least three years after tree planting;
(b) Of a species marketable as fiber for inclusion in the '
furnish' for manufacturing paper products;
(c) Harvested on a rotation cycle within 10 years after
planting; and
(d) Subject to intensive agricultural practices such as
fertilization, insect and disease control, cultivation and
irrigation.
(6)(a) Timber on land that, at the time of harvest, is assessed
under ORS 308.146 (1) to (3) or specially assessed under ORS
{ - 308.370 - } { + 308A.050 to 308A.128 + } or 308A.300 to
308A.330, if the land was assessed under ORS 308.146 (1) to (3)
or 308.232 or was specially assessed under ORS { - 308.370 - }
{ + 308A.050 to 308A.128 + } or 308A.300 to 308A.330 for at
least five property tax years preceding the date the timber was
harvested from the land, shall not be subject to the provisions
of ORS 321.405 to 321.515.
(b) For purposes of this subsection and ORS 321.421 (4), land
that has been forestland assessed under ORS 321.812 for any of
the five property tax years preceding the date the timber was
harvested from the land shall be considered to be forestland
assessed under ORS 321.812.
(7) Nothing contained in ORS 321.405 to 321.515 shall prevent:
(a) The collection of ad valorem property taxes which became a
lien against timber prior to July 1, 1962.
(b) The collection of taxes, charges or assessments made
pursuant to law for protection.
(c) The collection of taxes levied under the provisions of ORS
321.005 to 321.185 and 321.560 to 321.600.
{ + NOTE: + } Corrects references to repealed provision.
SECTION 46. ORS 321.487 is amended to read:
321.487. Each year when extending the operating
{ - levies - } { + levy + } of the county upon the assessment
rolls, the county assessor shall offset against the levy
submitted by the county the amount of revenue distributed to the
Enrolled House Bill 2777 (HB 2777-INTRO) Page 30
county pursuant to ORS 321.485 (3)(b) and correspondingly reduce
the amount of the levy to be collected through extension on the
tax roll for the current fiscal year.
{ + NOTE: + } Corrects terminology.
SECTION 47. { + ORS 321.731 is repealed. + }
{ + NOTE: + } Repeals outdated provisions.
SECTION 48. ORS 323.320 is amended to read:
323.320. (1) The Department of Revenue shall, pursuant to rule,
refund or credit to a distributor the denominated values, less
the discount given on their purchase, of:
(a) Any unused or damaged stamps; or
(b) Stamps affixed to packages of cigarettes that, prior to or
after distribution, have become unfit for use { - , - }
{ + or + } unsalable { - , - } { + or have been + }
destroyed, returned for credit or replaced, { - and - }
{ + if + } the department has proof of the cigarettes not being
used for smoking in the State of Oregon.
(2) Interest shall be computed, allowed and paid with respect
to a refund made under this section, at the rate established
under ORS 305.220 for each month or fraction of a month during a
period beginning 45 days after the receipt by the department of a
claim for refund.
{ + NOTE: + } Corrects word choice.
SECTION 49. ORS 323.455 is amended to read:
323.455. (1) All moneys received by the Department of Revenue
from the tax imposed by ORS 323.030 (1) shall be paid over to the
State Treasurer to be held in a suspense account established
under ORS 293.445. After the payment of refunds, 89.65 percent
shall be
{ - appropriated - } { + credited + } to the General Fund,
3.45 percent { - shall be - } { + is + } appropriated to the
cities of this state, 3.45 percent
{ - shall be - } { + is + } appropriated to the counties of
this state and 3.45 percent { - shall be - } { + is
continuously + } appropriated to the Department of Transportation
for the purpose of financing and improving transportation
services for elderly and disabled individuals as provided in ORS
391.800 to 391.830.
(2) The moneys so appropriated to cities and counties shall be
paid on a monthly basis within 35 days after the end of the month
for which a distribution is made. Each city shall receive such
share of the money appropriated to all cities as its population,
as determined under ORS 190.510 to 190.590 last preceding such
apportionment, bears to the total population of the cities of the
state, and each county shall receive such share of the money as
its population, determined under ORS 190.510 to 190.590 last
preceding such apportionment, bears to the total population of
the state.
(3) The moneys appropriated to the Department of Transportation
under subsection (1) of this section shall be distributed and
transferred to the Elderly and Disabled Special Transportation
Fund established by ORS 391.800 at the same time as the cigarette
tax moneys are distributed to cities and counties under this
section.
(4) Of the moneys { - appropriated - } { + credited + } to
the General Fund under this section 51.92 percent shall be
dedicated to funding the maintenance and expansion of the number
of persons eligible for medical assistance under the Oregon
Health Plan, or to funding the maintenance of the benefits
available under the Oregon Health Plan, or both, and 5.77 percent
Enrolled House Bill 2777 (HB 2777-INTRO) Page 31
shall be credited to the Tobacco Use Reduction Account
established under ORS 431.832.
{ + NOTE: + } Corrects terminology.
SECTION 50. ORS 341.085 is amended to read:
341.085. (1) An election for the purpose of presenting the
question of formation of a district and establishing a permanent
rate limit for operating taxes and the boundaries of the zones,
if the zones were recommended by the State Board of Education,
shall be held to submit the question to the electors registered
in the proposed district designated in the recommendation of the
state board. The election shall be held not sooner than the 90th
day after the effective date of the appropriation required by ORS
341.102. The election date shall be uniform throughout the
proposed district, and shall be set by the state board on a date
specified in ORS 255.345. However, if the question of
establishing a { - new tax base - } { + permanent rate limit
for operating taxes + } is to be submitted, the election must be
held on the same date as the next biennial primary election or
the next general election, as determined by the state board.
(2) ORS chapter 255 and ORS 250.035 and 250.036 govern the
notice and conduct of an election under this section. The state
board shall be the district elections authority for an election
conducted under this section. Notwithstanding ORS 255.305, the
state board shall pay the expenses incurred for the election.
(3) An elector registered in a precinct or in the portion of a
precinct which is located within the boundaries of the proposed
district may vote on any matter arising at the election under
subsection (1) of this section.
{ + NOTE: + } Corrects terminology.
SECTION 51. ORS 456.661 is amended to read:
456.661. (1) The aggregate principal amount of bonds issued
under ORS 456.645 that may be outstanding is $2 billion,
excluding bonds issued under and within the limits provided in
ORS 456.515 to 456.725 and any bonds that have been refunded
under ORS 456.650 or advance refunded under ORS 288.605 to
288.690. The amount of $30 million of the total $2 billion of
bonds authorized under this section or proceeds from the sale of
the bonds shall be made exclusively available for making or
participating in making residential loans for single-family homes
in cities with a population of 300,000 or more in the manner
specified in ORS 456.593. No more than $10 million of the bonds
authorized under this section or proceeds from the sale of the
bonds shall be made available for residential loans for home
improvements.
(2) For the purpose of determining the aggregate principal
amount of bonds issued or outstanding, the value of bonds shall
be calculated as follows:
(a) If, upon sale, the initial reoffering price is equal to or
more than 98 percent of the maturity value of the bonds, the
value of the bonds shall be the maturity value on the date of the
calculation.
(b) If, upon sale, the initial reoffering price is an amount
less than 98 percent of the maturity value of the bonds, the
value of the bonds shall be the price on any date of the
calculation that would result in a yield-to-maturity equal to the
yield-to-maturity at the time the bonds were sold by the state.
(3) For the purposes of the limitation contained in subsection
(1) of this section, the aggregate principal amount of bonds
outstanding shall be determined for any date of calculation by
subtracting the aggregate value of bonds that would have matured
Enrolled House Bill 2777 (HB 2777-INTRO) Page 32
or would have been redeemed through mandatory sinking fund
payments from the aggregate value of bonds issued.
(4) The Legislative Assembly finds that section 103A of the
Internal Revenue Code, as enacted by the 96th Congress of the
United States:
(a) Defines qualified mortgage bonds, which are treated as
exempt from federal income taxes under the code;
(b) Establishes limitations on the purposes and aggregate
amount or the state ceiling of qualified mortgage bonds that may
be issued within a state during any calendar year; and
(c) Authorizes the state to allocate the amount of qualified
mortgage bonds within the state ceiling among the units of
government having authority to issue those bonds.
(5) The Legislative Assembly further finds that:
(a) Pursuant to ORS 456.515 to 456.725, the Housing and
Community Services Department has served as the sole department
or instrumentality of the state authorized to coordinate and
establish statewide priorities for housing programs and to
provide planning and technical assistance to sponsors of housing
for persons and families of lower income throughout the state.
(b) The department's activities have been instrumental in
alleviating the serious shortage of decent, safe and sanitary
housing for lower income persons.
(c) Continuation of the department's programs for financing
owner-occupied residential housing to the fullest extent
practicable under section 103A of the Internal Revenue Code is a
matter of paramount concern to the state.
(d) Cities have issued qualified mortgage bonds to finance the
rehabilitation of housing as part of urban renewal or community
development plans under home rule powers or authority granted
under ORS { - 457.010 to 457.460 - } { + chapter 457 + }.
Further, some cities now have authority to issue bonds under ORS
280.417 to 280.485. Those bonds may be considered qualified
mortgage bonds under section 103A of the Internal Revenue Code
when issued to finance owned units in multiunit structures.
(6) For purposes of section 103A of the Internal Revenue Code,
the department shall allocate the state ceiling of qualified
mortgage bonds. The department shall determine the allocations to
cities as may be necessary for bonds issued as provided in
subsection (7) of this section and any balance of that state
ceiling shall be allocated to the department. This determination
shall be made for each calendar year and shall be set forth in a
Certificate of Determination signed by the director of the
department and filed with the State Treasurer. The Certificate of
Determination shall cover the allocation during the year or any
portion thereof.
(7) The department shall allocate to cities the portions of the
state ceiling as shall be necessary for bond programs specified
in subsection (5)(d) of this section. Before each January 1, any
city may notify the department of its intention to issue
qualified mortgage bonds and of the amount of the bonds intended
to be issued during the ensuing calendar year. Promptly upon
determining the applicable state ceiling for that calendar year
and the applicable limit for that city provided in paragraph (3)
of subsection (g) of section 103A of the Internal Revenue Code,
the department shall allocate to the city the lesser of the
amount of that limit or the amount intended to be issued by the
city. Upon request of the city, the department may increase or
decrease the allocation at any time in the discretion of the
director and amend the Certificate of Determination accordingly.
Enrolled House Bill 2777 (HB 2777-INTRO) Page 33
(8) The department shall be responsible for the designation of
areas of chronic economic distress within the state for approval
as provided in section 103A of the Internal Revenue Code.
{ + NOTE: + } Corrects statutory reference.
SECTION 52. ORS 527.710 is amended to read:
527.710. (1) In carrying out the purposes of ORS 527.610 to
527.770, 527.990 (1) and 527.992, the State Board of Forestry
shall adopt, in accordance with applicable provisions of ORS
183.310 to 183.550, rules to be administered by the State
Forester establishing standards for forest practices in each
region or subregion.
(2) The rules shall ensure the continuous growing and
harvesting of forest tree species. Consistent with ORS 527.630,
the rules shall provide for the overall maintenance of the
following resources:
(a) Air quality;
(b) Water resources, including but not limited to sources of
domestic drinking water;
(c) Soil productivity; and
(d) Fish and wildlife.
(3)(a) In addition to its rulemaking responsibilities under
subsection (2) of this section, the board shall collect and
analyze the best available information and establish inventories
of the following resource sites needing protection:
(A) Threatened and endangered fish and wildlife species
identified on lists that are adopted, by rule, by the State Fish
and Wildlife Commission or are federally listed under the
Endangered Species Act of 1973 as amended;
(B) Sensitive bird nesting, roosting and watering sites;
(C) Biological sites that are ecologically and scientifically
significant; and
(D) Significant wetlands.
(b) The board shall determine whether forest practices would
conflict with resource sites in the inventories required by
paragraph (a) of this subsection. If the board determines that
one or more forest practices would conflict with resource sites
in the inventory, the board shall consider the consequences of
the conflicting uses and determine appropriate levels of
protection.
(c) Based upon the analysis required by paragraph (b) of this
subsection, and consistent with the policies of ORS 527.630, the
board shall adopt rules appropriate to protect resource sites in
the inventories required by paragraph (a) of this subsection.
(4) Before adopting rules under subsection (1) of this section,
the board shall consult with other agencies of this state or any
of its political subdivisions that have functions with respect to
the purposes specified in ORS 527.630 or programs affected by
forest operations. Agencies and programs subject to consultation
under this subsection include, but are not limited to:
(a) Air and water pollution programs administered by the
Department of Environmental Quality under ORS chapters 468A and
468B and ORS 477.013 and 477.515 to 477.532;
(b) Mining operation programs administered by the Department of
Geology and Mineral Industries under ORS 516.010 to 516.130 and
ORS chapter 517;
(c) Game fish and wildlife, commercial fishing, licensing,
wildlife and bird refuge and fish habitat improvement tax
incentive programs administered by the State Department of Fish
and Wildlife under ORS 272.060, 315.134 and ORS chapters 496,
498, 501, 506 and 509;
Enrolled House Bill 2777 (HB 2777-INTRO) Page 34
(d) Park land, Willamette River Greenway, scenic waterway and
recreation trail programs administered by the State Parks and
Recreation Department under ORS 358.475 to 358.565, 390.310 to
390.368, 390.805 to 390.925, 390.950 to 390.989 and 390.121;
(e) The programs administered by the Columbia River Gorge
Commission under Public Law 99-663 and ORS 196.110 and 196.150;
(f) Removal and fill, natural heritage conservation and natural
heritage conservation tax incentive programs administered by the
State Land Board and the Division of State Lands under ORS
196.800 to 196.900, 273.553 to 273.591 { - , 307.550,
307.560 - } and 541.700 to 541.990;
(g) Federal Safe Drinking Water Act programs administered by
the Health Division under ORS 448.273 to 448.990;
(h) Natural heritage conservation programs administered by the
Natural Heritage Advisory Council under ORS 273.553 to 273.591
{ - , 307.550 and 307.560 - } ;
(i) Open space land tax incentive programs administered by
cities and counties under ORS 308A.300 to 308A.330;
(j) Water resources programs administered by the Water
Resources Department under ORS 536.220 to 536.540; and
(k) Pesticide control programs administered by the State
Department of Agriculture under ORS chapter 634.
(5) In carrying out the provisions of subsection (4) of this
section, the board shall consider and accommodate the rules and
programs of other agencies to the extent deemed by the board to
be appropriate and consistent with the purposes of ORS 527.630.
(6) The board shall adopt rules to meet the purposes of another
agency's regulatory program where it is the intent of the board
to administer the other agency's program on forestland and where
the other agency concurs by rule. An operation performed in
compliance with the board's rules shall be deemed to comply with
the other agency's program.
(7)(a) The board may enter into cooperative agreements or
contracts necessary in carrying out the purposes specified in ORS
527.630, including but not limited to stewardship agreements as
described in ORS 527.662.
(b) The State Forestry Department shall enter into agreements
with appropriate state agencies for joint monitoring of the
effectiveness of forest practice rules in protecting forest
resources and water quality.
(8) If based upon the analysis required in section 15 (2)(f),
chapter 919, Oregon Laws 1991, and as the results become
available, the board determines that additional rules are
necessary to protect forest resources pursuant to ORS 527.630,
the board shall adopt forest practice rules that reduce to the
degree practicable the adverse impacts of cumulative effects of
forest practices on air and water quality, soil productivity,
fish and wildlife resources and watersheds. Such rules shall
include a process for determining areas where adverse impacts
from cumulative effects have occurred or are likely to occur, and
may require that a written plan be submitted for harvests in such
areas.
(9)(a) The State Forester, in cooperation with the State
Department of Fish and Wildlife, shall identify streams for which
restoration of habitat would be environmentally beneficial. The
State Forester shall select as a priority those streams where
restoration efforts will provide the greatest benefits to fish
and wildlife, and to streambank and streambed stability.
(b) For those streams identified in paragraph (a) of this
subsection, the State Forester shall encourage landowners to
Enrolled House Bill 2777 (HB 2777-INTRO) Page 35
enter into cooperative agreements with appropriate state agencies
for conduct of restoration activities.
(c) The board, in consultation with appropriate state agencies,
shall study and identify methods for restoring or enhancing fish
and wildlife populations through restoration and rehabilitation
of sites beneficial to fish and wildlife.
(d) The board shall adopt rules to implement the findings of
this subsection.
(10) The board shall adopt rules that provide the State
Forester with authority to condition the approval of plans
required under ORS 527.670 (2) and (3) when the State Forester
makes a determination that there is evidence of a potential
threat to resources protected under this section by controlling
method, timing and extent of harvest when the forester determines
such limitations are necessary to achieve the objectives of ORS
527.630.
(11) In addition to its responsibilities under subsections (1)
to (3) of this section, the board shall adopt rules to reduce the
risk of serious bodily injury or death caused by a rapidly moving
landslide directly related to forest practices. The rules shall
consider the exposure of the public to these safety risks and
shall include appropriate practices designed to reduce the
occurrence, timing or effects of rapidly moving landslides. As
used in this subsection, 'rapidly moving landslide' has the
meaning given that term in ORS 195.250.
{ + NOTE: + } Deletes references to repealed provisions. (See
section 16 of this 2001 Act.)
----------
Passed by House March 12, 2001
...........................................................
Chief Clerk of House
...........................................................
Speaker of House
Passed by Senate March 29, 2001
...........................................................
President of Senate
Enrolled House Bill 2777 (HB 2777-INTRO) Page 36
Received by Governor:
......M.,............., 2001
Approved:
......M.,............., 2001
...........................................................
Governor
Filed in Office of Secretary of State:
......M.,............., 2001
...........................................................
Secretary of State
Enrolled House Bill 2777 (HB 2777-INTRO) Page 37