71st OREGON LEGISLATIVE ASSEMBLY--2001 Regular Session
 
NOTE:  Matter within  { +  braces and plus signs + } in an
amended section is new. Matter within  { -  braces and minus
signs - } is existing law to be omitted. New sections are within
 { +  braces and plus signs + } .
 
LC 2345
 
                         House Bill 3025
 
Sponsored by Representatives KNOPP, WITT; Representatives
  BACKLUND, CLOSE, GARRARD
 
 
                             SUMMARY
 
The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure as
introduced.
 
  Creates deduction from individual's taxable income for costs
paid toward tuition at institution of higher education.
  Applies to tuition paid in tax years beginning on or after
January 1, 2002.
 
                        A BILL FOR AN ACT
Relating to taxation.
Be It Enacted by the People of the State of Oregon:
  SECTION 1.  { + Section 2 of this 2001 Act is added to and made
a part of ORS chapter 316. + }
  SECTION 2.  { + (1) As used in this section:
  (a) 'Full-time student' means a student enrolled at an
institution of higher education:
  (A) For at least the minimum number of credits the institution
of higher education requires the student to enroll in during a
quarter or semester to qualify for full-time student status; and
  (B) For 45 quarter credits or 30 semester credits during an
eligible taxpayer's tax year, or any equivalent number of credits
as determined by the Department of Revenue by rule.
  (b) 'Institution of higher education' means an educational
institution authorized by the law of this state or another state
to award a degree for education received beyond the high school
level.
  (c) 'Eligible taxpayer' means an individual who paid for
tuition at an institution of higher education.
  (d) 'Tuition' means payment made, and not refunded, for the
cost of instruction at an institution of higher education when
the instruction is applied toward a degree beyond a high school
degree, including an associate's degree, a bachelor's degree, a
master's degree or any other higher degree.
  (2) In addition to other modifications to federal taxable
income contained in this chapter, there shall be subtracted from
federal taxable income the amount paid by an eligible taxpayer
during a tax year for tuition at an institution of higher
education.
  (3) Notwithstanding subsection (2) of this section, the amount
that may be subtracted from federal taxable income may not exceed
$15,000 per full-time student per tax year.
  (4)(a) For tax years beginning in each calendar year, the
Department of Revenue shall adjust the amount of the limitation
imposed by subsection (3) of this section by a percentage that
reflects the annual change in the nationwide average cost of
tuition.
  (b) To determine the percentage required for paragraph (a) of
this subsection, the department shall use reports published by
the College Board or any other reporting agency that monitors the
annual percentage change in the nationwide average cost of
tuition.
  (5)(a) In the case of a student who is not a full-time student,
the limitation imposed by subsection (3) or (4) of this section
shall be prorated.
  (b) The proportion for making a proration under this subsection
shall be:
  (A) For a student enrolled at an institution of higher
education that measures the school year in quarters, the amount
of the limitation imposed by subsection (3) or (4) of this
section divided by 45 and then multiplied by the number of
credits the student enrolled in during the tax year.
  (B) For a student enrolled at an institution of higher
education that measures the school year in semesters, the amount
of the limitation imposed by subsection (3) or (4) of this
section divided by 30 and then multiplied by the number of
credits the student enrolled in during the tax year.
  (c) In the case of a student enrolled in two institutions of
higher education during the tax year, one that measures the
school year in quarters and the other that measures the school
year in semesters, the department shall develop by rule a formula
for making the calculations under paragraph (b) of this
subsection in a manner that takes into consideration the
different systems of measuring the school year.
  (6) To receive a subtraction from federal taxable income under
this section, the eligible taxpayer must submit to the department
an application for each student that includes:
  (a) The amount of tuition paid by the eligible taxpayer during
the tax year.
  (b) The institution of higher education to which the tuition
was paid.
  (c) The minimum number of credits the institution of higher
education requires a student to enroll in to qualify as a
full-time student.
  (d) The number of credits for which tuition was paid and not
refunded.
  (e) The student's name, address and Social Security number.
  (7) The department may conduct an audit to confirm the
information submitted under subsection (6) of this section.
  SECTION 3. Section 2 of this 2001 Act applies to tuition costs
paid in tax years beginning on or after January 1, 2002.
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