Chapter 331 Oregon Laws 2005

AN ACT

HB 2995

Relating to refund anticipation loans; creating new provisions; and amending ORS 673.605, 673.615, 673.700 and 673.730.

Be It Enacted by the People of the State of Oregon:

SECTION 1. ORS 673.605 is amended to read:

673.605. As used in ORS 673.605 to 673.740 unless the context requires otherwise:

(1) “Board” means the State Board of Tax Practitioners created by ORS 673.725.

(2)(a) “Facilitator” means a person that individually or in conjunction or cooperation with another person processes, receives or accepts for delivery an application for a refund anticipation loan or a check in payment of refund anticipation loan proceeds or in any other manner materially facilitates the making of a refund anticipation loan.

(b) “Facilitator” does not mean a financial institution as defined in ORS 706.008, a person who has been issued a license under ORS chapter 725, an affiliate that is a servicer for a financial institution or for a person issued a license under ORS chapter 725, a person issued a certificate as a certified public accountant or licensed as a public accountant by the Oregon Board of Accountancy, or any person that acts solely as an intermediary and does not deal with a taxpayer in the making of a refund anticipation loan.

(3) “Lender” means a person that makes a refund anticipation loan with the person’s own funds or a line of credit or other funding from a financial institution as defined in ORS 706.008, but does not include a financial institution as defined in ORS 706.008.

(4) “Refund anticipation loan” means a loan that the lender arranges to be repaid directly from the proceeds of the taxpayer’s federal or state personal income tax refund.

(5)(a) “Refund anticipation loan fee” means the charges, fees or other consideration charged or imposed by the lender or facilitator for the making of a refund anticipation loan.

(b) “Refund anticipation loan fee” does not mean any charge, fee or other consideration usually charged or imposed by the facilitator in the ordinary course of business for nonloan services, including fees for tax return preparation and fees for electronic filing of tax returns.

[(2)] (6) “Tax consultant” means a person who is licensed under ORS 673.605 to 673.740 to prepare or advise or assist in the preparation of personal income tax returns for another and for valuable consideration.

(7) “Taxpayer” means an individual who files a federal or Oregon personal income tax return.

[(3)] (8) “Tax preparer” means any person who is licensed under ORS 673.605 to 673.740 as a tax preparer.

SECTION 2. Sections 3 and 4 of this 2005 Act are added to and made a part of ORS 673.605 to 673.740.

SECTION 3. (1) Prior to a taxpayer’s completion of an application for a refund anticipation loan, the facilitator shall clearly disclose in writing to the taxpayer on a form separate from the application:

(a) A listing or table of refund anticipation loan fees and the annual percentage rates, as defined by the federal Truth in Lending Act, 15 U.S.C. 1601 et seq., charged by the facilitator or lender for three or more representative refund anticipation loan amounts. For each loan amount, the schedule shall list separately the amount of each fee and the amount of interest charged by the facilitator or lender and the total amount of fees and interest charged.

(b) That the refund anticipation loan is a loan and not the taxpayer’s actual personal income tax refund.

(c) That electronic filing of the taxpayer’s tax return is available without applying for a refund anticipation loan.

(d) The average time announced by the appropriate taxing authority within which the taxpayer can expect to receive a refund if the taxpayer does not obtain a refund anticipation loan and the taxpayer’s return is filed:

(A) Electronically and the refund is directly deposited in the taxpayer’s bank account; or

(B) By mail and the refund is directly deposited in the taxpayer’s bank account or mailed to the taxpayer.

(e) That the Internal Revenue Service does not guarantee:

(A) That the full amount of the anticipated refund will be paid; or

(B) A specific date on which the taxpayer will receive the refund.

(f) That the taxpayer is responsible for repayment of the loan and related fees in the event the tax refund is not paid or is not paid in full.

(g) The estimated time within which the proceeds of the loan will be paid to the taxpayer if the loan is approved.

(h) The fees charged by the facilitator or lender if the refund anticipation loan is not approved.

(2) Prior to entering into a refund anticipation loan agreement, the facilitator shall clearly disclose to the taxpayer:

(a) The estimated total fees for the loan.

(b) The estimated annual percentage rate, as defined by the federal Truth in Lending Act, 15 U.S.C. 1601 et seq., for the loan.

SECTION 4. (1) A unit of a local government, as defined in ORS 174.116, may not adopt any rule, regulation, code or ordinance to restrict or limit any requirements under ORS 673.605 to 673.740 relating to refund anticipation loans.

(2) ORS 673.605 to 673.740 supersede and preempt any rule, regulation, code or ordinance of any unit of a local government, as defined in ORS 174.116, relating to refund anticipation loans.

SECTION 5. ORS 673.615 is amended to read:

673.615. Except as otherwise provided in ORS 673.605 to 673.740:

(1) A person [shall] may not prepare or advise or assist in the preparation of personal income tax returns for another and for valuable consideration or represent that the person is so engaged unless the person is licensed as a tax consultant under ORS 673.605 to 673.740.

(2) A tax preparer may prepare or advise or assist in the preparation of tax returns only under the supervision of a tax consultant, or a person described in ORS 673.610 (2) or (4), and subject to such conditions and limitations as the State Board of Tax Practitioners by rule may impose.

(3) A person may not be a facilitator of a refund anticipation loan without first being issued a license as a tax consultant or tax preparer under ORS 673.640.

SECTION 6. ORS 673.700 is amended to read:

673.700. The State Board of Tax Practitioners may refuse to issue or renew a tax consultant or preparer’s license, or may suspend or revoke a tax consultant or preparer’s license, or may reprimand any person licensed as a tax consultant or tax preparer for:

(1) Violation of ORS 673.615 or 673.705 or section 3 of this 2005 Act.

(2) Failure to keep the records required by ORS 673.690.

(3) Negligence or incompetence in tax consultant or tax preparer practice or when acting in the capacity of a tax preparer or tax consultant in another state, or under an exempt status or in preparation of the personal income tax return for another state or the federal government.

(4)(a) Conduct resulting in a conviction of a felony under the laws of any state or of the United States. However, such conduct may be considered only to the extent permissible under the provisions of ORS 670.280; or

(b) Conviction of any crime, an essential element of which is dishonesty, fraud or deception, under the laws of any state or of the United States.

(5) Conviction of willful failure to pay any tax or estimated tax, file any tax return, keep records or supply information required under the tax laws of any state or of the United States, or conviction of the willful making, rendering, delivery, disclosure, signing or verifying of any false or fraudulent list, return, account, statement or other document, or of supplying any false or fraudulent information, required under the tax laws of any state or of the United States.

(6) Failure to comply with continuing education requirements under ORS 673.655 or under ORS 673.667 unless such requirements have been waived by the board.

(7) Violation of the code of professional conduct prescribed by the board.

(8) Failure to pay any civil penalty incurred under ORS 673.735 within the time determined by the board.

(9) Cancellation, revocation or refusal to renew by any state or federal agency of, or entry of a consent order, stipulated agreement or judgment related to, the person’s authority to practice law, to practice as a certified public accountant or a public accountant or to practice under other regulatory law in any state, or to practice as an enrolled agent, if the grounds for the cancellation, revocation, refusal to renew, consent order, stipulated agreement or judgment were related to income tax preparation or if dishonesty, fraud or deception was involved.

(10) Cancellation, revocation or refusal to renew by any state or federal agency of, or entry of a consent order, stipulated agreement or judgment related to, a business’s authority to conduct operations related to the practice of law, certified public accountancy, public accountancy or other services provided under regulatory law in any state, or to provide enrolled agent services, if the grounds for the cancellation, revocation, refusal to renew, consent order, stipulated agreement or judgment involved the conduct or actions of the licensee or applicant and:

(a) Were related to income tax preparation; or

(b) Involved dishonesty, fraud or deception.

SECTION 7. ORS 673.730 is amended to read:

673.730. The State Board of Tax Practitioners shall have the following powers, in addition to the powers otherwise granted by ORS 673.605 to 673.740, and shall have all powers necessary or proper to carry the granted powers into effect:

(1) To determine qualifications of applicants for licensing as a tax consultant or a tax preparer in this state; to cause examinations to be prepared, conducted and graded; and to issue licenses to qualified applicants upon their compliance with ORS 673.605 to 673.740 and the rules of the board.

(2)(a) To restore the license of any tax consultant or preparer whose license has been suspended or revoked.

(b) The power of the board to suspend any license under ORS 673.700 includes the power to restore:

(A) At a time certain; or

(B) When the person subject to suspension fulfills conditions for reissuance set by the board.

(c) The power of the board to restore a license under paragraph (a) of this subsection specifically includes the power to restore a license suspended or revoked for the reason that the person has been convicted of a crime. In making a determination to restore a license, the board shall consider the relationship of the facts which supported the conviction to the code of professional conduct and all intervening circumstances in determining the fitness of the person to receive or hold a tax consultant’s or tax preparer’s license.

(3) To prescribe fees, subject to ORS 673.685, and to collect fees.

(4) To investigate alleged violations of ORS 673.605 to 673.740, or any rule or order adopted thereunder. The board may keep information gathered pursuant to an investigation by the board confidential until there is a final order or determination by the board, unless disclosure is considered necessary by the board for the investigation or prosecution of an alleged violation of ORS 673.605 to 673.740, or any rule or order adopted thereunder. The board may keep personal financial information gathered pursuant to an investigation by the board confidential after a final order or determination by the board, unless disclosure is considered necessary by the board for the investigation or prosecution of an alleged violation of ORS 673.605 to 673.740, or any rule or order adopted thereunder. For purposes of this subsection, personal financial information includes but is not limited to tax returns.

(5) To enforce the provisions of ORS 673.605 to 673.740 and to exercise general supervision over tax consultant and tax preparer practice.

(6) To issue an order directed to a person to cease and desist from any violation or threatened violation of ORS 673.615, 673.643 or 673.705 or section 3 of this 2005 Act, or any rule or order adopted thereunder, if the board has reason to believe that a person has been engaged, is engaging or is about to engage in any violation of ORS 673.615, 673.643 or 673.705 or section 3 of this 2005 Act, or any rule or order adopted thereunder.

(7) To assess civil penalties within a cease and desist order issued under subsection (6) of this section if the board has reason to believe that a person has been engaged or is engaging in any violation of ORS 673.615, 673.643 or 673.705 or section 3 of this 2005 Act, or any rule or order adopted thereunder. The civil penalty may not exceed $5,000 per violation.

(8) To formulate a code of professional conduct for tax consultants and tax preparers.

(9) To assess against the licensee or any other person found guilty of violating any provision of ORS 673.605 to 673.740, or any rule or order adopted thereunder, in addition to any other sanctions, the costs associated with the disciplinary or other action taken by the board.

(10) To order that any person who has engaged in or is engaging in any violation of ORS 673.605 to 673.740, or any rule or order adopted thereunder, shall offer to rescind and pay restitution to anyone harmed by the violation who seeks rescission.

SECTION 8. Sections 3 and 4 of this 2005 Act and the amendments to ORS 673.605, 673.615, 673.700 and 673.730 by sections 1, 5, 6 and 7 of this 2005 Act apply to refund anticipation loans facilitated or made on or after the effective date of this 2005 Act.

Approved by the Governor June 29, 2005

Filed in the office of Secretary of State June 29, 2005

Effective date January 1, 2006

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