74th OREGON LEGISLATIVE ASSEMBLY--2007 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 689
 
                         House Bill 2361
 
Ordered printed by the Speaker pursuant to House Rule 12.00A (5).
  Presession filed (at the request of House Interim Committee on
  Judiciary for Oregon State Bar Estate Planning Section)
 
 
                             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.
 
  Modifies Uniform Principal and Income Act. Clarifies that money
is received by reason of partial liquidation and allocable to
principal if total amount of money and property distributed by
entity in distribution or series of related distributions is
greater than 20 percent of entity's gross assets.
 
                        A BILL FOR AN ACT
Relating to partial liquidations; amending ORS 129.300.
Be It Enacted by the People of the State of Oregon:
  SECTION 1. ORS 129.300 is amended to read:
  129.300. (1) In this section, 'entity' means a corporation,
partnership, limited liability company, regulated investment
company, real estate investment trust, common trust fund or any
other organization in which a trustee has an interest other than
a trust or estate to which ORS 129.305 applies, a business or
activity to which ORS 129.308 applies or an asset-backed security
to which ORS 129.385 applies.
  (2) Except as otherwise provided in this section, a trustee
shall allocate to income money received from an entity.
  (3) A trustee shall allocate the following receipts from an
entity to principal:
  (a) Property other than money;
  (b) Money received in one distribution or a series of related
distributions in exchange for part or all of a trust's interest
in the entity;
  (c) Money received in total or partial liquidation of the
entity; and
  (d) Money received from an entity that is a regulated
investment company or a real estate investment trust if the money
distributed is a capital gain dividend for federal income tax
purposes.
  (4) Money is received in partial liquidation:
  (a) To the extent that the entity, at or near the time of a
distribution, indicates that it is a distribution in partial
liquidation; or
  (b) If the total amount of money and property
 { - received - }  { +  distributed by an entity + } in a
distribution or series of related distributions is greater than
20 percent of the entity's gross assets, as shown by the entity's
year-end financial statements immediately preceding the initial
 { - receipt - }  { +  distribution + }.
  (5) Money is not received in partial liquidation, nor may it be
taken into account under subsection (4)(b) of this section, to
the extent that it does not exceed the amount of income tax that
a trustee or beneficiary must pay on taxable income of the entity
that distributes the money.
  (6) A trustee may rely upon a statement made by an entity about
the source or character of a distribution if the statement is
made at or near the time of distribution by the entity's board of
directors or other person or group of persons authorized to
exercise powers to pay money or transfer property comparable to
those of a corporation's board of directors.
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