75th OREGON LEGISLATIVE ASSEMBLY--2010 Special 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 101

                        Senate Bill 1027

Sponsored by Senators BURDICK, MORSE; Senators BONAMICI, HASS
  (Presession filed.)

                             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.

  Changes method by which surplus 'kicker' refunds are made to
personal income taxpayers.
  Applies to biennia beginning on or after July 1, 2011.

                        A BILL FOR AN ACT
Relating to surplus refund methods; creating new provisions;
  amending ORS 291.349 and 305.792; and repealing ORS 291.351 and
  291.353.
Be It Enacted by the People of the State of Oregon:
  SECTION 1. ORS 291.349 is amended to read:
  291.349. (1) As soon as practicable after adjournment sine die
of the regular session of the Legislative Assembly, the Oregon
Department of Administrative Services shall report to the
Emergency Board the estimate as of July 1 of the first year of
the biennium of General Fund and State Lottery Fund revenues that
will be received by the state during that biennium. The Oregon
Department of Administrative Services shall base its estimate on
the last forecast given to the Legislative Assembly before
adjournment sine die of the regular session on which the printed,
adopted budget prepared in the Oregon Department of
Administrative Services is based, adjusted only insofar as
necessary to reflect changes in laws adopted at that session. The
report shall contain the estimated revenues from corporate income
and excise taxes separately from the estimated revenues from
other General Fund sources. The Oregon Department of
Administrative Services may revise the estimate if necessary
following adjournment sine die of any special or emergency
session of the Legislative Assembly but any revision does not
affect the basis of the computation described in subsection (3)
or (4) of this section.
  (2) As soon as practicable after the end of the biennium, the
Oregon Department of Administrative Services shall report to the
Emergency Board, or the Legislative Assembly if it is in session,
the amount of General Fund revenues collected as of the last June
30 of the preceding biennium. The report shall contain the
collections from corporate income and excise taxes separately
from collections from other sources.
  (3) If the revenues received from the corporate income and
excise taxes during the biennium exceed the amounts estimated to
be received from such taxes for the biennium, as estimated after
adjournment sine die of the regular session, by two percent or
more, the total amount of that excess shall be credited to
corporate income and excise taxpayers in a percentage amount of
prior year corporate excise and income tax liability as
determined under subsection (5) of this section. However, no
credit shall be allowed against tax liability imposed by ORS
317.090.
  (4) If the revenues received from General Fund revenue sources,
exclusive of those described in subsection (3) of this section,
during the biennium exceed the amounts estimated to be received
from such sources for the biennium, as estimated after
adjournment sine die of the regular session, by two percent or
more,   { - there shall be refunded from personal income tax
revenues an amount equal to the total amount of that excess,
reduced by the cost certified by the Department of Revenue under
ORS 291.351 as being allocable to payments described under this
subsection. The excess amount to be refunded shall be paid to
personal income taxpayers in a percentage amount of prior year
personal income tax liability as determined under subsection (6)
of this section. - }  { +  the total amount of that excess shall
be credited to personal income taxpayers in a percentage amount
of prior year personal income tax liability as determined under
subsection (5) of this section. + }
  (5)(a) If there is an excess to be credited under subsection
(3)  { + or (4) + } of this section,  { + or both, + } on or
before October 1, following the end of each biennium, the Oregon
Department of Administrative Services shall determine and certify
to the Department of Revenue the percentage   { - amount - }
 { + amounts + } of credit for purposes of subsection (3)  { + or
(4) + } of this section. The percentage   { - amount - }
 { + amounts + } determined shall be   { - a - }  percentage
  { - amount - }   { + amounts + } to the nearest one-tenth of a
percent that will distribute the excess to be credited
 { + either + } to corporate excise and income taxpayers { +  or
to personal income taxpayers + }.
  (b) The percentage amount  { + applicable to subsection (3) of
this section + } shall equal the amount distributed under
subsection (3) of this section divided by the estimated total
corporate income and excise tax liability for all corporate
income and excise taxpayers for tax years beginning in the
calendar year immediately preceding the calendar year in which
the excess is determined.
  (c) The amount of the surplus credit  { + under subsection (3)
of this section + } is determined by multiplying the percentage
amount determined under paragraph (b) of this subsection by the
total amount of a corporate income or excise taxpayer's tax
liability for the tax year beginning in the calendar year
immediately preceding the calendar year in which the excess is
determined in order to calculate the amount to be credited to the
taxpayer.
   { +  (d) The percentage amount applicable to subsection (4) of
this section shall equal the amount distributed under subsection
(4) of this section divided by the estimated total personal
income tax liability for all personal income taxpayers for tax
years beginning in the calendar year immediately preceding the
calendar year in which the excess is determined.
  (e) The amount of the surplus credit under subsection (4) of
this section is determined by multiplying the percentage amount
determined under paragraph (d) of this subsection by the total
amount of a personal income taxpayer's tax liability for the tax
year beginning in the calendar year immediately preceding the
calendar year in which the excess is determined in order to
calculate the amount to be credited to the taxpayer. + }
    { - (d) - }   { + (f) + } The credit shall be determined
based on the tax liability as shown on the return of the taxpayer
or as corrected by the Department of Revenue.
    { - (e) - }   { + (g) + } The credit shall be computed after
the allowance of a credit provided under ORS 316.082, 316.131 or
316.292, but before the allowance of any other credit or offset
against tax liability allowed or allowable under any provision of
law of this state, and before the application of estimated tax
payments, withholding or other advance tax payments.
    { - (f) - }   { + (h) + } If a credit applied against tax
liability as described in paragraph   { - (e) - }   { + (g) + }
of this subsection reduces tax liability to zero and an amount of
the credit remains unused, the remaining unused amount shall be
carried forward and applied against tax liability as prescribed
in paragraph   { - (e) - }   { + (g) + } of this subsection in
the succeeding tax year. Following application of the credit
against tax liability in a succeeding tax year, any amount
continuing to remain unused shall be carried forward and applied
against tax liability in a succeeding tax year until all
remaining amounts of unused credit are offset against tax
liability.
    { - (g) - }   { + (i) + } Notwithstanding paragraph
 { - (e) - }   { + (g) + } of this subsection, if an excess is
credited under subsection (3)  { + or (4) + } of this section for
a tax year and an unused credit amount from a prior tax year is
carried forward to the tax year as prescribed under paragraph
 { - (f) - }   { + (h) + } of this subsection, the amount of the
carryforward credit shall be applied against tax liability prior
to applying the new credit.
    { - (h) - }   { + (j) + } The Department of Revenue may
prescribe by rule the manner of calculating and claiming a credit
if the filing status of a corporation changes between the tax
year described in paragraph (b) of this subsection and the
succeeding tax year.
    { - (6)(a) If there is an excess to be refunded under
subsection (4) of this section, on or before September 15,
following the end of each biennium, the Oregon Department of
Administrative Services shall determine and certify to the
Department of Revenue the percentage amount of refund payment for
purposes of subsection (4) of this section. The percentage amount
so determined shall be a percentage amount to the nearest
one-hundredth of a percent that will distribute the excess to be
refunded to personal income taxpayers under subsection (4) of
this section. The percentage amount shall equal the amount
distributed under subsection (4) of this section divided by the
estimated total personal income tax liability for all personal
income taxpayers for tax years beginning in the calendar year
immediately preceding the calendar year in which the excess is
determined. - }
    { - (b) The Department of Revenue shall multiply the
percentage amount determined under paragraph (a) of this
subsection by the total amount of a personal income taxpayer's
tax liability for the tax year beginning in the calendar year
immediately preceding the calendar year in which the excess is
determined in order to calculate the amount of the refund to be
made to the taxpayer. For purposes of this paragraph, the
taxpayer's tax liability is the amount as shown on the return of
the taxpayer or as corrected by the Department of Revenue, and is
determined: - }
    { - (A) After the allowance of a credit provided under ORS
316.082, 316.131 or 316.292; - }
    { - (B) Before the allowance of any other credit or offset
against tax liability allowed or allowable on the return for the
tax year; and - }
    { - (C) Before the application of estimated tax payments,
withholding or other advance tax payments. - }
    { - (c) The refund described under this subsection shall be
mailed by the Department of Revenue to personal income taxpayers
eligible for the payment on or before December 15 following the
end of the biennium for which the payment described under this
subsection is being made. - }
    { - (d) Notwithstanding paragraph (c) of this subsection, the
Department of Revenue shall mail the refund at the earliest date
of practicable convenience in the case of a return: - }
    { - (A) For a tax year beginning in the calendar year
immediately preceding the calendar year in which the excess is
determined for which refund is being made; and - }
    { - (B) That is first filed on or after August 15 after the
end of the biennium. - }
    { - (7) No refund shall be made to a taxpayer if, after
making the calculation described under subsection (6) of this
section, the amount calculated is less than $1. - }
    { - (8) For purposes of ORS chapters 305 and 314 to 318,
refunds issued under subsection (6) of this section are refunds
of an overpayment of tax imposed under ORS chapter 316, but do
not bear interest. - }
  SECTION 2.  { + ORS 291.351 and 291.353 are repealed. + }
  SECTION 3.  { + Amounts in the Surplus Kicker Cost Account on
the effective date of this 2010 Act shall be transferred to the
General Fund. + }
  SECTION 4. ORS 305.792 is amended to read:
  305.792. (1) The Department of Revenue shall cause a checkoff
box to be printed on the personal income and corporate income or
excise tax returns for the appropriate tax year, by which a
taxpayer may indicate that a surplus refund   { - payment or - }
credit that the taxpayer may otherwise be entitled to under ORS
291.349 shall instead be used for funding education.
    { - (2)(a) A personal income taxpayer may elect to donate a
surplus refund payment to be made under ORS 291.349 to public
elementary and secondary school education. The taxpayer may make
the election by checking the appropriate checkoff box on the
taxpayer's return indicating the taxpayer's intention to donate
the surplus refund payment to public elementary and secondary
education. - }
    { - (b) Once made, the election is irrevocable for any
surplus refund payments received until a subsequent return is
filed for a later tax year, and on which the checkoff box is not
checked. - }
    { - (3)(a) - }   { + (2)(a) + } A  { + personal income or + }
corporate excise or income taxpayer may elect to not claim a
surplus refund credit that the taxpayer would otherwise be
entitled to pursuant to ORS 291.349, in order to achieve a
corresponding transfer of such moneys from the General Fund to
the State School Fund for the support of public elementary and
secondary school education. The taxpayer may make the election by
checking the appropriate checkoff box on the taxpayer's return
and by not using the surplus refund credit percentage to reduce
the taxpayer's tax liability.
  (b) A taxpayer that checks the appropriate checkoff box
indicating that the credit will not be claimed but that
nevertheless claims the credit in determining the taxpayer's tax
liability shall be considered to have not made the election under
this subsection.
  (c) The election to not claim a credit under this subsection
may not be revoked by filing an amended return.
    { - (4) After the determination that surplus refund payments
are to be made under ORS 291.349 (4) and (6), the department
shall determine the total amount of such payments for which an
election to donate to public elementary and secondary education
has been made and shall certify this amount to the State
Treasurer.  Following the department's certification to the State
Treasurer, an election to donate that biennium's surplus refund
payments under subsection (2) of this section is irrevocable. - }

    { - (5) - }   { + (3) + } Following the determination to
credit  { + personal income or + } corporate income and excise
taxes pursuant to ORS 291.349   { - (3) and (5) - } , the
department shall annually certify  { + to the State Treasurer + }
the total amount of allowable credits that have not been claimed
pursuant to an election made under subsection   { - (3) - }
 { + (2) + } of this section. The certification shall be made on
or before December 31 of each year, until the tax year for which
the credit would otherwise be claimed becomes a closed tax year.
  SECTION 5.  { + For purposes of determining the amount to be
certified to the State Treasurer under ORS 305.792, surplus
refund payment elections made under ORS 305.792 (2009 or earlier
edition) shall be considered surplus refund credit elections. + }
  SECTION 6.  { + The amendments to ORS 291.349 and 305.792 by
sections 1 and 4 of this 2010 Act apply to biennia beginning on
or after July 1, 2011. + }
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