Bill Text: OR HB2486 | 2013 | Regular Session | Introduced

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Bill Title: Relating to treatment of credit unions in tax law; prescribing an effective date; providing for revenue raising that requires approval by a three-fifths majority.

Spectrum: Committee Bill

Status: (Failed) 2013-07-08 - In committee upon adjournment. [HB2486 Detail]

Download: Oregon-2013-HB2486-Introduced.html

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     77th OREGON LEGISLATIVE ASSEMBLY--2013 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 1473

                         House Bill 2486

Introduced and printed pursuant to House Rule 12.00. Presession
  filed (at the request of House Interim Committee on Revenue)

                             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.

  Imposes corporate excise tax on state-chartered credit unions
and interstate credit unions holding one or more deposits of
public funds that exceed $250,000 or holding commercial loans
that in aggregate exceed amount equal to 10 percent of credit
union assets.
  Applies to tax years beginning on or after January 1, 2013.
  Takes effect on 91st day following adjournment sine die.

                        A BILL FOR AN ACT
Relating to treatment of credit unions in tax law; creating new
  provisions; amending ORS 311.473, 314.610, 317.010, 317.080 and
  723.752; prescribing an effective date; and providing for
  revenue raising that requires approval by a three-fifths
  majority.
Be It Enacted by the People of the State of Oregon:
  SECTION 1. ORS 314.610 is amended to read:
  314.610. As used in ORS 314.605 to 314.675, unless the context
otherwise requires:
  (1) 'Business income' means income arising from transactions
and activity in the regular course of the taxpayer's trade or
business and includes income from tangible and intangible
property if the acquisition, the management, use or rental, and
the disposition of the property constitute integral parts of the
taxpayer's regular trade or business operations.
  (2) 'Commercial domicile' means the principal place from which
the trade or business of the taxpayer is directed or managed.
  (3) 'Compensation' means wages, salaries, commissions and any
other form of remuneration paid to employees for personal
services.
  (4) 'Financial institution' means a person, corporation or
other business entity that is any of the following:
  (a) A bank holding company under the laws of this state or
under the federal Bank Holding Company Act of 1956, 12 U.S.C.
1841 et seq., as amended.
  (b) A savings and loan holding company under the National
Housing Act, 12 U.S.C. 1701 et seq., as amended.
  (c) A national bank organized and existing as a national bank
association under the National Bank Act, 12 U.S.C. 21 et seq., as
amended.

  (d) A savings association, as defined in 12 U.S.C.  1813(b)(1),
as amended.
  (e) A bank or thrift institution incorporated or organized
under the laws of any state.
  (f) An entity organized under the provisions of 12 U.S.C. 611
to 631, as amended.
  (g) An agency or branch of a foreign bank, as defined in 12
U.S.C. 3101, as amended.
  (h) A   { - state - }  credit union  { + as defined in ORS
723.006 + } with loan assets that exceed $50,000,000 as of the
first day of the taxable year of the   { - state - }  credit
union.
   { +  (i) An interstate credit union as defined in ORS 723.001
with loan assets that exceed $50,000,000 as of the first day of
the taxable year of the interstate credit union. + }
    { - (i) - }   { + (j) + } A production credit association
subject to 12 U.S.C. 2071 et seq., as amended.
   { +  (k) A credit union as defined in ORS 723.006 that at any
time during the taxable year of the credit union:
  (A) Holds one or more deposits of public funds as defined in
ORS 295.001 that exceed $250,000; or
  (B) Holds commercial loans that in the aggregate exceed an
amount equal to 10 percent of the assets of the credit union.
  (L) An interstate credit union as defined in ORS 723.001 that
at any time during the taxable year of the interstate credit
union:
  (A) Holds one or more deposits of public funds as defined in
ORS 295.001 that exceed $250,000; or
  (B) Holds commercial loans that in the aggregate exceed an
amount equal to 10 percent of the assets of the interstate credit
union. + }
    { - (j) - }   { + (m) + } A corporation, more than 50 percent
of the voting stock of which is owned, directly or indirectly, by
a person, corporation or other business entity described in
paragraphs (a) to   { - (i) - }   { + (L) + } of this subsection,
provided that the corporation is not an insurer taxable under ORS
317.655.
    { - (k) - }   { + (n) + } An entity that is not otherwise
described in this subsection, that is not an insurer taxable
under ORS 317.655 and that derives more than 50 percent of its
gross income from activities that a person, corporation or entity
described in paragraph (c), (d), (e), (f), (g), (h), (i) { + ,
(j), (k), (L) + } or
  { - (L) - }   { + (o) + } of this subsection is authorized to
conduct, not taking into account any income derived from
nonrecurring extraordinary sources.
    { - (L) - }   { + (o) + } A person that derives at least 50
percent of the person's annual average gross income, for
financial accounting purposes for the current tax year and the
two preceding tax years, from finance leases, excluding any gross
income from incidental or occasional transactions. For purposes
of this paragraph, 'finance lease' means:
  (A) A lease transaction that is the functional equivalent of an
extension of credit and that transfers substantially all of the
benefits and risks of the ownership of the leased property;
  (B) A direct financing lease or a leverage lease that meets the
criteria of Financial Accounting Standards Board Statement No.
13; or
  (C) Any other lease that is accounted for as a financing by a
lessor under generally accepted accounting principles.
  (5) 'Nonbusiness income' means all income other than business
income.
  (6) 'Public utility' means any business entity whose principal
business is ownership and operation for public use of any plant,
equipment, property, franchise, or license for the transmission
of communications, transportation of goods or persons, or the
production, storage, transmission, sale, delivery, or furnishing
of electricity, water, steam, oil, oil products or gas.
  (7) 'Sales' means all gross receipts of the taxpayer not
allocated under ORS 314.615 to 314.645.
  (8) 'State' means any state of the United States, the District
of Columbia, the Commonwealth of Puerto Rico, any territory or
possession of the United States, and any foreign country or
political subdivision thereof.
  SECTION 2. ORS 317.010, as amended by section 23, chapter 31,
Oregon Laws 2012, is amended to read:
  317.010. As used in this chapter, unless the context requires
otherwise:
  (1) 'Centrally assessed corporation' means every corporation
the property of which is assessed by the Department of Revenue
under ORS 308.505 to 308.665.
  (2) 'Department' means the Department of Revenue.
  (3)(a) 'Consolidated federal return' means the return permitted
or required to be filed by a group of affiliated corporations
under section 1501 of the Internal Revenue Code.
  (b) 'Consolidated state return' means the return required to be
filed under ORS 317.710 (5).
  (4) 'Doing business' means any transaction or transactions in
the course of its activities conducted within the state by a
national banking association, or any other corporation; provided,
however, that a foreign corporation whose activities in this
state are confined to purchases of personal property, and the
storage thereof incident to shipment outside the state, shall not
be deemed to be doing business unless such foreign corporation is
an affiliate of another foreign or domestic corporation which is
doing business in Oregon. Whether or not corporations are
affiliated shall be determined as provided in section 1504 of the
Internal Revenue Code.
  (5) 'Excise tax' means a tax measured by or according to net
income imposed upon national banking associations, all other
banks, and financial, centrally assessed, mercantile,
manufacturing and business corporations for the privilege of
carrying on or doing business in this state.
  (6) { + (a) + } 'Financial institution' has the meaning given
that term in ORS 314.610   { - except that it - }  { + .
  (b) 'Financial institution' + } does not include { + :
  (A) + } A credit union as defined in ORS 723.006  { + that at
no time during the taxable year of the credit union:
  (i) Holds one or more deposits of public funds as defined in
ORS 295.001 that exceed $250,000; or
  (ii) Holds commercial loans that in the aggregate exceed an
amount equal to 10 percent of the assets of the credit union + }
 { - , - }  { + ;
  (B) + } An interstate credit union as defined in ORS 723.001
 { + that at no time during the taxable year of the interstate
credit union:
  (i) Holds one or more deposits of public funds as defined in
ORS 295.001 that exceed $250,000; or
  (ii) Holds commercial loans that in the aggregate exceed an
amount equal to 10 percent of the assets of the interstate credit
union;  + }or
   { +  (C) + } A federal credit union.
  (7) 'Internal Revenue Code,' except where the Legislative
Assembly has provided otherwise, refers to the laws of the United
States or to the Internal Revenue Code as they are amended and in
effect:
  (a) On December 31, 2011; or
  (b) If related to the definition of taxable income, as
applicable to the tax year of the taxpayer.
  (8) 'Oregon taxable income' means taxable income, less the
deduction allowed under ORS 317.476, except as otherwise provided

with respect to insurers in subsection (11) of this section and
ORS 317.650 to 317.665.
  (9) 'Oregon net loss' means taxable loss, except as otherwise
provided with respect to insurers in subsection (11) of this
section and ORS 317.650 to 317.665.
  (10) 'Taxable income or loss' means the taxable income or loss
determined, or in the case of a corporation for which no federal
taxable income or loss is determined, as would be determined { +
if that entity were taxable for federal purposes + }, under
chapter 1, Subtitle A of the Internal Revenue Code and any other
laws of the United States relating to the determination of
taxable income or loss of corporate taxpayers, with the
additions, subtractions, adjustments and other modifications as
are specifically prescribed by this chapter except that in
determining taxable income or loss for any year, no deduction
under ORS 317.476 or 317.478 and section 45b, chapter 293, Oregon
Laws 1987, shall be allowed. If the corporation is a corporation
to which ORS 314.280 or 314.605 to 314.675 (requiring or
permitting apportionment of income from transactions or
activities carried on both within and without the state) applies,
to derive taxable income or loss, the following shall occur:
  (a) From the amount otherwise determined under this subsection,
subtract nonbusiness income, or add nonbusiness loss, whichever
is applicable.
  (b) Multiply the amount determined under paragraph (a) of this
subsection by the Oregon apportionment percentage defined under
ORS 314.280, 314.650 or 314.670, whichever is applicable.  The
resulting product shall be Oregon apportioned income or loss.
  (c) To the amount determined as Oregon apportioned income or
loss under paragraph (b) of this subsection, add nonbusiness
income allocable entirely to Oregon under ORS 314.280 or 314.625
to 314.645, or subtract nonbusiness loss allocable entirely to
Oregon under ORS 314.280 or 314.625 to 314.645. The resulting
figure is 'taxable income or loss' for those corporations
carrying on taxable transactions or activities both within and
without Oregon.
  (11) As used in ORS 317.122 and 317.650 to 317.665, ' insurer'
means any domestic, foreign or alien insurer as defined in ORS
731.082 and any interinsurance and reciprocal exchange and its
attorney in fact with respect to its attorney in fact net income
as a corporate attorney in fact acting as attorney in compliance
with ORS 731.458, 731.462, 731.466 and 731.470 for the reciprocal
or interinsurance exchange. However, 'insurer' does not include
title insurers or health care service contractors operating
pursuant to ORS 750.005 to 750.095.
  SECTION 3. ORS 317.080 is amended to read:
  317.080. The following corporations are exempt from the taxes
imposed by this chapter:
  (1) Organizations described in subsection (c) and subsection
(j) of section 501 of the Internal Revenue Code unless { + :
  (a) + } The exemption is denied under subsection (h), (i) or
(m) of section 501 or under section 502, 503 or 505 of the
Internal Revenue Code { + ;
  (b) The organization is a credit union as defined in ORS
723.006 that at any time during the taxable year of the credit
union:
  (A) Holds one or more deposits of public funds as defined in
ORS 295.001 that exceed $250,000; or
  (B) Holds commercial loans that in the aggregate exceed an
amount equal to 10 percent of the assets of the credit union; or
  (c) The organization is an interstate credit union as defined
in ORS 723.001 that at any time during the taxable year of the
interstate credit union:
  (A) Holds one or more deposits of public funds as defined in
ORS 295.001 that exceed $250,000; or

  (B) Holds commercial loans that in the aggregate exceed an
amount equal to 10 percent of the assets of the interstate credit
union + }.
  (2) Organizations described in section 501(d) of the Internal
Revenue Code, unless the exemption is denied under section 502 or
503 of the Internal Revenue Code.
  (3) Organizations described in section 501(e) of the Internal
Revenue Code.
  (4) Organizations described in section 501(f) of the Internal
Revenue Code.
  (5) Charitable risk pools described in section 501(n) of the
Internal Revenue Code.
  (6) Organizations described in section 521 of the Internal
Revenue Code.
  (7) Qualified state tuition programs described in section 529
of the Internal Revenue Code.
  (8) Foreign or alien insurance companies, but only with respect
to the underwriting profit derived from writing wet marine and
transportation insurance subject to tax under ORS 731.824 and
731.828.
  (9) Corporations, organized and operated primarily for the
purpose of furnishing permanent residential, recreational and
social facilities primarily for elderly persons, which:
  (a) Are corporations not for profit, authorized to transact
business in this state pursuant to ORS chapter 65 or any statute
repealed by chapter 580, Oregon Laws 1959;
  (b) Receive not less than 95 percent of their operating gross
income (excluding any investment income) solely from payments for
living, medical, recreational, and social services and
facilities, paid by or on behalf of the elderly persons using the
facilities of such corporation;
  (c) Permit no part of their net earnings to inure to the
benefit of any private stockholder or individual; and
  (d) Provide in their articles or other governing instrument
that, upon dissolution, the assets remaining after satisfying all
lawful debts and liabilities shall be distributed to one or more
corporations exempt from taxation under this chapter as
corporations organized and operated exclusively for religious,
charitable, scientific, literary or educational purposes.
  (10) People's utility districts established under ORS chapter
261.
  SECTION 4. ORS 723.752 is amended to read:
  723.752.  { + (1) + } Any credit union subject to this chapter
 { - shall be deemed - }   { + is considered + } an institution
for savings within the meaning of the law that exempts such
institutions from taxation.
  { - No - }   { + A + } law, except as stated in this section,
that taxes corporations in any form, or the shares thereof or the
accumulations therein,   { - shall - }   { + may not  + }apply to
credit unions doing business in accordance with this chapter
unless the credit unions are specifically named in the law.
   { +  (2) Subsection (1) of this section does not apply to
taxes imposed under ORS chapter 317. + }
  SECTION 5. ORS 311.473 is amended to read:
  311.473. (1) Any financial institution, as defined in ORS
  { - 317.010 - }  { +  706.008 + }, or agent or representative
of a financial institution, that, in the process of foreclosing
any security interest or other lien on taxable personal property,
including property classified as real property machinery and
equipment, or after the lien is foreclosed, causes the property
to be removed, or is knowledgeable that the property will be
removed by another after the foreclosure sale, from the county in
which the property is assessed or seized, shall notify the tax
collector of that county prior to the removal. The notice
 { - shall - }   { + must + } be mailed to the tax collector,
return receipt requested, and shall contain a description of the
property that is the subject of the foreclosure, together with
the name and address of the owner or owners of the property.
  (2) Failure to give the notice required under subsection (1) of
this section   { - shall - }   { + does + } not affect the
foreclosure, but the tax collector shall have recourse against
the financial institution on behalf of the taxing units for any
damages sustained on account of failure to mail the notice.
  SECTION 6.  { + The amendments to ORS 311.473, 314.610,
317.010, 317.080 and 723.752 by sections 1 to 5 of this 2013 Act
apply to tax years beginning on or after January 1, 2013. + }
  SECTION 7.  { + This 2013 Act takes effect on the 91st day
after the date on which the 2013 regular session of the
Seventy-seventh Legislative Assembly adjourns sine die. + }
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