Bill Text: OR SB754 | 2011 | Regular Session | Engrossed

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Bill Title: Relating to state finance; prescribing an effective date.

Spectrum: Committee Bill

Status: (Failed) 2011-06-30 - In committee upon adjournment. [SB754 Detail]

Download: Oregon-2011-SB754-Engrossed.html

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     76th OREGON LEGISLATIVE ASSEMBLY--2011 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 3598

                           A-Engrossed

                         Senate Bill 754
                   Ordered by the Senate May 9
             Including Senate Amendments dated May 9

Sponsored by COMMITTEE ON FINANCE AND 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.

    { - Establishes Oregon Universities Stability Fund and
Universities Capital Improvement and Maintenance Subaccount. Sets
conditions for appropriation of moneys in fund and subaccount.
Transfers surplus corporate income and excise tax revenue to
fund. - }
    { - Transfers surplus personal income tax revenues that do
not exceed six percent of revenue estimate to Oregon Rainy Day
Fund.  Transfers surplus personal income tax revenues exceeding
six percent of revenue estimate to taxpayers. - }
    { - Repeals statutory provisions establishing Oregon Rainy
Day Fund. Provides that transfer of portion of ending balance to
Oregon Rainy Day Fund does not occur if amount in fund equals at
least 12 percent of General Fund revenues collected during prior
biennium. - }
   { +  Establishes within Emergency Reserve Fund, established in
Senate Joint Resolution 26 (2011), Higher Education Stability
Subaccount. Establishes Higher Education Capital Improvement and
Maintenance Subaccount within Higher Education Stability
Subaccount. Authorizes, upon making certain findings and passing
with three-fifths majority vote, Legislative Assembly to
appropriate moneys from subaccounts for purposes of benefiting
higher education institutions and activities, community colleges
authorized by law to receive state aid and capital improvements
or deferred maintenance at Oregon University System or community
college facilities.
  Implements Senate Joint Resolution 26 (2011) by changing
statutory references to Oregon Rainy Day Fund to Emergency
Reserve Fund. Repeals obsolete statutory provisions relating to
Oregon Rainy Day Fund. Provides that surpluses of personal income
tax revenues in excess of two percent of forecast revenues are
equally deposited in Emergency Reserve Fund and returned to
personal income taxpayers. Provides that surpluses of corporate
excise or income tax revenues in excess of two percent be
deposited in Emergency Reserve Fund. + }
  Takes effect only if Senate Joint Resolution   { - 30 - }
 { + 26 + } (2011) is approved by people at next regular general
election. Takes effect on effective date of constitutional

amendment proposed in Senate Joint Resolution   { - 30 - }
 { + 26  + }(2011).

                        A BILL FOR AN ACT
Relating to state finance; creating new provisions; amending ORS
  291.349, 293.146, 305.792, 317.853 and 318.074; repealing ORS
  293.144 and 293.148; and prescribing an effective date.
Be It Enacted by the People of the State of Oregon:
  SECTION 1.  { + (1) The Higher Education Stability Subaccount
is established as a subaccount in the Emergency Reserve Fund
established by section 15, Article IX of the Oregon Constitution.
Moneys in the Higher Education Stability Subaccount may be
appropriated only for purposes that will benefit higher education
institutions, higher education activities or community colleges
authorized by law to receive state aid.
  (2) The Legislative Assembly may appropriate moneys from the
Higher Education Stability Subaccount only if the appropriation
is approved by three-fifths of the members serving in each house
of the Legislative Assembly and the Legislative Assembly finds
one of the following:
  (a) That the last quarterly economic and revenue forecast for a
biennium indicates that moneys available to the General Fund for
the next biennium will be at least three percent less than
appropriations from the General Fund for the current biennium;
  (b) That there has been a decline for two or more consecutive
quarters in the last 12 months in seasonally adjusted nonfarm
payroll employment; or
  (c) That a quarterly economic and revenue forecast projects
that revenues in the General Fund in the current biennium will be
at least two percent below what the revenues were projected to be
in the revenue forecast on which the legislatively adopted budget
for the current biennium was based.
  (3) Once each month, in the manner provided by law, the Oregon
Department of Administrative Services shall calculate the amount
of General Fund interest that is attributable to moneys in the
Higher Education Stability Subaccount. Except as provided in
section 2 of this 2011 Act, the amount calculated under this
subsection shall be transferred to the Higher Education Stability
Subaccount.
  (4) As used in this section, 'legislatively adopted budget '
means the budget enacted by the Legislative Assembly during an
odd-numbered year regular session. + }
  SECTION 2.  { + (1) There is created a Higher Education Capital
Improvement and Maintenance Subaccount within the Higher
Education Stability Subaccount. If the moneys in the Higher
Education Stability Subaccount just prior to the time of a
transfer scheduled under section 1 of this 2011 Act or ORS
291.349 equal at least 15 percent of the amount of General Fund
appropriations made to the Oregon University System and for
community colleges during the prior biennium, moneys that would
otherwise be transferred to the Higher Education Stability
Subaccount shall be deposited in the Higher Education Capital
Improvement and Maintenance Subaccount. Moneys in the Higher
Education Capital Improvement and Maintenance Subaccount may be
appropriated only for the purposes of capital improvements or
deferred maintenance at Oregon University System facilities or
community college facilities.
  (2) If the moneys in the Higher Education Stability Subaccount
just prior to the time of a transfer scheduled under section 1 of
this 2011 Act or ORS 291.349 do not equal at least 15 percent of
the amount of General Fund appropriations made to the Oregon
University System and for community colleges during the prior
biennium, the transfer to the Higher Education Stability
Subaccount shall be made regardless of whether that transfer
increases the amount in the Higher Education Stability Subaccount
to at least 15 percent of the amount of General Fund
appropriations made to the Oregon University System and for
community colleges during the prior biennium.
  (3) As used in this section:
  (a) 'General Fund appropriations' means the amount of moneys
appropriated from the General Fund for a biennium in the
legislatively approved budget for the biennium, minus the amount
of any General Fund appropriation balances for that biennium that
revert to the General Fund as provided by law.
  (b) 'Legislatively adopted budget' means the budget enacted by
the Legislative Assembly during an odd-numbered year regular
session.
  (c) 'Legislatively approved budget' means the legislatively
adopted budget as modified by the joint committee referred to in
section 3, Article III of this Constitution, or by the
Legislative Assembly meeting in regular or special session. + }
  SECTION 3. ORS 291.349 is amended to read:
  291.349. (1) As soon as practicable after adjournment sine die
of the  { + odd-numbered year + } 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
 { + odd-numbered year + } 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 - }   { + an even-numbered year regular session or
special + } 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, - }   { + by two percent or more, as estimated after
adjournment sine die of an odd-numbered year regular session, + }
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 - }  { +  transferred to the Higher Education Stability
Subaccount established by section 1 of this 2011 Act in the
Emergency Reserve Fund established by section 15, Article IX of
the Oregon Constitution + }.
  (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 - }   { + by
two percent or more, as estimated after adjournment sine die of
an odd-numbered year regular session, one-half of the total
amount of the excess shall be transferred to the Emergency
Reserve Fund established by section 15, Article IX of the Oregon
Constitution, and one-half of the total amount of the excess
shall be returned to personal income taxpayers + }, 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) - }
 { + (5) + } of this section.
    { - (5)(a) If there is an excess to be credited under
subsection (3) of this section, 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 of credit for purposes of subsection (3) of
this section. The percentage amount determined shall be a
percentage amount to the nearest one-tenth of a percent that will
distribute the excess to be credited to corporate excise and
income taxpayers. - }
    { - (b) The percentage amount 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 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 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) 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) If a credit applied against tax liability as
described in paragraph (e) 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) 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) Notwithstanding paragraph (e) of this subsection, if
an excess is credited under subsection (3) 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)
of this subsection, the amount of the carryforward credit shall
be applied against tax liability prior to applying the new
credit. - }
    { - (h) 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) - }  { +  (5)(a) + } If there is an excess to be
refunded  { + to personal income taxpayers + } 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  { + to personal income taxpayers + } 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) - }   { + (6) + } No refund shall be made to a
taxpayer if, after making the calculation described under
subsection   { - (6) - }   { + (5) + } of this section, the
amount calculated is less than $1.
    { - (8) - }   { + (7) + } For purposes of ORS chapters 305
and 314 to 318, refunds issued under subsection   { - (6) - }
 { + (5) + } of this section are refunds of an overpayment of tax
imposed under ORS chapter 316, but do not bear interest.
  SECTION 4. ORS 293.146 is amended to read:
  293.146. (1) As used in this section:
  (a) 'Ending balance' means the difference between the amount of
General Fund revenues collected during a biennium and the amount
of General Fund appropriations for the biennium.
  (b) 'General Fund appropriations' means the amount of moneys
appropriated from the General Fund for a biennium in the
legislatively approved budget for the biennium, minus the amount
of any General Fund appropriation balances for that biennium that
revert to the General Fund under ORS 293.190.

  (c) 'Legislatively approved budget' has the meaning given that
term in ORS 291.002.
  (2) Except as provided in   { - ORS 293.148 - }  { +  section
15 (5), Article IX of the Oregon Constitution + }, as soon as
possible after the ending balance for a biennium is determined,
an amount equal to one percent of the amount of General Fund
appropriations for that biennium shall be transferred to the
 { - Oregon Rainy Day Fund established by ORS 293.144 - }
 { + Emergency Reserve Fund established by section 15, Article IX
of the Oregon Constitution + }. If the ending balance does not
equal or exceed one percent of the amount of General Fund
appropriations, an amount equal to the ending balance shall be
transferred to the   { - Oregon Rainy Day Fund - }
 { + Emergency Reserve Fund + }.
  SECTION 5. 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) A 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) - }   { + (3) + } After the determination that
surplus refund payments are to be made under ORS 291.349 (4) and
 { - (6) - }  { +  (5) + }, 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) Following the determination to credit corporate
income and excise taxes pursuant to ORS 291.349 (3) and (5), the
department shall annually certify the total amount of allowable
credits that have not been claimed pursuant to an election made
under subsection (3) 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 6. ORS 317.853 is amended to read:

  317.853. (1) For tax years beginning on or after January 1,
2013, any revenue that is received as a result of a rate of tax
above six and six-tenths percent imposed under this chapter and
that is in excess of the revenue that would be received under
this chapter at a rate of six and six-tenths percent shall be
deposited into the   { - Oregon Rainy Day Fund - }
 { + Emergency Reserve Fund + } established by   { - ORS
293.144 - }  { +  section 15, Article IX of the Oregon
Constitution + }.
  (2) Before the end of each biennium, beginning with the
biennium ending on June 30, 2015, the Department of Revenue shall
estimate the revenue described in subsection (1) of this section
that is received during the biennium. An amount equal to that
estimate shall be transferred into the   { - Oregon Rainy Day
Fund - }  { + Emergency Reserve Fund + } established by   { - ORS
293.144 - }   { + section 15, Article IX of the Oregon
Constitution, + } on or before June 30 of each odd-numbered year.
  SECTION 7. ORS 318.074 is amended to read:
  318.074. (1) For tax years beginning on or after January 1,
2013, any revenue that is received as a result of a rate of tax
above six and six-tenths percent imposed under this chapter and
that is in excess of the revenue that would be received under
this chapter at a rate of six and six-tenths percent shall be
deposited into the   { - Oregon Rainy Day Fund - }
 { + Emergency Reserve Fund + } established by   { - ORS
293.144 - }   { + section 15, Article IX of the Oregon
Constitution + }.
  (2) Before the end of each biennium, beginning with the
biennium ending on June 30, 2015, the Department of Revenue shall
estimate the revenue described in subsection (1) of this section
that is received during the biennium. An amount equal to that
estimate shall be transferred into the   { - Oregon Rainy Day
Fund - }  { + Emergency Reserve Fund + } established by   { - ORS
293.144 - }   { + section 15, Article IX of the Oregon
Constitution, + } on or before June 30 of each odd-numbered year.
  SECTION 8.  { + Pursuant to section 15 (3), Article IX of the
Oregon Constitution, once each month, the Oregon Department of
Administrative Services shall calculate the amount of General
Fund interest that is attributable to moneys in the Emergency
Reserve Fund, exclusive of any subaccount in the Emergency
Reserve Fund.  Except as provided in section 15 (5), Article IX
of the Oregon Constitution, the amount calculated under this
section shall be transferred to the Emergency Reserve Fund. + }
  SECTION 9.  { + Sections 1, 2 and 8 of this 2011 Act, the
amendments to ORS 291.349, 293.146, 305.792, 317.853 and 318.074
by sections 3 to 7 of this 2011 Act and the repeal of ORS 293.144
and 293.148 by section 10 of this 2011 Act apply to biennia
beginning on or after July 1, 2011. + }
  SECTION 10.  { + ORS 293.144 and 293.148 are repealed. + }
  SECTION 11.  { + The Emergency Reserve Fund established by
section 15, Article IX of the Oregon Constitution, is intended to
be a continuation of the Oregon Rainy Day Fund established by ORS
293.144. Moneys contained on the effective date of this 2011 Act
in the Oregon Rainy Day Fund established by ORS 293.144 are
considered to be moneys in the Emergency Reserve Fund established
by section 15, Article IX of the Oregon Constitution. + }
  SECTION 12.  { + This 2011 Act does not become effective unless
the amendment to the Oregon Constitution proposed by Senate Joint
Resolution 26 (2011) is approved by the people at the regular
general election held in November 2012. This 2011 Act takes
effect on the effective date of that amendment. + }
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