The 2013 special-session package

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                                 77th OREGON LEGISLATIVE ASSEMBLY--2013 Special Session                                              House Bill 5101     Sponsored by JOINT COMMITTEE ON SPECIAL SESSION                                                             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.         Increases biennial appropriation to Department of Education for State School Fund. Modifies     amount department may spend from State School Fund for fiscal year beginning July 1, 2014.         Increases biennial appropriation to Department of Community Colleges and Workforce Devel-     opment for Community College Support Fund.         Increases biennial appropriation to Oregon Department of Administrative Services for Oregon     University System to limit tuition increases.         Increases biennial appropriation to Department of Human Services for aging and people with     disabilities and developmental disabilities programs.         Appropriates moneys from General Fund to Emergency Board for allocations during biennium     to state agencies to fund senior services.         Increases biennial appropriation to Department of Transportation for Public Transit Division’s     Elderly and People with Disabilities Transportation Program.         Increases limitation on biennial expenditures of Oregon Health Authority for community mental     health services.         Declares emergency, effective on passage. 1                                                   A BILL FOR AN ACT 2   Relating to state financial administration; creating new provisions; amending section 5, chapter 638, 3          Oregon Laws 2013; appropriating money; limiting expenditures; and declaring an emergency. 4   Be It Enacted by the People of the State of Oregon: 5 6                                                  STATE SCHOOL FUND 7 8          SECTION 1. Notwithstanding any other provision of law, the General Fund appropriation 9   made to the Department of Education by section 1, chapter 638, Oregon Laws 2013, for the10   biennium beginning July 1, 2013, for the State School Fund, is increased by $100,000,000.11          SECTION 2. Section 5, chapter 638, Oregon Laws 2013, is amended to read:12          Sec. 5. (1) The Department of Education may not spend more than $3,209,696,405 from the State13   School Fund for the fiscal year beginning July 1, 2013.14          (2) The Department of Education may not spend more than [$3,340,704,421] $3,440,704,421 from15   the State School Fund for the fiscal year beginning July 1, 2014.1617                                     COMMUNITY COLLEGE SUPPORT FUND1819          SECTION 3. Notwithstanding any other provision of law, the General Fund appropriation20   made to the Department of Community Colleges and Workforce Development by section 1 (2),21   chapter 562, Oregon Laws 2013, for the biennium beginning July 1, 2013, for the Community22   College Support Fund for community college districts, is increased by $15,000,000 to limit23   tuition and fee increases.24     NOTE: Matter in boldfaced type in an amended section is new; matter [italic and bracketed] is existing law to be omitted.     New sections are in boldfaced type.     LC 4                                            HB 5101 1                                  OREGON UNIVERSITY SYSTEM 2 3      SECTION 4. Notwithstanding any other provision of law, the General Fund appropriation 4   made to the Oregon Department of Administrative Services for use by the Oregon University 5   System by section 1 (1), chapter 564, Oregon Laws 2013, for the biennium beginning July 1, 6   2013, for public university support, is increased by $25,000,000 to limit tuition increases. 7 8                              DEPARTMENT OF HUMAN SERVICES 910      SECTION 5. Notwithstanding any other provision of law, the General Fund appropriation11   made to the Department of Human Services by section 1 (3), chapter 675, Oregon Laws 2013,12   for the biennium beginning July 1, 2013, for aging and people with disabilities and develop-13   mental disabilities programs, is increased by $10,000,000.1415                            EMERGENCY BOARD - SENIOR SERVICES1617      SECTION 6. (1) In addition to and not in lieu of any other appropriation, there is appro-18   priated to the Emergency Board, for the biennium beginning July 1, 2013, out of the General19   Fund, the amount of $26,000,000 to be allocated to state agencies to fund senior services.20      (2) If any moneys appropriated by subsection (1) of this section are not allocated by the21   Emergency Board prior to December 1, 2014, the moneys remaining on that date become22   available for any purpose for which the Emergency Board lawfully may allocate funds.2324                              DEPARTMENT OF TRANSPORTATION2526      SECTION 7. Notwithstanding any other provision of law, the General Fund appropriation27   made to the Department of Transportation by section 2, chapter 556, Oregon Laws 2013, for28   the biennium beginning July 1, 2013, for the Public Transit Division’s Elderly and People with29   Disabilities Transportation Program, is increased by $5,000,000.3031                                  OREGON HEALTH AUTHORITY3233      SECTION 8. Notwithstanding any other law limiting expenditures, the limitation on34   expenditures established by section 2 (1), chapter 668, Oregon Laws 2013, for the biennium35   beginning July 1, 2013, as the maximum limit for payment of expenses from fees, moneys or36   other revenues, including Miscellaneous Receipts, tobacco tax receipts, provider taxes, Med-37   icare receipts and federal funds for indirect cost recovery, Supplemental Security Income38   recoveries, Women, Infants and Children Program food rebates, the Coordinated School39   Health Program, the Edward Byrne Memorial State and Local Law Enforcement Assistance40   Grant Program, homeland security and emergency preparedness and response services, but41   excluding lottery funds and federal funds not described in section 2, chapter 668, Oregon42   Laws 2013, collected or received by the Oregon Health Authority, is increased by $10,000,00043   for community mental health services.4445                                          UNIT CAPTIONS                                               [2]                                           HB 5101 1      SECTION 9. The unit captions used in this 2013 special session Act are provided only for 2   the convenience of the reader and do not become part of the statutory law of this state or 3   express any legislative intent in the enactment of this 2013 special session Act. 4 5                                      EMERGENCY CLAUSE 6 7      SECTION 10. This 2013 special session Act being necessary for the immediate preserva- 8   tion of the public peace, health and safety, an emergency is declared to exist, and this 2013 9   special session Act takes effect on its passage.10                                              [3]                       77th OREGON LEGISLATIVE ASSEMBLY--2013 Special Session                                                   Enrolled                                  House Bill 5101Sponsored by JOINT COMMITTEE ON SPECIAL SESSION                                    CHAPTER .................................................                                                        AN ACTRelating to state financial administration; creating new provisions; amending section 5, chapter 638,    Oregon Laws 2013; appropriating money; limiting expenditures; and declaring an emergency.Be It Enacted by the People of the State of Oregon:                                           STATE SCHOOL FUND    SECTION 1. Notwithstanding any other provision of law, the General Fund appropriationmade to the Department of Education by section 1, chapter 638, Oregon Laws 2013, for thebiennium beginning July 1, 2013, for the State School Fund, is increased by $100,000,000.    SECTION 2. Section 5, chapter 638, Oregon Laws 2013, is amended to read:    Sec. 5. (1) The Department of Education may not spend more than $3,209,696,405 from the StateSchool Fund for the fiscal year beginning July 1, 2013.    (2) The Department of Education may not spend more than [$3,340,704,421] $3,440,704,421 fromthe State School Fund for the fiscal year beginning July 1, 2014.                             COMMUNITY COLLEGE SUPPORT FUND     SECTION 3. Notwithstanding any other provision of law, the General Fund appropriationmade to the Department of Community Colleges and Workforce Development by section 1(2), chapter 562, Oregon Laws 2013, for the biennium beginning July 1, 2013, for the Com-munity College Support Fund for community college districts, is increased by $15,000,000 tolimit tuition and fee increases.                                  OREGON UNIVERSITY SYSTEM    SECTION 4. Notwithstanding any other provision of law, the General Fund appropriationmade to the Oregon Department of Administrative Services for use by the Oregon UniversitySystem by section 1 (1), chapter 564, Oregon Laws 2013, for the biennium beginning July 1,2013, for public university support, is increased by $25,000,000 to limit tuition increases.                              DEPARTMENT OF HUMAN SERVICES   SECTION 5. Notwithstanding any other provision of law, the General Fund appropriationmade to the Department of Human Services by section 1 (3), chapter 675, Oregon Laws 2013,Enrolled House Bill 5101 (HB 5101-INTRO)                                                        Page 1for the biennium beginning July 1, 2013, for aging and people with disabilities and develop-mental disabilities programs, is increased by $10,000,000.                           EMERGENCY BOARD - SENIOR SERVICES    SECTION 6. (1) In addition to and not in lieu of any other appropriation, there is appro-priated to the Emergency Board, for the biennium beginning July 1, 2013, out of the GeneralFund, the amount of $26,000,000 to be allocated to state agencies to fund senior services.    (2) If any moneys appropriated by subsection (1) of this section are not allocated by theEmergency Board prior to December 1, 2014, the moneys remaining on that date becomeavailable for any purpose for which the Emergency Board lawfully may allocate funds.                              DEPARTMENT OF TRANSPORTATION    SECTION 7. Notwithstanding any other provision of law, the General Fund appropriationmade to the Department of Transportation by section 2, chapter 556, Oregon Laws 2013, forthe biennium beginning July 1, 2013, for the Public Transit Division’s Elderly and People withDisabilities Transportation Program, is increased by $5,000,000.                                  OREGON HEALTH AUTHORITY    SECTION 8. Notwithstanding any other law limiting expenditures, the limitation on ex-penditures established by section 2 (1), chapter 668, Oregon Laws 2013, for the biennium be-ginning July 1, 2013, as the maximum limit for payment of expenses from fees, moneys orother revenues, including Miscellaneous Receipts, tobacco tax receipts, provider taxes, Med-icare receipts and federal funds for indirect cost recovery, Supplemental Security Incomerecoveries, Women, Infants and Children Program food rebates, the Coordinated SchoolHealth Program, the Edward Byrne Memorial State and Local Law Enforcement AssistanceGrant Program, homeland security and emergency preparedness and response services, butexcluding lottery funds and federal funds not described in section 2, chapter 668, OregonLaws 2013, collected or received by the Oregon Health Authority, is increased by $10,000,000for community mental health services.                                             UNIT CAPTIONS    SECTION 9. The unit captions used in this 2013 special session Act are provided only forthe convenience of the reader and do not become part of the statutory law of this state orexpress any legislative intent in the enactment of this 2013 special session Act.                                           EMERGENCY CLAUSE    SECTION 10. This 2013 special session Act being necessary for the immediate preserva-tion of the public peace, health and safety, an emergency is declared to exist, and this 2013special session Act takes effect on its passage.Enrolled House Bill 5101 (HB 5101-INTRO)                                                Page 2Passed by House October 2, 2013                                                             Received by Governor:                                                                                            ........................M.,........................................................., 2013       ..................................................................................                                                                                            Approved:                  Ramona J. Line, Chief Clerk of House                                                                                            ........................M.,........................................................., 2013       ..................................................................................                                 Tina Kotek, Speaker of House                                                                                                         ..................................................................................Passed by Senate October 2, 2013                                                                                                           John Kitzhaber, Governor                                                                                            Filed in Office of Secretary of State:       ..................................................................................                                                                                            ........................M.,........................................................., 2013                       Peter Courtney, President of Senate                                                                                                         ..................................................................................                                                                                                                                 Kate Brown, Secretary of StateEnrolled House Bill 5101 (HB 5101-INTRO)                                                                                                                                      Page 3

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                                 77th OREGON LEGISLATIVE ASSEMBLY--2013 Special Session                                                       A-Engrossed                                               Senate Bill 861                                                  Ordered by the Senate October 1                                           Including Senate Amendments dated October 1     Sponsored by JOINT COMMITTEE ON SPECIAL SESSION

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     to consideration by the Legislative Assembly. It is an editor’s brief statement of the essential features of the     measure as introduced.     measure.         Modifies cost-of-living adjustment under Public Employees Retirement System.         Directs Public Employees Retirement Board to make annual supplementary payments to mem-     bers or member’s beneficiaries with yearly allowance or yearly pension or benefit of $20,000 or less.     bers or member’s beneficiaries [with yearly allowance or yearly pension or benefit of $20,000 or less.     Directs board to develop formula for determining whether it is reasonably prudent to make annual     supplementary payments to members and member’s beneficiaries with yearly allowance or yearly     pension or benefit of more than $20,000 and not more than $60,000.         Directs board to report to Legislative Assembly with recommendations relating to cost-of-living     adjustment and supplementary payments.     supplementary payments to members and member’s beneficiaries with yearly allowance or yearly pen-     sion or benefit of more than $20,000 and not more than $60,000].         [Directs board to report to Legislative Assembly with recommendations relating to cost-of-living     adjustment and supplementary payments.]         Sunsets supplementary payments on December 31, 2019.         Directs board to report to Governor, President of Senate and Speaker of House of Rep-     resentatives on recommendations relating to cost-of-living adjustment and supplementary     payments.         Provides for expedited review by Supreme Court upon petition by adversely affected party.

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 5 6                                          COST OF LIVING ADJUSTMENTS 6                                           COST-OF-LIVING ADJUSTMENTS 7

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21   than $40,000 but not more than $60,000, the allowance shall be increased by $700 plus one percent of22   the amount of the yearly allowance exceeding $40,000.]23          [(d)] (b) If the member’s or member’s beneficiary’s yearly allowance [for the previous year24   totaled] is more than $60,000, the allowance shall be increased by [$900 plus .25] $750 plus 0.1525   percent of the amount of the yearly allowance exceeding $60,000.26          [(3) If a member or member’s beneficiary has been receiving an allowance for less than 12 months     NOTE: Matter in boldfaced type in an amended section is new; matter [italic and bracketed] is existing law to be omitted.

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     LC 1                                                SB 861 1   on July 1 of any year, the board shall calculate the increase under subsection (2) of this section on the 2   basis of the yearly allowance the member or member’s beneficiary would have received if the member 3   or member’s beneficiary had received the monthly allowance for 12 months.] 4       [(4)] (3) Any increase in the allowance shall be paid from contributions of the public employer 5   under ORS 238.225. 6       (4) As used in this section, “yearly allowance” means the monthly allowance that a 7   member or member’s beneficiary is entitled to on July 1 of the year in which the board is 8   calculating the increase under subsection (1) of this section, multiplied by 12. 9       SECTION 2. The amendments to ORS 238.360 by section 1 of this 2013 special session Act10   apply to all increases to allowances made under ORS 238.360 on and after July 1, 2014.11       SECTION 3. ORS 238A.210, as amended by sections 5 and 7, chapter 53, Oregon Laws 2013, is12   amended to read:13       238A.210. (1) On July 1 of each year, the board shall increase every pension payable under ORS14   238A.180, 238A.185 and 238A.190, every disability benefit under ORS 238A.235 and every death ben-15   efit payable under ORS 238A.230 as provided in [subsections (2) and (3)] subsection (2) of this sec-16   tion. The increase shall be made for the payments payable on August 1 and thereafter.17       (2)(a) If a person’s yearly pension or benefit [for the previous year totaled $20,000] is $60,000 or18   less, the pension or benefit shall be increased by [two] 1.25 percent.19       [(b) If a person’s yearly pension or benefit for the previous year totaled more than $20,000 but not20   more than $40,000, the pension or benefit shall be increased by $400 plus 1.5 percent of the amount of21   the yearly pension or benefit exceeding $20,000.]22       [(c) If a person’s yearly pension or benefit for the previous year totaled more than $40,000 but not23   more than $60,000, the pension or benefit shall be increased by $700 plus one percent of the amount24   of the yearly pension or benefit exceeding $40,000.]25       [(d)] (b) If a person’s yearly pension or benefit [for the previous year totaled] is more than26   $60,000, the pension or benefit shall be increased by [$900 plus .25] $750 plus 0.15 percent of the27   amount of the yearly pension or benefit exceeding $60,000.28       [(3) If a person has been receiving a pension or benefit for less than 12 months on July 1 of any29   year, the board shall calculate the increase under subsection (2) of this section on the basis of the30   yearly allowance the person would have received if the person had received the pension or benefit for31   12 months.]32       (3) As used in this section, “yearly pension or benefit” means the monthly pension or33   benefit that a person is entitled to on July 1 of the year in which the board is calculating the34   increase under subsection (1) of this section, multiplied by 12.35       SECTION 4. The amendments to ORS 238A.210 by section 3 of this 2013 special session36   Act apply to all increases to pensions or benefits made under ORS 238A.210 on and after July37   1, 2014.38       SECTION 5. (1) The amendments to ORS 238.360 and 238A.210 by sections 1 and 3 of this39   2013 special session Act become operative on July 1, 2014.40       (2) The Public Employees Retirement Board may take any action before the operative41   date specified in subsection (1) of this section to enable the board, on and after the operative42   date specified in subsection (1) of this section, to exercise all the duties, functions and pow-43   ers conferred on the board by the amendments to ORS 238.360 and 238A.210 by sections 1 and44   3 of this 2013 special session Act.45       SECTION 6. ORS 238.465 is amended to read:                                            A-Eng. SB 861 1   the amount of the yearly allowance exceeding $40,000.] 2       [(d)] (b) If the member’s or member’s beneficiary’s yearly allowance [for the previous year 3   totaled] is more than $60,000, the allowance shall be increased by [$900 plus .25] $750 plus 0.15 4   percent of the amount of the yearly allowance exceeding $60,000. 5       [(3) If a member or member’s beneficiary has been receiving an allowance for less than 12 months 6   on July 1 of any year, the board shall calculate the increase under subsection (2) of this section on the 7   basis of the yearly allowance the member or member’s beneficiary would have received if the member 8   or member’s beneficiary had received the monthly allowance for 12 months.] 9       [(4)] (3) Any increase in the allowance shall be paid from contributions of the public employer10   under ORS 238.225.11       (4) As used in this section, “yearly allowance” means the monthly allowance that a12   member or member’s beneficiary is entitled to on July 1 of the year in which the board is13   calculating the increase under subsection (1) of this section, multiplied by 12.14       SECTION 2. The amendments to ORS 238.360 by section 1 of this 2013 special session Act15   apply to all increases to allowances made under ORS 238.360 on and after July 1, 2014.16       SECTION 3. ORS 238A.210, as amended by sections 5 and 7, chapter 53, Oregon Laws 2013, is17   amended to read:18       238A.210. (1) On July 1 of each year, the board shall increase every pension payable under ORS19   238A.180, 238A.185 and 238A.190, every disability benefit under ORS 238A.235 and every death ben-20   efit payable under ORS 238A.230 as provided in [subsections (2) and (3)] subsection (2) of this sec-21   tion. The increase shall be made for the payments payable on August 1 and thereafter.22       (2)(a) If a person’s yearly pension or benefit [for the previous year totaled $20,000] is $60,000 or23   less, the pension or benefit shall be increased by [two] 1.25 percent.24       [(b) If a person’s yearly pension or benefit for the previous year totaled more than $20,000 but not25   more than $40,000, the pension or benefit shall be increased by $400 plus 1.5 percent of the amount of26   the yearly pension or benefit exceeding $20,000.]27       [(c) If a person’s yearly pension or benefit for the previous year totaled more than $40,000 but not28   more than $60,000, the pension or benefit shall be increased by $700 plus one percent of the amount29   of the yearly pension or benefit exceeding $40,000.]30       [(d)] (b) If a person’s yearly pension or benefit [for the previous year totaled] is more than31   $60,000, the pension or benefit shall be increased by [$900 plus .25] $750 plus 0.15 percent of the32   amount of the yearly pension or benefit exceeding $60,000.33       [(3) If a person has been receiving a pension or benefit for less than 12 months on July 1 of any34   year, the board shall calculate the increase under subsection (2) of this section on the basis of the35   yearly allowance the person would have received if the person had received the pension or benefit for36   12 months.]37       (3) As used in this section, “yearly pension or benefit” means the monthly pension or38   benefit that a person is entitled to on July 1 of the year in which the board is calculating the39   increase under subsection (1) of this section, multiplied by 12.40       SECTION 4. The amendments to ORS 238A.210 by section 3 of this 2013 special session41   Act apply to all increases to pensions or benefits made under ORS 238A.210 on and after July42   1, 2014.43       SECTION 5. (1) The amendments to ORS 238.360 and 238A.210 by sections 1 and 3 of this44   2013 special session Act become operative on July 1, 2014.45       (2) The Public Employees Retirement Board may take any action before the operative                                                  [2]                                               SB 861 1       238.465. (1) Notwithstanding ORS 238.445 or any other provision of law, payments under this 2   chapter or ORS chapter 238A of any pension, annuity, retirement allowance, disability benefit, death 3   benefit, refund benefit or other benefit that would otherwise be made to a person entitled thereto 4   under this chapter or ORS chapter 238A shall be paid, in whole or in part, by the Public Employees 5   Retirement Board to an alternate payee if and to the extent expressly provided for in the terms of 6   any judgment of annulment or dissolution of marriage or of separation, or the terms of any court 7   order or court-approved property settlement agreement incident to any judgment of annulment or 8   dissolution of marriage or of separation. [Notwithstanding any other provisions of this section] Except 9   as provided in subsection (5) of this section, the total value of benefits payable to a member and10   to an alternate payee under this section may not be greater than the value of the benefits the11   member would otherwise be eligible to receive. Any payment under this subsection to an alternate12   payee bars recovery by any other person.13       (2) A judgment, order or settlement providing for payment to an alternate payee under sub-14   section (1) of this section may also provide:15       (a) That payments to the alternate payee may commence, at the election of the alternate payee,16   at any time after the earlier of:17       (A) The earliest date the member would be eligible to receive retirement benefits if the member18   separates from service; or19       (B) The date the member actually separates from service due to death, disability, retirement or20   termination of employment.21       (b) That the alternate payee may elect to receive payment in any form of pension, annuity, re-22   tirement allowance, disability benefit, death benefit, refund benefit or other benefit, except a benefit23   in the form of a joint and survivor annuity, that would be available to the member under this24   chapter or ORS chapter 238A, or that would be available to the member if the member retired or25   separated from service at the time of election by the alternate payee, without regard to the form26   of benefit elected by the member.27       (c) That the alternate payee’s life is the measuring life for the purpose of measuring payments28   to the alternate payee under the form of benefit selected by the alternate payee and for the purpose29   of determining necessary employer reserves.30       (d) Except as provided in ORS 238.305 (10) and 238.325 (7), that any person designated by the31   member as a beneficiary under ORS 238.300, 238.305, 238.325, 238A.190 or 238A.400 be changed, even32   though the member has retired and has begun receiving a retirement allowance or pension. If a33   change of beneficiary is ordered under this paragraph, the board shall adjust the anticipated benefits34   that would be payable to the member and the beneficiary to ensure that the cost to the system of35   providing benefits to the member and the new beneficiary does not exceed the cost that the system36   would have incurred to provide benefits to the member and the original beneficiary. The judgment,37   order or settlement may not provide for any change to the option selected by the retired member38   under ORS 238.300, 238.305, 238.320, 238.325, 238A.190 or 238A.400 as to the form of the retirement39   benefit.40       (3) The board shall adopt rules that provide for:41       (a) The creation of a separate account in the name of the alternate payee reflecting the42   judgment’s, order’s or agreement’s distribution of the member’s benefits under this chapter or ORS43   chapter 238A;44       (b) The establishing of criteria to determine whether domestic relations judgments, orders and45   agreements comply with this section; and                                           A-Eng. SB 861 1   date specified in subsection (1) of this section to enable the board, on and after the operative 2   date specified in subsection (1) of this section, to exercise all the duties, functions and pow- 3   ers conferred on the board by the amendments to ORS 238.360 and 238A.210 by sections 1 and 4   3 of this 2013 special session Act. 5       SECTION 6. ORS 238.465 is amended to read: 6       238.465. (1) Notwithstanding ORS 238.445 or any other provision of law, payments under this 7   chapter or ORS chapter 238A of any pension, annuity, retirement allowance, disability benefit, death 8   benefit, refund benefit or other benefit that would otherwise be made to a person entitled thereto 9   under this chapter or ORS chapter 238A shall be paid, in whole or in part, by the Public Employees10   Retirement Board to an alternate payee if and to the extent expressly provided for in the terms of11   any judgment of annulment or dissolution of marriage or of separation, or the terms of any court12   order or court-approved property settlement agreement incident to any judgment of annulment or13   dissolution of marriage or of separation. [Notwithstanding any other provisions of this section] Except14   as provided in subsection (5) of this section, the total value of benefits payable to a member and15   to an alternate payee under this section may not be greater than the value of the benefits the16   member would otherwise be eligible to receive. Any payment under this subsection to an alternate17   payee bars recovery by any other person.18       (2) A judgment, order or settlement providing for payment to an alternate payee under sub-19   section (1) of this section may also provide:20       (a) That payments to the alternate payee may commence, at the election of the alternate payee,21   at any time after the earlier of:22       (A) The earliest date the member would be eligible to receive retirement benefits if the member23   separates from service; or24       (B) The date the member actually separates from service due to death, disability, retirement or25   termination of employment.26       (b) That the alternate payee may elect to receive payment in any form of pension, annuity, re-27   tirement allowance, disability benefit, death benefit, refund benefit or other benefit, except a benefit28   in the form of a joint and survivor annuity, that would be available to the member under this29   chapter or ORS chapter 238A, or that would be available to the member if the member retired or30   separated from service at the time of election by the alternate payee, without regard to the form31   of benefit elected by the member.32       (c) That the alternate payee’s life is the measuring life for the purpose of measuring payments33   to the alternate payee under the form of benefit selected by the alternate payee and for the purpose34   of determining necessary employer reserves.35       (d) Except as provided in ORS 238.305 (10) and 238.325 (7), that any person designated by the36   member as a beneficiary under ORS 238.300, 238.305, 238.325, 238A.190 or 238A.400 be changed, even37   though the member has retired and has begun receiving a retirement allowance or pension. If a38   change of beneficiary is ordered under this paragraph, the board shall adjust the anticipated benefits39   that would be payable to the member and the beneficiary to ensure that the cost to the system of40   providing benefits to the member and the new beneficiary does not exceed the cost that the system41   would have incurred to provide benefits to the member and the original beneficiary. The judgment,42   order or settlement may not provide for any change to the option selected by the retired member43   under ORS 238.300, 238.305, 238.320, 238.325, 238A.190 or 238A.400 as to the form of the retirement44   benefit.45       (3) The board shall adopt rules that provide for:                                                  [3]                                              SB 861 1       (c) The definitions and procedures for the administration of this section. 2       (4) An alternate payee may designate a beneficiary for the purposes of death benefits payable 3   under ORS 238.390 and 238.395. Subject to ORS 238A.410 (2), an alternate payee may designate a 4   beneficiary for the purposes of death benefits payable under ORS 238A.410. If the alternate payee 5   fails to designate a beneficiary for the purposes of death benefits payable under ORS 238.390 and 6   238.395, the benefits shall be paid as provided by ORS 238.390 (2). If the alternate payee fails to 7   designate a beneficiary for the purposes of death benefits payable under ORS 238A.410, the benefits 8   shall be paid as provided by ORS 238A.410 (3). If a judgment, order or agreement awards an interest 9   to an alternate payee, and if the alternate payee predeceases the member before the alternate payee10   has commenced receiving benefits, the alternate payee shall be considered a member of the system11   who died before retiring for the purposes of the death benefits provided in ORS 238.390, 238.395,12   238A.230 and 238A.410, but for purposes of the death benefits provided in ORS 238.395, the alternate13   payee shall be considered a member of the system who died before retiring only if the member would14   have been eligible for death benefits under ORS 238.395 had the member died at the same time as15   the alternate payee. Payment of the death benefits to the beneficiaries, estate or other persons en-16   titled to receive the benefits under ORS 238.390, 238.395, 238A.230 and 238A.410, shall constitute17   payment in full of the alternate payee’s interest under the judgment, order or agreement.18       (5) Any increase in the retirement allowance provided to the member shall increase the amounts19   paid to the [spouse or former spouse of the member] alternate payee in the same proportion, except20   that:21       (a) An alternate payee is not entitled to receive cost-of-living adjustments under ORS 238.36022   or any other retirement allowance increase until benefits are first paid from the system on behalf23   of the member[.]; and24       (b) Cost-of-living adjustments under ORS 238.360 to the retirement allowance paid to an25   alternate payee shall be calculated on the basis of the amount of the alternate payee’s yearly26   allowance, as that term is defined in ORS 238.360.27       (6) An alternate payee under this section is not eligible to receive the benefits provided under28   ORS 238.410, 238.415, 238.420 and 238.440 by reason of the provisions of this section.29       (7) An alternate payee who elects to begin receiving payments under subsection (1) of this sec-30   tion before the member’s effective date of retirement is not eligible to receive any additional pay-31   ment by reason of credit in the system acquired by the member after the alternate payee begins to32   receive payments.33       (8) Subsection (1) of this section applies only to payments made by the board after the date of34   receipt by the board of written notice of the judgment, order or agreement and such additional in-35   formation and documentation as the board may prescribe.36       (9) Whenever the board is required to make payment to an alternate payee under the provisions37   of this section, the board shall charge and collect out of the benefits payable to the member and the38   alternate payee actual and reasonable administrative expenses and related costs incurred by the39   board in obtaining data and making calculations that are necessary by reason of the provisions of40   this section. The board may not charge more than $300 for total administrative expenses and related41   costs incurred in obtaining data or making calculations that are necessary by reason of the pro-42   visions of this section. The board shall allocate expenses and costs charged under the provisions of43   this subsection between the member and the alternate payee based on the fraction of the benefit44   received by the member or alternate payee.45       (10) Unless otherwise provided by the judgment, order or agreement, a member has no interest                                           A-Eng. SB 861 1       (a) The creation of a separate account in the name of the alternate payee reflecting the 2   judgment’s, order’s or agreement’s distribution of the member’s benefits under this chapter or ORS 3   chapter 238A; 4       (b) The establishing of criteria to determine whether domestic relations judgments, orders and 5   agreements comply with this section; and 6       (c) The definitions and procedures for the administration of this section. 7       (4) An alternate payee may designate a beneficiary for the purposes of death benefits payable 8   under ORS 238.390 and 238.395. Subject to ORS 238A.410 (2), an alternate payee may designate a 9   beneficiary for the purposes of death benefits payable under ORS 238A.410. If the alternate payee10   fails to designate a beneficiary for the purposes of death benefits payable under ORS 238.390 and11   238.395, the benefits shall be paid as provided by ORS 238.390 (2). If the alternate payee fails to12   designate a beneficiary for the purposes of death benefits payable under ORS 238A.410, the benefits13   shall be paid as provided by ORS 238A.410 (3). If a judgment, order or agreement awards an interest14   to an alternate payee, and if the alternate payee predeceases the member before the alternate payee15   has commenced receiving benefits, the alternate payee shall be considered a member of the system16   who died before retiring for the purposes of the death benefits provided in ORS 238.390, 238.395,17   238A.230 and 238A.410, but for purposes of the death benefits provided in ORS 238.395, the alternate18   payee shall be considered a member of the system who died before retiring only if the member would19   have been eligible for death benefits under ORS 238.395 had the member died at the same time as20   the alternate payee. Payment of the death benefits to the beneficiaries, estate or other persons en-21   titled to receive the benefits under ORS 238.390, 238.395, 238A.230 and 238A.410, shall constitute22   payment in full of the alternate payee’s interest under the judgment, order or agreement.23       (5) Any increase in the retirement allowance provided to the member shall increase the amounts24   paid to the [spouse or former spouse of the member] alternate payee in the same proportion, except25   that:26       (a) An alternate payee is not entitled to receive cost-of-living adjustments under ORS 238.36027   or any other retirement allowance increase until benefits are first paid from the system on behalf28   of the member[.]; and29       (b) Cost-of-living adjustments under ORS 238.360 or 238A.210 to the retirement allowance30   paid to an alternate payee shall be calculated on the basis of the amount of the alternate31   payee’s yearly allowance or yearly pension or benefit, as those terms are defined in ORS32   238.360 and 238A.210.33       (6) An alternate payee under this section is not eligible to receive the benefits provided under34   ORS 238.410, 238.415, 238.420 and 238.440 by reason of the provisions of this section.35       (7) An alternate payee who elects to begin receiving payments under subsection (1) of this sec-36   tion before the member’s effective date of retirement is not eligible to receive any additional pay-37   ment by reason of credit in the system acquired by the member after the alternate payee begins to38   receive payments.39       (8) Subsection (1) of this section applies only to payments made by the board after the date of40   receipt by the board of written notice of the judgment, order or agreement and such additional in-41   formation and documentation as the board may prescribe.42       (9) Whenever the board is required to make payment to an alternate payee under the provisions43   of this section, the board shall charge and collect out of the benefits payable to the member and the44   alternate payee actual and reasonable administrative expenses and related costs incurred by the45   board in obtaining data and making calculations that are necessary by reason of the provisions of                                                 [4]                                                SB 861 1   in the benefit payable to an alternate payee under this section. Upon the death of an alternate 2   payee, the board shall make such payment to the beneficiary designated by the alternate payee as 3   may be required under the form of benefit elected by the alternate payee. If a death benefit is pay- 4   able under ORS 238.390 or 238.395 by reason of the death of an alternate payee, payment of the 5   death benefit shall be made to the beneficiary designated by the alternate payee under ORS 238.390 6   (1), or as otherwise provided by ORS 238.390 and 238.395. 7         (11) As used in this section, “court” means any court of appropriate jurisdiction of this or any 8   other state or of the District of Columbia. 910                                     SUPPLEMENTARY PAYMENTS                                           A-Eng. SB 861 1   this section. The board may not charge more than $300 for total administrative expenses and related 2   costs incurred in obtaining data or making calculations that are necessary by reason of the pro- 3   visions of this section. The board shall allocate expenses and costs charged under the provisions of 4   this subsection between the member and the alternate payee based on the fraction of the benefit 5   received by the member or alternate payee. 6       (10) Unless otherwise provided by the judgment, order or agreement, a member has no interest 7   in the benefit payable to an alternate payee under this section. Upon the death of an alternate 8   payee, the board shall make such payment to the beneficiary designated by the alternate payee as 9   may be required under the form of benefit elected by the alternate payee. If a death benefit is pay-10   able under ORS 238.390 or 238.395 by reason of the death of an alternate payee, payment of the11   death benefit shall be made to the beneficiary designated by the alternate payee under ORS 238.39012   (1), or as otherwise provided by ORS 238.390 and 238.395.13       (11) As used in this section, “court” means any court of appropriate jurisdiction of this or any14   other state or of the District of Columbia.1516                                    SUPPLEMENTARY PAYMENTS1718       SECTION 7. Section 8 of this 2013 special session Act is added to and made a part of ORS19   chapter 238.20       SECTION 8. (1) As used in this section:21       (a) “Yearly allowance” has the meaning given that term in ORS 238.360.22       (b) “Yearly pension or benefit” has the meaning given that term in ORS 238A.210.23       (2) Each year, the Public Employees Retirement Board shall make a supplementary pay-24   ment to each member or member’s beneficiary. The supplementary payment shall be equal25   to 0.25 percent of the member’s or member’s beneficiary’s yearly allowance or yearly pension26   or benefit, but in no event may the supplementary payment exceed $150.27       (3) In addition to the supplementary payment under subsection (2) of this section, the28   board shall make an additional supplementary payment each year to each member or29   member’s beneficiary with a yearly allowance or yearly pension or benefit of $20,000 or less.30   A supplementary payment made under this subsection shall be equal to 0.25 percent of the31   member’s or member’s beneficiary’s yearly allowance or yearly pension or benefit.32       (4) The board shall make the first supplementary payments under subsections (2) and (3)33   of this section in 2014.34       (5) A supplementary payment made under this section may not be included in a member’s35   or member’s beneficiary’s yearly allowance or yearly pension or benefit for purposes of cal-36   culating cost-of-living adjustments under ORS 238.360, 238.575 or 238A.210.37       (6) The board shall pay supplementary payments under this section out of the reserve38   account established under ORS 238.670 (1).3940                                     REPORT TO LEGISLATURE4142       SECTION 9. On or before September 30, 2018, the Public Employees Retirement Board43   shall report to the Governor, the President of the Senate and the Speaker of the House of44   Representatives on:45       (1) Recommendations relating to the cost-of-living adjustment under the Public Employ-                                                   [5]                                        A-Eng. SB 861 1   ees Retirement System; 2       (2) Recommendations relating to the continuation of supplementary payments to mem- 3   bers and members’ beneficiaries under section 8 of this 2013 special session Act; and 4       (3) Recommendations on approaches to calculating cost-of-living adjustments under the 5   system that take into consideration a retired member’s years of creditable service. 6 7                                              SUNSET 8 9       SECTION 10. Sections 8 and 9 of this 2013 special session Act are repealed on December10   31, 2019.1112         SECTION 7. Section 8 of this 2013 special session Act is added to and made a part of ORS13   chapter 238.14         SECTION 8. (1) As used in this section:15         (a) “Yearly allowance” has the meaning given that term in ORS 238.360.16         (b) “Yearly pension or benefit” has the meaning given that term in ORS 238A.210.17         (2) Each year, the Public Employees Retirement Board shall make a supplementary pay-18   ment to each member or member’s beneficiary with a yearly allowance or yearly pension or19   benefit of $20,000 or less. The supplementary payment shall be equal to 0.25 percent of the20   member’s or member’s beneficiary’s yearly allowance or yearly pension or benefit.21         (3)(a) The board may make a supplementary payment each year to each member or22   member’s beneficiary with a yearly allowance or yearly pension or benefit that is more than23   $20,000 but not more than $60,000. A supplementary payment made under this subsection24   shall be equal to 0.25 percent of the member’s or member’s beneficiary’s yearly allowance25   or yearly pension or benefit.26         (b) The board shall develop a formula for determining each year whether it is reasonably27   prudent, based on the earnings of the Public Employees Retirement Fund, available reserves28   and the unfunded actuarial liability of the system, to make a supplementary payment under29   this subsection.30         (4) A supplementary payment made under this section may not be included in a member’s31   or member’s beneficiary’s yearly allowance or yearly pension or benefit for purposes of cal-32   culating cost-of-living adjustments under ORS 238.360, 238.575 or 238A.210.33         (5) The board shall pay supplementary payments under this section out of the reserve34   account established under ORS 238.670 (1).3536                                       REPORT TO LEGISLATURE3738         SECTION 9. On or before September 30, 2018, the Public Employees Retirement Board39   shall report to an appropriate committee or interim committee of the Legislative Assembly40   on:41         (1) Recommendations relating to the cost-of-living adjustment under the Public Employ-42   ees Retirement System; and43         (2) Recommendations relating to the continuation of supplementary payments to mem-44   bers and members’ beneficiaries under section 8 of this 2013 special session Act.45                                                   [5]                                            SB 861 1                                              SUNSET 2 3       SECTION 10. Sections 8 and 9 of this 2013 special session Act are repealed on December 4   31, 2019. 5 6                                        JUDICIAL REVIEW 7 8       SECTION 11. (1) Jurisdiction is conferred on the Supreme Court to determine in the 9   manner provided by this section whether this 2013 special session Act breaches any contract10   between members of the Public Employees Retirement System and their employers, violates11   any constitutional provision, including but not limited to impairment of contract rights of12   members of the Public Employees Retirement System under Article I, section 21, of the13   Oregon Constitution, or Article I, section 10, clause 1, of the United States Constitution, or14   is invalid for any other reason.15       (2) A person who is adversely affected by this 2013 special session Act or who will be16   adversely affected by this 2013 special session Act may institute a proceeding for review by17   filing with the Supreme Court a petition that meets the following requirements:18       (a) The petition must be filed within 60 days after the effective date of this 2013 special19   session Act.20       (b) The petition must include the following:21       (A) A statement of the basis of the challenge; and22       (B) A statement and supporting affidavit showing how the petitioner is adversely af-23   fected.24       (3) The petitioner shall serve a copy of the petition by registered or certified mail upon25   the Public Employees Retirement Board, the Attorney General and the Governor.26       (4) Proceedings for review under this section shall be given priority over all other mat-27   ters before the Supreme Court.28       (5) The Supreme Court shall allow public employers participating in the Public Employees29   Retirement System to intervene in any proceeding under this section.30       (6) In the event the Supreme Court determines that there are factual issues in the peti-31   tion, the Supreme Court may appoint a special master to hear evidence and to prepare re-32   commended findings of fact.3334                                            CAPTIONS3536       SECTION 12. The unit captions used in this 2013 special session Act are provided only for37   the convenience of the reader and do not become part of the statutory law of this state or38   express any legislative intent in the enactment of this 2013 special session Act.12                                        JUDICIAL REVIEW1314       SECTION 11. (1) Jurisdiction is conferred on the Supreme Court to determine in the15   manner provided by this section whether this 2013 special session Act breaches any contract16   between members of the Public Employees Retirement System and their employers, violates17   any constitutional provision, including but not limited to impairment of contract rights of18   members of the Public Employees Retirement System under Article I, section 21, of the19   Oregon Constitution, or Article I, section 10, clause 1, of the United States Constitution, or20   is invalid for any other reason.21       (2) A person who is adversely affected by this 2013 special session Act or who will be22   adversely affected by this 2013 special session Act may institute a proceeding for review by23   filing with the Supreme Court a petition that meets the following requirements:24       (a) The petition must be filed within 60 days after the effective date of this 2013 special25   session Act.26       (b) The petition must include the following:27       (A) A statement of the basis of the challenge; and28       (B) A statement and supporting affidavit showing how the petitioner is adversely af-29   fected.30       (3) The petitioner shall serve a copy of the petition by registered or certified mail upon31   the Public Employees Retirement Board, the Attorney General and the Governor.32       (4) Proceedings for review under this section shall be given priority over all other mat-33   ters before the Supreme Court.34       (5) The Supreme Court shall allow public employers participating in the Public Employees35   Retirement System to intervene in any proceeding under this section.36       (6) In the event the Supreme Court determines that there are factual issues in the peti-37   tion, the Supreme Court may appoint a special master to hear evidence and to prepare re-38   commended findings of fact.3940                                      EMERGENCY CLAUSE40                                            CAPTIONS4142       SECTION 13. This 2013 special session Act being necessary for the immediate preserva-43   tion of the public peace, health and safety, an emergency is declared to exist, and this 201344   special session Act takes effect on its passage.42       SECTION 12. The unit captions used in this 2013 special session Act are provided only for43   the convenience of the reader and do not become part of the statutory law of this state or44   express any legislative intent in the enactment of this 2013 special session Act.45                                              [6]                                       A-Eng. SB 8611                                      EMERGENCY CLAUSE23      SECTION 13. This 2013 special session Act being necessary for the immediate preserva-4   tion of the public peace, health and safety, an emergency is declared to exist, and this 20135   special session Act takes effect on its passage.6                                             [7]

@@ -1,3 +1,6 @@

                                 77th OREGON LEGISLATIVE ASSEMBLY--2013 Special Session                                                       A-Engrossed                                               Senate Bill 862                                                  Ordered by the Senate October 1                                           Including Senate Amendments dated October 1     Sponsored by JOINT COMMITTEE ON SPECIAL SESSION

@@ -6,3 +9,3 @@

     to consideration by the Legislative Assembly. It is an editor’s brief statement of the essential features of the     measure as introduced.     measure.         Excludes certain increases in salary made by employer to pay for insurance coverage from cal-

@@ -11,3 +14,3 @@

     Retirement System who is convicted of felony is subject to execution, garnishment, attachment or     other process to collect money award included in judgment in criminal action.     other process to collect portion of money award included in judgment in criminal action.         Modifies options available to members of Legislative Assembly under Public Employees Retire-

@@ -40,5 +43,2 @@

24          (a) Include any salary paid in or for the calendar month of separation from employment;25          (b) Exclude any salary for any pay period before the first full pay period that is included in the26   three consecutive calendar years of membership under subsection (1)(a) of this section; and27          (c) Exclude any salary for any pay period before the first full pay period that is included in the     NOTE: Matter in boldfaced type in an amended section is new; matter [italic and bracketed] is existing law to be omitted.

@@ -46,318 +46,325 @@

     LC 2                                                 SB 862 1   last 36 calendar months of membership under subsection (1)(b) of this section. 2       (3) For purposes of the computation of pension program benefits under ORS 238A.125 of a person 3   employed by a local government as defined in ORS 174.116, “final average salary” means whichever 4   of the following is greater: 5       (a) The average salary per calendar year earned by an active member in the three consecutive 6   calendar years of membership that produce the highest average salary, including calendar years in 7   which the member was employed for less than a full calendar year. If the number of consecutive 8   calendar years of active membership before the effective date of retirement of the member is three 9   or less, the final average salary for the member is the average salary per calendar year earned by10   the member in all of those years, without regard to whether the member was employed for full cal-11   endar years.12       (b) One-third of the total salary earned by an active member in the last 36 calendar months of13   membership before the effective date of retirement of the member.14       (4) For the purposes of calculating the final average salary of a member under this section, the15   salary of the member does not include:16       (a) Any amounts attributable to hours of overtime that exceed the average number of hours of17   overtime for the same class of employees as established by rule of the Public Employees Retirement18   Board. The Oregon Department of Administrative Services shall establish by rule more than one19   overtime average for a class of state employees based on the geographic placement of the employees.20       (b) Any increases in salary during the last 36 calendar months of membership before the21   effective date of retirement of the member that:22       (A) Are made by an employer to pay for insurance coverage previously paid for by the23   employer; and24       (B) Are not offered to all employees in the same class of employees as established by rule25   of the board under paragraph (a) of this subsection.26       SECTION 2. The amendments to ORS 238A.130 by section 1 of this 2013 special session27   Act apply only to increases in salary paid to a member of the pension program of the Oregon28   Public Service Retirement Plan on or after the effective date of this 2013 special session Act.                                           A-Eng. SB 862 1       (b) Exclude any salary for any pay period before the first full pay period that is included in the 2   three consecutive calendar years of membership under subsection (1)(a) of this section; and 3       (c) Exclude any salary for any pay period before the first full pay period that is included in the 4   last 36 calendar months of membership under subsection (1)(b) of this section. 5       (3) For purposes of the computation of pension program benefits under ORS 238A.125 of a person 6   employed by a local government as defined in ORS 174.116, “final average salary” means whichever 7   of the following is greater: 8       (a) The average salary per calendar year earned by an active member in the three consecutive 9   calendar years of membership that produce the highest average salary, including calendar years in10   which the member was employed for less than a full calendar year. If the number of consecutive11   calendar years of active membership before the effective date of retirement of the member is three12   or less, the final average salary for the member is the average salary per calendar year earned by13   the member in all of those years, without regard to whether the member was employed for full cal-14   endar years.15       (b) One-third of the total salary earned by an active member in the last 36 calendar months of16   membership before the effective date of retirement of the member.17       (4) For the purposes of calculating the final average salary of a member under this section, the18   salary of the member does not include:19       (a) Any amounts attributable to hours of overtime that exceed the average number of hours of20   overtime for the same class of employees as established by rule of the Public Employees Retirement21   Board. The Oregon Department of Administrative Services shall establish by rule more than one22   overtime average for a class of state employees based on the geographic placement of the employees.23       (b) Any increases in salary during the last 36 calendar months of membership before the24   effective date of retirement of the member that:25       (A) Are made by an employer to pay for insurance coverage previously paid for by the26   employer; and27       (B) Are not offered to all employees in the same class of employees as established by rule28   of the board under paragraph (a) of this subsection.29       SECTION 2. The amendments to ORS 238A.130 by section 1 of this 2013 special session30   Act apply only to increases in salary paid to a member of the pension program of the Oregon31   Public Service Retirement Plan on or after the effective date of this 2013 special session Act.3233                         EXECUTION, GARNISHMENT AND ATTACHMENT34                                          OF DISTRIBUTIONS3536       SECTION 3. Section 4 of this 2013 special session Act is added to and made a part of ORS37   chapter 238.38       SECTION 4. (1) Notwithstanding ORS 238.445, any retirement allowance, pension pay-39   ment, lump sum payment or other distribution payable under this chapter or ORS chapter40   238A to a person convicted of a felony is subject to execution, garnishment, attachment or41   other process to collect, and may be assigned to satisfy, the portion of a money award de-42   scribed in subsection (2) of this section that is included in a judgment entered in the criminal43   action as provided in ORS 18.048.44       (2) Subsection (1) of this section applies only to the amount of a money award attribut-45   able to restitution ordered under ORS 137.106 or a compensatory fine ordered under ORS                                                 [2]                                             A-Eng. SB 862 1   137.101. 2       SECTION 5. ORS 238A.050 is amended to read: 3       238A.050. (1) The Oregon Public Service Retirement Plan is part of the Public Employees Re- 4   tirement System and is administered by the Public Employees Retirement Board. 5       (2) ORS 238.008, 238.225, 238.229, 238.231, 238.285, 238.410, 238.445, 238.450, 238.455, 238.458, 6   238.460, 238.465, 238.470, 238.600, 238.601, 238.605, 238.610, 238.615, 238.618, 238.630, 238.635, 238.640, 7   238.645, 238.655, 238.660, 238.661, 238.665, 238.675, 238.692, 238.694, 238.695, 238.696, 238.698, 238.700, 8   238.705, 238.710 and 238.715 and section 4 of this 2013 special session Act apply to the Oregon 9   Public Service Retirement Plan.10       (3) The Oregon Investment Council shall invest the assets of the Oregon Public Service Retire-11   ment Plan as a part of the Public Employees Retirement Fund. Except as provided by subsection (4)12   of this section, the investment of Oregon Public Service Retirement Plan assets is subject to the13   provisions of ORS 293.701 to 293.820. The Oregon Investment Council may invest assets of the indi-14   vidual account program and pension program differently than the other assets of the Public Em-15   ployees Retirement System.16       (4) Investment of the assets of the Oregon Public Service Retirement Plan is not subject to the17   limitations imposed by ORS 293.726 (6).18       (5) The board may contract with a private provider for the administration of the individual ac-19   count program. The board is not subject to the provisions of ORS chapter 279A or 279B in awarding20   a contract under the provisions of this subsection. The board shall establish procedures for inviting21   proposals and awarding contracts under this subsection.22       SECTION 6. Section 4 of this 2013 special session Act and the amendments to ORS23   238A.050 by section 5 of this 2013 special session Act apply only to conduct resulting in a24   conviction of a felony that is committed on or after the effective date of this 2013 special25   session Act.2627                        STATUS OF LEGISLATORS IN PUBLIC EMPLOYEES28                                          RETIREMENT SYSTEM2930                          EXECUTION, GARNISHMENT AND ATTACHMENT31                                            OF DISTRIBUTIONS3233       SECTION 3. Section 4 of this 2013 special session Act is added to and made a part of ORS34   chapter 238.35       SECTION 4. Notwithstanding ORS 238.445, any retirement allowance, pension payment,36   lump sum payment or other distribution payable under this chapter or ORS chapter 238A to37   a person convicted of a felony is subject to execution, garnishment, attachment or other38   process to collect, and may be assigned to satisfy, a money award included in a judgment39   entered in the criminal action as provided in ORS 18.048.40       SECTION 5. ORS 238A.050 is amended to read:41       238A.050. (1) The Oregon Public Service Retirement Plan is part of the Public Employees Re-42   tirement System and is administered by the Public Employees Retirement Board.43       (2) ORS 238.008, 238.225, 238.229, 238.231, 238.285, 238.410, 238.445, 238.450, 238.455, 238.458,44   238.460, 238.465, 238.470, 238.600, 238.601, 238.605, 238.610, 238.615, 238.618, 238.630, 238.635, 238.640,45   238.645, 238.655, 238.660, 238.661, 238.665, 238.675, 238.692, 238.694, 238.695, 238.696, 238.698, 238.700,                                                   [2]                                                 SB 862 1   238.705, 238.710 and 238.715 and section 4 of this 2013 special session Act apply to the Oregon 2   Public Service Retirement Plan. 3       (3) The Oregon Investment Council shall invest the assets of the Oregon Public Service Retire- 4   ment Plan as a part of the Public Employees Retirement Fund. Except as provided by subsection (4) 5   of this section, the investment of Oregon Public Service Retirement Plan assets is subject to the 6   provisions of ORS 293.701 to 293.820. The Oregon Investment Council may invest assets of the indi- 7   vidual account program and pension program differently than the other assets of the Public Em- 8   ployees Retirement System. 9       (4) Investment of the assets of the Oregon Public Service Retirement Plan is not subject to the10   limitations imposed by ORS 293.726 (6).11       (5) The board may contract with a private provider for the administration of the individual ac-12   count program. The board is not subject to the provisions of ORS chapter 279A or 279B in awarding13   a contract under the provisions of this subsection. The board shall establish procedures for inviting14   proposals and awarding contracts under this subsection.15       SECTION 6. Section 4 of this 2013 special session Act and the amendments to ORS16   238A.050 by section 5 of this 2013 special session Act apply only to conduct resulting in a17   conviction of a felony that is committed on or after the effective date of this 2013 special18   session Act.1920                        STATUS OF LEGISLATORS IN PUBLIC EMPLOYEES21                                          RETIREMENT SYSTEM2223       SECTION 7. (1) A person who is appointed or elected as a member of the Legislative24   Assembly and who is not a member of the Public Employees Retirement System at the time25   of the appointment or election:26       (a) May not become a member of the Public Employees Retirement System for the pur-27   pose of service in the Legislative Assembly.28       (b) May elect to become a legislator member of the state deferred compensation plan29   under ORS 237.655 for the purpose of service in the Legislative Assembly.30       (2) An election under this section does not affect the ability of a person appointed or31   elected as a member of the Legislative Assembly to participate in the state deferred com-32   pensation plan in the manner provided by ORS 243.401 to 243.507 as other than a legislator33   member under ORS 237.655.34       SECTION 8. ORS 237.650 is amended to read:35       237.650. (1) Except as provided in this section, a person who is appointed or elected as a mem-36   ber of the Legislative Assembly and who is a member of the Public Employees Retirement37   System at the time of the appointment or election may make a retirement plan election in the38   manner provided by this section. If a person [appointed or elected as a member of the Legislative39   Assembly] who is permitted to make an election under this section does not make a retirement40   plan election under subsection [(2), (3) or (4)] (2), (3), (4) or (5) of this section, the person is deemed41   to have elected a retirement plan as provided in subsection [(7)] (6) of this section.42       (2) An active or inactive member of the Public Employees Retirement System who is appointed43   or elected as a member of the Legislative Assembly, and who established membership in the system44   before August 29, 2003, as described in ORS 238A.025, may:45       (a) Elect to remain a member of the system under ORS chapter 238 for the purpose of service30       SECTION 7. (1) A person who is appointed or elected as a member of the Legislative31   Assembly and who is not a member of the Public Employees Retirement System at the time32   of the appointment or election:33       (a) May not become a member of the Public Employees Retirement System for the pur-34   pose of service in the Legislative Assembly.35       (b) May elect to become a legislator member of the state deferred compensation plan36   under ORS 237.655 for the purpose of service in the Legislative Assembly.37       (2) An election under this section does not affect the ability of a person appointed or38   elected as a member of the Legislative Assembly to participate in the state deferred com-39   pensation plan in the manner provided by ORS 243.401 to 243.507 as other than a legislator40   member under ORS 237.655.41       SECTION 8. ORS 237.650 is amended to read:42       237.650. (1) Except as provided in this section, a person who is appointed or elected as a mem-43   ber of the Legislative Assembly and who is a member of the Public Employees Retirement44   System at the time of the appointment or election may make a retirement plan election in the45   manner provided by this section. If a person [appointed or elected as a member of the Legislative                                                   [3]                                                SB 862 1   in the Legislative Assembly; 2       (b) Decline to remain a member of the system under ORS chapter 238 and elect to become a 3   legislator member of the state deferred compensation plan under ORS 237.655 for the purpose of 4   service in the Legislative Assembly; or 5       (c) Decline to remain a member of the system under ORS chapter 238 or to become a legislator 6   member of the state deferred compensation plan under ORS 237.655 for the purpose of service in the 7   Legislative Assembly. 8       (3) A retired member of the Public Employees Retirement System who is appointed or elected 9   as a member of the Legislative Assembly, and who established membership in the system before10   August 29, 2003, as described in ORS 238A.025, may:11       (a) Elect to become an active member of the system under ORS chapter 238 for the purpose of12   service in the Legislative Assembly;13       (b) Decline to become an active member of the system under ORS chapter 238 and elect to be-14   come a legislator member of the state deferred compensation plan under ORS 237.655 for the purpose15   of service in the Legislative Assembly; or16       (c) Decline to become an active member of the system under ORS chapter 238 or to become a17   legislator member of the state deferred compensation plan under ORS 237.655 for the purpose of18   service in the Legislative Assembly.19       [(4) A person who is appointed or elected as a member of the Legislative Assembly and who is not20   a member of the Public Employees Retirement System at the time the person takes office may:]21       [(a) Elect to become a member of the Oregon Public Service Retirement Plan established under22   ORS chapter 238A for the purpose of service in the Legislative Assembly;]23       [(b) Decline to become a member of the Oregon Public Service Retirement Plan and elect to become24   a legislator member of the state deferred compensation plan under ORS 237.655 for the purpose of25   service in the Legislative Assembly; or]26       [(c) Decline to become a member of the Oregon Public Service Retirement Plan or to become a27   legislator member of the state deferred compensation plan under ORS 237.655 for the purpose of service28   in the Legislative Assembly.]29       [(5)] (4) An active or inactive member of the Public Employees Retirement System who is ap-30   pointed or elected as a member of the Legislative Assembly, and who established membership in the31   system on or after August 29, 2003, as described in ORS 238A.025, may [not make an election under32   this section and is an active member of the system under ORS chapter 238A for the purpose of service33   in the Legislative Assembly.]:34       (a) Elect to remain a member of the system under ORS chapter 238A for the purpose of35   service in the Legislative Assembly;36       (b) Decline to remain a member of the system under ORS chapter 238A and elect to be-37   come a legislator member of the state deferred compensation plan under ORS 237.655 for the38   purpose of service in the Legislative Assembly; or39       (c) Decline to remain a member of the system under ORS chapter 238A or to become a40   legislator member of the state deferred compensation plan under ORS 237.655 for the purpose41   of service in the Legislative Assembly.42       [(6)] (5) A retired member of the Public Employees Retirement System who is appointed or43   elected as a member of the Legislative Assembly, and who established membership in the system on44   or after August 29, 2003, as described in ORS 238A.025, may [not make an election under this section45   and remains a retired member of the system under ORS chapter 238A during the person’s service in                                                  [4]                                                SB 862 1   the Legislative Assembly.]: 2       (a) Elect to become an active member of the system under ORS chapter 238A for the 3   purpose of service in the Legislative Assembly; 4       (b) Decline to become an active member of the system under ORS chapter 238A and elect 5   to become a legislator member of the state deferred compensation plan under ORS 237.655 6   for the purpose of service in the Legislative Assembly; or 7       (c) Decline to become an active member of the system under ORS chapter 238A or to 8   become a legislator member of the state deferred compensation plan under ORS 237.655 for 9   the purpose of service in the Legislative Assembly.10       [(7)] (6) Written notice of an election under subsection [(2), (3) or (4)] (2), (3), (4) or (5) of this11   section must be given to the Public Employees Retirement Board not more than 30 days after the12   person takes office. If the board does not receive written notice of the election within 30 days after13   the person takes office:14       (a) A person described in subsection (2) of this section is deemed to have elected to remain a15   member of the Public Employees Retirement System under ORS chapter 238 for the purpose of ser-16   vice in the Legislative Assembly.17       (b) A person described in subsection (3) of this section is deemed to have declined to become18   an active member of the system under ORS chapter 238[,] or to become a legislator member of the19   state deferred compensation plan under ORS 237.655, and remains a retired member of the system20   under ORS chapter 238 for the purpose of service in the Legislative Assembly.21       (c) A person described in subsection (4) of this section is deemed to have elected to [become a22   member of the system under ORS chapter 238A for the purpose of service in the Legislative23   Assembly.] remain a member of the Public Employees Retirement System under ORS chapter24   238A for the purpose of service in the Legislative Assembly.25       (d) A person described in subsection (5) of this section is deemed to have declined to be-26   come an active member of the system under ORS chapter 238A or to become a legislator27   member of the state deferred compensation plan under ORS 237.655, and remains a retired28   member of the system under ORS chapter 238A for the purpose of service in the Legislative29   Assembly.30       [(8)] (7) An election under subsection (3)(b) or (c) or (5)(b) or (c) of this section does not affect31   the status of a person as a retired member of the system and a recipient of retirement benefits under32   ORS chapter 238 or 238A.33       [(9)] (8) An election under this section does not affect the ability of a person appointed or34   elected as a member of the Legislative Assembly to participate in the state deferred compensation35   plan in the manner provided by ORS 243.401 to 243.507 as other than a legislator member under ORS36   237.655.37       SECTION 9. ORS 237.655 is amended to read:38       237.655. (1)(a) If a person appointed or elected as a member of the Legislative Assembly elects39   under ORS 237.650 or section 7 of this 2013 special session Act to become a legislator member40   of the state deferred compensation plan for the purpose of service in the Legislative Assembly, the41   Legislative Assembly shall make employer contributions to the plan in an amount that is equal to42   six percent of the member’s salary plus the percentage of the member’s salary that would have43   been contributed to the Public Employees Retirement Board for the member’s normal cost44   under ORS 238A.220, as determined by the actuary under ORS 238.605.45       (b) Notwithstanding paragraph (a) of this subsection, contributions made to the plan by                                             A-Eng. SB 862 1   Assembly] who is permitted to make an election under this section does not make a retirement 2   plan election under subsection [(2), (3) or (4)] (2), (3), (4) or (5) of this section, the person is deemed 3   to have elected a retirement plan as provided in subsection [(7)] (6) of this section. 4       (2) An active or inactive member of the Public Employees Retirement System who is appointed 5   or elected as a member of the Legislative Assembly, and who established membership in the system 6   before August 29, 2003, as described in ORS 238A.025, may: 7       (a) Elect to remain a member of the system under ORS chapter 238 for the purpose of service 8   in the Legislative Assembly; 9       (b) Decline to remain a member of the system under ORS chapter 238 and elect to become a10   legislator member of the state deferred compensation plan under ORS 237.655 for the purpose of11   service in the Legislative Assembly; or12       (c) Decline to remain a member of the system under ORS chapter 238 or to become a legislator13   member of the state deferred compensation plan under ORS 237.655 for the purpose of service in the14   Legislative Assembly.15       (3) A retired member of the Public Employees Retirement System who is appointed or elected16   as a member of the Legislative Assembly, and who established membership in the system before17   August 29, 2003, as described in ORS 238A.025, may:18       (a) Elect to become an active member of the system under ORS chapter 238 for the purpose of19   service in the Legislative Assembly;20       (b) Decline to become an active member of the system under ORS chapter 238 and elect to be-21   come a legislator member of the state deferred compensation plan under ORS 237.655 for the purpose22   of service in the Legislative Assembly; or23       (c) Decline to become an active member of the system under ORS chapter 238 or to become a24   legislator member of the state deferred compensation plan under ORS 237.655 for the purpose of25   service in the Legislative Assembly.26       [(4) A person who is appointed or elected as a member of the Legislative Assembly and who is not27   a member of the Public Employees Retirement System at the time the person takes office may:]28       [(a) Elect to become a member of the Oregon Public Service Retirement Plan established under29   ORS chapter 238A for the purpose of service in the Legislative Assembly;]30       [(b) Decline to become a member of the Oregon Public Service Retirement Plan and elect to become31   a legislator member of the state deferred compensation plan under ORS 237.655 for the purpose of32   service in the Legislative Assembly; or]33       [(c) Decline to become a member of the Oregon Public Service Retirement Plan or to become a34   legislator member of the state deferred compensation plan under ORS 237.655 for the purpose of service35   in the Legislative Assembly.]36       [(5)] (4) An active or inactive member of the Public Employees Retirement System who is ap-37   pointed or elected as a member of the Legislative Assembly, and who established membership in the38   system on or after August 29, 2003, as described in ORS 238A.025, may [not make an election under39   this section and is an active member of the system under ORS chapter 238A for the purpose of service40   in the Legislative Assembly.]:41       (a) Elect to remain a member of the system under ORS chapter 238A for the purpose of42   service in the Legislative Assembly;43       (b) Decline to remain a member of the system under ORS chapter 238A and elect to be-44   come a legislator member of the state deferred compensation plan under ORS 237.655 for the45   purpose of service in the Legislative Assembly; or                                                   [4]                                            A-Eng. SB 862 1       (c) Decline to remain a member of the system under ORS chapter 238A or to become a 2   legislator member of the state deferred compensation plan under ORS 237.655 for the purpose 3   of service in the Legislative Assembly. 4       [(6)] (5) A retired member of the Public Employees Retirement System who is appointed or 5   elected as a member of the Legislative Assembly, and who established membership in the system on 6   or after August 29, 2003, as described in ORS 238A.025, may [not make an election under this section 7   and remains a retired member of the system under ORS chapter 238A during the person’s service in 8   the Legislative Assembly.]: 9       (a) Elect to become an active member of the system under ORS chapter 238A for the10   purpose of service in the Legislative Assembly;11       (b) Decline to become an active member of the system under ORS chapter 238A and elect12   to become a legislator member of the state deferred compensation plan under ORS 237.65513   for the purpose of service in the Legislative Assembly; or14       (c) Decline to become an active member of the system under ORS chapter 238A or to15   become a legislator member of the state deferred compensation plan under ORS 237.655 for16   the purpose of service in the Legislative Assembly.17       [(7)] (6) Written notice of an election under subsection [(2), (3) or (4)] (2), (3), (4) or (5) of this18   section must be given to the Public Employees Retirement Board not more than 30 days after the19   person takes office. If the board does not receive written notice of the election within 30 days after20   the person takes office:21       (a) A person described in subsection (2) of this section is deemed to have elected to remain a22   member of the Public Employees Retirement System under ORS chapter 238 for the purpose of ser-23   vice in the Legislative Assembly.24       (b) A person described in subsection (3) of this section is deemed to have declined to become25   an active member of the system under ORS chapter 238[,] or to become a legislator member of the26   state deferred compensation plan under ORS 237.655, and remains a retired member of the system27   under ORS chapter 238 for the purpose of service in the Legislative Assembly.28       (c) A person described in subsection (4) of this section is deemed to have elected to [become a29   member of the system under ORS chapter 238A for the purpose of service in the Legislative30   Assembly.] remain a member of the Public Employees Retirement System under ORS chapter31   238A for the purpose of service in the Legislative Assembly.32       (d) A person described in subsection (5) of this section is deemed to have declined to be-33   come an active member of the system under ORS chapter 238A or to become a legislator34   member of the state deferred compensation plan under ORS 237.655, and remains a retired35   member of the system under ORS chapter 238A for the purpose of service in the Legislative36   Assembly.37       [(8)] (7) An election under subsection (3)(b) or (c) or (5)(b) or (c) of this section does not affect38   the status of a person as a retired member of the system and a recipient of retirement benefits under39   ORS chapter 238 or 238A.40       [(9)] (8) An election under this section does not affect the ability of a person appointed or41   elected as a member of the Legislative Assembly to participate in the state deferred compensation42   plan in the manner provided by ORS 243.401 to 243.507 as other than a legislator member under ORS43   237.655.44       SECTION 9. ORS 237.655 is amended to read:45       237.655. (1)(a) If a person appointed or elected as a member of the Legislative Assembly elects                                                   [5]                                               SB 862 1   the Legislative Assembly under this subsection may not exceed the maximum allowed by 2   federal law. 3       (2) If a person appointed or elected as a member of the Legislative Assembly elects under ORS 4   237.650 or section 7 of this 2013 special session Act to become a legislator member of the state 5   deferred compensation plan for the purpose of service in the Legislative Assembly, and the person 6   also participates in the state deferred compensation plan in the manner provided by ORS 243.401 to 7   243.507 as other than a legislator member, the total contributions made to the plan by the person 8   and by the employer under subsection (1) of this section may not exceed the maximum allowed by 9   federal law governing the plan’s tax qualification.10       (3) Except for the contributions required by subsection (1) of this section, the Legislative As-11   sembly may not “pick-up,” assume or pay any contributions on behalf of a legislator member of the12   state deferred compensation plan.13       SECTION 10. Section 11 of this 2013 special session Act is added to and made a part of14   ORS 238A.100 to 238A.245.15       SECTION 11. Notwithstanding any other provision of this chapter:16       (1) A retired member who has retired as other than a member of the Legislative As-17   sembly and who is thereafter appointed or elected as a member of the Legislative Assembly18   may elect, by giving the Public Employees Retirement Board written notice, to receive the19   pension provided by this chapter for service as other than a member of the Legislative As-20   sembly, and be an active member as a member of the Legislative Assembly for the purpose21   of service in the Legislative Assembly. A person may make an election under this subsection22   only if the person becomes an active member for the purpose of service in the Legislative23   Assembly as provided in ORS 237.650 (5). Notice of an election under this subsection must24   be given by the person not more than 30 days after the person takes office.25       (2) A member of the Legislative Assembly who is a member of the Public Employees26   Retirement System under this chapter as a member of the Legislative Assembly and who27   becomes eligible to retire by reason of service as other than a member of the Legislative28   Assembly, without regard to when that service was performed, may elect, by giving the board29   written notice, to retire and receive the pension provided by this chapter for service as other30   than a member of the Legislative Assembly, and to continue, for the purpose of service in31   the Legislative Assembly, as an active member as a member of the Legislative Assembly.32       (3) Upon receipt of the notice provided for in subsection (1) or (2) of this section, the33   board shall determine the member’s pension for nonlegislative service based on the number34   of years of nonlegislative service, and shall determine any additional pension to be received35   after the member subsequently retires based on the number of years of service in the Leg-36   islative Assembly.37       SECTION 12. ORS 238A.245 is amended to read:38       238A.245. (1) Except as provided in [subsection (3) of this section] ORS 237.650 and section 1139   of this 2013 special session Act, the Public Employees Retirement Board shall cease making pen-40   sion payments to a retired member of the pension program who is reemployed by a participating41   public employer in a qualifying position. A retired member of the pension program who is employed42   in a qualifying position becomes an active member of the pension program without serving the43   probationary period provided for in ORS 238A.100.44       (2) If a retired member of the pension program is reemployed under the provisions of this sec-45   tion, any option chosen by the member under ORS 238A.190 is canceled, and upon retiring thereafter                                           A-Eng. SB 862 1   under ORS 237.650 or section 7 of this 2013 special session Act to become a legislator member 2   of the state deferred compensation plan for the purpose of service in the Legislative Assembly, the 3   Legislative Assembly shall make employer contributions to the plan in an amount that is equal to 4   six percent of the member’s salary plus the percentage of the member’s salary that would have 5   been contributed to the Public Employees Retirement Board for the member’s normal cost 6   under ORS 238A.220, as determined by the actuary under ORS 238.605. 7       (b) Notwithstanding paragraph (a) of this subsection, contributions made to the plan by 8   the Legislative Assembly under this subsection may not exceed the maximum allowed by 9   federal law.10       (2) If a person appointed or elected as a member of the Legislative Assembly elects under ORS11   237.650 or section 7 of this 2013 special session Act to become a legislator member of the state12   deferred compensation plan for the purpose of service in the Legislative Assembly, and the person13   also participates in the state deferred compensation plan in the manner provided by ORS 243.401 to14   243.507 as other than a legislator member, the total contributions made to the plan by the person15   and by the employer under subsection (1) of this section may not exceed the maximum allowed by16   federal law governing the plan’s tax qualification.17       (3) Except for the contributions required by subsection (1) of this section, the Legislative As-18   sembly may not “pick-up,” assume or pay any contributions on behalf of a legislator member of the19   state deferred compensation plan.20       SECTION 10. Section 11 of this 2013 special session Act is added to and made a part of21   ORS 238A.100 to 238A.245.22       SECTION 11. Notwithstanding any other provision of this chapter:23       (1) A retired member who has retired as other than a member of the Legislative As-24   sembly and who is thereafter appointed or elected as a member of the Legislative Assembly25   may elect, by giving the Public Employees Retirement Board written notice, to receive the26   pension provided by this chapter for service as other than a member of the Legislative As-27   sembly, and be an active member as a member of the Legislative Assembly for the purpose28   of service in the Legislative Assembly. A person may make an election under this subsection29   only if the person becomes an active member for the purpose of service in the Legislative30   Assembly as provided in ORS 237.650 (5). Notice of an election under this subsection must31   be given by the person not more than 30 days after the person takes office.32       (2) A member of the Legislative Assembly who is a member of the Public Employees33   Retirement System under this chapter as a member of the Legislative Assembly and who34   becomes eligible to retire by reason of service as other than a member of the Legislative35   Assembly, without regard to when that service was performed, may elect, by giving the board36   written notice, to retire and receive the pension provided by this chapter for service as other37   than a member of the Legislative Assembly, and to continue, for the purpose of service in38   the Legislative Assembly, as an active member as a member of the Legislative Assembly.39       (3) Upon receipt of the notice provided for in subsection (1) or (2) of this section, the40   board shall determine the member’s pension for nonlegislative service based on the number41   of years of nonlegislative service, and shall determine any additional pension to be received42   after the member subsequently retires based on the number of years of service in the Leg-43   islative Assembly.44       SECTION 12. ORS 238A.245 is amended to read:45       238A.245. (1) Except as provided in [subsection (3) of this section] ORS 237.650 and section 11                                                 [6]                                              SB 862 1   the member may elect any option provided for in ORS 238A.180 and 238A.190. The board shall re- 2   calculate the pension of the member upon subsequent retirement. 3       [(3) A retired member of the pension program who becomes a member of the Legislative Assembly 4   shall continue to receive the pension elected by the member. A retired member of the pension program 5   who becomes a member of the Legislative Assembly may not make an election under ORS 237.650.] 6       SECTION 13. ORS 238A.350 is amended to read: 7       238A.350. (1) Upon any contributions being made to the individual account program by or on 8   behalf of a member of the program, the Public Employees Retirement Board shall create the account 9   or accounts described in this section. Each account shall be adjusted at least annually in accordance10   with rules adopted by the board to reflect any net earnings or losses on those contributions and to11   pay the reasonable administrative costs of maintaining the program to the extent the earnings on12   the assets of the program are insufficient to pay those costs. The adjustments described in this13   subsection shall continue until the account is distributed to the member or forfeited.14       (2)(a) The board shall establish an employee account, which shall consist of the employee con-15   tributions made by or on behalf of the member as adjusted under subsection (1) of this section.16       (b) The board shall create a separate employee account for a member who becomes an17   active member for the purpose of service in the Legislative Assembly under ORS 237.650,18   which shall consist of the employee contributions made by or on behalf of the member that19   are attributable to the member’s legislative service, as adjusted under subsection (1) of this20   section.21       (3) If the public employer agrees to make employer contributions under ORS 238A.340, the board22   shall establish an employer account, which shall consist of the employer contributions made on be-23   half of the member as adjusted under subsection (1) of this section.24       (4) If the board accepts rollover contributions on behalf of the member, the board shall establish25   a rollover account, which shall consist of the rollover contributions made by the member as adjusted26   under subsection (1) of this section. Contributions and the earnings attributable to the contributions27   must be accounted for separately.28       (5) The board shall provide an annual statement to each active and inactive member of the29   program that reflects the amount credited to the accounts established under this section. The30   statement shall reflect whether the member is vested in the employer account under the provisions31   of ORS 238A.320.32       SECTION 14. ORS 243.163 is amended to read:33       243.163. A member of the Legislative Assembly who is receiving a pension or annuity under ORS34   238.092 (1)(a) or section 11 (1) of this 2013 special session Act shall be eligible to participate as35   a retired state officer in one of the group benefit plans described in ORS 243.135 after the member36   ceases to be a member of the Legislative Assembly if the member applies to the Public Employees’37   Benefit Board within 60 days after the member ceases to be a member of the Legislative Assembly.3839                                          JUDICIAL REVIEW                                           A-Eng. SB 862 1   of this 2013 special session Act, the Public Employees Retirement Board shall cease making pen- 2   sion payments to a retired member of the pension program who is reemployed by a participating 3   public employer in a qualifying position. A retired member of the pension program who is employed 4   in a qualifying position becomes an active member of the pension program without serving the 5   probationary period provided for in ORS 238A.100. 6       (2) If a retired member of the pension program is reemployed under the provisions of this sec- 7   tion, any option chosen by the member under ORS 238A.190 is canceled, and upon retiring thereafter 8   the member may elect any option provided for in ORS 238A.180 and 238A.190. The board shall re- 9   calculate the pension of the member upon subsequent retirement.10       [(3) A retired member of the pension program who becomes a member of the Legislative Assembly11   shall continue to receive the pension elected by the member. A retired member of the pension program12   who becomes a member of the Legislative Assembly may not make an election under ORS 237.650.]13       SECTION 13. ORS 238A.350 is amended to read:14       238A.350. (1) Upon any contributions being made to the individual account program by or on15   behalf of a member of the program, the Public Employees Retirement Board shall create the account16   or accounts described in this section. Each account shall be adjusted at least annually in accordance17   with rules adopted by the board to reflect any net earnings or losses on those contributions and to18   pay the reasonable administrative costs of maintaining the program to the extent the earnings on19   the assets of the program are insufficient to pay those costs. The adjustments described in this20   subsection shall continue until the account is distributed to the member or forfeited.21       (2)(a) The board shall establish an employee account, which shall consist of the employee con-22   tributions made by or on behalf of the member as adjusted under subsection (1) of this section.23       (b) The board shall create a separate employee account for a member who becomes an24   active member for the purpose of service in the Legislative Assembly under ORS 237.650,25   which shall consist of the employee contributions made by or on behalf of the member that26   are attributable to the member’s legislative service, as adjusted under subsection (1) of this27   section.28       (3) If the public employer agrees to make employer contributions under ORS 238A.340, the board29   shall establish an employer account, which shall consist of the employer contributions made on be-30   half of the member as adjusted under subsection (1) of this section.31       (4) If the board accepts rollover contributions on behalf of the member, the board shall establish32   a rollover account, which shall consist of the rollover contributions made by the member as adjusted33   under subsection (1) of this section. Contributions and the earnings attributable to the contributions34   must be accounted for separately.35       (5) The board shall provide an annual statement to each active and inactive member of the36   program that reflects the amount credited to the accounts established under this section. The37   statement shall reflect whether the member is vested in the employer account under the provisions38   of ORS 238A.320.39       SECTION 14. ORS 243.163 is amended to read:40       243.163. A member of the Legislative Assembly who is receiving a pension or annuity under ORS41   238.092 (1)(a) or section 11 (1) of this 2013 special session Act shall be eligible to participate as42   a retired state officer in one of the group benefit plans described in ORS 243.135 after the member43   ceases to be a member of the Legislative Assembly if the member applies to the Public Employees’44   Benefit Board within 60 days after the member ceases to be a member of the Legislative Assembly.45                                                 [7]                                        A-Eng. SB 862 1                                        JUDICIAL REVIEW 2 3       SECTION 15. (1) Jurisdiction is conferred on the Supreme Court to determine in the 4   manner provided by this section whether this 2013 special session Act breaches any contract 5   between members of the Public Employees Retirement System and their employers, violates 6   any constitutional provision, including but not limited to impairment of contract rights of 7   members of the Public Employees Retirement System under Article I, section 21, of the 8   Oregon Constitution, or Article I, section 10, clause 1, of the United States Constitution, or 9   is invalid for any other reason.10       (2) A person who is adversely affected by this 2013 special session Act or who will be11   adversely affected by this 2013 special session Act may institute a proceeding for review by12   filing with the Supreme Court a petition that meets the following requirements:13       (a) The petition must be filed within 60 days after the effective date of this 2013 special14   session Act.15       (b) The petition must include the following:16       (A) A statement of the basis of the challenge; and17       (B) A statement and supporting affidavit showing how the petitioner is adversely af-18   fected.19       (3) The petitioner shall serve a copy of the petition by registered or certified mail upon20   the Public Employees Retirement Board, the Attorney General and the Governor.21       (4) Proceedings for review under this section shall be given priority over all other mat-22   ters before the Supreme Court.23       (5) The Supreme Court shall allow public employers participating in the Public Employees24   Retirement System to intervene in any proceeding under this section.25       (6) In the event the Supreme Court determines that there are factual issues in the peti-26   tion, the Supreme Court may appoint a special master to hear evidence and to prepare re-27   commended findings of fact.2829                                            CAPTIONS3031       SECTION 16. The unit captions used in this 2013 special session Act are provided only for32   the convenience of the reader and do not become part of the statutory law of this state or33   express any legislative intent in the enactment of this 2013 special session Act.3435                                      EMERGENCY CLAUSE3637       SECTION 17. This 2013 special session Act being necessary for the immediate preserva-38   tion of the public peace, health and safety, an emergency is declared to exist, and this 201339   special session Act takes effect on its passage.4041       SECTION 15. (1) Jurisdiction is conferred on the Supreme Court to determine in the42   manner provided by this section whether this 2013 special session Act breaches any contract43   between members of the Public Employees Retirement System and their employers, violates44   any constitutional provision, including but not limited to impairment of contract rights of45   members of the Public Employees Retirement System under Article I, section 21, of the                                                 [7]                                            SB 862 1   Oregon Constitution, or Article I, section 10, clause 1, of the United States Constitution, or 2   is invalid for any other reason. 3       (2) A person who is adversely affected by this 2013 special session Act or who will be 4   adversely affected by this 2013 special session Act may institute a proceeding for review by 5   filing with the Supreme Court a petition that meets the following requirements: 6       (a) The petition must be filed within 60 days after the effective date of this 2013 special 7   session Act. 8       (b) The petition must include the following: 9       (A) A statement of the basis of the challenge; and10       (B) A statement and supporting affidavit showing how the petitioner is adversely af-11   fected.12       (3) The petitioner shall serve a copy of the petition by registered or certified mail upon13   the Public Employees Retirement Board, the Attorney General and the Governor.14       (4) Proceedings for review under this section shall be given priority over all other mat-15   ters before the Supreme Court.16       (5) The Supreme Court shall allow public employers participating in the Public Employees17   Retirement System to intervene in any proceeding under this section.18       (6) In the event the Supreme Court determines that there are factual issues in the peti-19   tion, the Supreme Court may appoint a special master to hear evidence and to prepare re-20   commended findings of fact.2122                                            CAPTIONS2324       SECTION 16. The unit captions used in this 2013 special session Act are provided only for25   the convenience of the reader and do not become part of the statutory law of this state or26   express any legislative intent in the enactment of this 2013 special session Act.2728                                      EMERGENCY CLAUSE2930       SECTION 17. This 2013 special session Act being necessary for the immediate preserva-31   tion of the public peace, health and safety, an emergency is declared to exist, and this 201332   special session Act takes effect on its passage.33                                              [8]

@@ -1,64 +1,68 @@

                                 77th OREGON LEGISLATIVE ASSEMBLY--2013 Special Session                                               Senate Bill 863     Sponsored by JOINT COMMITTEE ON SPECIAL SESSION                                                             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.         Makes legislative finding and declaration that regulation of agricultural seed, flower seed,     nursery seed and vegetable seed and products of agricultural seed, flower seed, nursery seed and     vegetable seed be reserved to state. Prohibits enactment or enforcement of local laws or measures     to regulate agricultural seed, flower seed, nursery seed and vegetable seed or products of agricul-     tural seed, flower seed, nursery seed and vegetable seed.         Declares emergency, effective on passage. 1                                                   A BILL FOR AN ACT 2   Relating to preemption of the local regulation of agriculture; and declaring an emergency. 3   Be It Enacted by the People of the State of Oregon: 4        SECTION 1. Sections 2 and 3 of this 2013 special session Act are added to and made a part 5   of ORS 633.511 to 633.750. 6        SECTION 2. (1) As used in this section, “nursery seed” means any propagant of nursery 7   stock as defined in ORS 571.005. 8        (2) The Legislative Assembly finds and declares that: 9        (a) The production and use of agricultural seed, flower seed, nursery seed and vegetable10   seed and products of agricultural seed, flower seed, nursery seed and vegetable seed are of11   substantial economic benefit to this state;12        (b) The economic benefits resulting from agricultural seed, flower seed, nursery seed and13   vegetable seed and seed product industries in this state make the protection, preservation14   and promotion of those industries a matter of statewide interest that warrants reserving15   exclusive regulatory power over agricultural seed, flower seed, nursery seed and vegetable16   seed and products of agricultural seed, flower seed, nursery seed and vegetable seed to the17   state; and18        (c) The agricultural seed, flower seed, nursery seed and vegetable seed and seed product19   industries in this state will be adversely affected if those industries are subject to a20   patchwork of local regulations.21        SECTION 3. (1) As used in this section:22        (a) “Local government” has the meaning given that term in ORS 174.116.23        (b) “Nursery seed” means any propagant of nursery stock as defined in ORS 571.005.24        (2) Except as provided in subsection (3) of this section, a local government may not enact25   or enforce a local law or measure, including but not limited to an ordinance, regulation,26   control area or quarantine, to inhibit or prevent the production or use of agricultural seed,27   flower seed, nursery seed or vegetable seed or products of agricultural seed, flower seed,28   nursery seed or vegetable seed. The prohibition imposed by this subsection includes, but is29   not limited to, any local laws or measures for regulating the display, distribution, growing,     NOTE: Matter in boldfaced type in an amended section is new; matter [italic and bracketed] is existing law to be omitted.     New sections are in boldfaced type.     LC 5-3                                            SB 863 1   harvesting, labeling, marketing, mixing, notification of use, planting, possession, processing, 2   registration, storage, transportation or use of agricultural seed, flower seed, nursery seed 3   or vegetable seed or products of agricultural seed, flower seed, nursery seed or vegetable 4   seed. 5      (3) Subsection (2) of this section does not prohibit a local government from enacting or 6   enforcing a local law or measure to inhibit or prevent the production or use of agricultural 7   seed, flower seed, nursery seed or vegetable seed or products of agricultural seed, flower 8   seed, nursery seed or vegetable seed on property owned by the local government. 9      SECTION 4. Section 3 of this 2013 special session Act does not apply to any local measure10   that was:11      (1) Proposed by initiative petition and, on or before January 31, 2013, qualified for place-12   ment on the ballot in a county; and13      (2) Approved by the electors of the county at an election held on May 20, 2014.14      SECTION 5. This 2013 special session Act being necessary for the immediate preservation15   of the public peace, health and safety, an emergency is declared to exist, and this 2013 special16   session Act takes effect on its passage.17                                                [2]                        77th OREGON LEGISLATIVE ASSEMBLY--2013 Special Session                                                    Enrolled                                    Senate Bill 863Sponsored by JOINT COMMITTEE ON SPECIAL SESSION                                     CHAPTER .................................................                                                         AN ACTRelating to preemption of the local regulation of agriculture; and declaring an emergency.Be It Enacted by the People of the State of Oregon:    SECTION 1. Sections 2 and 3 of this 2013 special session Act are added to and made apart of ORS 633.511 to 633.750.    SECTION 2. (1) As used in this section, “nursery seed” means any propagant of nurserystock as defined in ORS 571.005.    (2) The Legislative Assembly finds and declares that:    (a) The production and use of agricultural seed, flower seed, nursery seed and vegetableseed and products of agricultural seed, flower seed, nursery seed and vegetable seed are ofsubstantial economic benefit to this state;    (b) The economic benefits resulting from agricultural seed, flower seed, nursery seed andvegetable seed and seed product industries in this state make the protection, preservationand promotion of those industries a matter of statewide interest that warrants reservingexclusive regulatory power over agricultural seed, flower seed, nursery seed and vegetableseed and products of agricultural seed, flower seed, nursery seed and vegetable seed to thestate; and    (c) The agricultural seed, flower seed, nursery seed and vegetable seed and seed productindustries in this state will be adversely affected if those industries are subject to apatchwork of local regulations.    SECTION 3. (1) As used in this section:    (a) “Local government” has the meaning given that term in ORS 174.116.    (b) “Nursery seed” means any propagant of nursery stock as defined in ORS 571.005.    (2) Except as provided in subsection (3) of this section, a local government may not enactor enforce a local law or measure, including but not limited to an ordinance, regulation,control area or quarantine, to inhibit or prevent the production or use of agricultural seed,flower seed, nursery seed or vegetable seed or products of agricultural seed, flower seed,nursery seed or vegetable seed. The prohibition imposed by this subsection includes, but isnot limited to, any local laws or measures for regulating the display, distribution, growing,harvesting, labeling, marketing, mixing, notification of use, planting, possession, processing,registration, storage, transportation or use of agricultural seed, flower seed, nursery seedor vegetable seed or products of agricultural seed, flower seed, nursery seed or vegetableseed.    (3) Subsection (2) of this section does not prohibit a local government from enacting orenforcing a local law or measure to inhibit or prevent the production or use of agriculturalEnrolled Senate Bill 863 (SB 863-INTRO)                                                          Page 1seed, flower seed, nursery seed or vegetable seed or products of agricultural seed, flowerseed, nursery seed or vegetable seed on property owned by the local government.    SECTION 4. Section 3 of this 2013 special session Act does not apply to any local measurethat was:    (1) Proposed by initiative petition and, on or before January 31, 2013, qualified for place-ment on the ballot in a county; and    (2) Approved by the electors of the county at an election held on May 20, 2014.    SECTION 5. This 2013 special session Act being necessary for the immediate preservationof the public peace, health and safety, an emergency is declared to exist, and this 2013 specialsession Act takes effect on its passage.Passed by Senate October 2, 2013                                                            Received by Governor:                                                                                            ........................M.,........................................................., 2013       ..................................................................................                                                                                            Approved:                         Robert Taylor, Secretary of Senate                                                                                            ........................M.,........................................................., 2013       ..................................................................................                       Peter Courtney, President of Senate                                                                                                         ..................................................................................Passed by House October 2, 2013                                                                                                            John Kitzhaber, Governor                                                                                            Filed in Office of Secretary of State:       ..................................................................................                                                                                            ........................M.,........................................................., 2013                                 Tina Kotek, Speaker of House                                                                                                         ..................................................................................                                                                                                                                 Kate Brown, Secretary of StateEnrolled Senate Bill 863 (SB 863-INTRO)                                                                                                                                       Page 2

@@ -1,3 +1,6 @@

                                 77th OREGON LEGISLATIVE ASSEMBLY--2013 Special Session                                                       A-Engrossed                                              House Bill 3601                                                  Ordered by the House October 1                                           Including House Amendments dated October 1     Sponsored by JOINT COMMITTEE ON SPECIAL SESSION

@@ -6,3 +9,3 @@

     to consideration by the Legislative Assembly. It is an editor’s brief statement of the essential features of the     measure as introduced.     measure.         Increases corporate excise tax rate on taxable income between $1 million and $10 million.

@@ -11,7 +14,10 @@

     senior medical expenses. Converts itemized deduction to subtraction from federal taxable income.     Phases out amount of subtraction based on income. Increases age restriction over time. Increases     percentage of federal earned income credit allowable as credit against Oregon personal income tax.     Exempts existing interest charge domestic international sales corporations from corporate minimum     tax and provides reduced corporate excise tax rate. Applies to tax years beginning on or after     January 1, 2013.     Phases out amount of subtraction based on income. Increases age restriction over time. Applies to     tax years beginning on or after January 1, 2013. Increases percentage of federal earned income     credit allowable as credit against Oregon personal income tax. Applies to tax years beginning     on or after January 1, 2014. Exempts existing interest charge domestic international sales cor-     porations from corporate minimum tax. Imposes tax on commission received by domestic     international sales corporation. Creates subtraction from federal taxable income for dividend     received from domestic international sales corporation. [and provides reduced corporate excise     tax rate.] Applies to tax years beginning on or after January 1, 2013.         Allows for reduced rates of personal income tax imposed on nonpassive income attributable to

@@ -28,4 +34,4 @@

 2   Relating to taxation; creating new provisions; amending ORS 315.266, 316.085, 316.695, 317.061, 3          317.635, 317.853, 318.074, 323.030, 323.455 and 323.505; prescribing an effective date; and provid- 4          ing for revenue raising that requires approval by a three-fifths majority. 3          317.283, 317.635, 317.853, 318.074, 323.030, 323.455 and 323.505; prescribing an effective date; and 4          providing for revenue raising that requires approval by a three-fifths majority. 5   Be It Enacted by the People of the State of Oregon:

@@ -42,7 +48,2 @@

16   lowed under section 151 of the Internal Revenue Code.17          (b) In the case of an individual with respect to whom a credit under paragraph (a) of this sub-18   section is allowable to another taxpayer for a taxable year beginning in the calendar year in which19   the individual’s taxable year begins, the credit amount applicable to such individual for such20   individual’s taxable year is zero.21          (2)(a) A nonresident shall be allowed the credit provided under subsection (1) of this section     NOTE: Matter in boldfaced type in an amended section is new; matter [italic and bracketed] is existing law to be omitted.

@@ -50,641 +51,704 @@

     LC 3                                               HB 3601 1   computed in the same manner and subject to the same limitations as the credit allowed to a resident 2   of this state. However, the credit shall be prorated using the proportion provided in ORS 316.117. 3       (b) If a change in the taxable year of a taxpayer occurs as described in ORS 314.085, or if the 4   Department of Revenue terminates the taxpayer’s taxable year under ORS 314.440, the credit al- 5   lowed by this section shall be prorated or computed in a manner consistent with ORS 314.085. 6       (c) If a change in the status of a taxpayer from resident to nonresident or from nonresident to 7   resident occurs, the credit allowed by this section shall be determined in a manner consistent with 8   ORS 316.117. 9       (3) The Department of Revenue shall recompute the dollar amount of the personal exemption10   credit allowed for state personal income tax purposes. The computation shall be as follows:11       (a) Divide the monthly averaged U.S. City Average Consumer Price Index for the 12 consecutive12   months ending August 31 of the prior calendar year by the monthly averaged index for the first six13   months of 1986.14       (b) Recompute the dollar amount of the personal exemption credit by multiplying $90 by the15   appropriate indexing factor determined as provided in paragraph (a) of this subsection. Round off the16   amount obtained under this paragraph to the nearest $1.17       (4) As used in this section, “U.S. City Average Consumer Price Index” means the U.S. City Av-18   erage Consumer Price Index for All Urban Consumers (All Items) as published by the Bureau of19   Labor Statistics of the United States Department of Labor.20       (5) Notwithstanding subsections (1) to (3) of this section, a taxpayer may not claim the per-21   sonal exemption credit otherwise allowed under this section if [a] the taxpayer’s federal ad-22   justed gross income for the tax year exceeds $200,000 for joint return filers, a surviving spouse23   or a head of household, or $100,000 for an individual who is not a married individual and is24   not a surviving spouse, or is a married individual who files a separate return. [the threshold25   amount, the exemption amount shall be the greater of:]26       [(a) Thirty-three percent of the amount computed in subsection (3) of this section; or]27       [(b) The amount computed in subsection (3) of this section reduced by:]28       [(A) Two percentage points for each $2,500 (or fraction thereof) by which the taxpayer’s federal29   adjusted gross income exceeds the threshold amount; or]30       [(B) Two percentage points for each $1,250 (or fraction thereof) by which the taxpayer’s federal31   adjusted gross income exceeds the threshold amount, if the taxpayer is married but filing separately.]32       [(6) As used in this section, “threshold amount” means:]33       [(a) $234,600 in the case of a joint return or a surviving spouse.]34       [(b) $195,500 in the case of a head of a household.]35       [(c) $156,400 in the case of an individual who is not a married individual and is not a surviving36   spouse.]37       [(d) $117,300 in the case of a married individual filing a separate return.]38       [(7) The Department of Revenue shall adjust the threshold amounts in subsection (6) of this section39   according to the cost-of-living adjustment for the calendar year. The department shall annually recom-40   pute the threshold amounts for the current tax year by multiplying each dollar amount by the percent-41   age (if any) by which the monthly averaged U.S. City Average Consumer Price Index for the 1242   consecutive months ending August 31 of the prior calendar year exceeds the monthly averaged U.S.43   City Average Consumer Price Index for the 12 consecutive months ending August 31, 2006.]44       [(8) If a threshold amount computed under subsections (6) and (7) of this section is not a multiple45   of $50, the amount shall be rounded to the next lower multiple of $50.]                                           A-Eng. HB 3601 1       (b) In the case of an individual with respect to whom a credit under paragraph (a) of this sub- 2   section is allowable to another taxpayer for a taxable year beginning in the calendar year in which 3   the individual’s taxable year begins, the credit amount applicable to such individual for such 4   individual’s taxable year is zero. 5       (2)(a) A nonresident shall be allowed the credit provided under subsection (1) of this section 6   computed in the same manner and subject to the same limitations as the credit allowed to a resident 7   of this state. However, the credit shall be prorated using the proportion provided in ORS 316.117. 8       (b) If a change in the taxable year of a taxpayer occurs as described in ORS 314.085, or if the 9   Department of Revenue terminates the taxpayer’s taxable year under ORS 314.440, the credit al-10   lowed by this section shall be prorated or computed in a manner consistent with ORS 314.085.11       (c) If a change in the status of a taxpayer from resident to nonresident or from nonresident to12   resident occurs, the credit allowed by this section shall be determined in a manner consistent with13   ORS 316.117.14       (3) The Department of Revenue shall recompute the dollar amount of the personal exemption15   credit allowed for state personal income tax purposes. The computation shall be as follows:16       (a) Divide the monthly averaged U.S. City Average Consumer Price Index for the 12 consecutive17   months ending August 31 of the prior calendar year by the monthly averaged index for the first six18   months of 1986.19       (b) Recompute the dollar amount of the personal exemption credit by multiplying $90 by the20   appropriate indexing factor determined as provided in paragraph (a) of this subsection. Round off the21   amount obtained under this paragraph to the nearest $1.22       (4) As used in this section, “U.S. City Average Consumer Price Index” means the U.S. City Av-23   erage Consumer Price Index for All Urban Consumers (All Items) as published by the Bureau of24   Labor Statistics of the United States Department of Labor.25       (5) Notwithstanding subsections (1) to (3) of this section, a taxpayer may not claim the per-26   sonal exemption credit otherwise allowed under this section if [a] the taxpayer’s federal ad-27   justed gross income for the tax year exceeds $200,000 for joint return filers, a surviving spouse28   or a head of household, or $100,000 for an individual who is not a married individual and is29   not a surviving spouse, or is a married individual who files a separate return. [the threshold30   amount, the exemption amount shall be the greater of:]31       [(a) Thirty-three percent of the amount computed in subsection (3) of this section; or]32       [(b) The amount computed in subsection (3) of this section reduced by:]33       [(A) Two percentage points for each $2,500 (or fraction thereof) by which the taxpayer’s federal34   adjusted gross income exceeds the threshold amount; or]35       [(B) Two percentage points for each $1,250 (or fraction thereof) by which the taxpayer’s federal36   adjusted gross income exceeds the threshold amount, if the taxpayer is married but filing separately.]37       [(6) As used in this section, “threshold amount” means:]38       [(a) $234,600 in the case of a joint return or a surviving spouse.]39       [(b) $195,500 in the case of a head of a household.]40       [(c) $156,400 in the case of an individual who is not a married individual and is not a surviving41   spouse.]42       [(d) $117,300 in the case of a married individual filing a separate return.]43       [(7) The Department of Revenue shall adjust the threshold amounts in subsection (6) of this section44   according to the cost-of-living adjustment for the calendar year. The department shall annually recom-45   pute the threshold amounts for the current tax year by multiplying each dollar amount by the percent-                                                  [2]                                           HB 3601 1      SECTION 3. Section 4 of this 2013 special session Act is added to and made a part of ORS 2   chapter 316. 3      SECTION 4. (1)(a) In addition to the other modifications to federal taxable income con- 4   tained in this chapter, there shall be subtracted from federal taxable income the amount paid 5   for medical care of an individual and not compensated for by insurance or otherwise, as de- 6   scribed in section 213(a) of the Internal Revenue Code, if the individual meets the age re- 7   quirement for the tax year under subsection (2) of this section. The amount subtracted under 8   this section may not exceed: 9      (A) $3,600 for a joint return if both spouses meet the age requirement for the tax year10   under subsection (2) of this section, with no more than $1,800 attributable to the medical11   care of either spouse;12      (B) $1,800 for a joint return if only one spouse meets the age requirement for the tax13   year under subsection (2) of this section; or14      (C) $1,800 for each individual filing a return who meets the age requirement for the tax15   year under subsection (2) of this section.16      (b) The subtraction under this section may not include amounts that have previously17   been deducted in the calculation of Oregon taxable income.18      (2) The subtraction under this section is available only if the individual has attained the19   following age before the close of the tax year:20      (a) For tax years beginning on or after January 1, 2013, and before January 1, 2014, an21   individual must attain 62 years of age before the close of the tax year.22      (b) For tax years beginning on or after January 1, 2014, and before January 1, 2016, an23   individual must attain 63 years of age before the close of the tax year.24      (c) For tax years beginning on or after January 1, 2016, and before January 1, 2018, an25   individual must attain 64 years of age before the close of the tax year.26      (d) For tax years beginning on or after January 1, 2018, and before January 1, 2020, an27   individual must attain 65 years of age before the close of the tax year.28      (e) For tax years beginning on or after January 1, 2020, an individual must attain 66 years29   of age before the close of the tax year.30      (3) Notwithstanding the amount calculated under subsection (1) of this section, the31   maximum amount allowed for a subtraction under this section may not exceed:32      (a) $1,400 per individual, if the federal adjusted gross income of the taxpayer for the tax33   year is $50,000 or more and less than $100,000 for a taxpayer who files a return jointly, as a34   head of household or as a surviving spouse, or for all other taxpayers, $25,000 or more and35   less than $50,000.36      (b) $1,000 per individual, if the federal adjusted gross income of the taxpayer for the tax37   year is $100,000 or more and less than $200,000 for a taxpayer who files a return jointly, as38   a head of household or as a surviving spouse, or for all other taxpayers, $50,000 or more and39   less than $100,000.40      (4) A subtraction may not be claimed under this section if the federal adjusted gross in-41   come of the taxpayer for the tax year exceeds:42      (a) $200,000 for joint return filers, a surviving spouse or a head of household; or43      (b) $100,000 for an individual who is not a married individual and is not a surviving44   spouse, or is a married individual who files a separate return.45      SECTION 5. ORS 316.695, as amended by section 4, chapter 750, Oregon Laws 2013, is amended                                                [3]                                                 HB 3601 1   to read: 2        316.695. (1) In addition to the modifications to federal taxable income contained in this chapter, 3   there shall be added to or subtracted from federal taxable income: 4        (a) If, in computing federal income tax for a tax year, the taxpayer deducted itemized deductions, 5   as defined in section 63(d) of the Internal Revenue Code, the taxpayer shall add the amount of 6   itemized deductions deducted (the itemized deductions less an amount, if any, by which the itemized 7   deductions are reduced under section 68 of the Internal Revenue Code). 8        (b) If, in computing federal income tax for a tax year, the taxpayer deducted the standard de- 9   duction, as defined in section 63(c) of the Internal Revenue Code, the taxpayer shall add the amount10   of the standard deduction deducted.11        (c)(A) From federal taxable income there shall be subtracted the larger of (i) the taxpayer’s12   itemized deductions or (ii) a standard deduction. Except as provided in subsection (8) of this section,13   for purposes of this subparagraph, “standard deduction” means the sum of the basic standard de-14   duction and the additional standard deduction.15        (B) For purposes of subparagraph (A) of this paragraph, the basic standard deduction is:16        (i) $3,280, in the case of joint return filers or a surviving spouse;17        (ii) $1,640, in the case of an individual who is not a married individual and is not a surviving18   spouse;19        (iii) $1,640, in the case of a married individual who files a separate return; or20        (iv) $2,640, in the case of a head of household.21        (C)(i) For purposes of subparagraph (A) of this paragraph for tax years beginning on or after22   January 1, 2003, the Department of Revenue shall annually recompute the basic standard deduction23   for each category of return filer listed under subparagraph (B) of this paragraph. The basic standard24   deduction shall be computed by dividing the monthly averaged U.S. City Average Consumer Price25   Index for the 12 consecutive months ending August 31 of the prior calendar year by the average26   U.S. City Average Consumer Price Index for the second quarter of 2002, then multiplying that quo-27   tient by the amount listed under subparagraph (B) of this paragraph for each category of return28   filer.29        (ii) If any change in the maximum household income determined under this subparagraph is not30   a multiple of $5, the increase shall be rounded to the next lower multiple of $5.31        (iii) As used in this subparagraph, “U.S. City Average Consumer Price Index” means the U.S.32   City Average Consumer Price Index for All Urban Consumers (All Items) as published by the Bureau33   of Labor Statistics of the United States Department of Labor.34        (D) For purposes of subparagraph (A) of this paragraph, the additional standard deduction is the35   sum of each additional amount to which the taxpayer is entitled under subsection (7) of this section.36        (E) As used in subparagraph (B) of this paragraph, “surviving spouse” and “head of household”37   have the meaning given those terms in section 2 of the Internal Revenue Code.38        (F) In the case of the following, the standard deduction referred to in subparagraph (A) of this39   paragraph shall be zero:40        (i) A husband or wife filing a separate return where the other spouse has claimed itemized de-41   ductions under subparagraph (A) of this paragraph;42        (ii) A nonresident alien individual;43        (iii) An individual making a return for a period of less than 12 months on account of a change44   in the individual’s annual accounting period;45        (iv) An estate or trust;                                          A-Eng. HB 3601 1   age (if any) by which the monthly averaged U.S. City Average Consumer Price Index for the 12 2   consecutive months ending August 31 of the prior calendar year exceeds the monthly averaged U.S. 3   City Average Consumer Price Index for the 12 consecutive months ending August 31, 2006.] 4       [(8) If a threshold amount computed under subsections (6) and (7) of this section is not a multiple 5   of $50, the amount shall be rounded to the next lower multiple of $50.] 6       SECTION 3. Section 4 of this 2013 special session Act is added to and made a part of ORS 7   chapter 316. 8       SECTION 4. (1)(a) In addition to the other modifications to federal taxable income con- 9   tained in this chapter, there shall be subtracted from federal taxable income the amount paid10   for medical care of an individual and not compensated for by insurance or otherwise, as de-11   scribed in section 213(a) of the Internal Revenue Code, if the individual meets the age re-12   quirement for the tax year under subsection (2) of this section. The amount subtracted under13   this section may not exceed:14       (A) $3,600 for a joint return if both spouses meet the age requirement for the tax year15   under subsection (2) of this section, with no more than $1,800 attributable to the medical16   care of either spouse;17       (B) $1,800 for a joint return if only one spouse meets the age requirement for the tax18   year under subsection (2) of this section, with no more than $1,800 attributable to the med-19   ical care of that spouse; or20       (C) $1,800 for each individual filing a return who meets the age requirement for the tax21   year under subsection (2) of this section, with no more than $1,800 attributable to the med-22   ical care of that individual.23       (b) The subtraction under this section may not include amounts that have previously24   been deducted in the calculation of Oregon taxable income.25       (2) The subtraction under this section is available only if the individual has attained the26   following age before the close of the tax year:27       (a) For tax years beginning on or after January 1, 2013, and before January 1, 2014, an28   individual must attain 62 years of age before the close of the tax year.29       (b) For tax years beginning on or after January 1, 2014, and before January 1, 2016, an30   individual must attain 63 years of age before the close of the tax year.31       (c) For tax years beginning on or after January 1, 2016, and before January 1, 2018, an32   individual must attain 64 years of age before the close of the tax year.33       (d) For tax years beginning on or after January 1, 2018, and before January 1, 2020, an34   individual must attain 65 years of age before the close of the tax year.35       (e) For tax years beginning on or after January 1, 2020, an individual must attain 66 years36   of age before the close of the tax year.37       (3) Notwithstanding the amount calculated under subsection (1) of this section, the38   maximum amount allowed for a subtraction under this section may not exceed:39       (a) $1,400 per individual, if the federal adjusted gross income of the taxpayer for the tax40   year is $50,000 or more and less than $100,000 for a taxpayer who files a return jointly, as a41   head of household or as a surviving spouse, or for all other taxpayers, $25,000 or more and42   less than $50,000.43       (b) $1,000 per individual, if the federal adjusted gross income of the taxpayer for the tax44   year is $100,000 or more and less than $200,000 for a taxpayer who files a return jointly, as45   a head of household or as a surviving spouse, or for all other taxpayers, $50,000 or more and                                                 [3]                                            A-Eng. HB 3601 1   less than $100,000. 2        (4) A subtraction may not be claimed under this section if the federal adjusted gross in- 3   come of the taxpayer for the tax year exceeds: 4        (a) $200,000 for joint return filers, a surviving spouse or a head of household; or 5        (b) $100,000 for an individual who is not a married individual and is not a surviving 6   spouse, or is a married individual who files a separate return. 7        SECTION 5. ORS 316.695, as amended by section 4, chapter 750, Oregon Laws 2013, is amended 8   to read: 9        316.695. (1) In addition to the modifications to federal taxable income contained in this chapter,10   there shall be added to or subtracted from federal taxable income:11        (a) If, in computing federal income tax for a tax year, the taxpayer deducted itemized deductions,12   as defined in section 63(d) of the Internal Revenue Code, the taxpayer shall add the amount of13   itemized deductions deducted (the itemized deductions less an amount, if any, by which the itemized14   deductions are reduced under section 68 of the Internal Revenue Code).15        (b) If, in computing federal income tax for a tax year, the taxpayer deducted the standard de-16   duction, as defined in section 63(c) of the Internal Revenue Code, the taxpayer shall add the amount17   of the standard deduction deducted.18        (c)(A) From federal taxable income there shall be subtracted the larger of (i) the taxpayer’s19   itemized deductions or (ii) a standard deduction. Except as provided in subsection (8) of this section,20   for purposes of this subparagraph, “standard deduction” means the sum of the basic standard de-21   duction and the additional standard deduction.22        (B) For purposes of subparagraph (A) of this paragraph, the basic standard deduction is:23        (i) $3,280, in the case of joint return filers or a surviving spouse;24        (ii) $1,640, in the case of an individual who is not a married individual and is not a surviving25   spouse;26        (iii) $1,640, in the case of a married individual who files a separate return; or27        (iv) $2,640, in the case of a head of household.28        (C)(i) For purposes of subparagraph (A) of this paragraph for tax years beginning on or after29   January 1, 2003, the Department of Revenue shall annually recompute the basic standard deduction30   for each category of return filer listed under subparagraph (B) of this paragraph. The basic standard31   deduction shall be computed by dividing the monthly averaged U.S. City Average Consumer Price32   Index for the 12 consecutive months ending August 31 of the prior calendar year by the average33   U.S. City Average Consumer Price Index for the second quarter of 2002, then multiplying that quo-34   tient by the amount listed under subparagraph (B) of this paragraph for each category of return35   filer.36        (ii) If any change in the maximum household income determined under this subparagraph is not37   a multiple of $5, the increase shall be rounded to the next lower multiple of $5.38        (iii) As used in this subparagraph, “U.S. City Average Consumer Price Index” means the U.S.39   City Average Consumer Price Index for All Urban Consumers (All Items) as published by the Bureau40   of Labor Statistics of the United States Department of Labor.41        (D) For purposes of subparagraph (A) of this paragraph, the additional standard deduction is the42   sum of each additional amount to which the taxpayer is entitled under subsection (7) of this section.43        (E) As used in subparagraph (B) of this paragraph, “surviving spouse” and “head of household”44   have the meaning given those terms in section 2 of the Internal Revenue Code.45        (F) In the case of the following, the standard deduction referred to in subparagraph (A) of this                                                   [4]                                               HB 3601 1       (v) A common trust fund; or 2       (vi) A partnership. 3       (d) For the purposes of paragraph (c)(A) of this subsection, the taxpayer’s itemized deductions 4   are the [sum of:] 5       [(A)] amount of the taxpayer’s itemized deductions as defined in section 63(d) of the Internal 6   Revenue Code (reduced, if applicable, as described under section 68 of the Internal Revenue Code) 7   minus the deduction for Oregon income tax (reduced, if applicable, by the proportion that the re- 8   duction in federal itemized deductions resulting from section 68 of the Internal Revenue Code bears 9   to the amount of federal itemized deductions as defined for purposes of section 68 of the Internal10   Revenue Code).[; and]11       [(B) The amount paid for medical care of the taxpayer during the tax year and not compensated12   for by insurance or otherwise, as described in section 213(a) of the Internal Revenue Code, not to ex-13   ceed seven and one-half percent of the federal adjusted gross income of the taxpayer, if the taxpayer14   or the taxpayer’s spouse has attained 62 years of age before the close of the tax year and if the amount15   is attributable to medical care of a taxpayer who has attained 62 years of age before the close of the16   tax year.]17       (2)(a) There shall be subtracted from federal taxable income any portion of the distribution of18   a pension, profit-sharing, stock bonus or other retirement plan, representing that portion of contri-19   butions which were taxed by the State of Oregon but not taxed by the federal government under20   laws in effect for tax years beginning prior to January 1, 1969, or for any subsequent year in which21   the amount that was contributed to the plan under the Internal Revenue Code was greater than the22   amount allowed under this chapter.23       (b) Interest or other earnings on any excess contributions of a pension, profit-sharing, stock24   bonus or other retirement plan not permitted to be deducted under paragraph (a) of this subsection25   may not be added to federal taxable income in the year earned by the plan and may not be sub-26   tracted from federal taxable income in the year received by the taxpayer.27       (3)(a) Except as provided in subsection (4) of this section, there shall be added to federal taxable28   income the amount of any federal income taxes in excess of the amount provided in paragraphs (b)29   to (d) of this subsection, accrued by the taxpayer during the tax year as described in ORS 316.685,30   less the amount of any refund of federal taxes previously accrued for which a tax benefit was re-31   ceived.32       (b) The limits applicable to this subsection are:33       (A) $5,500, if the federal adjusted gross income of the taxpayer for the tax year is less than34   $125,000, or, if reported on a joint return, less than $250,000.35       (B) $4,400, if the federal adjusted gross income of the taxpayer for the tax year is $125,000 or36   more and less than $130,000, or, if reported on a joint return, $250,000 or more and less than37   $260,000.38       (C) $3,300, if the federal adjusted gross income of the taxpayer for the tax year is $130,000 or39   more and less than $135,000, or, if reported on a joint return, $260,000 or more and less than40   $270,000.41       (D) $2,200, if the federal adjusted gross income of the taxpayer for the tax year is $135,000 or42   more and less than $140,000, or, if reported on a joint return, $270,000 or more and less than43   $280,000.44       (E) $1,100, if the federal adjusted gross income of the taxpayer for the tax year is $140,000 or45   more and less than $145,000, or, if reported on a joint return, $280,000 or more and less than                                           A-Eng. HB 3601 1   paragraph shall be zero: 2       (i) A husband or wife filing a separate return where the other spouse has claimed itemized de- 3   ductions under subparagraph (A) of this paragraph; 4       (ii) A nonresident alien individual; 5       (iii) An individual making a return for a period of less than 12 months on account of a change 6   in the individual’s annual accounting period; 7       (iv) An estate or trust; 8       (v) A common trust fund; or 9       (vi) A partnership.10       (d) For the purposes of paragraph (c)(A) of this subsection, the taxpayer’s itemized deductions11   are the [sum of:]12       [(A)] amount of the taxpayer’s itemized deductions as defined in section 63(d) of the Internal13   Revenue Code (reduced, if applicable, as described under section 68 of the Internal Revenue Code)14   minus the deduction for Oregon income tax (reduced, if applicable, by the proportion that the re-15   duction in federal itemized deductions resulting from section 68 of the Internal Revenue Code bears16   to the amount of federal itemized deductions as defined for purposes of section 68 of the Internal17   Revenue Code).[; and]18       [(B) The amount paid for medical care of the taxpayer during the tax year and not compensated19   for by insurance or otherwise, as described in section 213(a) of the Internal Revenue Code, not to ex-20   ceed seven and one-half percent of the federal adjusted gross income of the taxpayer, if the taxpayer21   or the taxpayer’s spouse has attained 62 years of age before the close of the tax year and if the amount22   is attributable to medical care of a taxpayer who has attained 62 years of age before the close of the23   tax year.]24       (2)(a) There shall be subtracted from federal taxable income any portion of the distribution of25   a pension, profit-sharing, stock bonus or other retirement plan, representing that portion of contri-26   butions which were taxed by the State of Oregon but not taxed by the federal government under27   laws in effect for tax years beginning prior to January 1, 1969, or for any subsequent year in which28   the amount that was contributed to the plan under the Internal Revenue Code was greater than the29   amount allowed under this chapter.30       (b) Interest or other earnings on any excess contributions of a pension, profit-sharing, stock31   bonus or other retirement plan not permitted to be deducted under paragraph (a) of this subsection32   may not be added to federal taxable income in the year earned by the plan and may not be sub-33   tracted from federal taxable income in the year received by the taxpayer.34       (3)(a) Except as provided in subsection (4) of this section, there shall be added to federal taxable35   income the amount of any federal income taxes in excess of the amount provided in paragraphs (b)36   to (d) of this subsection, accrued by the taxpayer during the tax year as described in ORS 316.685,37   less the amount of any refund of federal taxes previously accrued for which a tax benefit was re-38   ceived.39       (b) The limits applicable to this subsection are:40       (A) $5,500, if the federal adjusted gross income of the taxpayer for the tax year is less than41   $125,000, or, if reported on a joint return, less than $250,000.42       (B) $4,400, if the federal adjusted gross income of the taxpayer for the tax year is $125,000 or43   more and less than $130,000, or, if reported on a joint return, $250,000 or more and less than44   $260,000.45       (C) $3,300, if the federal adjusted gross income of the taxpayer for the tax year is $130,000 or                                                  [5]                                               HB 3601 1   $290,000. 2       (c) If the federal adjusted gross income of the taxpayer is $145,000 or more for the tax year, or, 3   if reported on a joint return, $290,000 or more, the limit is zero and the taxpayer is not allowed a 4   subtraction for federal income taxes under ORS 316.680 (1) for the tax year. 5       (d) In the case of a husband and wife filing separate tax returns, the amount added shall be in 6   the amount of any federal income taxes in excess of 50 percent of the amount provided for individual 7   taxpayers under paragraphs (a) to (c) of this subsection, less the amount of any refund of federal 8   taxes previously accrued for which a tax benefit was received. 9       (e) For purposes of this subsection, the limits applicable to a joint return shall apply to a head10   of household or a surviving spouse, as defined in section 2(a) and (b) of the Internal Revenue Code.11       (f)(A) For a calendar year beginning on or after January 1, 2008, the Department of Revenue12   shall make a cost-of-living adjustment to the federal income tax threshold amounts described in13   paragraphs (b) and (d) of this subsection.14       (B) The cost-of-living adjustment for a calendar year is the percentage by which the monthly15   averaged U.S. City Average Consumer Price Index for the 12 consecutive months ending August 3116   of the prior calendar year exceeds the monthly averaged index for the period beginning September17   1, 2005, and ending August 31, 2006.18       (C) As used in this paragraph, “U.S. City Average Consumer Price Index” means the U.S. City19   Average Consumer Price Index for All Urban Consumers (All Items) as published by the Bureau of20   Labor Statistics of the United States Department of Labor.21       (D) If any adjustment determined under subparagraph (B) of this paragraph is not a multiple of22   $50, the adjustment shall be rounded to the next lower multiple of $50.23       (E) The adjustment shall apply to all tax years beginning in the calendar year for which the24   adjustment is made.25       (4)(a) In addition to the adjustments required by ORS 316.130, a full-year nonresident individual26   shall add to taxable income a proportion of any accrued federal income taxes as computed under27   ORS 316.685 in excess of the amount provided in subsection (3) of this section in the proportion28   provided in ORS 316.117.29       (b) In the case of a husband and wife filing separate tax returns, the amount added under this30   subsection shall be computed in a manner consistent with the computation of the amount to be31   added in the case of a husband and wife filing separate returns under subsection (3) of this section.32   The method of computation shall be determined by the Department of Revenue by rule.33       (5) Subsections (3)(d) and (4)(b) of this section shall not apply to married individuals living apart34   as defined in section 7703(b) of the Internal Revenue Code.35       (6)(a) For tax years beginning on or after January 1, 1981, and prior to January 1, 1983, income36   or loss taken into account in determining federal taxable income by a shareholder of an S corpo-37   ration pursuant to sections 1373 to 1375 of the Internal Revenue Code shall be adjusted for purposes38   of determining Oregon taxable income, to the extent that as income or loss of the S corporation,39   they were required to be adjusted under the provisions of ORS chapter 317.40       (b) For tax years beginning on or after January 1, 1983, items of income, loss or deduction taken41   into account in determining federal taxable income by a shareholder of an S corporation pursuant42   to sections 1366 to 1368 of the Internal Revenue Code shall be adjusted for purposes of determining43   Oregon taxable income, to the extent that as items of income, loss or deduction of the shareholder44   the items are required to be adjusted under the provisions of this chapter.45       (c) The tax years referred to in paragraphs (a) and (b) of this subsection are those of the S                                            A-Eng. HB 3601 1   more and less than $135,000, or, if reported on a joint return, $260,000 or more and less than 2   $270,000. 3       (D) $2,200, if the federal adjusted gross income of the taxpayer for the tax year is $135,000 or 4   more and less than $140,000, or, if reported on a joint return, $270,000 or more and less than 5   $280,000. 6       (E) $1,100, if the federal adjusted gross income of the taxpayer for the tax year is $140,000 or 7   more and less than $145,000, or, if reported on a joint return, $280,000 or more and less than 8   $290,000. 9       (c) If the federal adjusted gross income of the taxpayer is $145,000 or more for the tax year, or,10   if reported on a joint return, $290,000 or more, the limit is zero and the taxpayer is not allowed a11   subtraction for federal income taxes under ORS 316.680 (1) for the tax year.12       (d) In the case of a husband and wife filing separate tax returns, the amount added shall be in13   the amount of any federal income taxes in excess of 50 percent of the amount provided for individual14   taxpayers under paragraphs (a) to (c) of this subsection, less the amount of any refund of federal15   taxes previously accrued for which a tax benefit was received.16       (e) For purposes of this subsection, the limits applicable to a joint return shall apply to a head17   of household or a surviving spouse, as defined in section 2(a) and (b) of the Internal Revenue Code.18       (f)(A) For a calendar year beginning on or after January 1, 2008, the Department of Revenue19   shall make a cost-of-living adjustment to the federal income tax threshold amounts described in20   paragraphs (b) and (d) of this subsection.21       (B) The cost-of-living adjustment for a calendar year is the percentage by which the monthly22   averaged U.S. City Average Consumer Price Index for the 12 consecutive months ending August 3123   of the prior calendar year exceeds the monthly averaged index for the period beginning September24   1, 2005, and ending August 31, 2006.25       (C) As used in this paragraph, “U.S. City Average Consumer Price Index” means the U.S. City26   Average Consumer Price Index for All Urban Consumers (All Items) as published by the Bureau of27   Labor Statistics of the United States Department of Labor.28       (D) If any adjustment determined under subparagraph (B) of this paragraph is not a multiple of29   $50, the adjustment shall be rounded to the next lower multiple of $50.30       (E) The adjustment shall apply to all tax years beginning in the calendar year for which the31   adjustment is made.32       (4)(a) In addition to the adjustments required by ORS 316.130, a full-year nonresident individual33   shall add to taxable income a proportion of any accrued federal income taxes as computed under34   ORS 316.685 in excess of the amount provided in subsection (3) of this section in the proportion35   provided in ORS 316.117.36       (b) In the case of a husband and wife filing separate tax returns, the amount added under this37   subsection shall be computed in a manner consistent with the computation of the amount to be38   added in the case of a husband and wife filing separate returns under subsection (3) of this section.39   The method of computation shall be determined by the Department of Revenue by rule.40       (5) Subsections (3)(d) and (4)(b) of this section shall not apply to married individuals living apart41   as defined in section 7703(b) of the Internal Revenue Code.42       (6)(a) For tax years beginning on or after January 1, 1981, and prior to January 1, 1983, income43   or loss taken into account in determining federal taxable income by a shareholder of an S corpo-44   ration pursuant to sections 1373 to 1375 of the Internal Revenue Code shall be adjusted for purposes45   of determining Oregon taxable income, to the extent that as income or loss of the S corporation,                                                  [6]                                                HB 3601 1   corporation. 2       (d) As used in paragraph (a) of this subsection, an S corporation refers to an electing small 3   business corporation. 4       (7)(a) The taxpayer shall be entitled to an additional amount, as referred to in subsection 5   (1)(c)(A) and (D) of this section, of $1,000: 6       (A) For the taxpayer if the taxpayer has attained age 65 before the close of the taxpayer’s tax 7   year; and 8       (B) For the spouse of the taxpayer if the spouse has attained age 65 before the close of the tax 9   year and an additional exemption is allowable to the taxpayer for such spouse for federal income10   tax purposes under section 151(b) of the Internal Revenue Code.11       (b) The taxpayer shall be entitled to an additional amount, as referred to in subsection (1)(c)(A)12   and (D) of this section, of $1,000:13       (A) For the taxpayer if the taxpayer is blind at the close of the tax year; and14       (B) For the spouse of the taxpayer if the spouse is blind as of the close of the tax year and an15   additional exemption is allowable to the taxpayer for such spouse for federal income tax purposes16   under section 151(b) of the Internal Revenue Code. For purposes of this subparagraph, if the spouse17   dies during the tax year, the determination of whether such spouse is blind shall be made imme-18   diately prior to death.19       (c) In the case of an individual who is not married and is not a surviving spouse, paragraphs (a)20   and (b) of this subsection shall be applied by substituting “$1,200” for “$1,000.”21       (d) For purposes of this subsection, an individual is blind only if the individual’s central visual22   acuity does not exceed 20/200 in the better eye with correcting lenses, or if the individual’s visual23   acuity is greater than 20/200 but is accompanied by a limitation in the fields of vision such that the24   widest diameter of the visual field subtends an angle no greater than 20 degrees.25       (8) In the case of an individual with respect to whom a deduction under section 151 of the26   Internal Revenue Code is allowable for federal income tax purposes to another taxpayer for a tax27   year beginning in the calendar year in which the individual’s tax year begins, the basic standard28   deduction (referred to in subsection (1)(c)(B) of this section) applicable to such individual for such29   individual’s tax year shall equal the lesser of:30       (a) The amount allowed to the individual under section 63(c)(5) of the Internal Revenue Code for31   federal income tax purposes for the tax year for which the deduction is being claimed; or32       (b) The amount determined under subsection (1)(c)(B) of this section.33       SECTION 6. ORS 317.635 is amended to read:34       317.635. (1) Except as provided in subsection (2) of this section and ORS 317.283, a domestic35   international sales corporation, commonly referred to as “DISC,” as defined in section 992 of the36   Internal Revenue Code, shall be taxed in the manner provided for other corporations under this37   chapter and without regard to sections 991 to 996 of the Internal Revenue Code.38       (2) An interest charge DISC formed on or before the effective date of this 2013 special39   session Act:40       (a) Is exempt from the tax imposed under ORS 317.090; and41       (b) Notwithstanding ORS 317.061, shall be taxed under this chapter at a rate of 2.5 per-42   cent.43       SECTION 6a. ORS 315.266 is amended to read:44       315.266. (1) In addition to any other credit available for purposes of ORS chapter 316, an eligible45   resident individual shall be allowed a credit against the tax otherwise due under ORS chapter 316                                            A-Eng. HB 3601 1   they were required to be adjusted under the provisions of ORS chapter 317. 2       (b) For tax years beginning on or after January 1, 1983, items of income, loss or deduction taken 3   into account in determining federal taxable income by a shareholder of an S corporation pursuant 4   to sections 1366 to 1368 of the Internal Revenue Code shall be adjusted for purposes of determining 5   Oregon taxable income, to the extent that as items of income, loss or deduction of the shareholder 6   the items are required to be adjusted under the provisions of this chapter. 7       (c) The tax years referred to in paragraphs (a) and (b) of this subsection are those of the S 8   corporation. 9       (d) As used in paragraph (a) of this subsection, an S corporation refers to an electing small10   business corporation.11       (7)(a) The taxpayer shall be entitled to an additional amount, as referred to in subsection12   (1)(c)(A) and (D) of this section, of $1,000:13       (A) For the taxpayer if the taxpayer has attained age 65 before the close of the taxpayer’s tax14   year; and15       (B) For the spouse of the taxpayer if the spouse has attained age 65 before the close of the tax16   year and an additional exemption is allowable to the taxpayer for such spouse for federal income17   tax purposes under section 151(b) of the Internal Revenue Code.18       (b) The taxpayer shall be entitled to an additional amount, as referred to in subsection (1)(c)(A)19   and (D) of this section, of $1,000:20       (A) For the taxpayer if the taxpayer is blind at the close of the tax year; and21       (B) For the spouse of the taxpayer if the spouse is blind as of the close of the tax year and an22   additional exemption is allowable to the taxpayer for such spouse for federal income tax purposes23   under section 151(b) of the Internal Revenue Code. For purposes of this subparagraph, if the spouse24   dies during the tax year, the determination of whether such spouse is blind shall be made imme-25   diately prior to death.26       (c) In the case of an individual who is not married and is not a surviving spouse, paragraphs (a)27   and (b) of this subsection shall be applied by substituting “$1,200” for “$1,000.”28       (d) For purposes of this subsection, an individual is blind only if the individual’s central visual29   acuity does not exceed 20/200 in the better eye with correcting lenses, or if the individual’s visual30   acuity is greater than 20/200 but is accompanied by a limitation in the fields of vision such that the31   widest diameter of the visual field subtends an angle no greater than 20 degrees.32       (8) In the case of an individual with respect to whom a deduction under section 151 of the33   Internal Revenue Code is allowable for federal income tax purposes to another taxpayer for a tax34   year beginning in the calendar year in which the individual’s tax year begins, the basic standard35   deduction (referred to in subsection (1)(c)(B) of this section) applicable to such individual for such36   individual’s tax year shall equal the lesser of:37       (a) The amount allowed to the individual under section 63(c)(5) of the Internal Revenue Code for38   federal income tax purposes for the tax year for which the deduction is being claimed; or39       (b) The amount determined under subsection (1)(c)(B) of this section.40       SECTION 6. ORS 317.635 is amended to read:41       317.635. (1) Except as provided in ORS 317.283, a domestic international sales corporation,42   commonly referred to as “DISC,” as defined in section 992 of the Internal Revenue Code, shall be43   taxed in the manner provided for other corporations under this chapter and without regard to44   sections 991 to 996 of the Internal Revenue Code.45       (2) An interest charge DISC formed on or before the effective date of this 2013 special                                                     [7]                                               HB 3601 1   for the tax year in an amount equal to [six] eight percent of the earned income credit allowable to 2   the individual for the same tax year under section 32 of the Internal Revenue Code. 3       (2) An eligible nonresident individual shall be allowed the credit computed in the same manner 4   and subject to the same limitations as the credit allowed a resident by subsection (1) of this section. 5   However, the credit shall be prorated using the proportion provided in ORS 316.117. 6       (3) If a change in the taxable year of a taxpayer occurs as described in ORS 314.085, or if the 7   Department of Revenue terminates the taxpayer’s taxable year under ORS 314.440, the credit al- 8   lowed by this section shall be prorated or computed in a manner consistent with ORS 314.085. 9       (4) If a change in the status of a taxpayer from resident to nonresident or from nonresident to10   resident occurs, the credit allowed by this section shall be determined in a manner consistent with11   ORS 316.117.12       (5) If the amount allowable as a credit under this section, when added to the sum of the amounts13   allowable as payment of tax under ORS 316.187 or 316.583, other tax prepayment amounts and other14   refundable credit amounts, exceeds the taxes imposed by ORS chapters 314 and 316 for the tax year15   after application of any nonrefundable credits allowable for purposes of ORS chapter 316 for the tax16   year, the amount of the excess shall be refunded to the taxpayer as provided in ORS 316.502.17       (6) The Department of Revenue may adopt rules for purposes of this section, including but not18   limited to rules relating to proof of eligibility and the furnishing of information regarding the federal19   earned income credit claimed by the taxpayer for the tax year.20       (7) Refunds attributable to the earned income credit allowed under this section shall not bear21   interest.22       SECTION 7. (1) Section 4 of this 2013 special session Act and the amendments to ORS23   316.085, 316.695, 317.061 and 317.635 by sections 1, 2, 5 and 6 of this 2013 special session Act24   apply to tax years beginning on or after January 1, 2013.25       (2) The amendments to ORS 315.266 by section 6a of this 2013 special session Act apply26   to tax years beginning on or after January 1, 2014.27       SECTION 8. ORS 317.853 is amended to read:28       317.853. (1) For tax years beginning on or after January 1, 2013, and before January 1, 2017,29   any revenue that is received as a result of a rate of tax above [six and six-tenths] 7.5 percent im-30   posed under this chapter and that is in excess of the revenue that would be received under this31   chapter at a rate of [six and six-tenths] 7.5 percent shall be deposited into the Oregon Rainy Day32   Fund established by ORS 293.144.33       (2) For tax years beginning on or after January 1, 2017, any revenue that is received as34   a result of a rate of tax above 7.2 percent imposed under this chapter and that is in excess35   of the revenue that would be received under this chapter at a rate of 7.2 percent shall be36   deposited into the Oregon Rainy Day Fund established by ORS 293.144.37       [(2)] (3) Before the end of each biennium, beginning with the biennium ending on June 30, 2015,38   the Department of Revenue shall estimate the revenue described in [subsection (1)] subsection (1)39   or (2) of this section that is received during the biennium. An amount equal to that estimate shall40   be transferred into the Oregon Rainy Day Fund established by ORS 293.144 on or before June 3041   of each odd-numbered year.42       SECTION 9. ORS 318.074 is amended to read:43       318.074. (1) For tax years beginning on or after January 1, 2013, and before January 1, 2017,44   any revenue that is received as a result of a rate of tax above [six and six-tenths] 7.5 percent im-45   posed under this chapter and that is in excess of the revenue that would be received under this                                                  [8]                                              HB 3601 1   chapter at a rate of [six and six-tenths] 7.5 percent shall be deposited into the Oregon Rainy Day 2   Fund established by ORS 293.144. 3         (2) For tax years beginning on or after January 1, 2017, any revenue that is received as 4   a result of a rate of tax above 7.2 percent imposed under this chapter and that is in excess 5   of the revenue that would be received under this chapter at a rate of 7.2 percent shall be 6   deposited into the Oregon Rainy Day Fund established by ORS 293.144. 7         [(2)] (3) Before the end of each biennium, beginning with the biennium ending on June 30, 2015, 8   the Department of Revenue shall estimate the revenue described in [subsection (1)] subsection (1) 9   or (2) of this section that is received during the biennium. An amount equal to that estimate shall10   be transferred into the Oregon Rainy Day Fund established by ORS 293.144 on or before June 3011   of each odd-numbered year.12         SECTION 10. Sections 11 to 13 of this 2013 special session Act are added to and made a13   part of ORS chapter 316.14         SECTION 11. (1) As used in this section:15         (a) “Nonpassive income” means income other than income from passive activity as de-16   termined under section 469 of the Internal Revenue Code. “Nonpassive income” does not in-17   clude wages, interest, dividends or capital gains.18         (b) “Nonpassive loss” means loss other than loss from passive activity as determined19   under section 469 of the Internal Revenue Code.20         (2) If a taxpayer that meets the conditions of subsection (6) of this section has nonpas-21   sive income attributable to any partnership or S corporation after reduction for nonpassive22   losses, that portion of the taxpayer’s income that meets the conditions of subsection (6) of23   this section shall be taxed at a rate of:24         (a)(A) Seven percent of the first $250,000 of taxable income, or fraction thereof;25         (B) Seven and two-tenths percent of taxable income exceeding $250,000 but not exceeding26   $500,000;27         (C) Seven and six-tenths percent of taxable income exceeding $500,000 but not exceeding28   $1 million;29         (D) Eight percent of taxable income exceeding $1 million but not exceeding $2.5 million;30         (E) Nine percent of taxable income exceeding $2.5 million but not exceeding $5 million;31   and32         (F) Nine and nine-tenths percent of taxable income exceeding $5 million; or33         (b) At the election of the taxpayer, the rate otherwise applicable under ORS 316.037.34         (3) The reduced rates allowed under subsection (2) of this section may be adjusted as35   provided in section 13 of this 2013 special session Act.36         (4) A taxpayer shall use the subtractions, deductions or additions otherwise allowed un-37   der this chapter in the calculation of income that is taxed at the rates otherwise applicable38   under ORS 316.037.39         (5) The election under subsection (2)(b) of this section shall be irrevocable and shall be40   made on the taxpayer’s original return. The election shall be made on a form prescribed by41   the Department of Revenue and filed with the taxpayer’s tax return for the tax year or at42   such other time and manner as the department may prescribe by rule. A taxpayer who uses43   the reduced rates available under subsection (2) of this section may not join in the filing of44   a composite return under ORS 314.778.45         (6) The rates listed in subsection (2) of this section apply to nonpassive income attribut-                                                 [9]                                            HB 3601 1   able to a partnership or S corporation only if: 2      (a) The taxpayer materially participates in the day-to-day operations of the trade or 3   business; 4      (b) The partnership or S corporation employs at least one person who is not an owner, 5   member or limited partner of the partnership or S corporation; and 6      (c) At least 1,200 aggregate hours of work in Oregon are performed, by the close of the 7   tax year for which the reduced rate is allowed, by employees who meet the requirements of 8   paragraph (b) of this subsection and who are employed by the partnership or S corporation. 9   In determining whether this requirement is met, only hours worked in a week in which a10   worker works at least 30 hours may be considered.11      SECTION 12. Section 11 of this 2013 special session Act applies to tax years beginning12   on or after January 1, 2015.13      SECTION 13. (1)(a) As soon as practicable, the Department of Revenue, after consulta-14   tion with the Legislative Revenue Officer, shall prepare an estimate of projected use by tax-15   payers of the reduced rates provided in section 11 (2) of this 2013 special session Act. The16   estimate shall include the projected use of the reduced rates in tax years beginning on or17   after January 1, 2015, and before January 1, 2017. The estimate shall express as a ratio the18   revenue loss anticipated as a result of the reduced rates of taxation in section 11 (2) of this                                          A-Eng. HB 3601 1   session Act is exempt from the tax imposed under ORS 317.090. 2       SECTION 6a. ORS 317.283 is amended to read: 3       317.283. (1) To derive Oregon taxable income, federal taxable income shall be modified to the 4   extent necessary to not recognize for Oregon tax purposes any transaction between the taxpayer 5   and a related domestic international sales corporation. The taxpayer shall be considered to have 6   entered directly into any transactions with third parties that are treated for federal income tax 7   purposes as having been entered into by a related domestic international sales corporation. To sat- 8   isfy the requirements of this section: 9       (a) No deduction shall be allowed to any taxpayer for any payment to a related domestic inter-10   national sales corporation;11       (b) No income or expense that would be attributed to a taxpayer but for the provisions of12   sections 991 to 996 of the Internal Revenue Code shall be treated as attributable to a related do-13   mestic international sales corporation; and14       (c) No deduction shall be allowed to a taxpayer for interest on DISC-related deferred tax li-15   ability paid pursuant to section 995 (f) of the Internal Revenue Code.16       (2) Notwithstanding subsection (1) of this section:17       (a) A tax shall be imposed under this chapter at a rate of 2.5 percent on any commission18   received by a domestic international sales corporation; and19       (b) A deduction shall be allowed for commission payments to a domestic international20   sales corporation, if the domestic international sales corporation is formed on or before the21   effective date of this 2013 special session Act.22       [(2)] (3) As used in this section, “domestic international sales corporation” means a domestic23   international sales corporation as defined in section 992 of the Internal Revenue Code.24       SECTION 6b. Section 6c of this 2013 special session Act is added to and made a part of25   ORS chapter 316.26       SECTION 6c. (1) In addition to the other modifications to federal taxable income con-27   tained in this chapter, there shall be subtracted from federal taxable income the amount of28   any dividend received by the taxpayer from a domestic international sales corporation.29       (2) As used in this section, “domestic international sales corporation” means a domestic30   international sales corporation as defined in section 992 of the Internal Revenue Code.31       SECTION 6d. ORS 315.266 is amended to read:32       315.266. (1) In addition to any other credit available for purposes of ORS chapter 316, an eligible33   resident individual shall be allowed a credit against the tax otherwise due under ORS chapter 31634   for the tax year in an amount equal to [six] eight percent of the earned income credit allowable to35   the individual for the same tax year under section 32 of the Internal Revenue Code.36       (2) An eligible nonresident individual shall be allowed the credit computed in the same manner37   and subject to the same limitations as the credit allowed a resident by subsection (1) of this section.38   However, the credit shall be prorated using the proportion provided in ORS 316.117.39       (3) If a change in the taxable year of a taxpayer occurs as described in ORS 314.085, or if the40   Department of Revenue terminates the taxpayer’s taxable year under ORS 314.440, the credit al-41   lowed by this section shall be prorated or computed in a manner consistent with ORS 314.085.42       (4) If a change in the status of a taxpayer from resident to nonresident or from nonresident to43   resident occurs, the credit allowed by this section shall be determined in a manner consistent with44   ORS 316.117.45       (5) If the amount allowable as a credit under this section, when added to the sum of the amounts                                                   [8]                                           A-Eng. HB 3601 1   allowable as payment of tax under ORS 316.187 or 316.583, other tax prepayment amounts and other 2   refundable credit amounts, exceeds the taxes imposed by ORS chapters 314 and 316 for the tax year 3   after application of any nonrefundable credits allowable for purposes of ORS chapter 316 for the tax 4   year, the amount of the excess shall be refunded to the taxpayer as provided in ORS 316.502. 5       (6) The Department of Revenue may adopt rules for purposes of this section, including but not 6   limited to rules relating to proof of eligibility and the furnishing of information regarding the federal 7   earned income credit claimed by the taxpayer for the tax year. 8       (7) Refunds attributable to the earned income credit allowed under this section shall not bear 9   interest.10       SECTION 7. (1) Sections 4 and 6c of this 2013 special session Act and the amendments11   to ORS 316.085, 316.695, 317.061, 317.283 and 317.635 by sections 1, 2, 5, 6 and 6a of this 201312   special session Act apply to tax years beginning on or after January 1, 2013.13       (2) The amendments to ORS 315.266 by section 6d of this 2013 special session Act apply14   to tax years beginning on or after January 1, 2014.15       SECTION 8. ORS 317.853 is amended to read:16       317.853. (1) For tax years beginning on or after January 1, 2013, and before January 1, 2017,17   any revenue that is received as a result of a rate of tax above [six and six-tenths] 7.5 percent im-18   posed under this chapter and that is in excess of the revenue that would be received under this19   chapter at a rate of [six and six-tenths] 7.5 percent shall be deposited into the Oregon Rainy Day20   Fund established by ORS 293.144.21       (2) For tax years beginning on or after January 1, 2017, any revenue that is received as22   a result of a rate of tax above 7.2 percent imposed under this chapter and that is in excess23   of the revenue that would be received under this chapter at a rate of 7.2 percent shall be24   deposited into the Oregon Rainy Day Fund established by ORS 293.144.25       [(2)] (3) Before the end of each biennium, beginning with the biennium ending on June 30, 2015,26   the Department of Revenue shall estimate the revenue described in [subsection (1)] subsection (1)27   or (2) of this section that is received during the biennium. An amount equal to that estimate shall28   be transferred into the Oregon Rainy Day Fund established by ORS 293.144 on or before June 3029   of each odd-numbered year.30       SECTION 9. ORS 318.074 is amended to read:31       318.074. (1) For tax years beginning on or after January 1, 2013, and before January 1, 2017,32   any revenue that is received as a result of a rate of tax above [six and six-tenths] 7.5 percent im-33   posed under this chapter and that is in excess of the revenue that would be received under this34   chapter at a rate of [six and six-tenths] 7.5 percent shall be deposited into the Oregon Rainy Day35   Fund established by ORS 293.144.36       (2) For tax years beginning on or after January 1, 2017, any revenue that is received as37   a result of a rate of tax above 7.2 percent imposed under this chapter and that is in excess38   of the revenue that would be received under this chapter at a rate of 7.2 percent shall be39   deposited into the Oregon Rainy Day Fund established by ORS 293.144.40       [(2)] (3) Before the end of each biennium, beginning with the biennium ending on June 30, 2015,41   the Department of Revenue shall estimate the revenue described in [subsection (1)] subsection (1)42   or (2) of this section that is received during the biennium. An amount equal to that estimate shall43   be transferred into the Oregon Rainy Day Fund established by ORS 293.144 on or before June 3044   of each odd-numbered year.45       SECTION 10. Sections 11 to 13 of this 2013 special session Act are added to and made a                                                  [9]                                          A-Eng. HB 3601 1   part of ORS chapter 316. 2         SECTION 11. (1) As used in this section: 3         (a) “Nonpassive income” means income other than income from passive activity as de- 4   termined under section 469 of the Internal Revenue Code. “Nonpassive income” does not in- 5   clude wages, interest, dividends or capital gains. 6         (b) “Nonpassive loss” means loss other than loss from passive activity as determined 7   under section 469 of the Internal Revenue Code. 8         (2) If a taxpayer that meets the conditions of subsection (6) of this section has nonpas- 9   sive income attributable to any partnership or S corporation after reduction for nonpassive10   losses, that portion of the taxpayer’s income that meets the conditions of subsection (6) of11   this section shall be taxed at a rate of:12         (a)(A) Seven percent of the first $250,000 of taxable income, or fraction thereof;13         (B) Seven and two-tenths percent of taxable income exceeding $250,000 but not exceeding14   $500,000;15         (C) Seven and six-tenths percent of taxable income exceeding $500,000 but not exceeding16   $1 million;17         (D) Eight percent of taxable income exceeding $1 million but not exceeding $2.5 million;18         (E) Nine percent of taxable income exceeding $2.5 million but not exceeding $5 million;19   and20         (F) Nine and nine-tenths percent of taxable income exceeding $5 million; or21         (b) At the election of the taxpayer, the rate otherwise applicable under ORS 316.037.22         (3) The reduced rates allowed under subsection (2) of this section may be adjusted as23   provided in section 13 of this 2013 special session Act.24         (4) A taxpayer shall use the subtractions, deductions or additions otherwise allowed un-25   der this chapter in the calculation of income that is taxed at the rates otherwise applicable26   under ORS 316.037. The only addition or subtraction allowed in the calculation of nonpassive27   income for which the taxpayer uses the reduced rates allowed under subsection (2) of this28   section shall be any depreciation adjustment directly related to the partnership or S corpo-29   ration.30         (5) The election under subsection (2)(b) of this section shall be irrevocable and shall be31   made on the taxpayer’s original return. If the taxpayer uses the reduced rates allowed under32   subsection (2) of this section, the calculation of income shall be substantiated on a form33   prescribed by the Department of Revenue and filed with the taxpayer’s tax return for the tax34   year or at such other time and manner as the department may prescribe by rule. A taxpayer35   who uses the reduced rates available under subsection (2) of this section may not join in the36   filing of a composite return under ORS 314.778.37         (6) The rates listed in subsection (2) of this section apply to nonpassive income attribut-38   able to a partnership or S corporation only if:39         (a) The taxpayer materially participates in the day-to-day operations of the trade or40   business;41         (b) The partnership or S corporation employs at least one person who is not an owner,42   member or limited partner of the partnership or S corporation; and43         (c) At least 1,200 aggregate hours of work in Oregon are performed, by the close of the44   tax year for which the reduced rate is allowed, by employees who meet the requirements of45   paragraph (b) of this subsection and who are employed by the partnership or S corporation.                                                 [10]                                        A-Eng. HB 3601 1   In determining whether this requirement is met, only hours worked in a week in which a 2   worker works at least 30 hours may be considered. 3      (7)(a) A nonresident may apply the reduced rates allowed under subsection (2) of this 4   section only to income earned in Oregon. 5      (b) A part-year resident shall calculate the tax due using the reduced rates allowed under 6   subsection (2) of this section by first applying those rates to the taxpayer’s nonpassive in- 7   come that meets the requirements of subsection (6) of this section, and then multiplying that 8   amount by the ratio of the taxpayer’s nonpassive income in Oregon divided by nonpassive 9   income from all sources.10      SECTION 12. Section 11 of this 2013 special session Act applies to tax years beginning11   on or after January 1, 2015.12      SECTION 13. (1)(a) As soon as practicable, the Legislative Revenue Officer, after con-13   sultation with the Department of Revenue, shall prepare estimates of projected use by tax-14   payers of the reduced rates provided in section 11 (2) of this 2013 special session Act. The15   estimates shall include the projected use of the reduced rates in tax years beginning on or16   after January 1, 2015, and before January 1, 2017, and in tax years beginning on or after17   January 1, 2019, and before January 1, 2021. The estimates shall express as a ratio the re-18   venue loss anticipated as a result of the reduced rates of taxation in section 11 (2) of this19   2013 special session Act, divided by projected total income in this state, for those tax years.20      (b) Not later than July 1, 2018, the department shall report to an interim committee of21   the Legislative Assembly related to revenue regarding the use of the reduced rates provided22   in section 11 (2) of this 2013 special session Act. The report shall express as a ratio, for tax23   years beginning on or after January 1, 2015, and before January 1, 2017, the actual revenue24   loss resulting from the allowance of reduced rates of taxation provided in section 11 (2) of25   this 2013 special session Act divided by actual total income in this state for those tax years.26   If the ratio exceeds the ratio included by the department in the estimate required under27   paragraph (a) of this subsection by more than 25 percent, the rates listed in section 11 (2)28   of this 2013 special session Act shall be proportionately adjusted to generate revenue suffi-29   cient to compensate for the additional revenue loss, but may in no event exceed 9.9 percent30   of taxable income or be reduced to less than the original rate provided in section 11 (2) of31   this 2013 special session Act.32      (c) The adjusted rates provided under paragraph (b) of this subsection shall apply to tax33   years beginning on or after January 1, 2019.34      (2)(a) Not later than July 1, 2022, the department shall report to an interim committee35   of the Legislative Assembly related to revenue regarding the use of the reduced rates pro-36   vided in section 11 (2) of this 2013 special session Act. The report shall express as a ratio, for37   tax years beginning on or after January 1, 2019, and before January 1, 2021, the actual re-38   venue loss resulting from the allowance of reduced rates of taxation provided in section 1139   (2) of this 2013 special session Act divided by actual total income in this state for those tax40   years. If the ratio departs from the ratio included by the department in the estimate re-41   quired under subsection (1)(a) of this section by more than 25 percent, the rates listed in42   section 11 (2) of this 2013 special session Act shall be proportionately adjusted to generate43   revenue sufficient to compensate for the additional revenue loss or gain, but may in no event44   exceed 9.9 percent of taxable income or be reduced to lower than the original rate provided45   in section 11 (2) of this 2013 special session Act.                                              [10]                                               HB 3601 1       (b) The adjusted rates provided under paragraph (a) of this subsection shall apply to tax 2   years beginning on or after January 1, 2023. 3       SECTION 14. ORS 323.030 is amended to read: 4       323.030. (1) Every distributor shall pay a tax upon distributions of cigarettes at the rate of 29 5   mills for the distribution of each cigarette in this state. 6       (2) The taxes imposed by ORS 323.005 to 323.482 are in lieu of all other state, county or mu- 7   nicipal taxes on the sale or use of cigarettes. 8       (3) Any cigarette with respect to which a tax has been prepaid under ORS 323.068 or has oth- 9   erwise once been imposed under ORS 323.005 to 323.482 is not subject upon a subsequent distrib-10   ution to the taxes imposed by ORS 323.005 to 323.482.11       (4) In addition to and not in lieu of any other tax imposed under ORS 323.005 to 323.482,12   every distributor shall pay a tax upon distributions of cigarettes at the rate of 6.5 mills for13   the distribution of each cigarette in this state.14       SECTION 15. ORS 323.030, as amended by section 14 of this 2013 special session Act, is15   amended to read:16       323.030. (1) Every distributor shall pay a tax upon distributions of cigarettes at the rate of 2917   mills for the distribution of each cigarette in this state.18       (2) The taxes imposed by ORS 323.005 to 323.482 are in lieu of all other state, county or mu-19   nicipal taxes on the sale or use of cigarettes.20       (3) Any cigarette with respect to which a tax has been prepaid under ORS 323.068 or has oth-21   erwise once been imposed under ORS 323.005 to 323.482 is not subject upon a subsequent distrib-22   ution to the taxes imposed by ORS 323.005 to 323.482.23       (4) In addition to and not in lieu of any other tax imposed under ORS 323.005 to 323.482, every24   distributor shall pay a tax upon distributions of cigarettes at the rate of [6.5] seven mills for the25   distribution of each cigarette in this state.26       SECTION 16. ORS 323.030, as amended by sections 14 and 15 of this 2013 special session Act,27   is amended to read:28       323.030. (1) Every distributor shall pay a tax upon distributions of cigarettes at the rate of 2929   mills for the distribution of each cigarette in this state.30       (2) The taxes imposed by ORS 323.005 to 323.482 are in lieu of all other state, county or mu-31   nicipal taxes on the sale or use of cigarettes.32       (3) Any cigarette with respect to which a tax has been prepaid under ORS 323.068 or has oth-33   erwise once been imposed under ORS 323.005 to 323.482 is not subject upon a subsequent distrib-34   ution to the taxes imposed by ORS 323.005 to 323.482.35       (4) In addition to and not in lieu of any other tax imposed under ORS 323.005 to 323.482, every36   distributor shall pay a tax upon distributions of cigarettes at the rate of [seven] 7.5 mills for the37   distribution of each cigarette in this state.38       SECTION 17. ORS 323.455, as amended by section 2, chapter 722, Oregon Laws 2013, is39   amended to read:40       323.455. (1) All moneys received by the Department of Revenue from the tax imposed by ORS41   323.030 (1) shall be paid over to the State Treasurer to be held in a suspense account established42   under ORS 293.445. The department may pay expenses for administration and enforcement of ORS43   323.005 to 323.482 out of moneys received from the tax imposed under ORS 323.030 (1). Amounts44   necessary to pay administrative and enforcement expenses are continuously appropriated to the de-45   partment from the suspense account. After the payment of administrative and enforcement expenses                                                     [11]                                              HB 3601 1   and refunds, 89.65 percent shall be credited to the General Fund, 3.45 percent is appropriated to the 2   cities of this state, 3.45 percent is appropriated to the counties of this state and 3.45 percent is 3   continuously appropriated to the Department of Transportation for the purpose of financing and 4   improving transportation services for elderly individuals and individuals with disabilities as provided 5   in ORS 391.800 to 391.830. 6       (2) The moneys [so] appropriated to cities and counties under subsection (1) of this section 7   shall be paid on a monthly basis within 35 days after the end of the month for which a distribution 8   is made. Each city shall receive such share of the money appropriated to all cities as its population, 9   as determined under ORS 190.510 to 190.590 last preceding such apportionment, bears to the total10   population of the cities of the state, and each county shall receive such share of the money as its11   population, determined under ORS 190.510 to 190.590 last preceding such apportionment, bears to the12   total population of the state.13       (3) The moneys appropriated to the Department of Transportation under subsection (1) of this14   section shall be distributed and transferred to the Elderly and Disabled Special Transportation Fund15   established by ORS 391.800 at the same time as the cigarette tax moneys are distributed to cities16   and counties under this section.17       (4) Of the moneys credited to the General Fund under [this] subsection (1) of this section, 51.9218   percent shall be dedicated to funding the maintenance and expansion of the number of persons eli-19   gible for the medical assistance program under ORS chapter 414, or to funding the maintenance of20   the benefits available under the program, or both, and 5.77 percent shall be credited to the Tobacco21   Use Reduction Account established under ORS 431.832.22       (5) All moneys received by the Department of Revenue from the tax imposed by ORS23   323.030 (4) shall be paid over to the State Treasurer to be held in a suspense account estab-24   lished under ORS 293.445. After the payment of refunds, the balance shall be credited as25   follows:26       (a) 76.92 percent to the Oregon Health Authority Fund established by ORS 413.101, for the27   purpose of providing the services described in ORS 430.630.28       (b) 23.08 percent according to the distribution formula provided in subsection (4) of this29   section.30       SECTION 18. ORS 323.455, as amended by section 2, chapter 722, Oregon Laws 2013, and sec-31   tion 17 of this 2013 special session Act, is amended to read:32       323.455. (1) All moneys received by the Department of Revenue from the tax imposed by ORS33   323.030 (1) shall be paid over to the State Treasurer to be held in a suspense account established34   under ORS 293.445. The department may pay expenses for administration and enforcement of ORS35   323.005 to 323.482 out of moneys received from the tax imposed under ORS 323.030 (1). Amounts36   necessary to pay administrative and enforcement expenses are continuously appropriated to the de-37   partment from the suspense account. After the payment of administrative and enforcement expenses38   and refunds, 89.65 percent shall be credited to the General Fund, 3.45 percent is appropriated to the39   cities of this state, 3.45 percent is appropriated to the counties of this state and 3.45 percent is40   continuously appropriated to the Department of Transportation for the purpose of financing and41   improving transportation services for elderly individuals and individuals with disabilities as provided42   in ORS 391.800 to 391.830.43       (2) The moneys appropriated to cities and counties under subsection (1) of this section shall be44   paid on a monthly basis within 35 days after the end of the month for which a distribution is made.45   Each city shall receive such share of the money appropriated to all cities as its population, as de-                                                 [12]                                               HB 3601 1   termined under ORS 190.510 to 190.590 last preceding such apportionment, bears to the total popu- 2   lation of the cities of the state, and each county shall receive such share of the money as its 3   population, determined under ORS 190.510 to 190.590 last preceding such apportionment, bears to the 4   total population of the state. 5       (3) The moneys appropriated to the Department of Transportation under subsection (1) of this 6   section shall be distributed and transferred to the Elderly and Disabled Special Transportation Fund 7   established by ORS 391.800 at the same time as the cigarette tax moneys are distributed to cities 8   and counties under this section. 9       (4) Of the moneys credited to the General Fund under subsection (1) of this section, 51.92 per-10   cent shall be dedicated to funding the maintenance and expansion of the number of persons eligible11   for the medical assistance program under ORS chapter 414, or to funding the maintenance of the12   benefits available under the program, or both, and 5.77 percent shall be credited to the Tobacco Use13   Reduction Account established under ORS 431.832.14       (5) All moneys received by the Department of Revenue from the tax imposed by ORS 323.030 (4)15   shall be paid over to the State Treasurer to be held in a suspense account established under ORS16   293.445. After the payment of refunds, the balance shall be credited [as follows:]17       [(a) 76.92 percent to the Oregon Health Authority Fund established by ORS 413.101, for the pur-18   pose of providing the services described in ORS 430.630.]19       [(b) 23.08 percent according to the distribution formula provided in subsection (4) of this section.]20   to the Oregon Health Authority Fund established by ORS 413.101 and shall be used to provide21   the services described in ORS 430.630.22       SECTION 18a. ORS 323.505 is amended to read:23       323.505. (1) A tax is hereby imposed upon the distribution of all tobacco products in this state.24   The tax imposed by this section is intended to be a direct tax on the consumer, for which payment25   upon distribution is required to achieve convenience and facility in the collection and administration26   of the tax. The tax shall be imposed on a distributor at the time the distributor distributes tobacco27   products.28       (2) The tax imposed under this section shall be imposed at the rate of:29       (a) Sixty-five percent of the wholesale sales price of cigars, but not to exceed 50 cents per cigar;30       (b) One dollar and seventy-eight cents per ounce based on the net weight determined by the31   manufacturer, in the case of moist snuff, except that the minimum tax under this paragraph is $2.1432   per retail container; or33       (c) Sixty-five percent of the wholesale sales price of all tobacco products that are not cigars or34   moist snuff.35       (3) For reporting periods beginning on or after July 1, [2019] 2022, the rates of tax applicable36   to moist snuff under subsection (2)(b) of this section shall be adjusted for each biennium according37   to the cost-of-living adjustment for the calendar year. The Department of Revenue shall recompute38   the rates for each biennium by adding to the rates in subsection (2)(b) of this section the product39   obtained by multiplying the rates in subsection (2)(b) of this section by a factor that is equal to 0.2540   multiplied by the percentage (if any) by which the monthly averaged U.S. City Average Consumer41   Price Index for the 12 consecutive months ending August 31 of the prior calendar year exceeds the42   monthly averaged U.S. City Average Consumer Price Index for the 12 consecutive months ending43   August 31, [2017] 2020.44       (4) If the tax imposed under this section does not equal an amount calculable to a whole cent,45   the tax shall be equal to the next higher whole cent. However, the amount remitted to the Depart-                                                 [13]                                             HB 3601 1   ment of Revenue by the taxpayer for each quarter shall be equal only to 98.5 percent of the total 2   taxes due and payable by the taxpayer for the quarter. 3       (5) No tobacco product shall be subject to the tax if the base product or other intermediate form 4   thereof has previously been taxed under this section. 5       SECTION 19. (1) The amendments to ORS 323.030 and 323.455 by sections 14 and 17 of this 6   2013 special session Act apply to distributions of cigarettes occurring on or after January 1, 7   2014, and before January 1, 2016. 8       (2) The amendments to ORS 323.030 by section 15 of this 2013 special session Act apply 9   to distributions of cigarettes occurring on or after January 1, 2016, and before January 1,10   2018.11       (3) The amendments to ORS 323.030 by section 16 of this 2013 special session Act apply12   to distributions of cigarettes occurring on or after January 1, 2018.13       (4) The amendments to ORS 323.455 by section 18 of this 2013 special session Act apply14   to distributions of cigarettes occurring on or after January 1, 2016.15       SECTION 20. (1) In addition to and not in lieu of any other tax, for the privilege of16   holding or storing cigarettes for sale, use or consumption, a floor tax is imposed upon every17   dealer at the rate of 6.5 mills for each cigarette in the possession of or under the control of18   the dealer in this state at 12:01 a.m. on January 1, 2014.19       (2) The tax imposed by this section is due and payable on or before January 20, 2014. Any20   amount of tax that is not paid within the time required shall bear interest at the rate es-21   tablished under ORS 305.220 per month, or fraction of a month, from the date on which the22   tax is due to be paid, until paid.23       (3) On or before January 20, 2014, every dealer must file a report with the Department24   of Revenue in such form as the department may prescribe. The report must state the num-25   ber of cigarettes in the possession of or under the control of the dealer in this state at 12:0126   a.m. on January 1, 2014, and the amount of tax due. Each report must be accompanied by a27   remittance payable to the department for the amount of tax due.28       SECTION 21. In addition to and not in lieu of any other tax, for the privilege of distrib-29   uting cigarettes as a distributor and for holding or storing cigarettes for sale, use or con-30   sumption, a floor tax and cigarette adjustment indicia tax is imposed upon every distributor31   in the amount of 16.25 cents for each Oregon cigarette tax stamp bearing the designation32   “25,” in the amount of 13 cents for each Oregon cigarette tax stamp bearing the designation33   “20,” and in the amount of 6.5 cents for each Oregon cigarette tax stamp bearing the desig-34   nation “10,” that is affixed to any package of cigarettes in the possession of or under the35   control of the distributor at 12:01 a.m. on January 1, 2014.36       SECTION 22. (1) Every distributor must take an inventory as of 12:01 a.m. on January37   1, 2014, of all packages of cigarettes to which are affixed Oregon cigarette tax stamps and38   of all unaffixed Oregon cigarette tax stamps in the possession of or under the control of the39   distributor.40       (2) Every distributor must file a report with the Department of Revenue on or before41   January 20, 2014, in such form as the department may prescribe, showing:42       (a) The number of Oregon cigarette tax stamps, with the designations of the stamps, that43   were affixed to packages of cigarettes in the possession of or under the control of the dis-44   tributor at 12:01 a.m. on January 1, 2014; and45       (b) The number of unaffixed Oregon cigarette tax stamps, with the designations of the                                                [14]                                             HB 3601 1   stamps, that were in the possession of or under the control of the distributor at 12:01 a.m. 2   on January 1, 2014. 3      (3) The amount of tax required to be paid with respect to the affixed Oregon cigarette 4   tax stamps shall be computed pursuant to section 21 of this 2013 special session Act and 5   remitted with the distributor’s report. Any amount of tax not paid within the time specified 6   for the filing of the report shall bear interest at the rate established under ORS 305.220 per 7   month, or fraction of a month, from the due date of the report until paid. 8      SECTION 23. All moneys received by the Department of Revenue from the taxes imposed 9   by sections 20 and 21 of this 2013 special session Act shall be paid over to the State Treasurer10   to be held in a suspense account established under ORS 293.445. After the payment of re-11   funds, the balance shall be credited to the Oregon Health Authority Fund established by ORS12   413.101, for providing the services described in ORS 430.630.13      SECTION 24. The Department of Revenue shall waive any penalty or interest that would14   otherwise apply to taxes due if the penalty or interest is based on underpayment or15   underreporting that results solely from the operation of section 4 of this 2013 special session16   Act or from the amendments to ORS 316.085, 316.695 and 317.061 by sections 1, 2 and 5 of this17   2013 special session Act.18      SECTION 25. The Department of Revenue may adopt rules or take any other action be-19   fore the effective date of this 2013 special session Act that is necessary to enable the de-20   partment to exercise, on or after the effective date of this 2013 special session Act, all the21   duties, functions and powers conferred on the department by sections 4, 11, 13 and 20 to 2322   of this 2013 special session Act and the amendments to ORS 315.266, 316.085, 316.695, 317.061,23   317.635, 317.853, 318.074, 323.030, 323.455 and 323.505 by sections 1, 2, 5, 6, 6a, 8, 9 and 14 to24   18a of this 2013 special session Act.25      SECTION 26. This 2013 special session Act takes effect on the 91st day after the date on26   which the 2013 special session of the Seventy-seventh Legislative Assembly adjourns sine die.27                                               [15]20      (b) Not later than July 1, 2018, the Legislative Revenue Officer shall report to an interim21   committee of the Legislative Assembly related to revenue regarding the use of the reduced22   rates provided in section 11 (2) of this 2013 special session Act. The report shall express as23   a ratio, for tax years beginning on or after January 1, 2015, and before January 1, 2017, the24   actual revenue loss resulting from the allowance of reduced rates of taxation provided in25   section 11 (2) of this 2013 special session Act divided by actual total income in this state for26   those tax years. If the ratio exceeds the ratio calculated under paragraph (a) of this sub-27   section by more than 15 percent, the rates listed in section 11 (2) of this 2013 special session28   Act shall be proportionately adjusted to achieve a ratio of approximately 105 percent of the29   ratio calculated in subsection (1)(a) of this section for tax years beginning on or after Janu-30   ary 1, 2015, and before January 1, 2017, but may in no event exceed 9.9 percent of taxable31   income or be reduced to less than the original rate provided in section 11 (2) of this 201332   special session Act.33      (c) The adjusted rates provided under paragraph (b) of this subsection shall apply to tax34   years beginning on or after January 1, 2019.35      (2)(a) Not later than July 1, 2022, the Legislative Revenue Officer shall report to an in-36   terim committee of the Legislative Assembly related to revenue regarding the use of the37   reduced rates provided in section 11 (2) of this 2013 special session Act. The report shall ex-38   press as a ratio, for tax years beginning on or after January 1, 2019, and before January 1,39   2021, the actual revenue loss resulting from the allowance of reduced rates of taxation pro-40   vided in section 11 (2) of this 2013 special session Act divided by actual total income in this41   state for those tax years. If the ratio exceeds the ratio included in the estimate required42   under subsection (1)(a) of this section for tax years beginning on or after January 1, 2019,43   and before January 1, 2021, by more than 25 percent, the rates listed in section 11 (2) of this44   2013 special session Act shall be proportionately adjusted to achieve a ratio of approximately45   115 percent of the ratio calculated in subsection (1)(a) of this section for tax years beginning                                              [11]                                           A-Eng. HB 3601 1   on or after January 1, 2019, and before January 1, 2021. If the ratio is less than 75 percent 2   of the ratio included in the estimate required under subsection (1)(a) of this section for tax 3   years beginning on or after January 1, 2019, and before January 1, 2021, the rates listed in 4   section 11 (2) of this 2013 special session Act shall be proportionately adjusted to achieve a 5   ratio of approximately 85 percent of the ratio calculated in subsection (1)(a) of this section 6   for tax years beginning on or after January 1, 2019, and before January 1, 2021. The adjusted 7   rates under this subsection may in no event exceed 9.9 percent of taxable income or be re- 8   duced to lower than the original rate provided in section 11 (2) of this 2013 special session 9   Act.10       (b) The adjusted rates provided under paragraph (a) of this subsection shall apply to tax11   years beginning on or after January 1, 2023.12       SECTION 14. ORS 323.030 is amended to read:13       323.030. (1) Every distributor shall pay a tax upon distributions of cigarettes at the rate of 2914   mills for the distribution of each cigarette in this state.15       (2) The taxes imposed by ORS 323.005 to 323.482 are in lieu of all other state, county or mu-16   nicipal taxes on the sale or use of cigarettes.17       (3) Any cigarette with respect to which a tax has been prepaid under ORS 323.068 or has oth-18   erwise once been imposed under ORS 323.005 to 323.482 is not subject upon a subsequent distrib-19   ution to the taxes imposed by ORS 323.005 to 323.482.20       (4) In addition to and not in lieu of any other tax imposed under ORS 323.005 to 323.482,21   every distributor shall pay a tax upon distributions of cigarettes at the rate of 6.5 mills for22   the distribution of each cigarette in this state.23       SECTION 15. ORS 323.030, as amended by section 14 of this 2013 special session Act, is24   amended to read:25       323.030. (1) Every distributor shall pay a tax upon distributions of cigarettes at the rate of 2926   mills for the distribution of each cigarette in this state.27       (2) The taxes imposed by ORS 323.005 to 323.482 are in lieu of all other state, county or mu-28   nicipal taxes on the sale or use of cigarettes.29       (3) Any cigarette with respect to which a tax has been prepaid under ORS 323.068 or has oth-30   erwise once been imposed under ORS 323.005 to 323.482 is not subject upon a subsequent distrib-31   ution to the taxes imposed by ORS 323.005 to 323.482.32       (4) In addition to and not in lieu of any other tax imposed under ORS 323.005 to 323.482, every33   distributor shall pay a tax upon distributions of cigarettes at the rate of [6.5] seven mills for the34   distribution of each cigarette in this state.35       SECTION 16. ORS 323.030, as amended by sections 14 and 15 of this 2013 special session Act,36   is amended to read:37       323.030. (1) Every distributor shall pay a tax upon distributions of cigarettes at the rate of 2938   mills for the distribution of each cigarette in this state.39       (2) The taxes imposed by ORS 323.005 to 323.482 are in lieu of all other state, county or mu-40   nicipal taxes on the sale or use of cigarettes.41       (3) Any cigarette with respect to which a tax has been prepaid under ORS 323.068 or has oth-42   erwise once been imposed under ORS 323.005 to 323.482 is not subject upon a subsequent distrib-43   ution to the taxes imposed by ORS 323.005 to 323.482.44       (4) In addition to and not in lieu of any other tax imposed under ORS 323.005 to 323.482, every45   distributor shall pay a tax upon distributions of cigarettes at the rate of [seven] 7.5 mills for the                                                     [12]                                           A-Eng. HB 3601 1   distribution of each cigarette in this state. 2       SECTION 17. ORS 323.455, as amended by section 2, chapter 722, Oregon Laws 2013, is 3   amended to read: 4       323.455. (1) All moneys received by the Department of Revenue from the tax imposed by ORS 5   323.030 (1) shall be paid over to the State Treasurer to be held in a suspense account established 6   under ORS 293.445. The department may pay expenses for administration and enforcement of ORS 7   323.005 to 323.482 out of moneys received from the tax imposed under ORS 323.030 (1). Amounts 8   necessary to pay administrative and enforcement expenses are continuously appropriated to the de- 9   partment from the suspense account. After the payment of administrative and enforcement expenses10   and refunds, 89.65 percent shall be credited to the General Fund, 3.45 percent is appropriated to the11   cities of this state, 3.45 percent is appropriated to the counties of this state and 3.45 percent is12   continuously appropriated to the Department of Transportation for the purpose of financing and13   improving transportation services for elderly individuals and individuals with disabilities as provided14   in ORS 391.800 to 391.830.15       (2) The moneys [so] appropriated to cities and counties under subsection (1) of this section16   shall be paid on a monthly basis within 35 days after the end of the month for which a distribution17   is made. Each city shall receive such share of the money appropriated to all cities as its population,18   as determined under ORS 190.510 to 190.590 last preceding such apportionment, bears to the total19   population of the cities of the state, and each county shall receive such share of the money as its20   population, determined under ORS 190.510 to 190.590 last preceding such apportionment, bears to the21   total population of the state.22       (3) The moneys appropriated to the Department of Transportation under subsection (1) of this23   section shall be distributed and transferred to the Elderly and Disabled Special Transportation Fund24   established by ORS 391.800 at the same time as the cigarette tax moneys are distributed to cities25   and counties under this section.26       (4) Of the moneys credited to the General Fund under [this] subsection (1) of this section, 51.9227   percent shall be dedicated to funding the maintenance and expansion of the number of persons eli-28   gible for the medical assistance program under ORS chapter 414, or to funding the maintenance of29   the benefits available under the program, or both, and 5.77 percent shall be credited to the Tobacco30   Use Reduction Account established under ORS 431.832.31       (5) All moneys received by the Department of Revenue from the tax imposed by ORS32   323.030 (4) shall be paid over to the State Treasurer to be held in a suspense account estab-33   lished under ORS 293.445. After the payment of refunds, the balance shall be credited as34   follows:35       (a) 76.92 percent to the Oregon Health Authority Fund established by ORS 413.101, for the36   purpose of providing the services described in ORS 430.630.37       (b) 23.08 percent according to the distribution formula provided in subsection (4) of this38   section.39       SECTION 18. ORS 323.455, as amended by section 2, chapter 722, Oregon Laws 2013, and sec-40   tion 17 of this 2013 special session Act, is amended to read:41       323.455. (1) All moneys received by the Department of Revenue from the tax imposed by ORS42   323.030 (1) shall be paid over to the State Treasurer to be held in a suspense account established43   under ORS 293.445. The department may pay expenses for administration and enforcement of ORS44   323.005 to 323.482 out of moneys received from the tax imposed under ORS 323.030 (1). Amounts45   necessary to pay administrative and enforcement expenses are continuously appropriated to the de-                                                     [13]                                           A-Eng. HB 3601 1   partment from the suspense account. After the payment of administrative and enforcement expenses 2   and refunds, 89.65 percent shall be credited to the General Fund, 3.45 percent is appropriated to the 3   cities of this state, 3.45 percent is appropriated to the counties of this state and 3.45 percent is 4   continuously appropriated to the Department of Transportation for the purpose of financing and 5   improving transportation services for elderly individuals and individuals with disabilities as provided 6   in ORS 391.800 to 391.830. 7       (2) The moneys appropriated to cities and counties under subsection (1) of this section shall be 8   paid on a monthly basis within 35 days after the end of the month for which a distribution is made. 9   Each city shall receive such share of the money appropriated to all cities as its population, as de-10   termined under ORS 190.510 to 190.590 last preceding such apportionment, bears to the total popu-11   lation of the cities of the state, and each county shall receive such share of the money as its12   population, determined under ORS 190.510 to 190.590 last preceding such apportionment, bears to the13   total population of the state.14       (3) The moneys appropriated to the Department of Transportation under subsection (1) of this15   section shall be distributed and transferred to the Elderly and Disabled Special Transportation Fund16   established by ORS 391.800 at the same time as the cigarette tax moneys are distributed to cities17   and counties under this section.18       (4) Of the moneys credited to the General Fund under subsection (1) of this section, 51.92 per-19   cent shall be dedicated to funding the maintenance and expansion of the number of persons eligible20   for the medical assistance program under ORS chapter 414, or to funding the maintenance of the21   benefits available under the program, or both, and 5.77 percent shall be credited to the Tobacco Use22   Reduction Account established under ORS 431.832.23       (5) All moneys received by the Department of Revenue from the tax imposed by ORS 323.030 (4)24   shall be paid over to the State Treasurer to be held in a suspense account established under ORS25   293.445. After the payment of refunds, the balance shall be credited [as follows:]26       [(a) 76.92 percent to the Oregon Health Authority Fund established by ORS 413.101, for the pur-27   pose of providing the services described in ORS 430.630.]28       [(b) 23.08 percent according to the distribution formula provided in subsection (4) of this section.]29   to the Oregon Health Authority Fund established by ORS 413.101 and shall be used to provide30   the services described in ORS 430.630.31       SECTION 18a. ORS 323.505 is amended to read:32       323.505. (1) A tax is hereby imposed upon the distribution of all tobacco products in this state.33   The tax imposed by this section is intended to be a direct tax on the consumer, for which payment34   upon distribution is required to achieve convenience and facility in the collection and administration35   of the tax. The tax shall be imposed on a distributor at the time the distributor distributes tobacco36   products.37       (2) The tax imposed under this section shall be imposed at the rate of:38       (a) Sixty-five percent of the wholesale sales price of cigars, but not to exceed 50 cents per cigar;39       (b) One dollar and seventy-eight cents per ounce based on the net weight determined by the40   manufacturer, in the case of moist snuff, except that the minimum tax under this paragraph is $2.1441   per retail container; or42       (c) Sixty-five percent of the wholesale sales price of all tobacco products that are not cigars or43   moist snuff.44       (3) For reporting periods beginning on or after July 1, [2019] 2022, the rates of tax applicable45   to moist snuff under subsection (2)(b) of this section shall be adjusted for each biennium according                                                 [14]                                           A-Eng. HB 3601 1   to the cost-of-living adjustment for the calendar year. The Department of Revenue shall recompute 2   the rates for each biennium by adding to the rates in subsection (2)(b) of this section the product 3   obtained by multiplying the rates in subsection (2)(b) of this section by a factor that is equal to 0.25 4   multiplied by the percentage (if any) by which the monthly averaged U.S. City Average Consumer 5   Price Index for the 12 consecutive months ending August 31 of the prior calendar year exceeds the 6   monthly averaged U.S. City Average Consumer Price Index for the 12 consecutive months ending 7   August 31, [2017] 2020. 8       (4) If the tax imposed under this section does not equal an amount calculable to a whole cent, 9   the tax shall be equal to the next higher whole cent. However, the amount remitted to the Depart-10   ment of Revenue by the taxpayer for each quarter shall be equal only to 98.5 percent of the total11   taxes due and payable by the taxpayer for the quarter.12       (5) No tobacco product shall be subject to the tax if the base product or other intermediate form13   thereof has previously been taxed under this section.14       SECTION 19. (1) The amendments to ORS 323.030 and 323.455 by sections 14 and 17 of this15   2013 special session Act apply to distributions of cigarettes occurring on or after January 1,16   2014, and before January 1, 2016.17       (2) The amendments to ORS 323.030 by section 15 of this 2013 special session Act apply18   to distributions of cigarettes occurring on or after January 1, 2016, and before January 1,19   2018.20       (3) The amendments to ORS 323.030 by section 16 of this 2013 special session Act apply21   to distributions of cigarettes occurring on or after January 1, 2018.22       (4) The amendments to ORS 323.455 by section 18 of this 2013 special session Act apply23   to distributions of cigarettes occurring on or after January 1, 2016.24       SECTION 20. (1) In addition to and not in lieu of any other tax, for the privilege of25   holding or storing cigarettes for sale, use or consumption, a floor tax is imposed upon every26   dealer at the rate of 6.5 mills for each cigarette in the possession of or under the control of27   the dealer in this state at 12:01 a.m. on January 1, 2014.28       (2) The tax imposed by this section is due and payable on or before January 20, 2014. Any29   amount of tax that is not paid within the time required shall bear interest at the rate es-30   tablished under ORS 305.220 per month, or fraction of a month, from the date on which the31   tax is due to be paid, until paid.32       (3) On or before January 20, 2014, every dealer must file a report with the Department33   of Revenue in such form as the department may prescribe. The report must state the num-34   ber of cigarettes in the possession of or under the control of the dealer in this state at 12:0135   a.m. on January 1, 2014, and the amount of tax due. Each report must be accompanied by a36   remittance payable to the department for the amount of tax due.37       SECTION 21. In addition to and not in lieu of any other tax, for the privilege of distrib-38   uting cigarettes as a distributor and for holding or storing cigarettes for sale, use or con-39   sumption, a floor tax and cigarette adjustment indicia tax is imposed upon every distributor40   in the amount of 16.25 cents for each Oregon cigarette tax stamp bearing the designation41   “25,” and in the amount of 13 cents for each Oregon cigarette tax stamp bearing the desig-42   nation “20,” that is affixed to any package of cigarettes in the possession of or under the43   control of the distributor at 12:01 a.m. on January 1, 2014.44       SECTION 22. (1) Every distributor must take an inventory as of 12:01 a.m. on January45   1, 2014, of all packages of cigarettes to which are affixed Oregon cigarette tax stamps and                                                 [15]                                          A-Eng. HB 3601 1   of all unaffixed Oregon cigarette tax stamps in the possession of or under the control of the 2   distributor. 3       (2) Every distributor must file a report with the Department of Revenue on or before 4   January 20, 2014, in such form as the department may prescribe, showing: 5       (a) The number of Oregon cigarette tax stamps, with the designations of the stamps, that 6   were affixed to packages of cigarettes in the possession of or under the control of the dis- 7   tributor at 12:01 a.m. on January 1, 2014; and 8       (b) The number of unaffixed Oregon cigarette tax stamps, with the designations of the 9   stamps, that were in the possession of or under the control of the distributor at 12:01 a.m.10   on January 1, 2014.11       (3) The amount of tax required to be paid with respect to the affixed Oregon cigarette12   tax stamps shall be computed pursuant to section 21 of this 2013 special session Act and13   remitted with the distributor’s report. Any amount of tax not paid within the time specified14   for the filing of the report shall bear interest at the rate established under ORS 305.220 per15   month, or fraction of a month, from the due date of the report until paid.16       SECTION 23. All moneys received by the Department of Revenue from the taxes imposed17   by sections 20 and 21 of this 2013 special session Act shall be paid over to the State Treasurer18   to be held in a suspense account established under ORS 293.445. After the payment of re-19   funds, the balance shall be credited to the Oregon Health Authority Fund established by ORS20   413.101, for providing the services described in ORS 430.630.21       SECTION 23a. (1) All Oregon cigarette tax stamps in the possession of or under the22   control of any dealer or distributor as of December 31, 2015, bearing the indicia of $1.64 for23   each Oregon cigarette tax stamp bearing the designation “25,” or of $1.31 for each Oregon24   cigarette tax stamp bearing the designation “20,” shall expire on January 31, 2016.25       (2) All Oregon cigarette tax stamps in the possession of or under the control of any26   dealer or distributor as of December 31, 2017, bearing the indicia of $1.65 for each Oregon27   cigarette tax stamp bearing the designation “25,” or of $1.32 for each Oregon cigarette tax28   stamp bearing the designation “20,” shall expire on January 31, 2018.29       SECTION 24. The Department of Revenue shall waive any penalty or interest that would30   otherwise apply to taxes due if the penalty or interest is based on underpayment or31   underreporting that results solely from the operation of section 4 of this 2013 special session32   Act or from the amendments to ORS 316.085, 316.695, 317.061 and 317.283 by sections 1, 2, 533   and 6a of this 2013 special session Act.34       SECTION 25. The Department of Revenue may adopt rules or take any other action be-35   fore the effective date of this 2013 special session Act that is necessary to enable the de-36   partment to exercise, on or after the effective date of this 2013 special session Act, all the37   duties, functions and powers conferred on the department by sections 4, 6c, 11, 13 and 20 to38   23 of this 2013 special session Act and the amendments to ORS 315.266, 316.085, 316.695,39   317.061, 317.283, 317.635, 317.853, 318.074, 323.030, 323.455 and 323.505 by sections 1, 2, 5, 6, 6a,40   6d, 8, 9 and 14 to 18a of this 2013 special session Act.41       SECTION 26. This 2013 special session Act takes effect on the 91st day after the date on42   which the 2013 special session of the Seventy-seventh Legislative Assembly adjourns sine die.43                                                [16]