68th OREGON LEGISLATIVE ASSEMBLY--1995 Regular Session
NOTE: Matter within { + braces and plus signs + } in an
amended section is new. Matter within { - braces and minus
signs - } is existing law to be omitted. New sections are within
{ + braces and plus signs + } .
LC 2241
A-Engrossed
Senate Bill 562
Ordered by the Senate May 25
Including Senate Amendments dated May 25
Sponsored by Senator KENNEMER; Senators BAKER, LIM, SHANNON,
STULL, YIH
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.
{ - Exempts from Oregon income taxation amounts paid as
benefits from state and federal public employee retirement plans
to extent benefits are attributable to service before September
29, 1991. Applies to all taxable years beginning on or after
January 1, 1991. - }
{ - Eliminates certain retirement benefit increases payable
to state employees who have no service before September 29, 1991.
Eliminates certain retirement allowance increases for person
first employed on or after effective date of Act. - }
{ - Requires Department of Revenue to calculate and pay
refunds for taxes paid in tax years beginning on or after January
1, 1991. Requires reductions in refunds payable to state
retirees for certain benefits paid to retirees since 1991. - }
{ + Exempts all public employee retirement income
attributable to service before October 1, 1991, from personal
income taxation. Exempts certain private employee retirement
income attributable to service before October 1, 1991, from
personal income taxation. Calculates pre-October 1991 benefits
based on years of service. Limits exemption of private
retirement income to $50,000 per annum. Requires that private
retiree be 55 years of age or older to claim exemption.
Eliminates certain pension increase paid to members of Public
Employes' Retirement System in compensation for taxation of
benefits paid under system. Prohibits payment of certain
additional benefits to members of system who establish membership
on or after effective date of Act. + }
A BILL FOR AN ACT
Relating to retirement; creating new provisions; amending ORS
237.208, 237.209, 237.230, 316.087, 316.157 and 316.680; and
repealing ORS 237.635 and sections 7 and 14, chapter 796,
Oregon Laws 1991, and section 26, chapter 815, Oregon Laws
1991.
Be It Enacted by the People of the State of Oregon:
**************************** SECTION 1. ORS 316.680 is amended
to read:
316.680. (1) There shall be subtracted from federal taxable
income:
(a) The interest or dividends on obligations of the United
States and its territories and possessions or of any authority,
commission or instrumentality of the United States to the extent
includable in gross income for federal income tax purposes but
exempt from state income taxes under the laws of the United
States. However, the amount subtracted under this paragraph shall
be reduced by any interest on indebtedness incurred to carry the
obligations or securities described in this paragraph, and by any
expenses incurred in the production of interest or dividend
income described in this paragraph to the extent that such
expenses, including amortizable bond premiums, are deductible in
determining federal taxable income.
(b) The amount of any federal income taxes accrued by the
taxpayer during the taxable year as described in ORS 316.685,
less the amount of any refunds of federal taxes previously
accrued for which a tax benefit was received.
(c)(A) If the taxpayer does not qualify for the subtraction
under subparagraph (B) of this paragraph, compensation (other
than pension or retirement pay) received for active service
performed by a member of the Armed Forces of the United States in
an amount not to exceed $3,000 per annum.
(B) For the tax year of initial draft or enlistment into the
Armed Forces of the United States or for the tax year of
discharge from or termination of full-time active duty for the
Armed Forces of the United States, compensation (other than
pension or retirement pay or pay for service when on military
reserve duty) paid by the Armed Forces of the United States for
services performed outside this state, if the taxpayer is on
active duty as a full-time officer, enlistee or draftee, with the
Armed Forces of the United States.
(d) For taxable years open to audit on October 5, 1973, the
amount of any deferred income which was added to federal taxable
income for state tax purposes under subsection (2)(e) of this
section in a prior taxable year and which is now added to federal
taxable income. For purposes of this paragraph, the amount
subtracted shall not exceed the amount of gain now reported on
the federal return. If the gain is a capital gain or subject to
capital gain treatment, the adjustments under this paragraph
shall be similar to the adjustments made under subsection (2)(e)
of this section in the prior year.
(e)(A) Any expenses under ORS 118.070 (6) that have not been
deducted in computing federal taxable income and have not been
and will not be claimed as deductions for Oregon inheritance tax
purposes under ORS 118.070.
(B) Amounts allowable under sections 2621 (a)(2) and 2622 (b)
of the Internal Revenue Code to the extent that the taxpayer does
not elect under section 642(g) of the Internal Revenue Code to
reduce federal taxable income by those amounts.
{ + (f) For individuals who attain 55 years of age before the
close of the taxable year, private pension income, as defined by
subsection (4) of this section, to the extent those amounts are
attributable to service rendered before October 1, 1991. The
amount that may be subtracted under this paragraph may not exceed
$50,000 per annum. If a joint return is filed, no more than
$50,000 may be subtracted under the provisions of this
paragraph. + }
{ + (g) Any amounts received as public pension income, as
defined in subsection (5) of this section, to the extent those
amounts are attributable to service rendered before October 1,
1991. + }
(2) There shall be added to federal taxable income:
(a) Interest or dividends, exempt from federal income tax, on
obligations or securities of any foreign state or of a political
subdivision or authority of any foreign state. However, the
amount added under this paragraph shall be reduced by any
interest on indebtedness incurred to carry the obligations or
securities described in this paragraph and by any expenses
incurred in the production of interest or dividend income
described in this paragraph.
(b) Interest or dividends on obligations of any authority,
commission, instrumentality and territorial possession of the
United States which by the laws of the United States are exempt
from federal income tax but not from state income taxes. However,
the amount added under this paragraph shall be reduced by any
interest on indebtedness incurred to carry the obligations or
securities described in this paragraph and by any expenses
incurred in the production of interest or dividend income
described in this paragraph.
(c) The amount of any federal estate taxes allocable to income
in respect of a decedent not taxable by Oregon.
(d) The amount of any allowance for depletion in excess of the
taxpayer's adjusted basis in the property depleted, deducted on
the taxpayer's federal income tax return for the taxable year,
pursuant to sections 613, 613A, 614, 616 and 617 of the Internal
Revenue Code.
(e) The amount of any gain which is deferred for tax
recognition purposes upon the voluntary or involuntary conversion
or exchange of tangible real or personal property as provided
under ORS 314.290.
(f) For taxable years beginning on and after January 1, 1972,
any expenses under ORS 118.070 (6) that have been or will be
claimed as deductions for Oregon inheritance tax purposes in an
amount not to exceed the deductions actually claimed by the
taxpayer on the federal income tax return for the same taxable
year.
(g) For taxable years beginning on or after January 1, 1985,
the dollar amount deducted under section 151 of the Internal
Revenue Code for personal exemptions for the taxable year.
(3) Discount and gain or loss on retirement or disposition of
obligations described under subsection (2)(a) of this section
issued on or after January 1, 1985, shall be treated for purposes
of this chapter in the same manner as under sections 1271 to 1283
and other pertinent sections of the Internal Revenue Code as if
the obligations, although issued by a foreign state or a
political subdivision of a foreign state, were not tax exempt
under the Internal Revenue Code.
{ + (4) For purposes of subsection (1)(f) of this section, '
private pension income' means distributions from or pursuant to
an employee pension benefit plan, as defined in section 3(2) of
the Employee Retirement Income Security Act of 1974, that
satisfies the requirements of section 401 of the Internal Revenue
Code.
(5) For the purposes of subsection (1)(g) of this section, '
public pension income' means:
(a) Distributions from or pursuant to a public retirement
system of this state or a political subdivision of this state, or
a public retirement system created by an Act of this state or a
political subdivision of this state, or the public retirement
system of any other state or local government; and
(b) Distributions from or pursuant to a federal retirement
system created by the Federal Government for any officer or
employee of the United States, including any person retired from
service in the United States Civil Service, the Armed Forces of
the United States or any agency or subdivision thereof.
(6) For the purposes of subsection (1)(f) and (g) of this
section, the portion of pension income attributable to service
rendered before October 1, 1991, shall be determined by dividing
the number of years of service performed before October 1, 1991,
by the total number of years of service during which the pension
income was earned. + }
**************************** SECTION 2. ORS 316.087 is amended
to read:
316.087. (1) A resident individual shall be allowed a credit
against the tax otherwise due under this chapter in an amount
equal to 40 percent of the credit for the elderly or the
permanently and totally disabled allowable pursuant to section 22
of the Internal Revenue Code as of December 31, 1992,
notwithstanding the limitation imposed by section 26 of the
Internal Revenue Code as of December 31, 1992.
(2) A nonresident individual shall be allowed the credit
computed in the same manner and subject to the same limitations
as the credit allowed a resident by subsection (1) of this
section. However, the credit shall be prorated using the
proportion provided in ORS 316.117.
(3) If a change in the taxable year of a taxpayer occurs as
described in ORS 314.085, or if the department terminates the
taxpayer's taxable year under ORS 314.440, the credit allowed by
this section shall be prorated or computed in a manner consistent
with ORS 314.085.
(4) If a change in the status of a taxpayer from resident to
nonresident or from nonresident to resident occurs, the credit
allowed by this section shall be determined in a manner
consistent with ORS 316.117.
(5) No credit shall be allowed under this section for the
taxable year if the taxpayer { - claims the credit allowed
under ORS 316.157 - } { + subtracts any pension income from
federal taxable income under the provisions of ORS 316.680 (1)(f)
or (g) + }.
**************************** SECTION 3. ORS 237.208 is amended
to read:
237.208. (1) Upon retirement of an employee who is a member of
the system and computation of that member's service retirement
allowance under ORS 237.111, 237.147 or 237.155, or computation
of any disability retirement allowance under ORS 237.171, 237.181
or 237.187, the board shall add to the amount of the allowance,
including the amount of any refund of accumulated employee
contributions, an additional amount equal to the percentage
increase provided in subsection (4) of this section.
(2) The amount of any death benefit under ORS 237.165, 237.167
or 237.169, including the amount of any monthly payments, shall
be increased by an amount equal to the percentage increase
provided in subsection (4) of this section.
(3) A member of the system who receives a lump sum under ORS
237.151 in lieu of a retirement allowance or other benefit shall
receive an additional amount equal to the percentage increase
provided in subsection (4) of this section.
(4)(a) The percentage increases provided for in this section to
the benefits payable to or on account of a member of the system
who is serving as other than a police officer or fire fighter at
the time of death or retirement shall be:
(A) For a member with a combined total of 10 or more years of
creditable service in the system and prior service credit under
ORS 237.081 but less than a combined total of 20 years, one
percent.
(B) For a member with a combined total of 20 or more years of
creditable service in the system and prior service credit under
ORS 237.081 but less than a combined total of 25 years, two
percent.
(C) For a member with a combined total of 25 or more years of
creditable service in the system and prior service credit under
ORS 237.081 but less than a combined total of 30 years, three
percent.
(D) For a member with a combined total of 30 or more years of
creditable service in the system and prior service credit under
ORS 237.081, four percent.
(b) The percentage increases provided for in this section to
the benefits payable to or on account of a member of the system
who is serving as a police officer or fire fighter at the time of
death or retirement shall be:
(A) For a member with a combined total of 10 or more years of
creditable service in the system and prior service credit under
ORS 237.081 but less than a combined total of 20 years, one
percent.
(B) For a member with a combined total of 20 or more years of
creditable service in the system and prior service credit under
ORS 237.081 but less than a combined total of 25 years, two and
one-half percent.
(C) For a member with a combined total of 25 or more years of
creditable service in the system and prior service credit under
ORS 237.081, four percent.
(c) The benefits payable to or on account of a member with less
than a combined total of 10 years of creditable service in the
system and prior service credit under ORS 237.081 at the time of
death or retirement shall not be increased under the provisions
of this section.
(5) The increased benefits provided for in this section shall
be funded by employer contributions.
(6) This section applies only to members whose effective date
of retirement or death is on or after January 1, 1991.
{ + (7) The percentage increases provided for in this section
apply only to that portion of a member's retirement allowance
that is attributable to service rendered on or after October 1,
1991. The portion of a member's retirement allowance that is
attributable to service rendered on or after October 1, 1991,
shall be determined for the purposes of this section by dividing
the number of years of service performed on or after October 1,
1991, by the total number of years of service by the member. + }
**************************** SECTION 4. ORS 237.209 is amended
to read:
237.209. (1) In addition to any increase under ORS 237.060,
first effective for the month of August 1981, payable September
1, 1981, the monthly retirement allowance payable to or on
account of any person who has retired as a member of the Public
Employes' Retirement System shall be increased by a percentage
based on the calendar year in which the person retired, as set
forth in the following table:
_________________________________________________________________
____NOTE_TO_GOPHER_CUSTOMERS:__________________________________
THE FOLLOWING TABULAR TEXT MAY BE IRREGULAR.
FOR COMPLETE INFORMATION PLEASE SEE THE PRINTED MEASURE.
_______________________________________________________________
Calendar Year Percentage
of Retirement Increase
____NOTE_TO_GOPHER_CUSTOMERS:__________________________________
THE FOLLOWING TABULAR TEXT MAY BE IRREGULAR.
FOR COMPLETE INFORMATION PLEASE SEE THE PRINTED MEASURE.
_______________________________________________________________
1980 4.00
1979 4.32
1978 4.76
1977 4.44
1976 4.72
1975 4.92
1974 5.28
1973 5.92
1972 6.20
1971 6.36
1970 6.60
1969 6.88
1968 7.20
1967 7.36
1966 7.56
1965 7.88
1964 8.12
1963 8.32
1962 8.56
1961 8.64
1960 8.76
1959 8.96
1958 9.08
1957 9.28
1956 9.68
1955 10.00
1954 10.04
1953 10.16
1952 10.56
1951 10.64
1950 or any prev11.40year
____________________________________________________________
END OF POSSIBLE IRREGULAR TABULAR TEXT
____________________________________________________________
_________________________________________________________________
(2) In addition to any increase under ORS 237.060 and
subsection (1) of this section, first effective for the month of
July 1982, payable August 1, 1982, the monthly retirement
allowance payable to or on account of any person who has retired
as a member of the Public Employes' Retirement System shall be
increased by a percentage based on the calendar year in which the
person retired. The percentage shall be four percent in respect
to a person who retired in the calendar year 1981. The percentage
in respect to a person who retired in a calendar year previous to
the calendar year 1981 shall be the applicable percentage in the
table set forth in subsection (1) of this section.
(3) In addition to any increase under ORS 237.060, first
effective for the month of July 1985, payable August 1, 1985, the
monthly retirement allowance payable to or on account of any
person who has retired as a member of the Public Employes'
Retirement System shall be increased by a percentage based on the
calendar year in which the person retired, as set forth in the
following table:
_________________________________________________________________
____NOTE_TO_GOPHER_CUSTOMERS:__________________________________
THE FOLLOWING TABULAR TEXT MAY BE IRREGULAR.
FOR COMPLETE INFORMATION PLEASE SEE THE PRINTED MEASURE.
_______________________________________________________________
Calendar Year Percentage
of Retirement Increase
____NOTE_TO_GOPHER_CUSTOMERS:__________________________________
THE FOLLOWING TABULAR TEXT MAY BE IRREGULAR.
FOR COMPLETE INFORMATION PLEASE SEE THE PRINTED MEASURE.
_______________________________________________________________
1983 3.00
1982 3.01
1981 3.09
1980 3.24
1979 3.48
1978 3.80
1977 3.57
1976 3.77
1975 3.92
1974 4.17
1973 4.63
1972 4.82
1971 4.93
1970 5.09
1969 5.28
1968 5.49
1967 5.60
1966 5.73
1965 5.94
1964 6.09
1963 6.22
1962 6.37
1961 6.42
1960 6.50
1959 6.62
1958 6.70
1957 6.82
1956 7.06
1955 7.25
1954 or any previ7.28year
_________________________________________________________________
____________________________________________________________
END OF POSSIBLE IRREGULAR TABULAR TEXT
____________________________________________________________
(4) In addition to any increase under ORS 237.060 and
subsection (3) of this section, first effective for the month of
July 1986, payable August 1, 1986, the monthly retirement
allowance payable to or on account of any person who has retired
as a member of the Public Employes' Retirement System shall be
increased by a percentage based on the calendar year in which the
person retired. The percentage shall be three percent in respect
to a person who retired in the calendar year 1984. The percentage
in respect to a person who retired in a calendar year previous to
the calendar year 1984 shall be the applicable percentage in the
table set forth in subsection (3) of this section.
(5) In addition to any increase under ORS 237.060, first
effective for the month of July 1989, payable August 1, 1989, the
monthly retirement allowance payable to or on account of any
person who has retired as a member of the Public Employes'
Retirement System shall be increased by a percentage based on the
calendar year in which the person retired, as set forth in the
following table:
_________________________________________________________________
____NOTE_TO_GOPHER_CUSTOMERS:__________________________________
THE FOLLOWING TABULAR TEXT MAY BE IRREGULAR.
FOR COMPLETE INFORMATION PLEASE SEE THE PRINTED MEASURE.
_______________________________________________________________
Calendar Year Percentage
of Retirement Increase
____NOTE_TO_GOPHER_CUSTOMERS:__________________________________
THE FOLLOWING TABULAR TEXT MAY BE IRREGULAR.
FOR COMPLETE INFORMATION PLEASE SEE THE PRINTED MEASURE.
_______________________________________________________________
1988 0
1987 0
1986 0
1985 0
1984 0
1983 0
1982 0
1981 0
1980 3
1979 11
1978 16
1977 3
1976 7
1975 15
1974 25
1973 14
1972 15
1971 0
1970 0
1969 4
1968 7
1967 0
1966 0
1965 0
1964 0
1963 1
1962 1
1961 2
1960 3
1959 3
1958 5
1957 9
1956 9
1955 7
1954 8
1953 8
1952 10
1951 19
1950 or any previou18year
____________________________________________________________
END OF POSSIBLE IRREGULAR TABULAR TEXT
____________________________________________________________
_________________________________________________________________
{ - (6) In addition to any increase under ORS 237.060, first
effective for the month of December 1990, payable January 1,
1991, the monthly retirement allowance payable to or on account
of any person who has retired as a member of the Public Employes'
Retirement System shall be increased by the following
percentages: - }
{ - (a) If the member was serving as other than a police
officer or fire fighter at the time of retirement, the percentage
increase shall be: - }
{ - (A) For a member with a combined total of 10 or more
years of creditable service in the system and prior service
credit under ORS 237.081 but less than a combined total of 20
years, one percent. - }
{ - (B) For a member with a combined total of 20 or more
years of creditable service in the system and prior service
credit under ORS 237.081 but less than a combined total of 25
years, two percent. - }
{ - (C) For a member with a combined total of 25 or more
years of creditable service in the system and prior service
credit under ORS 237.081 but less than a combined total of 30
years, three percent. - }
{ - (D) For a member with a combined total of 30 or more
years of creditable service in the system and prior service
credit under ORS 237.081, four percent. - }
{ - (b) If the member was serving as a police officer or fire
fighter at the time of retirement, the percentage increase shall
be: - }
{ - (A) For a member with a combined total of 10 or more
years of creditable service in the system and prior service
credit under ORS 237.081 but less than a combined total of 20
years, one percent. - }
{ - (B) For a member with a combined total of 20 or more
years of creditable service in the system and prior service
credit under ORS 237.081 but less than a combined total of 25
years, two and one-half percent. - }
{ - (C) For a member with a combined total of 25 or more
years of creditable service in the system and prior service
credit under ORS 237.081, four percent. - }
{ - (c) The monthly retirement allowance payable to or on
account of a member with less than a combined total of 10 years
of creditable service in the system and prior service credit
under ORS 237.081 at the time of retirement shall not be
increased under the provisions of this subsection. - }
{ - (7) The increased allowance provided in subsection (6) of
this section shall be funded by employer contributions. - }
**************************** SECTION 5. ORS 237.230 is amended
to read:
237.230. (1) Every monthly retirement allowance or pension
payable to a judge member or surviving spouse of a judge member
under ORS 237.211 to 237.233 shall be adjusted annually to
reflect the percentage increase or decrease in the cost of living
as provided in ORS 237.060.
(2) ORS 237.209 (4) { - to (7) - } { + and (5) + } apply in
respect to a judge member who retired in the calendar year 1984
or any calendar year thereafter as provided in ORS 237.209 (4)
{ - to (7) - } { + and (5) + }, and for that purpose the
monthly retirement referred to in ORS 237.209 (4) { - to
(7) - } { + and (5) + } shall be the monthly retirement
allowance payable to a judge member or the monthly pension
payable to the surviving spouse of a judge member under ORS
237.227 (3)(a).
**************************** SECTION 6. { + Sections 7 and 8
of this Act are added to and made a part of ORS 237.199 to
237.291. + }
**************************** SECTION 7. { + (1) ORS 237.208
applies only to a member who establishes membership in the Public
Employes' Retirement System before the effective date of this
1995 Act.
(2) A person establishes membership in the system before the
effective date of this 1995 Act for the purposes of this section
if:
(a) The person is a member of the system, or a judge member of
the system, on the effective date of this 1995 Act;
(b) The person was a member of the system before the effective
date of this 1995 Act, ceased to be a member of the system under
the provisions of ORS 237.109, 237.111 or 237.223 before the
effective date of this 1995 Act, but restores part or all of the
forfeited creditable service from before the effective date of
this 1995 Act under the provisions of ORS 237.108 or 237.111
after the effective date of this 1995 Act; or
(c) The person performed any period of service for a
participating public employer before the effective date of this
1995 Act that is credited to the six-month period of employment
required of an employee under ORS 237.011 before an employee may
become a member of the system. + }
**************************** SECTION 8. { + (1) The repeal of
ORS 237.635 and sections 7 and 14, chapter 796, Oregon Laws 1991,
and section 26, chapter 815, Oregon Laws 1991, by section 11 of
this 1995 Act and the amendments to ORS 237.208, 237.209 and
237.230 by sections 3, 4 and 5 of this 1995 Act become operative
on January 1, 1997.
(2) On or before January 1, 1997, the Public Employes'
Retirement Board shall recalculate the benefits payable to any
member of the system who received an increased benefit under the
amendments to ORS 237.209, 237.230 and 237.233 by sections 3, 4
and 5 of chapter 796, Oregon Laws 1991, or under section 26,
chapter 815, Oregon Laws 1991, and shall reduce the benefit
payable to the member to the amount the member would have
received if the provisions of chapter 796, Oregon Laws 1991, and
section 26, chapter 815, Oregon Laws 1991, had not been enacted.
The retirement allowance so calculated is effective for the month
of January 1997, payable February 1, 1997, and thereafter.
(3) On or before January 1, 1997, the Public Employes'
Retirement Board shall recalculate the benefits payable to any
member of the system who received an increased benefit under the
provisions of ORS 237.208. The recalculated benefit shall be that
provided by ORS 237.208 as amended by section 3 of this 1995 Act.
The retirement allowance so calculated is effective for the month
of January 1997, payable February 1, 1997, and thereafter.
(4) For the purposes of this Act, any judge who retired or died
after August 1, 1991, and whose retirement pay or pension would
have been paid from the Judges' Retirement Fund except for the
provisions of chapter 815, Oregon Laws 1991, shall be considered
to have received an increase in the benefits payable to the judge
or surviving spouse of the judge under the provisions of ORS
237.208, and shall not be considered to have received an increase
in benefits under the provisions of section 7, chapter 796,
Oregon Laws 1991. The benefit being paid to the judge or the
surviving spouse of the judge shall be recalculated in the same
manner as provided in subsection (3) of this section for the
retirement allowances of other members of the system.
(5) On or before January 1, 1997, a public employer that was
required to provide increases in retirement benefits for police
officers and firefighters of the public employer under the
provisions of ORS 237.635 (1993 Edition) shall reduce the benefit
payable to the police officers and firefighters to the amount the
police officers or firefighters would have received if ORS
237.635 had not been enacted. The reduced benefits so calculated
are effective for the month of January 1997. + }
**************************** SECTION 9. ORS 316.157 is amended
to read:
316.157. (1) In the case of a resident eligible individual,
there shall be allowed as a credit against the taxes otherwise
due under this chapter for the taxable year an amount equal to
the lesser of the tax liability of the taxpayer or nine percent
of net pension income.
(2) For purposes of this section:
(a) 'Eligible individual' means any individual who is receiving
pension income and who has attained the following age before the
close of the taxable year:
(A) For taxable years beginning on or after January 1, 1991,
and before January 1, 1993, the individual must attain 58 years
of age before the close of the taxable year.
(B) For taxable years beginning on or after January 1, 1993,
and before January 1, 1995, the individual must attain 59 years
of age before the close of the taxable year.
(C) For taxable years beginning on or after January 1, 1995,
and before January 1, 1997, the individual must attain 60 years
of age before the close of the taxable year.
(D) For taxable years beginning on or after January 1, 1997,
and before January 1, 1999, the individual must attain 61 years
of age before the close of the taxable year.
(E) For taxable years beginning on or after January 1, 1999,
the individual must attain 62 years of age before the close of
the taxable year.
(b) 'Household income' has that meaning given in ORS 310.630
except that 'household income' shall not include social security
benefits received by the taxpayer or the spouse of the taxpayer.
(c) 'Net pension income' means:
(A) For eligible individuals filing a joint return, the lesser
of the pension income of the eligible individuals received during
the taxable year or the excess, if any, of $15,000 over the sum
of the following amounts:
(i) Any social security benefits received by the eligible
individual, or by the spouse of the individual, during the
taxable year; and
(ii) The excess, if any, of household income over $30,000.
(B) For an eligible individual filing a return other than a
joint return, the lesser of the pension income of the eligible
individual received during the taxable year or the excess, if
any, of $7,500 over the sum of the following amounts:
(i) Any social security benefits received by the eligible
individual during the taxable year; and
(ii) The excess, if any, of household income over $15,000.
(d) { + Except as provided in paragraph (e) of this
subsection, + } ' pension income' means income included in
federal taxable income from:
(A) Distributions from or pursuant to an employee pension
benefit plan, as defined in section 3(2) of the Employee
Retirement Income Security Act of 1974, which satisfies the
requirements of section 401 of the Internal Revenue Code;
(B) Distributions from or pursuant to a public retirement
system of this state or a political subdivision of this state, or
a public retirement system created by an Act of this state or a
political subdivision of this state, or the public retirement
system of any other state or local government;
(C) Distributions from or pursuant to a federal retirement
system created by the Federal Government for any officer or
employee of the United States, including any person retired from
service in the United States Civil Service, the Armed Forces of
the United States or any agency or subdivision thereof;
(D) Distributions or withdrawals from or pursuant to an
eligible deferred compensation plan which satisfies the
requirements of section 457 of the Internal Revenue Code;
(E) Distributions or withdrawals from or pursuant to an
individual retirement account, annuity or trust or simplified
employee pension which satisfies the requirements of section 408
of the Internal Revenue Code; and
(F) Distributions or withdrawals from or pursuant to an
employee annuity, including custodial accounts treated as
annuities, subject to section 403 (a) or (b) of the Internal
Revenue Code.
{ + (e) 'Pension income' does not include any amounts that
are subtracted from federal taxable income for the purpose of
computing Oregon income tax under the provisions of ORS 316.680
(1)(f) or (g). + }
{ - (e) - } { + (f) + } 'Social security benefits' means
social security benefits, as defined in section 86 of the
Internal Revenue Code (Title II social security or tier 1
railroad retirement benefits).
(3) A nonresident eligible individual shall be allowed the
credit computed in the same manner and subject to the same
limitations as the credit allowed a resident by subsection (1) of
this section. However, the credit shall be allowed only in that
proportion that the eligible individual's pension income included
in federal adjusted gross income from Oregon sources bears to the
eligible individual's pension income included in federal adjusted
gross income from all sources.
(4) If a change in the taxable year of the eligible individual
occurs as described in ORS 314.085, or if the department
terminates the tax year of the eligible individual under ORS
314.440, the credit allowed by this section shall be prorated or
computed in a manner consistent with ORS 316.085.
(5) If a change in the status of the eligible individual from
resident to nonresident or from nonresident to resident occurs,
the credit allowed by this section shall be determined in a
manner consistent with subsection (3) of this section.
(6) For purposes of this section, 'federal adjusted gross
income' is as described in ORS 316.013.
**************************** SECTION 10. { + The amendments to
ORS 316.680 and 316.087 by sections 1 and 2 of this Act, and the
amendments to ORS 316.157 by section 9 of this Act, apply only to
taxable years commencing on or after January 1, 1997. + }
**************************** SECTION 11. { + ORS 237.635,
sections 7 and 14, chapter 796, Oregon Laws 1991, and section 26,
chapter 815, Oregon Laws 1991, are repealed. + }
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