Legal language

Amends Constitution: Creates dedicated K through 12 education fund; increases funding by taxing assets over $50 million.

BE IT ENACTED BY THE PEOPLE OF THE STATE OF OREGON:

PARAGRAPH 1. The Constitution of the State of Oregon is amended by creating a new section 11M to be added to and made a part of Article XI, such section to read:

Section 11M. Limitation on applicability of sections 11 and 11b on assets tax. (1) The limitations of sections 11 and 11b of this Article do not apply to the assets tax in this section if the assets tax was incurred on or after January 1, 2016:

(2) The Legislative Assembly shall appropriate and allocate in each biennium sums of money for the state’s system of kindergarten through 12th grade public education to fund quality goals established by law.

(a) The sums of money shall consist of, at minimum:

(i) A sum equal to the amount per student in the State School Fund on July 1, 2015, multiplied by the number of students in the state’s system of public education, adjusted for inflation; and

(ii) The revenues from the taxes imposed under subsection (3) of this section.

(b) The fund established under this subsection may be used to collect and administer the tax imposed under subsection (3) of this section.

(3)(a) The Legislative Assembly shall by law:

(A) Impose a tax of 2.5 percent per year on all of a person’s assets in Oregon if the person has over $50 million.

(B) Allow a person to claim as a refund against its taxes imposed in any year under paragraph (a)(A) of this subsection, for which the amount of such refund shall not exceed its assets tax paid for that year, any tax on assets in this section which another person has paid with respect to that year.

(C) Require that the legal burden of reporting, compliance, and proof is on the person.

(D) Require that a person with less than one-fifth of the assets required to pay the tax not be required to report its assets for purposes of the tax in this section.

(E) Not allow blockage discounts or discounts for lack of marketability in calculating the taxable valuation of assets.

(F) Distribute, apportion, or allocate property valuation between or among any two or more persons owned or controlled directly or indirectly by the same interests, if determined that such distribution, apportionment, or allocation is necessary in order to clearly reflect the valuation of any of such taxpayers.

(G) Require a biennial audit of revenue and distribution.

(b) As used in this subsection:

(A) “Assets” means the sum of the market value of all assets in the proportion to which a person has an indirect or direct ownership or beneficial interest, including real property, cash, savings accounts, bonds, business ownership and other investments, after deducting outstanding liabilities.

(B) “Person” means an individual, corporation, including nonprofit corporation, business trust, estate, trust, partnership, limited liability company, association, joint venture, affiliated group, unitary business group or foreign government.

(c) For the tax imposed under paragraph (a) of this subsection, the Legislative Assembly shall provide that:

(A) Real property is in Oregon if located in Oregon, and shall be taxed at the gross value, which shall be the minimum value owed by the person for (3)(a)(A), not reduced or encumbered by loans, debt, or other intangibles.

(B) Personal property and intangible assets wherever located are in Oregon if the taxpayer is a resident of Oregon.

(C) The taxable value of personal property and intangible assets for a person other than an individual is the worldwide value of the person’s assets multiplied by the percent in Oregon of the average of the person’s:

(i) Real property;

(ii) Wages (including employee benefits); and

(iii) Sales.

(d)(A) The tax required by paragraph (a) of this subsection must apply to tax years beginning January 1, 2016.

(B) The obligations imposed by subsection (2) of this section as amended by this 2016 measure apply beginning with the biennium that begins July 1, 2017.