Bill Text: OR SJR8 | 2011 | Regular Session | Introduced

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Bill Title: Proposing amendment to Oregon Constitution relating to valuation of property.

Spectrum: Unknown

Status: (Failed) 2011-06-30 - In committee upon adjournment. [SJR8 Detail]

Download: Oregon-2011-SJR8-Introduced.html

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     76th OREGON LEGISLATIVE ASSEMBLY--2011 Regular Session

NOTE:  Matter within  { +  braces and plus signs + } in an
amended section is new. Matter within  { -  braces and minus
signs - } is existing law to be omitted. New sections are within
 { +  braces and plus signs + } .

 LC 2694

                    Senate Joint Resolution 8

Printed pursuant to Senate Interim Rule 213.28 by order of the
  President of the Senate in conformance with presession filing
  rules, indicating neither advocacy nor opposition on the part
  of the President (at the request of Senate Interim Committee on
  Finance and Revenue)

                             SUMMARY

The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure as
introduced.

  Proposes amendment to Oregon Constitution creating minimum
assessed value for ad valorem property taxation equal to 50
percent of real market value and maximum assessed value for
property taxation equal to 75 percent of real market value.
Changes exception valuation of property to 75 percent of real
market value. Adds to classes of property subject to exception
valuation property sold or transferred to new owner.
  Applies to tax years beginning after July 1, 2010.
  Refers proposed amendment to people for their approval or
rejection at next regular general election.

                        JOINT RESOLUTION
Be It Resolved by the Legislative Assembly of the State of
  Oregon:
  PARAGRAPH 1. Section 11, Article XI of the Constitution of the
State of Oregon, is amended to read:
   { +  Sec. 11. + } (1)(a) For the tax year beginning July 1,
1997, each unit of property in this state shall have a maximum
assessed value for ad valorem property tax purposes that does not
exceed the property's real market value for the tax year
beginning July 1, 1995, reduced by 10 percent.
  (b) For tax years beginning after July 1,   { - 1997, - }  { +
2010, each unit of property in this state shall have a minimum
assessed value for ad valorem property tax purposes equal to 50
percent of the property's real market value and + } the
property's maximum assessed value shall not increase by more than
three percent from the previous tax year.
  (c) Notwithstanding paragraph (a) or (b) of this subsection,
property shall be valued at   { - the ratio of average maximum
assessed value to average real market value of property located
in the area in which the property is located that is within the
same property class - }  { +  75 percent of the property's real
market value + }, if on or after July 1,   { - 1995 - }  { +
2010 + }:
  (A) The property is new property or new improvements to
property;
  (B) The property is partitioned or subdivided;
  (C) The property is rezoned and used consistently with the
rezoning;
  (D) The property is first taken into account as omitted
property;
  (E) The property becomes disqualified from exemption, partial
exemption or special assessment;   { - or - }
  (F) A lot line adjustment is made with respect to the property,
except that the total assessed value of all property affected by
a lot line adjustment shall not exceed the total maximum assessed
value of the affected property under paragraph (a) or (b) of this
subsection  { - . - }  { + ; or
  (G) The property is sold or transferred to a new owner. + }
  (d) Property shall be valued under paragraph (c) of this
subsection only for the first tax year in which the changes
described in paragraph (c) of this subsection are taken into
account following   { - the effective date of this section - }
 { +  June 19, 1997 + }. For each tax year thereafter, the limits
described in paragraph (b) of this subsection apply.
  (e) The Legislative Assembly shall enact laws that
 { - establish property classes and areas - }   { + define 'sale'
and 'transfer' + } sufficient to make a determination under
paragraph (c) of this subsection.
  (f) Each property's assessed value shall not exceed  { + 75
percent of + } the property's real market value.
  (g) There shall not be a reappraisal of the real market value
used in the tax year beginning July 1, 1995, for purposes of
determining the property's maximum assessed value under paragraph
(a) of this subsection.
  (2) { + (a) + } The maximum assessed value of property that is
assessed under a partial exemption or special assessment law
shall be determined { + :
  (A) + }   { - by - }   { + By + } applying the percentage
reduction of paragraph (a)  { + of subsection (1) of this
section + } and the limit of paragraph (b) of subsection (1) of
this section  { - , - }  { + ; + } or
   { +  (B) + }   { - if - }   { + If + } newly eligible for
partial exemption or special assessment,   { - using a ratio
developed in a manner consistent with - }  { + as provided in + }
paragraph (c) of subsection (1) of this section   { - to the
property's partially exempt or specially assessed value in the
manner provided by law - } .
   { +  (b) + } After disqualification from partial exemption or
special assessment, any additional taxes authorized by law may be
imposed  { - , but in the aggregate may not exceed the amount
that would have been imposed under this section had the property
not been partially exempt or specially assessed for the years for
which the additional taxes are being collected - }  { +  and the
maximum assessed value of the property shall be determined as
provided in paragraph (c) of subsection (1) of this section + }.
  (3)(a)(A) The Legislative Assembly shall enact laws to reduce
the amount of ad valorem property taxes imposed by local taxing
districts in this state so that the total of all ad valorem
property taxes imposed in this state for the tax year beginning
July 1, 1997, is reduced by 17 percent from the total of all ad
valorem property taxes that would have been imposed under
repealed sections 11 and 11a of this Article (1995 Edition) and
section 11b of this Article but not taking into account Ballot
Measure 47 (1996), for the tax year beginning July 1, 1997.
  (B) The ad valorem property taxes to be reduced under
subparagraph (A) of this paragraph are those taxes that would
have been imposed under repealed sections 11 or 11a of this
Article (1995 Edition) or section 11b of this Article, as
modified by subsection (11) of this section, other than taxes
described in subsection (4), (5), (6) or (7) of this section,
taxes imposed to pay bonded indebtedness described in section 11b
of this Article, as modified by paragraph (d) of subsection (11)
of this section, or taxes described in section 1c, Article IX of
this Constitution.
  (C) It shall be the policy of this state to distribute the
reductions caused by this paragraph so as to reflect:
  (i) The lesser of ad valorem property taxes imposed for the tax
year beginning July 1, 1995, reduced by 10 percent, or ad valorem
property taxes imposed for the tax year beginning July 1, 1994;
  (ii) Growth in new value under subparagraph (A), (B), (C), (D)
or (E) of paragraph (c) of subsection (1) of this section, as
added to the assessment and tax rolls for the tax year beginning
July 1, 1996, or July 1, 1997 (or, if applicable, for the tax
year beginning July 1, 1995); and
  (iii) Ad valorem property taxes authorized by voters to be
imposed in tax years beginning on or after July 1, 1996, and
imposed according to that authority for the tax year beginning
July 1, 1997.
  (D) It shall be the policy of this state and the local taxing
districts of this state to prioritize public safety and public
education in responding to the reductions caused by this
paragraph while minimizing the loss of decision-making control of
local taxing districts.
  (E) If the total value for the tax year beginning July 1, 1997,
of additions of value described in subparagraph (A), (B), (C),
(D) or (E) of paragraph (c) of subsection (1) of this section
that are added to the assessment and tax rolls for the tax year
beginning July 1, 1996, or July 1, 1997, exceeds four percent of
the total assessed value of property statewide for the tax year
beginning July 1, 1997 (before taking into account the additions
of value described in subparagraph (A), (B), (C), (D) or (E) of
paragraph (c) of subsection (1) of this section), then any ad
valorem property taxes attributable to the excess above four
percent shall reduce the dollar amount of the reduction described
in subparagraph (A) of this paragraph.
  (b) For the tax year beginning July 1, 1997, the ad valorem
property taxes that were reduced under paragraph (a) of this
subsection shall be imposed on the assessed value of property in
a local taxing district as provided by law, and the rate of the
ad valorem property taxes imposed under this paragraph shall be
the local taxing district's permanent limit on the rate of ad
valorem property taxes imposed by the district for tax years
beginning after July 1, 1997, except as provided in subsection
(5) of this section.
  (c)(A) A local taxing district that has not previously imposed
ad valorem property taxes and that seeks to impose ad valorem
property taxes shall establish a limit on the rate of ad valorem
property tax to be imposed by the district. The rate limit
established under this subparagraph shall be approved by a
majority of voters voting on the question. The rate limit
approved under this subparagraph shall serve as the district's
permanent rate limit under paragraph (b) of this subsection.
  (B) The voter participation requirements described in
subsection (8) of this section apply to an election under this
paragraph.
  (d) If two or more local taxing districts seek to consolidate
or merge, the limit on the rate of ad valorem property tax to be
imposed by the consolidated or merged district shall be the rate
that would produce the same tax revenue as the local taxing
districts would have cumulatively produced in the year of
consolidation or merger, if the consolidation or merger had not
occurred.
  (e)(A) If a local taxing district divides, the limit on the
rate of ad valorem property tax to be imposed by each local
taxing district after division shall be the same as the local
taxing district's rate limit under paragraph (b) of this
subsection prior to division.

  (B) Notwithstanding subparagraph (A) of this paragraph, the
limit determined under this paragraph shall not be greater than
the rate that would have produced the same amount of ad valorem
property tax revenue in the year of division, had the division
not occurred.
  (f) Rates of ad valorem property tax established under this
subsection may be carried to a number of decimal places provided
by law and rounded as provided by law.
  (g) Urban renewal levies described in this subsection shall be
imposed as provided in subsections (15) and (16) of this section
and may not be imposed under this subsection.
  (h) Ad valorem property taxes described in this subsection
shall be subject to the limitations described in section 11b of
this Article, as modified by subsection (11) of this section.
  (4)(a)(A) A local taxing district other than a school district
may impose a local option ad valorem property tax that exceeds
the limitations imposed under this section by submitting the
question of the levy to voters in the local taxing district and
obtaining the approval of a majority of the voters voting on the
question.
  (B) The Legislative Assembly may enact laws permitting a school
district to impose a local option ad valorem property tax as
otherwise provided under this subsection.
  (b) A levy imposed pursuant to legislation enacted under this
subsection may be imposed for no more than five years, except
that a levy for a capital project may be imposed for no more than
the lesser of the expected useful life of the capital project or
10 years.
  (c) The voter participation requirements described in
subsection (8) of this section apply to an election held under
this subsection.
  (5)(a) Any portion of a local taxing district levy shall not be
subject to reduction and limitation under paragraphs (a) and (b)
of subsection (3) of this section if that portion of the levy is
used to repay:
  (A) Principal and interest for any bond issued before December
5, 1996, and secured by a pledge or explicit commitment of ad
valorem property taxes or a covenant to levy or collect ad
valorem property taxes;
  (B) Principal and interest for any other formal, written
borrowing of moneys executed before December 5, 1996, for which
ad valorem property tax revenues have been pledged or explicitly
committed, or that are secured by a covenant to levy or collect
ad valorem property taxes;
  (C) Principal and interest for any bond issued to refund an
obligation described in subparagraph (A) or (B) of this
paragraph; or
  (D) Local government pension and disability plan obligations
that commit ad valorem property taxes and to ad valorem property
taxes imposed to fulfill those obligations.
  (b)(A) A levy described in this subsection shall be imposed on
assessed value as otherwise provided by law in an amount
sufficient to repay the debt described in this subsection. Ad
valorem property taxes may not be imposed under this subsection
  { - that - }   { + to + } repay the debt at an earlier date or
on a different schedule than established in the agreement
creating the debt.
  (B) A levy described in this subsection shall be subject to the
limitations imposed under section 11b of this Article, as
modified by subsection (11) of this section.
  (c)(A) As used in this subsection, 'local government pension
and disability plan obligations that commit ad valorem property
taxes' is limited to contractual obligations for which the levy
of ad valorem property taxes has been committed by a local
government charter provision that was in effect on December 5,

1996, and, if in effect on December 5, 1996, as amended
thereafter.
  (B) The rates of ad valorem property taxes described in this
paragraph may be adjusted so that the maximum allowable rate is
capable of raising the revenue that the levy would have been
authorized to raise if applied to property valued at real market
value.
  (C) Notwithstanding subparagraph (B) of this paragraph, ad
valorem property taxes described in this paragraph shall be taken
into account for purposes of the limitations in section 11b of
this Article, as modified by subsection (11) of this section.
  (D) If any proposed amendment to a charter described in
subparagraph (A) of this paragraph permits the ad valorem
property tax levy for local government pension and disability
plan obligations to be increased, the amendment must be approved
by voters in an election. The voter participation requirements
described in subsection (8) of this section apply to an election
under this subparagraph. No amendment to any charter described in
this paragraph may cause ad valorem property taxes to exceed the
limitations of section 11b of this Article, as   { - amended - }
 { + modified + } by subsection (11) of this section.
  (d) If the levy described in this subsection was a tax base or
other permanent continuing levy, other than a levy imposed for
the purpose described in subparagraph (D) of paragraph (a) of
this subsection, prior to   { - the effective date of this
section - }  { +  June 19, 1997 + }, for the tax year following
the repayment of debt described in this subsection the local
taxing district's rate of ad valorem property tax established
under paragraph (b) of subsection (3) of this section shall be
increased to the rate that would have been in effect had the levy
not been excepted from the reduction described in subsection (3)
of this section. No adjustment shall be made to the rate of ad
valorem property tax of local taxing districts other than the
district imposing a levy under this subsection.
  (e) If this subsection would apply to a levy described in
paragraph (d) of this subsection, the local taxing district
imposing the levy may elect out of the provisions of this
subsection. The levy of a local taxing district making the
election shall be included in the reduction and ad valorem
property tax rate determination described in subsection (3) of
this section.
  (6)(a) The ad valorem property tax of a local taxing district,
other than a city, county or school district, that is used to
support a hospital facility shall not be subject to the reduction
described in paragraph (a) of subsection (3) of this section. The
entire ad valorem property tax imposed under this subsection for
the tax year beginning July 1, 1997, shall be the local taxing
district's permanent limit on the rate of ad valorem property
taxes imposed by the district under paragraph (b) of subsection
(3) of this section.
  (b) Ad valorem property taxes described in this subsection
shall be subject to the limitations imposed under section 11b of
this Article, as modified by subsection (11) of this section.
  (7) Notwithstanding any other existing or former provision of
this Constitution, the following are validated, ratified,
approved and confirmed:
  (a) Any levy of ad valorem property taxes approved by a
majority of voters voting on the question in an election held
before December 5, 1996, if the election met the voter
participation requirements described in subsection (8) of this
section and the ad valorem property taxes were first imposed for
the tax year beginning July 1, 1996, or July 1, 1997. A levy
described in this paragraph shall not be subject to reduction
under paragraph (a) of subsection (3) of this section but shall
be taken into account in determining the local taxing district's
permanent rate of ad valorem property tax under paragraph (b) of
subsection (3)  { + of + } this section. This paragraph does not
apply to levies described in subsection (5) of this section or to
levies to pay bonded indebtedness described in section 11b of
this Article, as modified by subsection (11) of this section.
  (b) Any serial or one-year levy to replace an existing serial
or one-year levy approved by a majority of the voters voting on
the question at an election held after December 4, 1996, and to
be first imposed for the tax year beginning July 1, 1997, if the
rate or the amount of the levy approved is not greater than the
rate or the amount of the levy replaced.
  (c) Any levy of ad valorem property taxes approved by a
majority of voters voting on the question in an election held on
or after December 5, 1996, and before   { - the effective date of
this section - }  { +  June 19, 1997, + } if the election met the
voter participation requirements described in subsection (8) of
this section and the ad valorem property taxes were first imposed
for the tax year beginning July 1, 1997. A levy described in this
paragraph shall be treated as a local option ad valorem property
tax under subsection (4) of this section. This paragraph does not
apply to levies described in subsection (5) of this section or to
levies to pay bonded indebtedness described in section 11b of
this Article, as modified by subsection (11) of this section.
  (8) An election described in subsection (3), (4), (5)(c)(D),
(7)(a) or (c) or (11) of this section shall authorize the matter
upon which the election is being held only if:
  (a) At least 50 percent of registered voters eligible to vote
in the election cast a ballot; or
  (b) The election is a general election in an even-numbered
year.
  (9) The Legislative Assembly shall replace, from the state's
General Fund, revenue lost by the public school system because of
the limitations of this section. The amount of the replacement
revenue shall not be less than the total replaced in fiscal year
1997-1998.
  (10)(a) As used in this section:
  (A) 'Improvements' includes new construction, reconstruction,
major additions, remodeling, renovation and rehabilitation,
including installation, but does not include minor construction
or ongoing maintenance and repair.
  (B) 'Ad valorem property tax' does not include taxes imposed to
pay principal and interest on bonded indebtedness described in
paragraph (d) of subsection (11) of this section.
  (b) In calculating the addition to value for new property and
improvements, the amount added shall be net of the value of
retired property.
  (11) For purposes of this section and for purposes of
implementing the limits in section 11b of this Article in tax
years beginning on or after July 1, 1997:
  (a)(A) The real market value of property shall be the amount in
cash that could reasonably be expected to be paid by an informed
buyer to an informed seller, each acting without compulsion in an
 { - arm's length - }   { + arm's-length + } transaction
occurring as of the assessment date for the tax year, as
established by law.
  (B) The Legislative Assembly shall enact laws to adjust the
real market value of property to reflect a substantial casualty
loss of value after the assessment date.
  (b) The $5 (public school system) and $10 (other government)
limits on property taxes per $1,000 of real market value
described in subsection (1) of section 11b of this Article shall
be determined on the basis of property taxes imposed in each
geographic area taxed by the same local taxing districts.
  (c)(A) All property taxes described in this section are subject
to the limits described in paragraph (b) of this subsection,
except for taxes described in paragraph (d) of this subsection.

  (B) If property taxes exceed the limitations imposed under
either category of local taxing district under paragraph (b) of
this subsection:
  (i) Any local option ad valorem property taxes imposed under
this subsection shall be proportionally reduced by those local
taxing districts within the category that is imposing local
option ad valorem property taxes; and
  (ii) After local option ad valorem property taxes have been
eliminated, all other ad valorem property taxes shall be
proportionally reduced by those taxing districts within the
category, until the limits are no longer exceeded.
  (C) The percentages used to make the proportional reductions
under subparagraph (B) of this paragraph shall be calculated
separately for each category.
  (d) Bonded indebtedness, the taxes of which are not subject to
limitation under this section or section 11b of this Article,
consists of:
  (A) Bonded indebtedness authorized by a provision of this
Constitution;
  (B) Bonded indebtedness issued on or before November 6, 1990;
or
  (C) Bonded indebtedness:
  (i) Incurred for capital construction or capital improvements;
and
  (ii)(I) If issued after November 6, 1990, and approved prior to
December 5, 1996, the issuance of which has been approved by a
majority of voters voting on the question; or
  (II) If approved by voters after December 5, 1996, the issuance
of which has been approved by a majority of voters voting on the
question in an election that is in compliance with the voter
participation requirements in subsection (8) of this section.
  (12) Bonded indebtedness described in subsection (11) of this
section includes bonded indebtedness issued to refund bonded
indebtedness described in subsection (11) of this section.
  (13) As used in subsection (11) of this section, with respect
to bonded indebtedness issued on or after December 5, 1996, '
capital construction' and 'capital improvements':
  (a) Include public safety and law enforcement vehicles with a
projected useful life of five years or more; and
  (b) Do not include:
  (A) Maintenance and repairs, the need for which could
reasonably be anticipated.
  (B) Supplies and equipment that are not intrinsic to the
structure.
  (14) Ad valorem property taxes imposed to pay principal and
interest on bonded indebtedness described in section 11b of this
Article, as modified by subsection (11) of this section, shall be
imposed on the assessed value of the property determined under
this section or, in the case of specially assessed property, as
otherwise provided by law or as limited by this section,
whichever is applicable.
  (15) If ad valorem property taxes are divided as provided in
section 1c, Article IX of this Constitution, in order to fund a
redevelopment or urban renewal project, then notwithstanding
subsection (1) of this section, the ad valorem property taxes
levied against the increase shall be used exclusively to pay any
indebtedness incurred for the redevelopment or urban renewal
project.
  (16) The Legislative Assembly shall enact laws that allow
collection of ad valorem property taxes sufficient to pay, when
due, indebtedness incurred to carry out urban renewal plans
existing on December 5, 1996. These collections shall cease when
the indebtedness is paid. Unless excepted from limitation under
section 11b of this Article, as modified by subsection (11) of
this section, nothing in this subsection shall be construed to
remove ad valorem property taxes levied against the increase from
the dollar limits in paragraph (b) of subsection (11) of this
section.
  (17)(a) If, in an election on November 5, 1996, voters approved
a new tax base for a local taxing district under repealed section
11 of this Article (1995 Edition) that was not to go into effect
until the tax year beginning July 1, 1998, the local taxing
district's permanent rate limit under subsection (3) of this
section shall be recalculated for the tax year beginning on July
1, 1998, to reflect:
  (A) Ad valorem property taxes that would have been imposed had
repealed section 11 of this Article (1995 Edition) remained in
effect; and
  (B) Any other permanent continuing levies that would have been
imposed under repealed section 11 of this Article (1995 Edition),
as reduced by subsection (3) of this section.
  (b) The rate limit determined under this subsection shall be
the local taxing district's permanent rate limit for tax years
beginning on or after July 1, 1999.
  (18) Section 32, Article I, and section 1, Article IX of this
Constitution, shall not apply to this section.
  (19)(a) The Legislative Assembly shall by statute limit the
ability of local taxing districts to impose new or additional
fees, taxes, assessments or other charges for the purpose of
using the proceeds as alternative sources of funding to make up
for ad valorem property tax revenue reductions caused by the
initial implementation of this section, unless the new or
additional fee, tax, assessment or other charge is approved by
voters.
  (b) This subsection shall not apply to new or additional fees,
taxes, assessments or other charges for a government product or
service that a person:
  (A) May legally obtain from a source other than government; and
  (B) Is reasonably able to obtain from a source other than
government.
  (c) As used in this subsection, 'new or additional fees, taxes,
assessments or other charges' does not include moneys received by
a local taxing district as:
  (A) Rent or lease payments;
  (B) Interest, dividends, royalties or other investment
earnings;
  (C) Fines, penalties and unitary assessments;
  (D) Amounts charged to and paid by another unit of government
for products, services or property; or
  (E) Payments derived from a contract entered into by the local
taxing district as a proprietary function of the local taxing
district.
  (d) This subsection does not apply to a local taxing district
that derived less than 10 percent of the local taxing district's
operating revenues from ad valorem property taxes, other than ad
valorem property taxes imposed to pay bonded indebtedness, during
the fiscal year ending June 30, 1996.
  (e) An election under this subsection need not comply with the
voter participation requirements described in subsection (8) of
this section.
  (20) If any provision of this section is determined to be
unconstitutional or otherwise invalid, the remaining provisions
shall continue in full force and effect.

  PARAGRAPH 2.  { + The amendment proposed by this resolution
shall be submitted to the people for their approval or rejection
at the next regular general election held throughout this
state. + }
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