Chapter 753 Oregon Laws 2001

AN ACT

HB 2208

Relating to taxation; creating new provisions; amending ORS 294.435, 294.480, 307.242, 307.244, 307.325, 307.400, 310.060, 310.692, 311.370, 311.645, 311.668, 311.676, 311.706, 311.708, 312.140 and 609.100 and section 2, chapter 266, Oregon Laws 1993; and prescribing an effective date.

Be It Enacted by the People of the State of Oregon:

SECTION 1. ORS 311.645 is amended to read:

311.645. (1) Whenever, after delinquency, in the opinion of the tax collector, it becomes necessary to charge taxes on personal property against real property in order that the personal property taxes may be collected, the tax collector shall select for the purpose some particular tract or lots of real property owned by the person, firm, corporation or association owing the personal property taxes and shall note on the tax roll opposite the tract or lots selected the taxes on the personal property. Thereafter, [such] the personal property taxes shall be a lien on the real property selected and shall be enforced in the same manner as other tax liens on real property. The notation of the lien [on the tax roll], with the date thereof [and the initials of the officer making the notation], shall be entered [by writing the notation, date and initials with ink] on the tax roll. Unless the notation[, date and initials] and date are [so] entered on the roll, the lien shall be of no force or effect.

(2) Subsection (1) of this section shall not be applicable to real property as to which all of the following conditions exist:

(a) The property is owned as tenants by the entirety by a member of a partnership and the spouse of the member who is not a member of the partnership.

(b) The property is used as the personal residence of the spouse.

(c) The partner contributed no part of the consideration in the transaction which vested an ownership interest in the spouse.

(d) The delinquent personal property taxes for which a lien is sought under subsection (1) of this section are the taxes of the partnership and not of the spouse.

(3) Any lien upon real property described in subsection (2) of this section is void and of no effect.

(4) Any lien upon property described in subsection (2) of this section existing on August 22, 1969, or which may hereinafter be imposed, shall be extinguished, set aside and held for naught upon the verified petition of the spouse to the county commissioners and proof by the spouse of the requirements described in subsection (2) of this section. Upon approval of the petition, the county commissioners shall order the necessary correction to be made in the tax rolls.

SECTION 2. ORS 312.140 is amended to read:

312.140. (1) A mortgagee or other holder of a recorded lien on real property may file with the tax collector a request that notice of any foreclosure list including [such] the real property be given to [such] the mortgagee or other lienholder. The request shall contain the name and address of the person filing it, the description of the property and the name of the owner or reputed owner thereof, and the date of expiration of the mortgage or lien. Notice need not be given after expiration of the mortgage or lien, unless a further request therefor is filed. If the mortgagee or lienholder furnishes a duplicate form of request for the notice, the tax collector shall certify thereon to the filing and return the duplicate to the person making the request.

(2) Whenever any property described in the request for notice is included in a foreclosure list, the tax collector shall send by registered mail or by certified mail with return receipt written notice thereof to the mortgagee or other lienholder. At the time of mailing the notice the tax collector shall note that fact [in ink] in the latest tax roll opposite the description of the property. The notation in the tax roll is prima facie evidence that the notice was mailed. Where the same mortgagee or lienholder has filed requests for notices on two or more properties included in a foreclosure list, one general notice may be issued covering all such properties.

SECTION 3. Section 4 of this 2001 Act is added to and made a part of ORS 294.305 to 294.565.

SECTION 4. (1) Following the adoption of a budget under ORS 294.435 that does not include revenue from a proposed local option tax, if a municipal corporation places a local option tax measure on the ballot for an election held in September and the electors of the municipal corporation approve the measure, in order to impose the local option tax during the current fiscal year or current budget period the governing body of the municipal corporation must:

(a) Adopt an ordinance or resolution to determine, make and declare the local option tax and to categorize the local option tax amount or rate as provided in ORS 310.060;

(b) Receive from the assessor of the county in which the municipal corporation is located (or, if the municipal corporation is located in more than one county, from the assessor of each county in which the municipal corporation is located) written approval to file a supplemental notice of property tax as described in ORS 310.060 (9); and

(c) File with the assessor of the county in which the municipal corporation is located (or, if the municipal corporation is located in more than one county, with the assessor of each county in which the municipal corporation is located) two copies of the ordinance or resolution described in paragraph (a) of this subsection, two copies of the supplemental notice of property tax required under ORS 310.060 and two copies of the approved local option tax measure.

(2) Funds raised by a local option tax described in this section may not be expended by the municipal corporation unless the municipal corporation has adopted a supplemental budget in accordance with ORS 294.480. Funds may be expended only in accordance with the supplemental budget so adopted.

(3) As soon as received, the county assessor shall forward one copy of each of the documents described in subsection (1)(c) of this section to the Department of Revenue.

SECTION 5. ORS 294.435 is amended to read:

294.435. (1) After the public hearing provided for in ORS 294.430 (1) has been held, the governing body shall enact the proper ordinances or resolutions to adopt the budget, to make the appropriations, to determine, make and declare the ad valorem property tax amount or rate to be certified to the assessor for the ensuing year and to itemize and categorize the ad valorem property tax amount or rate as provided in ORS 310.060. Consideration shall be given to matters discussed at the public hearing. The budget estimates and proposed ad valorem property tax amount or rate as shown in the budget document may be amended prior to adoption and may also be amended by the governing body following adoption if such amendments are adopted prior to the commencement of the fiscal year to which the budget relates. However, the amount of estimated expenditures for each fund [shall] may not be increased by more than $5,000 or 10 percent of the estimated expenditures, whichever is greater, and the amount or rate of the total ad valorem property taxes to be certified by the municipal corporation to the assessor [shall] may not exceed the amount approved by the budget committee[,]:

(a) Unless the amended budget document is republished as provided by ORS 294.416 or 294.418 and 294.421 for the original budget and another public hearing is held as provided by ORS 294.430 (1); or

(b) Except to the extent ad valorem property taxes may be increased pursuant to section 4 of this 2001 Act.

(2) After the public hearing provided for in ORS 294.430 (2) or (3) has been held and the certification of the tax supervising and conservation commission received, if such certification is required, the governing body shall enact the proper ordinances or resolutions to adopt the budget, to make the appropriations, to determine, make and declare the ad valorem property tax amount or rate and to itemize and categorize the ad valorem property tax amount or rate as provided in ORS 310.060. Consideration shall be given any orders, recommendations or objections made by the tax supervising and conservation commission in accordance with law. The action taken on each order, recommendation or objection after such consideration by the governing body, with the reasons for such action, shall be included in the ordinance or resolution adopting the budget. A certified copy of the ordinance or resolution shall be sent to the commission within 15 days after the date the ordinance or resolution is adopted. The budget estimates, appropriations and ad valorem property tax amount or rate as shown in the budget document may be amended prior to adoption and may also be amended by the governing body following adoption if such amendments are adopted prior to the commencement of the fiscal year to which the budget relates. However, the amount of estimated expenditures for each fund [shall] may not be increased by more than $5,000 or 10 percent of the estimated expenditures, whichever is greater, and the amount or rate of the total ad valorem property taxes to be certified by the municipal corporation to the assessor [shall] may not exceed the amount shown in the budget document at the time of the budget hearing[,]:

(a) Unless the amended budget document is resubmitted to the tax supervising and conservation commission for another public hearing, and for recommendations or objections of that body; or

(b) Except to the extent ad valorem property taxes may be increased pursuant to section 4 of this 2001 Act.

(3) The appropriations required by subsections (1) and (2) of this section shall, as a minimum, contain one amount for each organizational unit or program of each fund. In addition, separate amounts shall be appropriated in each fund for debt service, special payments, interfund revenue transfers, capital outlay, operating expenses which cannot be allocated to an organizational unit or program and operating contingencies. If the governing body so desires, it may appropriate separate amounts for activities within an organizational unit or program. For those municipal corporations where the term “organizational unit” has no application, the appropriations shall contain separate amounts for personal services, materials and services, capital outlay, debt service, special payments, interfund revenue transfers and operating contingency for each fund.

(4) Thereafter no greater expenditure, or encumbrance if encumbrance accounting is used, of public money shall be made for any specific purpose other than the amount appropriated therefor except as provided in ORS 294.326, 294.440, 294.450 and 294.480.

(5) The determination of the amount or rate of ad valorem property taxes to be certified shall be entered in the proper records of the governing body. Except as provided in section 4 of this 2001 Act, no greater tax than that so entered upon the record shall be certified by the municipal corporation proposing the tax for the purpose or purposes indicated.

(6) Nothing contained in this section shall preclude a governing body during the fiscal year by appropriate ordinance or resolution, after public hearing, from adjusting budgeted resources and reducing appropriations to reflect a decrease in available resources.

(7)(a) The governing body shall determine, make and declare ad valorem property taxes under subsections (1) and (2) of this section as a rate per $1,000 of assessed value if the taxes are operating taxes or rate-based local option taxes as a rate per $1,000 of assessed value.

(b) The governing body shall determine, make and declare ad valorem property taxes under subsections (1) and (2) of this section as an amount if the taxes are being certified as amount-based local option taxes, to pay principal and interest on exempt bonded indebtedness or to pay other government obligations described in section 11 (5), Article XI of the Oregon Constitution.

SECTION 6. ORS 294.480, as amended by section 25, chapter 135, Oregon Laws 2001 (Enrolled House Bill 2022), is amended to read:

294.480. (1) Notwithstanding requirements as to estimates of and limitation on expenditures, the governing body of any municipal corporation may make a supplemental budget for the fiscal year or budget period for which the regular budget has been prepared under one or more of the following circumstances:

(a) An occurrence or condition which had not been ascertained at the time of the preparation of a budget for the current year or current budget period which requires a change in financial planning.

(b) A pressing necessity which was not foreseen at the time of the preparation of the budget for the current year or current budget period which requires prompt action.

(c) Funds were made available by another unit of federal, state or local government and the availability of such funds could not have been ascertained at the time of the preparation of the budget for the current year or current budget period.

(d) A request for services or facilities, the cost of which shall be supplied by a private individual, corporation or company or by another governmental unit and the amount of the request could not have been accurately ascertained at the time of the preparation of the budget for the current year or current budget period.

(e) Proceeds from the involuntary destruction, involuntary conversion, or sale of property has necessitated the immediate purchase, construction or acquisition of different facilities in order to carry on the governmental operation.

(f) Ad valorem property taxes are received during the fiscal year or budget period in an amount sufficiently greater than the amount estimated to be collected that the difference will significantly affect the level of government operations to be funded by those taxes as provided in the budget for the current year or current budget period.

(g) A local option tax described in section 4 of this 2001 Act is certified for extension on the assessment and tax roll under ORS 310.060 for the fiscal year or budget period in which the local option tax measure is approved by voters.

(2) A supplemental budget [shall] may not extend beyond the end of the fiscal year or budget period during which it is submitted.

(3) When the estimated expenditures contained in a supplemental budget for a fiscal year or budget period differ by less than 10 percent of any one of the individual funds contained in the regular budget for that fiscal year or budget period that is being changed in the supplemental budget, the governing body of the municipal corporation may adopt the supplemental budget at a regular meeting of the governing body. Notice of such regular meeting, including sufficient detail on revenues and expenditures, shall be published by one or more of the methods permitted under ORS 294.311 (35) not less than five days prior to the meeting. Following such meeting, the governing body shall make additional appropriations and may thereafter make additional expenditures as authorized by such appropriations.

(4) When the estimated expenditures contained in a supplemental budget for a fiscal year or budget period differ by 10 percent or more of any one of the individual funds contained in the regular budget for that fiscal year or budget period that is being changed in the supplemental budget, the supplemental budget, or a summary thereof, shall be published, or, in counties having a tax supervising and conservation commission, shall be submitted to the tax supervising and conservation commission within the county. The governing body, or, where applicable, the tax supervising and conservation commission shall then hold a public hearing on the supplemental budget. Publication of the budget and notice of the hearing shall be given in the manner provided in ORS 294.421. Following such hearing, the governing body shall make additional appropriations and may thereafter make additional expenditures as authorized by such appropriations.

(5) Except as provided in section 4 of this 2001 Act, the making of a supplemental budget [shall] does not authorize the governing body to increase the municipal corporation’s total ad valorem property taxes above the amount or rate published with the regular budget and certified to the assessor under ORS 310.060 in conjunction with the regular budget for the fiscal year or for each fiscal year of the budget period to which the supplemental budget applies.

SECTION 7. ORS 310.060 is amended to read:

310.060. (1) Not later than July 15 of each year, every city, school district or other public corporation authorized to levy or impose a tax on property shall file a written notice certifying the ad valorem property tax rate or the estimated amount of ad valorem property taxes to be imposed by the taxing district and any other taxes on property imposed by the taxing district on property subject to ad valorem property taxation that are required or authorized to be placed on the assessment and tax roll for the current fiscal year. The notice shall be accompanied by [a copy] two copies of a lawfully adopted ordinance or resolution that categorizes the tax, fee, charge, assessment or toll as subject to or not subject to the limits of section 11b, Article XI of the Oregon Constitution, identified by the categories set forth in ORS 310.150.

(2) For any ad valorem property taxes levied by the taxing district, the notice shall state as separate items:

(a) The taxing district’s rate of ad valorem property taxation that is within the permanent rate limitation imposed by section 11 (3), Article XI of the Oregon Constitution, or within the statutory rate limit determined in ORS 310.236 (4)(b) or 310.237, if applicable;

(b) The total rate or amount of the taxing district’s local option taxes imposed pursuant to ORS 280.040 to 280.145 that have a term of five years or less and that are not for capital projects;

(d) The total amount levied for the payment of bonded indebtedness or interest thereon that is not subject to limitation under section 11 (11) or section 11b, Article XI of the Oregon Constitution; and

(e) The total amount levied that is subject to section 11b, Article XI of the Oregon Constitution, but that is not subject to the permanent ad valorem property tax rate limit described in section 11 (3), Article XI of the Oregon Constitution, because the amount levied is to be 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.

(3)(a) The notice shall also list each rate or amount subject to the limits of section 11b, Article XI of the Oregon Constitution, identified by the categories set forth in ORS 310.150.

(b) If an item described in subsection (2) of this section is allocable to more than one category described in ORS 310.150, the notice shall list separately the portion of each item allocable to each category.

(4) For any other taxes on property imposed by the taxing district, the notice shall state:

(a) The total amount of money to be raised by each other tax, in the aggregate or on a property by property basis, as appropriate.

(b) Each amount that is subject to the limits of section 11b, Article XI of the Oregon Constitution, identified by the categories set forth in ORS 310.150.

(5) For any district authorized by law to place any other fees, charges, assessments or tolls on the assessment and tax roll, the notice shall state the total amount of money to be raised on a property by property basis.

(6) In addition to the notice required under subsection (1) of this section, any taxing district that is subject to the Local Budget Law shall also provide the documents required by ORS 294.555 (2).

(7) Not later than July 15 of each year, the taxing district shall give the notice and documents described in this section to the assessor of the county in which the principal office of the taxing district is located and, if the taxing district is located in more than one county, to the assessor of each county in which any part of the taxing district is located. Not later than September 30 of each year, the taxing district shall provide a complete copy of the budget document to the clerk of the county in which the principal office of the taxing district is located and, if the taxing district is located in more than one county, to the clerk of each county in which any part of the taxing district is located.

(8) The Department of Revenue shall prescribe the form of notice required by this section. All amounts shall be stated in dollars and cents or ad valorem property tax rates in dollars and cents per thousand dollars of assessed value, as required by law. If the notice is given to the assessor and the clerk of more than one county, a copy of each other such notice given shall accompany every notice given. Upon the giving of the notice, every school district located in a county to which ORS 334.350 to 334.400 apply immediately shall supply a copy thereof to the school superintendent of the county wherein the district is located. Immediately upon receipt thereof every such notice and copy shall be filed in the office of the receiving officer.

(9) For good and sufficient reason, the county assessor may extend the time for the giving of the notice or correcting an erroneous certification for the current year up to but not later than October 1 as the county assessor considers reasonable.

SECTION 8. Section 4 of this 2001 Act and the amendments to ORS 294.435, 294.480 and 310.060 by sections 5 to 7 of this 2001 Act apply to fiscal years and tax years beginning on or after July 1, 2002.

SECTION 9. ORS 311.370 is amended to read:

311.370. (1)(a) For all taxes, penalties and other charges collected by the tax collector under, including, but not limited to, ORS 92.095, 100.110, 308.260, 308.865, 308A.119, 308A.324, 308A.700 to 308A.733, 311.165, 311.415, 311.465, 354.690, 358.525 and 454.225, the tax collector shall issue receipts similar in form to the receipts issued on payment of taxes regularly charged on the tax roll.

(b) The assessor shall enter all assessments of property to which paragraph (a) of this subsection applies in the assessment roll and shall make proper entries showing the extension of the taxes in the usual manner and as though no payment to the tax collector had been made.

(2) Upon receipt thereof, the tax collector shall deposit with the county treasurer all money collected by the tax collector under subsection (1) of this section. The county treasurer shall issue to the tax collector duplicate receipts for the money and shall hold it in a special account in the name of the tax collector.

(3) Upon delivery of the assessment roll pursuant to ORS 311.115, the tax collector shall post the payments evidenced by the receipts, and the amount of any underpayment or overpayment. The tax collector shall then make a statement to the county treasurer which shall specify the amount to be retained in the special account to make the refunds required under subsection (4)[(b)] of this section. The tax collector shall direct the county treasurer to transfer [dispose of] the balance in the special account [in the same manner as other tax payments] to the unsegregated tax collections account described in ORS 311.385.

(4) Any sum collected by the tax collector [which is in excess of] that exceeds the amount extended on the tax roll as provided in subsection (1)(b) of this section by $5 or more [shall be disposed of by the tax collector as follows:]

[(a) Any excess under $5 shall be paid to the districts in which the taxed property is located in the same manner as interest on taxes is paid to such districts.]

[(b) Any excess of $5 or over] shall be refunded to the taxpayer by the county treasurer upon receiving instructions for doing so from the tax collector. If an amount remains that cannot be refunded by June 30 of the next calendar year, the tax collector shall instruct the treasurer to [distribute the moneys to the taxing districts in the same manner as the excesses are distributed under paragraph (a) of this subsection] transfer the amount to the unsegregated tax collections account described in ORS 311.385.

(5) If a sum less than the tax charged on the tax roll has been collected, the deficiency shall be canceled by the tax collector if such sum is $5 or less, and the tax collector shall note upon the tax roll opposite the appropriate account, “Tax deficiency canceled pursuant to ORS 311.370.” Otherwise, the deficiency shall be collected as provided by law.

(6) If an appeal [which] that is perfected under ORS 311.467 for taxes collected under ORS 311.465 results in a refund under ORS 311.806, the reimbursement for the refund to the unsegregated tax collections account shall be made from the account provided for in subsection (2) of this section.

SECTION 10. The amendments to ORS 311.370 by section 9 of this 2001 Act apply to tax years beginning on or after July 1, 2002.

SECTION 11. ORS 307.325 is amended to read:

307.325. (1) The items of personal property described in subsection (2) of this section which, on the assessment date, are owned and in the actual or constructive possession of the farmer who produced them or who has procured them for use or consumption in the farm operations of the farmer, shall be exempt from taxation.

(2) The items referred to in subsection (1) of this section are as follows:

(a) Grain.

(b) Seed.

(d) Fruit.

(e) Vegetables.

(f) Nuts.

(g) Hops.

(h) Wool.

(i) Fish.

(j) Poultry [held primarily for sale for human consumption].

(k) Butter, cheese and evaporated, condensed or concentrated milk.

(L) Mint.

(m) Bivalve mollusks.

(n) Livestock.

(o) Fur-bearing animals.

(p) Bees.

SECTION 12. ORS 307.400 is amended to read:

307.400. [(1) Livestock, poultry, fur-bearing animals and bees are exempt from ad valorem taxation.]

[(2) All inventory shall be exempt from ad valorem taxation.]

[(3) As used in subsection (2) of this section, “inventory” means the following tangible personal property:]

[(a) Farm machinery and equipment used primarily in the preparation of land, planting, raising, cultivating, irrigating, harvesting or placing in storage of farm crops; or]

[(b) Farm machinery and equipment used primarily for the purpose of feeding, breeding, management and sale of, or the produce of, livestock, poultry, fur-bearing animals or bees or for dairying and the sale of dairy products; or]

[(c) Farm machinery and equipment used primarily in any other agricultural or horticultural use or animal husbandry or any combination thereof; or]

[(d) Items of tangible personal property, including but not limited to, tools, machinery and equipment, owned by or in the possession or under the control of the taxpayer that are used by the taxpayer predominantly in the construction, reconstruction, maintenance, repair, support or operation of that farm machinery, equipment and other real and personal farm improvements, that are:]

[(A) Owned by or in the possession or under the control of the taxpayer; and]

[(B) Used primarily in the animal husbandry, agricultural or horticultural activities, or combination of animal husbandry, agricultural or horticultural activities, carried on by the taxpayer; or]

[(e) Center pivots, wheel lines, movable set lines; or]

[(f)] Items of tangible personal property [described as] consisting of inventory, including but not limited to materials, supplies, containers, goods in process, finished goods and other personal property owned by or in possession of the taxpayer, that are or will become part of the stock in trade of the taxpayer held for sale in the ordinary course of business, are exempt from ad valorem property taxation.

[(4) As used in this section:]

[(a) “Center pivot” means a piece of self-propelled machinery that rotates around a riser for the purpose of sprinkling a circular tract of land. “Center pivot” includes all of the component parts of the center pivot irrigation system that are ordinarily located above the ground on the land to be irrigated and that can be disconnected from the riser and moved to another point. A center pivot constitutes personal property.]

[(b) “Center pivot irrigation system” means an irrigation system that uses pumping stations and pipelines to convey water from its source to a riser to which a center pivot may be connected and used for sprinkling.]

[(c) “Riser” means a pipe located in the field to be irrigated that rises vertically up through the surface of the ground.]

[(5) The following are exempt from ad valorem taxation:]

[(a) Frost control systems used in agricultural or horticultural activities carried on by the farmer.]

[(b) Trellises used for hops, beans or fruit or for other agricultural or horticultural purposes.]

[(c) Hop harvesting equipment, including but not limited to, hop pickers.]

[(d) Oyster racks, trays, stakes and other in-water structures used to raise bivalve mollusks.]

[(e) Equipment used for the fresh shell egg industry that is directly related and reasonably necessary to produce, prepare, package and ship fresh shell eggs from the place of origin to market, whether bolted to the floor, wired or plumbed to interconnected equipment, including, but not limited to, grain bins, conveyors for transporting grain, grain grinding machinery, feed storage hoppers, cages, egg collection conveyors and equipment for washing, drying, candling, grading, packaging and shipping fresh shell eggs.]

[(6) There shall be exempt from ad valorem taxation the radio communications equipment, meteorological equipment and other personal property used in connection with the operation of the field burning smoke management program established under ORS 468A.555 to 468A.620 and 468A.992.]

SECTION 13. ORS 609.100 is amended to read:

609.100. (1) In a county, precinct or city having a dog control program under ORS 609.030, 609.040 to 609.110 and 609.405, every person keeping a dog that has a set of permanent canine teeth or is six months old, whichever comes first, shall procure a license for the dog. The license must be procured by paying a license fee to the county in which the person resides not later than March 1 of each year or within 30 days after the person becomes keeper of the dog. However, the county governing body may provide for dates other than March 1 for annual payment of fees. The fee for the license shall be determined by the county governing body in such amount as it finds necessary to carry out ORS 609.040 to 609.110. A license fee shall not be less than $25 for each dog, except that the fee shall not be less than $3 for each spayed female or neutered male dog for which a veterinarian’s certificate of operation for the spaying or neutering of the dog is presented to the county. If the person fails to procure a license within the time provided by this section, the county governing body may prescribe a penalty in an additional sum to be set by the governing body.

(2) The county shall, at the time of issuing a license, supply the licensee, without charge, with a suitable identification tag, which shall be fastened by the licensee to a collar and kept on the dog at all times when not in the immediate possession of the licensee.

(3) The license fees in subsection (1) of this section do not apply to dogs that are kept primarily in kennels and are not permitted to run at large. The county governing body may establish a separate license for dogs that are kept primarily in kennels when the dogs cease to be [taxed as] considered inventory under ORS 307.400, the fee for which shall not exceed $5 per dog.

(4) No license fee shall be required to be paid for any dog kept by a blind person who uses it as a guide. A license shall be issued for such dog upon the blind person’s filing of an affidavit with the county showing that the dog qualifies for exemption.

(5) The county shall keep a record of dog licenses.

(6) Notwithstanding any other provision of this section or ORS 609.015, when the keeper of a dog obtains a license for the dog, that license is valid and is in lieu of a license for the dog required by any other city or county within this state, for the remainder of the license period:

(a) If the keeper of the dog changes residence to a city or county other than the city or county in which the license was issued; or

(b) If the keeper of the dog transfers the keeping of the dog to a person who resides in a city or county other than the city or county in which the license was issued.

SECTION 14. Sections 15 to 18 of this 2001 Act are added to and made a part of ORS chapter 307.

SECTION 15. (1) The following tangible personal property is exempt from ad valorem property taxation:

(a) Farm machinery and equipment used primarily in the preparation of land, planting, raising, cultivating, irrigating, harvesting or placing in storage of farm crops;

(b) Farm machinery and equipment used primarily for the purpose of feeding, breeding, management and sale of, or the produce of, livestock, poultry, fur-bearing animals or bees or for dairying and the sale of dairy products; or

(c) Farm machinery and equipment used primarily in any other agricultural or horticultural use or animal husbandry or any combination of these activities.

(2)(a) Items of tangible personal property, including but not limited to tools, machinery and equipment that are used predominantly in the construction, reconstruction, maintenance, repair, support or operation of farm machinery, and equipment and other real or personal farm improvements that are used primarily in animal husbandry, agricultural or horticultural activities, or any combination of these activities, are exempt from ad valorem property taxation.

(b) An item of tangible personal property described in paragraph (a) of this subsection is exempt from ad valorem property taxation only if the person that owns, possesses or controls the item also:

(A) Owns, possesses or controls the farm machinery, equipment and other real and personal farm improvements for which the item is used; and

(B) Carries on the animal husbandry, agricultural or horticultural activity, or combination of activities, in which the farm machinery, equipment or other real and personal farm improvements are used.

SECTION 16. The following items of real property machinery and equipment or tangible personal property are exempt from ad valorem property taxation:

(1) Frost control systems used in agricultural or horticultural activities carried on by the farmer;

(2) Trellises used for hops, beans or fruit or for other agricultural or horticultural purposes;

(3) Hop harvesting equipment, including but not limited to hop pickers;

(4) Oyster racks, trays, stakes and other in-water structures used to raise bivalve mollusks; or

(5) Equipment used for the fresh shell egg industry that is directly related and reasonably necessary to produce, prepare, package and ship fresh shell eggs from the place of origin to market, whether bolted to the floor, wired or plumbed to interconnected equipment, including but not limited to grain bins, conveyors for transporting grain, grain grinding machinery, feed storage hoppers, cages, egg collection conveyors and equipment for washing, drying, candling, grading, packaging and shipping fresh shell eggs.

SECTION 17. (1) Center pivots, wheel lines or movable set lines are exempt from ad valorem property taxation.

(2) As used in this section:

(a) “Center pivot” means a piece of self-propelled machinery that rotates around a riser for the purpose of sprinkling a circular tract of land. “Center pivot” includes all of the component parts of the center pivot irrigation system that are ordinarily located above the ground on the land to be irrigated and that can be disconnected from the riser and moved to another point. A center pivot constitutes personal property.

(b) “Center pivot irrigation system” means an irrigation system that uses pumping stations and pipelines to convey water from its source to a riser to which a center pivot may be connected and used for sprinkling.

(c) “Riser” means a pipe located in the field to be irrigated that rises vertically through the surface of the ground.

SECTION 18. Radio communications equipment, meteorological equipment or other tangible personal property used in connection with the operation of the field burning smoke management program established under ORS 468A.555 to 468A.620 and 468A.992 is exempt from ad valorem property taxation.

SECTION 19. Sections 15 to 18 of this 2001 Act and the amendments to ORS 307.325 and 307.400 by sections 11 and 12 of this 2001 Act apply to property tax years beginning on or after July 1, 2002.

SECTION 20. ORS 310.692 is amended to read:

310.692. (1) Amounts necessary to make the payments authorized by ORS 307.244 and 310.635 [may] shall be transferred to a suspense account established under ORS 293.445 from the appropriation made by the Legislative Assembly to fund the elderly rental assistance program.

(2) If any portion of the tax liability for which the refund payments described in subsection (1) of this section are authorized are offset against the refund, the Department of Revenue shall transfer from the suspense account referred to in subsection (1) of this section to the General Fund an amount equal to the income tax liability.

(3) Of the total amount transferred to the suspense account referred to in subsection (1) of this section for the biennium, the department shall allocate a portion to each fiscal year. The allocation shall be the department’s best estimate of the most efficient use of the moneys in the suspense account so as to minimize any reductions in the payments required under ORS 307.244 and 310.635 for each fiscal year.

[(3)] (4) On or before [September 15] November 1 of each fiscal year of each biennium, the Department of Revenue shall [estimate] determine the amount of money needed to make the payments under ORS 307.244 and 310.635 for that fiscal year. If the sum of the obligations is [estimated to be] greater than the amounts credited to the suspense account referred to in [ORS 293.445 for the] subsection (1) of this section and allocated to that fiscal year for those obligations under subsection (3) of this section, the [elderly rental assistance] payments required under ORS 307.244 and 310.635 shall be proportionally reduced [in order] so that the state [shall] does not accrue a debt in excess of the amount credited. [No claim for payment shall] A claim for payment may not accrue to a taxpayer under ORS 310.635 or to a county under ORS 307.244 in excess of the amount determined under this subsection.

(5) If the amount allocated to the first fiscal year of a biennium under subsection (3) of this section exceeds the amount of actual payments made under ORS 307.244 or 310.635, the excess amount shall be available for payments under ORS 307.244 or 310.635 in the second fiscal year of the biennium.

SECTION 21. The amendments to ORS 310.692 by section 20 of this 2001 Act apply to biennia beginning on or after July 1, 2001.

SECTION 22. ORS 307.242 is amended to read:

307.242. (1) Upon compliance with this section, whenever a corporation, as defined in ORS 307.375, is receiving or has received any federal or state financial assistance, such as a loan, mortgage insurance, aid to construction, rent supplement or otherwise, under the following federal or state laws, the property owned or being purchased by that corporation in actual use for corporate purposes or in the process of construction for use for corporate purposes on January 1 of the assessment year is exempt from ad valorem taxation:

(a) Section 202 of Title II of the National Housing Act (12 U.S.C. 1701q).

(b) Section 236 of the National Housing Act (12 U.S.C. 1715z (1)).

(d) Section 101 of Title I of the National Housing Act (12 U.S.C. 1701s) or section 8 of Title II of the National Housing Act (42 U.S.C. 1437f), providing rent supplement or housing assistance payments.

(e) ORS 456.515 to 456.725 and 458.505 to 458.515.

(2) A corporation claiming the exemption under subsection (1) of this section shall file with the county assessor, on forms prescribed by the Department of Revenue and supplied by the assessor, a written claim therefor in duplicate on or before April 1 of each assessment year for which the exemption is claimed. If the claim for any year is not filed within the time specified, [except as provided under ORS 307.475 and subsection (3) of this section,] the exemption [shall] may not be allowed on the assessment roll for that year. In addition to any other matters prescribed by the Department of Revenue to be contained in or accompany the claim, the claim shall:

(a) Declare or be accompanied by a declaration that the corporation meets the requirements of ORS 307.375 and that the property meets the requirements of ORS 307.243 (1);

(b) Describe or be accompanied by a description of the federal financial assistance the corporation is receiving or has received;

(c) Contain or be accompanied by a statement showing in detail the sources and amounts of all income received by the corporation and the basis for rental amounts charged for occupancy of the facilities; and

(d) Be signed by the taxpayer subject to the penalties for false swearing.

(3) Notwithstanding subsection (2) of this section:

(a) If the property qualifies for exemption on or after March 1 and before July 1, the claim may be filed within 30 days after the date of qualification.

(b) A statement may be filed under this section at any time prior to [December 31] September 15 of the assessment year for which exemption is first desired. However, any statement filed after the time for filing the statement specified in subsection (2) of this section, unless filed under paragraph (a) of this subsection, must be accompanied by a late filing fee of the greater of $200 or one-tenth of one percent of the real market value of the property to which the statement pertains, as determined as of January 1 of the assessment year by the assessor for this purpose. If the statement is not accompanied by the late filing fee or if the late filing fee is not otherwise paid, no exemption shall be allowed for the year based upon a statement filed pursuant to this subsection. A statement may be filed under this section notwithstanding that there are no grounds for hardship as required for late filing under ORS 307.475. The value of the property used to determine the late filing fee under this section is appealable in the same manner as other acts of the county assessor. Any filing fee collected under this section shall be deposited to the county general fund to be made available for county general governmental expenses.

(4) The assessor shall act upon the claim and shall approve or reject it, noting the action of the assessor upon both the original and the duplicate copies. The duplicate copy therefor shall be returned to the claimant.

(5) The Department of Revenue shall furnish to a county assessor, upon the request of the county assessor, a statement certifying the qualification or nonqualification of a corporation under ORS 307.375 and this section based upon the corporation’s claim under this section.

(6) Residents of a facility of a corporation exempt from taxation under this section [shall] may not be entitled to the tax benefits of ORS 307.370 to 307.385.

SECTION 23. ORS 307.244 is amended to read:

307.244. (1) The assessor shall compute and list the value and compute and list the amount of tax which would have been charged on each property receiving an exemption under ORS 307.242 had the property not received an exemption. On or before October 15, [or as soon as practicable,] the county assessor shall certify the total amounts so computed for each county to the Department of Revenue and to the county treasurer.

(2) Not later than November 15, [or as soon as practicable,] the Department of Revenue shall pay to each county treasurer the amount certified under subsection (1) of this section, less any discount provided in ORS 311.505. The payments made by the department under this section shall be made from the suspense account referred to in ORS 310.692. If necessary, the payments may be prorated as provided in ORS 310.692.

(3) Payments made by the department to the various county treasurers under this section shall be distributed to the taxing units of the county in accordance with the schedule of percentages computed under ORS 311.390.

SECTION 24. The amendments to ORS 307.242 and 307.244 by sections 22 and 23 of this 2001 Act apply to tax years beginning on or after July 1, 2001.

SECTION 25. ORS 311.668, as amended by section 2, chapter 1097, Oregon Laws 1999, is amended to read:

311.668. (1)(a) Subject to ORS 311.670, an individual, or two or more individuals jointly, may elect to defer the property taxes on their homestead by filing a claim for deferral with the county assessor after January 1 and on or before April 15 of the first year in which deferral is claimed if:

(A) The individual, or, in the case of two or more individuals filing a claim jointly, each individual, is 62 years of age or older on April 15 of the year in which the claim is filed; or

(B) The individual is a disabled person on April 15 of the year in which the claim is filed. In the case of individuals filing a claim jointly, only one individual need be a disabled person in order to make the election.

(b) In order to make the election described in paragraph (a) of this subsection, the individual must have, or in the case of two or more individuals filing a claim jointly, all of the individuals together must have household income, as defined in ORS 310.630, for the calendar year immediately preceding the calendar year in which the claim is filed of less than [$27,500] $32,000.

(c) The county assessor shall forward each claim filed under this subsection to the Department of Revenue which shall determine if the property is eligible for deferral.

(2) When the taxpayer elects to defer property taxes for any year by filing a claim for deferral under subsection (1) of this section, it shall have the effect of:

(a) Deferring the payment of the property taxes levied on the homestead for the fiscal year beginning on July 1 of such year.

(b) Continuing the deferral of the payment by the taxpayer of any property taxes deferred under ORS 311.666 to 311.701 for previous years which have not become delinquent under ORS 311.686.

(c) Continuing the deferral of the payment by the taxpayer of any future property taxes for as long as the provisions of ORS 311.670 are met.

(3) If a guardian or conservator has been appointed for an individual otherwise qualified to obtain deferral of taxes under ORS 311.666 to 311.701, the guardian or conservator may act for such individual in complying with the provisions of ORS 311.666 to 311.701.

(4) If a trustee of an inter vivos trust which was created by and is revocable by an individual, who is both the trustor and a beneficiary of the trust and who is otherwise qualified to obtain a deferral of taxes under ORS 311.666 to 311.701, owns the fee simple estate under a recorded instrument of sale, the trustee may act for the individual in complying with the provisions of ORS 311.666 to 311.701.

(5) Nothing in this section shall be construed to require a spouse of an individual to file a claim jointly with the individual even though the spouse may be eligible to claim the deferral jointly with the individual.

(6) Any person aggrieved by the denial of a claim for deferral of homestead property taxes or disqualification from deferral of homestead property taxes may appeal in the manner provided by ORS 305.404 to 305.560.

(7)(a) For each tax year beginning on or after July 1, 2002, the Department of Revenue shall recompute the maximum household income that may be incurred under an allowable claim for deferral under subsection (1)(b) of this section. The computation shall be as follows:

(A) Divide the average U.S. City Average Consumer Price Index for the first six months of the current calendar year by the average U.S. City Average Consumer Price Index for the first six months of 2001.

(B) Recompute the maximum household income by multiplying [$27,500] $32,000 by the appropriate indexing factor determined as provided in subparagraph (A) of this paragraph.

(b) As used in this subsection, “U.S. City Average Consumer Price Index” means the U.S. City Average Consumer Price Index for All Urban Consumers (All Items) as published by the Bureau of Labor Statistics of the United States Department of Labor.

(c) If any change in the maximum household income determined under paragraph (a) of this subsection is not a multiple of $500, the increase shall be rounded to the nearest multiple of $500.

SECTION 26. The amendments to ORS 311.668 by section 25 of this 2001 Act apply to claims for property tax deferral filed on or after January 1, 2002.

SECTION 27. ORS 311.676, as amended by section 4, chapter 1097, Oregon Laws 1999, is amended to read:

311.676. (1) Upon determining the amount of deferred taxes on tax-deferred property for the tax year, the Department of Revenue shall pay to the respective county tax collectors an amount equivalent to the deferred taxes less three percent thereof. Payment shall be made from the revolving account established under ORS 311.701.

(2) The department shall maintain accounts for each deferred property and shall accrue interest only on the actual amount of taxes advanced to the county.

(3)(a) If only a portion of taxes are deferred under ORS 311.689, the department shall pay the portion that is eligible for deferral to the tax collector and shall provide a separate notice to the county assessor stating the amount of property taxes that the department is paying.

(b) The notice stating the amount of property taxes paid by the department and any other county records indicating those amounts are not subject to the prohibitions against disclosure set forth in ORS 314.835.

SECTION 28. The amendments to ORS 311.676 by section 27 of this 2001 Act apply only to the deferral of property taxes in tax years beginning on or after July 1, 2001.

SECTION 29. Section 2, chapter 266, Oregon Laws 1993, as amended by section 3, chapter 748, Oregon Laws 1995, is amended to read:

Sec. 2. (1)(a) Land acquired by an Indian tribe by purchase, gift or without consideration is exempt from taxation if:

(A) The land is located within the ancient tribal boundaries of the tribe; and

(B) Transfer of the land to a trust administered by the United States has been requested or is in process.

(b) The exemption under this section shall continue for no more than four years after the initial year of exemption under this section[, and in no case shall the exemption continue beyond the 2001-2002 tax year]. If the land is not transferred to the trust within the five-tax-year exemption period, the exemption pursuant to this subsection shall cease commencing with the first tax year beginning after the expiration of the five-tax-year period.

[(2) Subsection (1) of this section applies to land acquired after January 1, 1991, and to tax years beginning on or after July 1, 1991. Any property taxes and interest that have been paid on behalf of property described in subsection (1) of this section for the tax year beginning July 1, 1991, or for a subsequent tax year within the exemption period, shall be refunded in the manner provided under subsection (3) of this section. If the taxes have not been paid, the taxes and interest due thereon are abated.]

[(3) Upon a determination that a property is exempt under this section, the tax collector shall notify the governing body of the county of any refund required and the governing body shall cause a refund of the taxes to be made from the unsegregated tax collections account established under ORS 311.385, without interest. The tax collector and assessor shall make the necessary correcting entries in the records of their offices.]

[(4) This section is repealed on July 1, 2002. The repeal is applicable to tax years beginning on or after July 1, 2002, and no exemption of property shall be granted pursuant to this section]

(2) Property may not be exempt under this section for a tax year beginning on or after July 1, [2002] 2012.

SECTION 30. ORS 311.706 is amended to read:

311.706. (1) In order to qualify for deferral of payment of special assessment for local improvement amounts under ORS 311.702 to 311.735, the taxpayer or, in the case of two or more individuals filing a claim jointly, each filing the claim for deferral and the homestead with respect to which the claim is filed must meet the following requirements at the time the claim for deferral is filed and thereafter so long as payment of the amount of special assessment for local improvement is deferred:

(a) The taxpayer filing the claim for deferral must be 62 years of age or older.

(b) The taxpayer filing the claim, by himself or herself or together with his or her spouse, must own the fee simple estate or be purchasing the fee simple estate under a recorded instrument of sale.

(c) The property with respect to which the claim is filed must be the homestead of the taxpayer who files the claim for deferral, except for a taxpayer required to be absent from the homestead by reason of health.

(d) If the taxpayer is delinquent in payment of the special assessment for local improvement or any installments thereof, the homestead must not have yet been sold at foreclosure sale.

(e) The household income, as defined in ORS 310.630, of the taxpayer filing the claim must have been [$17,500] $32,000 or less for the calendar year immediately preceding the calendar year in which the claim for deferral of special assessment for local improvement installment amounts is filed.

(f) There must be no prohibition to the deferral of special assessments contained in any provision of federal law, rule or regulation applicable to a mortgage, trust deed, land sale contract or conditional sale contract for which the homestead is security.

(2) If a trustee of an inter vivos trust which was created by and is revocable by a taxpayer, who is both the trustor and beneficiary of the trust and who is otherwise qualified to obtain a deferral of special assessment for local improvement under ORS 311.702 to 311.735 owns the fee simple estate under a recorded instrument of sale, the trustee may act for the taxpayer in complying with the provisions of ORS 311.702 to 311.735.

(3) Nothing in this section shall be construed to require a spouse of a taxpayer to file a claim jointly with the taxpayer even though the spouse may be eligible to claim the deferral jointly with the taxpayer.

(4) Nothing in this section shall be construed to disqualify a taxpayer otherwise qualifying for deferral if the spouse of the taxpayer is less than 62 years of age or if the spouse does not own, or is not purchasing under a recorded instrument of sale, a fee simple estate in the homestead.

(5) Subject to ORS 311.729, when a taxpayer exercises the election to claim the deferral under ORS 311.704, it shall have the effect of:

(a) Deferring payment of the amount of special assessment for local improvements deferred pursuant to the claim until the special assessment for local improvements become delinquent under ORS 311.718.

(b) Continuing the deferral of payment by the taxpayer of any special assessment for local improvements deferred under ORS 311.702 to 311.735 for previous years which have not become delinquent under ORS 311.718.

(6)(a) For each tax year beginning on or after July 1, 2002, the Department of Revenue shall recompute the maximum household income that may be incurred under an allowable claim for deferral under subsection (1)(e) of this section. The computation shall be as follows:

(B) Recompute the maximum household income by multiplying $32,000 by the appropriate indexing factor determined as provided in subparagraph (A) of this paragraph.

(b) As used in this section, “U.S. City Average Consumer Price Index” means the U.S. City Average Consumer Price Index for All Urban Consumers (All Items) as published by the Bureau of Labor Statistics of the United States Department of Labor.

(c) If any change in the maximum household income determined under paragraph (a) of this subsection is not a multiple of $500, the increase shall be rounded to the nearest multiple of $500.

SECTION 31. ORS 311.708 is amended to read:

311.708. (1) A claim for deferral under ORS 311.704 shall be in writing on a form prescribed by the Department of Revenue and shall:

(a) Describe the homestead.

(b) Recite facts establishing the eligibility for the deferral under the provisions of ORS 311.702 to 311.735 including facts that establish that the household income as defined in ORS 310.630 of the taxpayer, or in the case of two or more taxpayers claiming the deferral jointly, was less than [$17,500] the amount required under ORS 311.706 for the calendar year immediately preceding the calendar year in which the claim is filed.

(c) Have attached any documentary proof required by the department to show that the requirements of ORS 311.702 to 311.735 have been met.

(2) There shall be annexed to the claim a statement verified by a written declaration of the applicant making the claim to the effect that the statements contained in the claim are true.

(3) The claim shall incorporate the terms or have annexed thereto a certified copy of the agreement for payment of the special assessment for local improvement in installments. The claim shall be filed on or after October 1 and before December 1 of the calendar year in which the deferral is first claimed.

(4) Any person aggrieved by the denial of a claim for deferral of special assessments for local improvements or disqualification from deferral of special assessments for local improvements may appeal in the manner provided by ORS 305.404 to 305.560.

SECTION 32. The amendments to ORS 311.706 and 311.708 by sections 30 and 31 of this 2001 Act apply to tax years beginning on or after July 1, 2002.

SECTION 33. This 2001 Act takes effect on the 91st day after the date on which the regular session of the Seventy-first Legislative Assembly adjourns sine die.

Approved by the Governor July 6, 2001

Filed in the office of Secretary of State July 6, 2001

Effective date October 6, 2001

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