Chapter 925 Oregon Laws 2001

AN ACT

HB 3057

Relating to taxation; creating new provisions; amending ORS 308.146, 308.296, 308A.359, 308A.362 and 316.037 and sections 4 and 7, chapter [Vetoed], Oregon Laws 2001 (Enrolled Senate Bill 67); and repealing sections 1 and 5, chapter [Vetoed], Oregon Laws 2001 (Enrolled Senate Bill 67).

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

SECTION 1. If both House Bill 2272 and Senate Bill 67 become law, section 1, chapter [Vetoed], Oregon Laws 2001 (Enrolled Senate Bill 67) (amending ORS 316.037), is repealed and ORS 316.037, as amended by section 11, chapter 660, Oregon Laws 2001 (Enrolled House Bill 2272), is amended to read:

316.037. (1)(a) A tax is imposed for each taxable year on the entire taxable income of every resident of this state. The amount of the tax shall be determined in accordance with the following table:

______________________________________________________________________________

If taxable income is: The tax is:

Not over $2,000..................................... 5% of

taxable

income

Over $2,000 but not

over $5,000.................................. $100 plus 7%

of the excess

over $2,000

Over $5,000............................................ $310 plus 9%

of the excess

over $5,000

______________________________________________________________________________

(b) For tax years beginning in each calendar year, the Department of Revenue shall adopt a table which shall apply in lieu of the table contained in paragraph (a) of this subsection, as follows:

(A) The minimum and maximum dollar amounts for each rate bracket for which a tax is imposed shall be increased by the cost-of-living adjustment for the calendar year.

(B) The rate applicable to any rate bracket as adjusted under subparagraph (A) of this paragraph shall not be changed.

(C) The amounts setting forth the tax, to the extent necessary to reflect the adjustments in the rate brackets, shall be adjusted.

(c) For purposes of paragraph (b) of this subsection, the cost-of-living adjustment for any calendar year is the percentage (if any) by which the monthly averaged U.S. City Average Consumer Price Index for the 12 consecutive months ending August 31 of the prior calendar year exceeds the monthly averaged index for the second quarter of the calendar year 1992.

(d) 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.

(e) If any increase determined under paragraph (b) of this subsection is not a multiple of $50, the increase shall be rounded to the next lowest multiple of $50.

(2) Notwithstanding subsection (1) of this section, any gain that is treated as net capital gain for federal tax purposes and that is included in taxable income in this state shall be taxed at the lesser of the rate applicable under subsection (1) of this section or six percent.

[(2)] (3) A tax is imposed for each taxable year upon the entire taxable income of every part-year resident of this state. The amount of the tax shall be computed under [subsection (1)] subsections (1) and (2) of this section as if the part-year resident were a full-year resident and shall be multiplied by the ratio provided under ORS 316.117 to determine the tax on income derived from sources within this state.

[(3)] (4) A tax is imposed for each taxable year on the taxable income of every full-year nonresident that is derived from sources within this state. The amount of the tax shall be determined in accordance with [the table set forth in subsection (1)] subsections (1) and (2) of this section.

SECTION 2. If both House Bill 2272 and Senate Bill 67 become law, section 4, chapter [Vetoed], Oregon Laws 2001 (Enrolled Senate Bill 67), is amended to read:

Sec. 4. The amendments to ORS 316.037, 316.122 and 317.061 by [sections 1, 2 and 3 of this 2001 Act] sections 2 and 3, chapter [Vetoed], Oregon Laws 2001 (Enrolled Senate Bill 67), and section 1 of this 2001 Act apply to tax years beginning on or after January 1, 2003.

SECTION 3. If both House Bill 2272 and Senate Bill 67 become law, section 5, chapter [Vetoed], Oregon Laws 2001 (Enrolled Senate Bill 67) (amending ORS 316.037), is repealed and ORS 316.037, as amended by section 11, chapter 660, Oregon Laws 2001 (Enrolled House Bill 2272), and section 1 of this 2001 Act, is amended to read:

316.037. (1)(a) A tax is imposed for each taxable year on the entire taxable income of every resident of this state. The amount of the tax shall be determined in accordance with the following table:

______________________________________________________________________________

If taxable income is: The tax is:

Not over $2,000..................................... 5% of

taxable

income

Over $2,000 but not

over $5,000.................................. $100 plus 7%

of the excess

over $2,000

Over $5,000............................................ $310 plus 9%

of the excess

over $5,000

______________________________________________________________________________

(b) For tax years beginning in each calendar year, the Department of Revenue shall adopt a table which shall apply in lieu of the table contained in paragraph (a) of this subsection, as follows:

(A) The minimum and maximum dollar amounts for each rate bracket for which a tax is imposed shall be increased by the cost-of-living adjustment for the calendar year.

(B) The rate applicable to any rate bracket as adjusted under subparagraph (A) of this paragraph shall not be changed.

(C) The amounts setting forth the tax, to the extent necessary to reflect the adjustments in the rate brackets, shall be adjusted.

(e) If any increase determined under paragraph (b) of this subsection is not a multiple of $50, the increase shall be rounded to the next lowest multiple of $50.

(2) Notwithstanding subsection (1) of this section, any gain that is treated as net capital gain for federal tax purposes and that is included in taxable income in this state shall be taxed at [the lesser of the rate applicable under subsection (1) of this section or six] four percent.

(3) A tax is imposed for each taxable year upon the entire taxable income of every part-year resident of this state. The amount of the tax shall be computed under subsections (1) and (2) of this section as if the part-year resident were a full-year resident and shall be multiplied by the ratio provided under ORS 316.117 to determine the tax on income derived from sources within this state.

(4) A tax is imposed for each taxable year on the taxable income of every full-year nonresident that is derived from sources within this state. The amount of the tax shall be determined in accordance with subsections (1) and (2) of this section.

SECTION 4. If both House Bill 2272 and Senate Bill 67 become law, section 7, chapter [Vetoed], Oregon Laws 2001 (Enrolled Senate Bill 67), is amended to read:

Sec. 7. The amendments to ORS 316.037 and 317.061 by [sections 5 and 6 of this 2001 Act] section 6, chapter [Vetoed], Oregon Laws 2001 (Enrolled Senate Bill 67), and section 3 of this 2001 Act apply to tax years beginning on or after January 1, 2005.

SECTION 5. Section 6 of this 2001 Act is added to and made a part of ORS 308A.350 to 308A.383.

SECTION 6. (1) Land located within the boundaries of a city and an urban growth boundary is exempt from the ad valorem property taxes of the city and county in which the land is located if:

(a) The governing bodies of the city and the county in which the land is located have both adopted ordinances or resolutions:

(A) Permitting the designation of land as riparian land; and

(B) If possible, describing how the city or county will provide technical assistance to landowners preparing riparian management plans pursuant to ORS 308A.359 and will monitor landowner compliance with approved plans; and

(b) The land qualifies for designation and exemption as riparian land under ORS 308A.350 to 308A.383.

(2) Copies of the authorizing ordinances or resolutions must be given to the county assessor and to the State Department of Fish and Wildlife.

SECTION 7. ORS 308A.359 is amended to read:

308A.359. (1) The State Department of Fish and Wildlife shall develop standards and criteria for the designation of land as riparian. Upon the receipt of an application referred to it by the county assessor, the department shall determine if the land described in the application is qualified for designation as riparian.

(2) The department shall review riparian management plans submitted by applicants to assure compliance with the intent of ORS 308A.353. Standards and criteria to be used to determine consistency with the intent of ORS 308A.350 to 308A.383 shall be developed by the department and shall be reviewed by the department annually. These criteria shall be in addition to the following provisions limiting participation under ORS 308A.350 to 308A.383:

(a)(A) Subject to subparagraph (B) of this paragraph, and except as provided in subparagraph (C) of this paragraph, only lands planned and zoned as forest or agricultural lands, including rangeland, in compliance with the statewide planning goals adopted under ORS 197.240 and outside adopted urban growth boundaries shall qualify.

(B) Lands that, as of July 1, 1997, are outside adopted urban growth boundaries and also as of that date are planned and zoned as forest or agricultural lands, including rangeland, in compliance with the statewide planning goals adopted under ORS 197.240 qualify, for tax years beginning on or after July 1, 1998, for riparian designation if they are managed in the manner provided for designated riparian lands and are otherwise eligible for riparian designation under ORS 308A.350 to 308A.383 even though the lands are no longer outside adopted urban growth boundaries or planned or zoned as forest or agriculture.

(C) Lands within the boundaries of a city and an urban growth boundary, if the city and county governing bodies have authorized the exemption under section 6 of this 2001 Act, may qualify if the lands are managed in the manner provided for riparian designation under ORS 308A.350 to 308A.383.

(b) Land management activities permitted within designated riparian lands shall be consistent with the intent of ORS 308A.350 to 308A.383.

(3) Land that the State Department of Fish and Wildlife determines may qualify for designation as riparian shall be approved by the department for designation and exemption under ORS 308A.350 to 308A.383 only if the owner of the land has developed and implemented, in accordance with the standards adopted under subsections (1) and (2) of this section, adequate measures for:

(a) The continued protection of the land; or

(b) Techniques for rehabilitation of the riparian land and those measures or techniques are approved by the department.

(4) The department may approve the application for designation of land as riparian with respect to only part of the land that is the subject of the application, but if any part of the application is denied, the applicant may withdraw the entire application.

SECTION 8. ORS 308A.362 is amended to read:

308A.362. (1) The State Department of Fish and Wildlife shall immediately notify the county assessor and the applicant of its approval or disapproval of an application which shall in no event be later than April 1 of the year following the year of receipt of the application. Subject to subsection (2) of this section and the mileage limitation of ORS 308A.380, an application not denied by April 1 shall be deemed approved, and the land that is the subject of the application shall be considered to be land that qualifies under ORS 308A.359.

(2) An application for land described in ORS 308A.359 (2)(a)(B) shall be approved only if filed on or before five years after the date the land became land no longer outside adopted urban growth boundaries or planned or zoned as forest or agricultural land.

(3) An application for land described in section 6 (1) of this 2001 Act may be approved only if ordinances or resolutions authorizing the exemption have been adopted by the city and county in which the land is located and these ordinances or resolutions are in effect on the date of application.

(4) The department may not approve more than 50 applications for land described in section 6 (1) of this 2001 Act for any tax year. An application that is not approved because of the limitation imposed by this subsection shall be held for consideration for the next tax year.

[(3)] (5)(a) When the department approves land for designation as riparian under ORS 308A.359, it shall enter an order of approval and file a copy of the order with the county assessor within 10 days. Upon receipt of the order, the county assessor shall enter a notation on the assessment roll that the land described in the order is exempt from ad valorem taxation.

(b) If the land is as described in section 6 (1) of this 2001 Act, the exemption shall apply only to the ad valorem property taxes of the city and county that have authorized the exemption.

[(4)] (6) On approval of an application filed under ORS 308A.356, for each year of designation the assessor shall indicate on the assessment and tax roll that the property is exempt from taxation as riparian land or, in the case of land described in section 6 (1) of this 2001 Act, partially exempt from taxation. The assessor shall also indicate on the tax roll that the land[and] is subject to potential additional taxes as provided by ORS 308A.368, by adding the notation “designated riparian land (potential add'l tax).”

[(5)] (7) Any owner whose application for designation has been denied may appeal to the department under the provisions of ORS 183.310 to 183.550 governing contested cases.

SECTION 9. Section 6 of this 2001 Act and the amendments to ORS 308A.359 and 308A.362 by sections 7 and 8 of this 2001 Act apply to tax years beginning on or after July 1, 2002.

SECTION 10. Section 11 of this 2001 Act is added to and made a part of ORS 271.715 to 271.795.

SECTION 11. (1) An owner of real property considering whether to convey a conservation easement or a highway scenic preservation easement to a holder may apply to the county assessor for a report on the effect of the conveyance of the easement on the assessed value of the property upon which the easement is to be granted.

(2) The request for the report shall be made in writing to the assessor and shall be accompanied by:

(a) An appraisal of the property prepared by an appraiser certified or licensed under ORS chapter 674. The appraisal shall have been prepared within three months preceding the date that application is made to the assessor and shall state the appraiser's opinion of the real market value of the property both before and after the easement is conveyed;

(b) A copy of the instrument creating the easement; and

(c) A fee in an amount determined by the assessor, as reimbursement for the costs of preparing the report.

(3) Upon receipt of a completed application, the assessor shall determine what the assessed value for the property would have been had the easement been accepted and recorded by the proposed holder for the last tax year in which a property tax statement described in ORS 311.250 was sent to the property owner. The assessor shall prepare a written report stating the assessor's findings and shall send the report to the property owner.

SECTION 12. ORS 308.146 is amended to read:

308.146. (1) The maximum assessed value of property shall equal 103 percent of the property's assessed value from the prior year or 100 percent of the property's maximum assessed value from the prior year, whichever is greater.

(2) Except as provided in subsections (3) and (4) of this section, the assessed value of property to which this section applies shall equal the lesser of:

(a) The property's maximum assessed value; or

(b) The property's real market value.

(3) Notwithstanding subsections (1) and (2) of this section, the maximum assessed value and assessed value of property shall be determined as provided in ORS 308.149 to 308.166 if:

(a) The property is new property or new improvements to property;

(b) The property is partitioned or subdivided;

(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.

(4) Notwithstanding subsections (1) and (2) of this section, if property is subject to partial exemption or special assessment, the property's maximum assessed value and assessed value shall be determined as provided under the provisions of law granting the partial exemption or special assessment.

(5)(a) Notwithstanding subsection (1) of this section, when a portion of property is destroyed or damaged due to fire or act of God, for the year in which the destruction or damage is reflected by a reduction in real market value, the maximum assessed value of the property shall be reduced to reflect the loss from fire or act of God.

(b) This subsection does not apply:

(A) To any property that is assessed under ORS 308.505 to 308.665.

(B) If the damaged or destroyed property is property that, when added to the assessment and tax roll, constituted minor construction for which no adjustment to maximum assessed value was made.

(6)(a) If, during the period beginning on January 1 and ending on July 1 of an assessment year, any real or personal property is destroyed or damaged, the owner or purchaser under a recorded instrument of sale in the case of real property, or the person assessed, person in possession or owner in the case of personal property, may apply to the county assessor to have the real market and assessed value of the property determined as of July 1 of the current assessment year.

(b) The person described in paragraph (a) of this subsection shall file an application for assessment under this section with the county assessor on or before August 1 of the current year.

(c) If the conditions described in this subsection are applicable to the property, then notwithstanding ORS 308.210, the property shall be assessed as of July 1, at 1:00 a.m. of the assessment year, in the manner otherwise provided by law.

(7)(a) Paragraph (b) of this subsection applies if:

(A) A conservation easement or highway scenic preservation easement is in effect on the assessment date;

(B) The tax year is the first tax year in which the conservation easement or highway scenic preservation easement is taken into account in determining the property's assessed value; and

(C) A report has been issued by the county assessor under section 11 of this 2001 Act within 12 months preceding or following the date the easement was recorded.

(b) The assessed value of the property shall be as determined in the report issued under section 11 of this 2001 Act, but may be further adjusted by changes in value as a result of any of the factors described in ORS 309.115 (2), to the extent adjustments do not cause the assessed value of the property to exceed the property's maximum assessed value.

SECTION 13. The amendments to ORS 308.146 by section 12 of this 2001 Act apply to tax years beginning on or after July 1, 2002.

SECTION 14. ORS 308.296 is amended to read:

308.296. (1) Each person, firm, corporation or association required by ORS 308.290 to file a return reporting only taxable personal property, who or which has not filed a return within the time fixed in ORS 308.290 or as extended, shall be subject to a penalty as provided in this section.

(2) A taxpayer who files a return to which this section applies after March 1, or after April 15, if the taxpayer received an extension, but on or before June 1, is subject to a penalty equal to five percent of the tax attributable to the taxable personal property of the taxpayer.

(3) A taxpayer who files a return to which this section applies after June 1, but on or before August 1, is subject to a penalty equal to 25 percent of the tax attributable to the taxable personal property of the taxpayer.

(4) After August 1, a taxpayer who files a return to which this section applies or who fails to file a return shall be subject to a penalty equal to [100] 50 percent of the tax attributable to the taxable personal property of the taxpayer.

(5) If a delinquency penalty provided in this section is imposed, the tax statement for the year in which the penalty is imposed shall reflect the amount of the penalty and shall constitute notice to the taxpayer.

(6) The county board of property tax appeals, upon application of the taxpayer, may waive the liability for all or a portion of the penalty upon a proper showing of good and sufficient cause. However, an application made under this subsection shall not be considered by the board unless filed timely and in the same manner as an appeal under ORS 309.100. There shall be no appeal from the determination of the board under this subsection.

(7) If the board waives all or a portion of a penalty already imposed and entered on the roll, the person in charge of the roll shall cancel the waived penalty and enter the cancellation on the roll as an error correction under ORS 311.205 and, if the waived penalty has been paid, it shall be refunded without interest under ORS 311.806.

SECTION 15. The amendments to ORS 308.296 by section 14 of this 2001 Act apply to penalties imposed for the failure to file a return reporting taxable personal property that is due on or after the effective date of this 2001 Act.

Approved by the Governor August 8, 2001

Filed in the office of Secretary of State August 9, 2001

Effective date January 1, 2002

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