72nd OREGON LEGISLATIVE ASSEMBLY--2003 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 1724
House Bill 3050
Sponsored by COMMITTEE ON REVENUE (at the request of Oregon
Municipal Finance Officers Association)
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.
Modifies local government budget documentation requirements and
procedures.
Clarifies tax supervising and conservation commission
jurisdiction. Modifies commission filing requirements.
A BILL FOR AN ACT
Relating to local government budgets; amending ORS 294.352,
294.356, 294.381, 294.386, 294.416, 294.435, 294.445, 294.460,
294.625 and 310.060.
Be It Enacted by the People of the State of Oregon:
SECTION 1. ORS 294.352 is amended to read:
294.352. (1) Each municipal corporation shall prepare estimates
of expenditures for the ensuing year or ensuing budget period.
(2) The estimates required by subsection (1) of this section
shall be prepared by organizational unit or by program.
(3) Estimates required by subsection (1) of this section and
prepared by organizational unit shall be detailed under separate
object classifications of personal services, materials and
services and capital outlay. Separate estimates shall be made for
special payments, debt service, interfund revenue transfers,
operating expenses and general capital outlays which cannot
reasonably be allocated to an organizational unit.
(4) Estimates required by subsection (1) of this section and
prepared by program shall be arranged for each activity of a
program. Estimates under each activity shall be detailed under
separate object classifications of personal services, materials
and services and capital outlay. Separate estimates shall be made
for each program for special payments, debt service, interfund
revenue transfers, operating expenses and general capital outlays
which cannot reasonably be allocated to an activity within a
function. For common and union high school districts and
community colleges, estimates required by this subsection shall
be further detailed by object within each object classification.
{ - (5) Estimates of expenditures for personal services,
other than services of persons who receive an hourly wage or who
are hired on a part-time basis, shall list the salary for each
officer and employee, except that employees of like
classification and salary range, (such range not to exceed that
established by the governing body of the municipal corporation in
accordance with its policy for setting salaries) in each
organizational unit or activity may be listed by the number of
those employees, the limits of each salary range and the amount
of their combined salaries. - }
{ - (6) - } { + (5) + } The general capital outlay estimate
shall include separate amounts for land, buildings, improvements
to land other than buildings and machinery and equipment which
cannot be reasonably allocated to an organizational unit or
activity.
{ - (7) - } { + (6) + } The debt service estimates shall
include separate amounts for principal and interest of each bond
issue in each fund.
{ - (8) - } { + (7) + } There may be included in each fund
an estimate for general operating contingencies.
{ - (9) - } { + (8) + } If the estimates required by
subsection (1) of this section are not prepared by fund, there
shall be prepared a summary which cross-references programs or
organizational units to the appropriations required by ORS
294.435.
SECTION 2. ORS 294.356 is amended to read:
294.356. (1) Each school district, each education service
district and each community college district shall prepare its
estimates of expenditures required by ORS 294.352 in accordance
with the classification of revenue and expenditure accounts
prescribed by rules of the State Board of Education with the
approval of the Department of Revenue. The Department of Revenue
shall be responsible for determining compliance.
(2) The term 'organizational unit' { - shall - } { +
does + } not apply to hospitals, school districts, education
service districts and community colleges in preparing estimates
of expenditures under ORS 294.352 or making appropriations under
ORS 294.435. The term ' organizational unit' { - shall - }
{ + does + } not apply to hospitals in preparing the budget
summary required by ORS 294.416.
(3) { - Notwithstanding ORS 294.352 (5), - } Each municipal
corporation which operates a public utility or hospital shall
prepare its estimates for such operations in accordance with the
generally accepted system of accounts for such operation or in
accordance with the general system of accounts contained in ORS
294.311 to 294.520.
SECTION 3. ORS 294.386 is amended to read:
294.386. Each municipal corporation shall prepare a financial
summary. The financial summary shall include:
(1) A summary statement by funds showing the estimate of budget
resources and the estimate of expenditures;
(2) A classified statement of outstanding indebtedness, but not
including indebtedness that has been defeased and is no longer
considered to be outstanding as provided in ORS 288.675;
(3) A classified statement of all indebtedness authorized but
not incurred; { - and - }
(4) A summary statement of the estimate of ad valorem property
taxes, stated in dollars and cents and also stated as an
estimated tax rate per thousand dollars of assessed value { + ;
and
(5) A statement of total full-time equivalent positions of the
municipal corporation for the current year or current budget
period and for the ensuing year or ensuing budget period + }.
SECTION 4. ORS 294.416 is amended to read:
294.416. Except as provided in ORS 294.418, there shall be
published, as provided in ORS 294.421:
(1) { + (a) + } A summary of the budget as approved by the
budget committee and compared with the actual expenditures and
budget resources of the preceding year or preceding budget period
and the budget summary of the current year or current budget
period in accordance with forms prescribed by the Department of
Revenue in the manner provided in ORS 294.413. The summary shall
be of sufficient detail to inform the citizens of the municipal
corporation of the proposed financial plan for the ensuing year
or ensuing budget period. As a minimum requirement { - , - }
{ + :
(A) For school districts, education service districts,
community college districts and community college service
districts, the summary shall list total requirements for each
fund and expenditures, listed by the account classification
prescribed by the State Board of Education by rule; and
(B) For all other municipal corporations, the summary shall
list + } { - the - } personnel services, { - the major
expense items under - } materials and services { + , + }
{ - and - } capital outlay { + , + } { - for each
organizational unit or activity of each fund and the major items
for - } debt service, special payments { - , - } and operating
contingencies for each fund { - shall be listed separately - }
{ + and the total requirements for each fund + }. { - The
summary shall show the major items of budget resources. As used
in this subsection, the term ' program' may be substituted for
the term 'organizational unit' for municipal corporations which
prepare program budgets. - } { +
(b) Municipal corporations using a program budget shall list
total requirements for each program within each fund. + }
(2) The financial summary prepared under ORS 294.386 for the
ensuing year or ensuing budget period and for the current year or
current budget period.
(3) A notice of the time and place at which the budget document
as approved by the budget committee may be discussed with the
governing body.
(4) A statement that the budget is prepared in accordance with
the basis of accounting used in the preceding year or preceding
budget period unless a change in the basis of accounting is
anticipated. If a change in the basis of accounting is to be
made, there shall be an explanation of the change and the effects
of the change.
(5) A notice of the place where the complete budget document is
available for inspection by the general public during regular
business hours and where copies of the complete budget document
may be obtained.
SECTION 5. ORS 294.445 is amended to read:
294.445. (1) A municipal corporation shall record its revenues
and expenditures, on a fund by fund basis, using either the cash
basis, the modified accrual basis or the accrual basis of
accounting.
(2) The selection of the basis of accounting is left to the
discretion of each municipal corporation. Any change in the basis
of accounting shall be clearly set forth in the budget message
for the fiscal year or budget period in which the change is
contemplated and the reasons for the change and its effect on the
operations of the municipal corporation shall be explained. Once
a new basis of accounting is adopted, it shall be followed in the
year or period for which the budget was prepared and each
succeeding year or period thereafter until changed in a
subsequent budget. Such change must be published as provided in
ORS 294.416 (3).
{ + (3) If a municipal corporation using the accrual basis or
modified accrual basis of accounting makes capital project
expenditures or reimbursable federal, state or local program
expenditures during a fiscal year or budget period and the
expenditures exceed the estimated amount of expenditures included
in the budget of the municipal corporation for the fiscal year or
budget period as the result of accruals, upon determining that
the excess exists, the municipal corporation shall appropriate
the amount of the excess by means of a resolution or ordinance
adopted by the governing body of the municipal corporation.
Further action need not be taken to lawfully budget, appropriate
or spend the excess. + }
SECTION 6. ORS 294.460 is amended to read:
294.460. (1) It shall be lawful to loan money from any fund to
any other fund of the municipal corporation whenever the loan is
authorized by official resolution or ordinance of the governing
body. The loans shall be made in compliance with the applicable
requirements and limitations of this section. Loans made under
this section { - shall - } { + may + } not be made from:
(a) Debt service reserve funds created to provide additional
security for outstanding bonds or other borrowing obligations
that the municipal corporation has covenanted with the holders of
such bonds or other borrowing obligations to maintain at certain
specified levels. However, nothing in this paragraph is intended
or shall be construed to prohibit loans from any such debt
service reserve fund to the extent that the aggregate outstanding
amount of the loans does not exceed the amount by which the
amount in such debt service reserve fund exceeds the amount the
municipal corporation has covenanted to maintain in the reserve
fund with the holders of the related bonds or other borrowing
obligations;
(b) Debt service funds created to account for moneys needed to
make annual debt service payments on outstanding bonds or other
borrowing obligations; or
(c) Moneys credited to any fund when, under applicable
constitutional provisions, the moneys are restricted to specific
uses unless the purpose for which the loan is to be made is a use
allowed under such constitutional provisions.
(2) The resolution or ordinance authorizing any interfund loan
permitted under this section shall:
(a) State the fund from which the loan is to be made, the fund
to which the loan is to be made, the purpose for which the loan
is to be made and the principal amount of the loan.
(b) If the interfund loan is a capital loan, set forth a
schedule under which the principal amount of the loan, together
with interest thereon at the rate provided for in paragraph (c)
{ - (B) - } of this subsection, is to be budgeted and repaid
{ - to - } { + in + } the lending fund. { + The schedule
shall annually budget repayments as expenditures in the borrowing
fund and as resources in the lending fund. + } The schedule shall
provide for the repayment in full of the loan over a term not to
exceed five years from the date the loan is made.
(c) If the interfund loan is a capital loan, provide that the
loan shall bear interest at an annual rate equal to:
(A) The rate of return on moneys invested in the local
government investment pool under ORS 294.805 to 294.895, as
reported under ORS 294.875, immediately prior to the adoption of
the ordinance or resolution authorizing the loan; or
(B) Such other rate as the governing body may determine.
(d) If the interfund loan is an operating loan, provide that
the money loaned shall be budgeted and repaid to the fund from
which the money was borrowed by the end of the ensuing year or
ensuing budget period.
{ + (e) If interest is to be paid on an interfund loan in the
current year or current budget period, revise the current budget
to reflect the interest as an expenditure in the borrowing fund
and as a resource in the lending fund.
(f) If an interfund loan will not be fully repaid during the
current year or current budget period, revise the current budget
to reflect the loan as an expenditure in the lending fund and the
loan proceeds as a resource in the borrowing fund. + }
(3) The payment of any operating loans not repaid in the year
or budget period in which the operating loan was made shall be
budgeted as a requirement in the ensuing year or ensuing budget
period.
(4) It shall be lawful to commingle cash balances of funds so
long as all such fund moneys are segregated in the budget and
accounting records.
(5) As used in this section:
(a) 'Capital loan' means any interfund loan, or portion
thereof, made for the purpose of financing the design,
acquisition, construction, installation or improvement of real or
personal property and not for the purpose of paying operating
expenses.
(b) 'Operating loan' means any interfund loan, or portion
thereof, that is not a capital loan, including any interfund
loan, or portion thereof, made for the purpose of paying
operating expenses.
SECTION 7. ORS 294.625 is amended to read:
294.625. { + (1) + } The { + tax supervising and
conservation + } commission shall have jurisdiction over all
municipal corporations in the county subject to the provisions of
the Local Budget Law. If the territory of the municipal
corporation lies in two or more counties, the municipal
corporation shall be within the jurisdiction of the commission
if { + :
(a) + } The real market value of all property subject to
taxation by the municipal corporation in a county having a
commission is greater than the real market value of property
subject to taxation by the municipal corporation in any other
county { + ; or
(b) The county in which the commission is established is the
principal county of the municipal corporation + }.
{ + (2) As used in this section:
(a) 'Principal county' has the meaning given that term in ORS
341.005.
(b) + } { - Real market value is - } { + ' Real market
value' means + } the real market value computed according to ORS
308.207 from the { + most recent + } assessment rolls { - last
in the process of collection - } .
SECTION 8. 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
either the ensuing year or for each of the years of the ensuing
budget period 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 or budget period to which the
budget relates. However, the amount of estimated expenditures for
each fund in an annual budget may not be increased by more than
$5,000 or 10 percent of the estimated expenditures, whichever is
greater, and the amount of estimated expenditures for each fund
in a biennial budget may not be increased by more than $10,000 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 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 ORS 294.437.
(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 for either the ensuing fiscal year or for each of the fiscal
years of the ensuing budget period 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 - } { + on or before July 15 of the
ensuing year or July 15 of the first fiscal year of the ensuing
budget period + }. 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 or budget
period to which the budget relates. However, the amount of
estimated expenditures for each fund may not be increased by more
than $5,000 or 10 percent of the estimated expenditures,
whichever is greater, the amount of estimated expenditures for
each fund in a biennial budget may not be increased by more than
$10,000 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 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 ORS 294.437.
(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 ORS 294.437,
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 or budget period 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 9. ORS 310.060, as amended by section 32, chapter 695,
Oregon Laws 2001, 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 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;
(c) The total amount of the taxing district's local option
taxes that are 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 (3).
(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. { + If the principal office of the taxing
district is located in a county that has a tax supervising and
conservation commission, the budget document shall be filed with
the commission in lieu of being filed with the clerk of the
county. + }
(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.
(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 10. ORS 294.381 is amended to read:
294.381. (1) Each municipal corporation that has the power to
levy an ad valorem property tax shall estimate, in the manner
provided in this section, the amount of revenues that will be
received in the ensuing year or ensuing budget period through the
imposition of taxes upon the taxable property within the
municipal corporation.
(2) Subject to the additional adjustments required under
subsection (3) of this section, the estimated ad valorem taxes
that will be received in the ensuing year or ensuing budget
period is the sum of the following:
(a) The amount derived by multiplying the estimated assessed
value for the ensuing year or each fiscal year of the ensuing
budget period of the taxable property within the municipal
corporation, after boundary changes have been filed in final
approved form with the county assessor and the Department of
Revenue as provided in ORS 308.225, by whichever of the following
is applicable to the municipal corporation:
(A) The municipal corporation's permanent rate limit on
operating taxes, as defined in ORS 310.202 (8), or such lesser
rate as the municipal corporation may determine to use for
purposes of levying such ad valorem taxes; or
(B) The municipal corporation's statutory rate limit on
operating taxes, as defined in ORS 310.202 (10), or such lesser
rate as the municipal corporation may determine to use for
purposes of levying such ad valorem taxes.
(b) If the municipal corporation is authorized to levy a local
option tax that was authorized by the electors as a dollar
amount, the dollar amount of such local option tax that is
authorized to be levied in the ensuing year or ensuing budget
period.
(c) If the municipal corporation is authorized to levy a local
option tax that was authorized by the electors as a tax rate, the
amount derived by multiplying the authorized rate of such local
option tax for the ensuing year or ensuing budget period by the
estimated assessed value for the ensuing year or each fiscal year
of the ensuing budget period of the taxable property within the
municipal corporation.
(d) An amount equal to the principal and interest on all bonded
indebtedness of the municipal corporation that is due and payable
in the ensuing year or ensuing budget period, { + adjusted for
any unappropriated ending fund balance and then + }divided by
the annual average percentage of taxes collected in the county in
which the taxable property of the municipal corporation is
located.
(3) The sum of the amounts determined under subsection (2)(a),
(b) and (c) of this section shall be reduced by an amount equal
to the estimated amount of such taxes that will not be collected
as a result of:
(a) The discounts allowed under ORS 311.505;
(b) The limits imposed under ORS 310.150 (3); and
(c) The failure of taxpayers to pay such taxes in the year for
which they are levied.
(4) The estimated ad valorem taxes determined in accordance
with subsections (2) and (3) of this section shall be used by the
municipal corporation for purposes of complying with the
requirements of ORS 310.060 (1).
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