75th OREGON LEGISLATIVE ASSEMBLY--2009 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 1434
House Bill 2609
Sponsored by Representative HANNA; Representatives GILLIAM,
MAURER, OLSON, THATCHER, THOMPSON, WINGARD
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.
Requires Department of Human Services and Department of Revenue
to collaborate in establishing outreach program to educate senior
citizens and persons with disabilities about property tax
deferral.
Increases income limit to qualify for property tax deferral.
Adjusts income limit based on Portland-Salem Consumer Price
Index. Excludes nontaxable income from consideration in
determining eligibility for property tax deferral.
Appropriates moneys from General Fund to Department of Revenue
for Senior Property Tax Deferral Revolving Account.
A BILL FOR AN ACT
Relating to property tax deferral; creating new provisions;
amending ORS 311.666, 311.668, 311.672, 311.689, 311.691 and
311.693; and appropriating money.
Be It Enacted by the People of the State of Oregon:
SECTION 1. { + The Department of Human Services in
collaboration with the Department of Revenue shall establish and
maintain an outreach program to educate senior citizens and
persons with disabilities about the opportunity to defer property
taxes on a homestead under ORS 311.666 to 311.701 for the purpose
of increasing the number of eligible individuals and families
electing to defer property taxes pursuant to ORS 311.666 to
311.701. + }
SECTION 2. ORS 311.666 is amended to read:
311.666. As used in ORS 311.666 to 311.701:
{ - (1) 'Department' means the Department of Revenue. - }
{ + (1) 'Federal adjusted gross income' means federal
adjusted gross income of the individual electing to defer
property taxes, or in the case of two or more individuals
electing to defer property tax jointly, the combined federal
adjusted gross income of all of the individuals together, or the
federal adjusted gross income of the spouse who has filed a claim
under ORS 311.688, all as determined for the tax year beginning
in the calendar year prior to which a determination is required
under ORS 311.689 (2). ' Federal adjusted gross income' shall be
determined under the Internal Revenue Code, as amended and in
effect on December 31, 2008, without any of the additions,
subtractions or other modifications or adjustments required under
ORS chapter 314 or 316. + }
(2) 'Homestead' means the owner occupied principal dwelling,
either real or personal property, owned by the taxpayer and the
tax lot upon which it is located. If the homestead is located in
a multiunit building, the homestead is the portion of the
building actually used as the principal dwelling and its
percentage of the value of the common elements and of the value
of the tax lot upon which it is built. The percentage is the
value of the unit consisting of the homestead compared to the
total value of the building exclusive of the common elements, if
any.
(3) 'Person with a disability' means a person who has been
determined to be eligible to receive or who is receiving federal
Social Security benefits due to disability or blindness,
including a person who is receiving Social Security survivor
benefits in lieu of Social Security benefits due to disability or
blindness.
(4) 'Taxpayer' means an individual who has filed a claim for
deferral under ORS 311.668 or individuals who have jointly filed
a claim for deferral under ORS 311.668.
(5) 'Tax-deferred property' means the property upon which taxes
are deferred under ORS 311.666 to 311.701.
(6) 'Taxes' or 'property taxes' means ad valorem taxes,
assessments, fees and charges entered on the assessment and tax
roll.
SECTION 3. ORS 311.668 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 person with a disability 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 person with
a disability 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, - } { + federal adjusted gross income + } for
the calendar year immediately preceding the calendar year in
which the claim is filed of less than { - $32,000 - } { +
$49,000 + }.
(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 - } { + 2010 + }, the Department of Revenue shall
recompute the maximum
{ - household income - } { + federal adjusted gross
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 - } { +
Portland-Salem + } Consumer Price Index for the first six months
of the current calendar year by the { - average U.S. City
Average - } { + Portland-Salem + } Consumer Price Index for the
first six months of { - 2001 - } { + 2009 + }.
(B) { - Recompute the maximum household income by
multiplying - } { + Multiply $49,000 by the + } { - $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 - }
{ + ' Portland-Salem + } Consumer Price Index' means the
{ - U.S. City Average - } { + Portland-Salem + } 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 - }
{ + federal adjusted gross 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 4. ORS 311.672 is amended to read:
311.672. (1) A taxpayer's claim for deferral under ORS 311.668
shall be in writing on a form supplied 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 311.666 to 311.701, including facts
that establish that the { - household income as defined in ORS
310.630 - } { + federal adjusted gross income + } of the
individual, or in the case of two or more individuals claiming
the deferral jointly, { + the combined federal adjusted gross
income + } of all of the individuals together { + , + } was, for
the calendar year immediately preceding the calendar year in
which the claim is filed, less than or equal to the maximum
{ - household income - } { + federal adjusted gross income + }
that may be incurred under an allowable claim for deferral, as
provided in ORS 311.668.
(c) Have attached any documentary proof required by the
department to show that the requirements of ORS 311.666 to
311.701 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.
SECTION 5. ORS 311.689, as amended by section 10, chapter 45,
Oregon Laws 2008, is amended to read:
311.689. (1) Notwithstanding ORS 311.668 or any other provision
of ORS 311.666 to 311.701, if the individual or, in the case of
two or more individuals electing to defer property taxes jointly,
all of the individuals together, or the spouse who has filed a
claim under ORS 311.688, has federal adjusted gross income that
exceeds { - $32,000 - } { + $49,000 + } for the tax year that
began in the previous calendar year, then for the tax year next
beginning, the amount of taxes for which deferral is allowed
shall be reduced by $0.50 for each dollar of federal adjusted
gross income in excess of { - $32,000 - } { + $49,000 + }.
(2) Prior to June 1 of each year, and notwithstanding ORS
314.835, the Department of Revenue shall review returns filed
under ORS chapter 314 and 316 to determine if subsection (1) of
this section is applicable for a homestead for the tax year next
beginning. If subsection (1) of this section is applicable, the
department shall notify by mail the taxpayer or spouse electing
deferral, and the taxes otherwise to be deferred for the tax year
next beginning shall be reduced as provided in subsection (1) of
this section or, if federal adjusted gross income in excess of
{ - $32,000 - } { + $49,000 + } exceeds the amount of
property taxes by a factor of two, the property taxes shall not
be deferred.
(3) If the taxpayer or spouse does not file a return for
purposes of ORS chapters 314 and 316 and the department has
reason to believe that the federal adjusted gross income of the
taxpayer or spouse exceeds { - $32,000 - } { + $49,000 + }
for the tax year that began in the previous calendar year, the
department shall notify by mail the taxpayer or spouse electing
deferral. If, within 30 days after the notice is mailed, the
taxpayer or spouse does not file a return under ORS chapter 314
or 316 or otherwise satisfy the department that federal adjusted
gross income does not exceed
{ - $32,000 - } { + $49,000 + }, the department shall again
notify the taxpayer or spouse, and the taxes otherwise to be
deferred for the tax year next beginning shall not be deferred.
(4) For tax years beginning on or after July 1, { - 2002 - }
{ + 2010 + }, the federal adjusted gross income limit set forth
in subsections (1) to (3) of this section shall be recomputed by
multiplying
{ - $32,000 by the indexing - } { + $49,000 by the + } factor
described in ORS 311.668 (7)(a)(A), and rounding the amount so
computed to the nearest multiple of $500.
(5) Nothing in this section shall affect the continued deferral
of taxes that have been deferred for tax years beginning prior to
the tax year next beginning or the right to deferral of taxes for
a tax year beginning after the tax year next beginning if
subsection (1) { + of this section + } is not applicable for
that tax year for the homestead.
{ - (6) As used in this section, 'federal adjusted gross
income' means federal adjusted gross income of the individual or,
in the case of two or more individuals electing to defer property
tax jointly, the combined federal adjusted gross income of the
individuals, or the federal adjusted gross income of the spouse
who has filed a claim under ORS 311.688, all as determined for
the tax year beginning in the calendar year prior to which a
determination is required under subsection (2) of this section.
' Federal adjusted gross income' shall be determined under the
Internal Revenue Code, as amended and in effect on December 31,
2007, without any of the additions, subtractions or other
modifications or adjustments required under ORS chapter 314 or
316. - }
{ - (7)(a) - } { + (6)(a) + } If, after an initial
determination under this section has been made by the department,
upon audit or examination or otherwise, it is discovered that the
taxpayer or spouse had federal adjusted gross income in excess of
the limitation provided under subsection (1) of this section, the
department shall determine the amount of taxes deferred that
should not have been deferred and give notice to the taxpayer or
spouse of the amount of taxes that should not have been deferred.
The provisions of ORS chapters 305 and 314 shall apply to a
determination of the department under this section in the same
manner as those provisions are applicable to an income tax
deficiency. The amount of deferred taxes that should not have
been deferred shall bear interest from the date paid by the
department until paid at the rate established under ORS 305.220
for deficiencies. A deficiency shall not be assessed under this
section if notice required under this section is not given to the
taxpayer or spouse within three years after the date that the
department has paid the deferred taxes to the county. Upon
payment of the amount assessed as deficiency, and interest, the
department shall execute a release in the amount of the payment
and the release shall be conclusive evidence of the removal and
extinguishment of the lien under ORS 311.666 to 311.701 to the
extent of the payment.
(b) If, after an initial determination under this section has
been made by the department, upon claim for refund, audit or
examination or otherwise, it is discovered that the taxpayer or
spouse had federal adjusted gross income in the amount of or less
than the limitation provided under subsection (1) of this
section, the department shall determine the amount of taxes
deferred that should have been deferred and give notice to the
taxpayer or spouse of the amount of taxes that should have been
deferred. The provisions of ORS chapters 305 and 314 shall apply
to a determination of the department under this section in the
same manner as those provisions are applicable to an income tax
refund. The amount of the taxes that should have been deferred
shall bear interest from the date paid by the taxpayer to the
county at the rate established under ORS 305.220 for refunds
until paid. Claim for refund under this paragraph must be filed
within three years after the earliest date that the taxpayer or
spouse is notified by the department that the taxes are not
deferred.
{ - (8) - } { + (7) + } This section applies to all
tax-deferred property, notwithstanding that election to defer
taxes is made under ORS 311.666 to 311.701 before or after
October 3, 1989.
SECTION 6. ORS 311.691 is amended to read:
311.691. (1) Notwithstanding any provision of ORS chapter 312
to the contrary and ORS 311.696 (1), upon compliance with ORS
311.693, taxes assessed against a tax-deferred homestead for any
tax year that were unpaid as of July 1 of the tax year for which
homestead property tax deferral was initially granted under ORS
311.666 to 311.701, and that remain unpaid, shall remain a lien
and shall become delinquent as otherwise provided by law, but
shall not be subject to foreclosure under ORS chapter 312 until
August 15 of the calendar year following the calendar year in
which one of the circumstances listed in ORS 311.684 occurs.
(2) This section does not apply if:
(a) The tax-deferred homestead property is a manufactured
structure or floating home and is moved out of state;
(b) Except in the case of a manufactured structure or floating
home, the tax-deferred homestead property is personal property;
or
(c) The owner of the tax-deferred homestead property has
{ - household income - } { + federal adjusted gross
income + }, for the calendar year immediately preceding the
calendar year in which application is filed under ORS 311.693, of
more than the maximum { - household income - } { + federal
adjusted gross income + } that may be incurred under an allowable
claim for deferral, as provided in ORS 311.668.
(3) If the property to which subsection (1) of this section
applies has been included on a foreclosure list, or a judgment of
foreclosure entered, the property shall be removed from the
foreclosure list, or judgment vacated, unless the proceeding
against the property involves delinquent taxes other than those
described in subsection (1) of this section.
(4) Upon removal from the foreclosure list, or upon vacation of
the judgment, no penalty shall be imposed under ORS 312.110 or
312.120. In lieu thereof, the penalty is abated, or if the
penalty has been paid, upon application made to the county
assessor on or before July 1 of the year immediately following
the year of vacation or removal, the penalty shall be refunded
out of the unsegregated tax collections account in the manner
provided in ORS 311.806.
(5) Within 60 days after approval of an application under ORS
311.693, with respect to any property to which this section
applies, the tax collector shall make the proper entries on the
tax roll and shall remove the property from the foreclosure list
and proceeding.
(6) If a judgment has been entered foreclosing liens for
delinquent taxes against any property which is the subject of an
application filed under ORS 311.693, and the delinquent taxes
include only those taxes described in subsection (1) of this
section, or taxes in excess of those described in subsection (1)
of this section are paid, the judgment shall be null and void and
of no effect and the tax collector shall make the proper entries
on the assessment and tax rolls to reflect the vacation of the
judgment and to acknowledge the subsisting liens.
(7) Nothing in this section shall remove or release property to
which this section applies from the lien of any unpaid tax
thereon, but the unpaid taxes shall remain valid and subsisting
liens as though the foreclosure proceeding had not been
instituted or as though the foreclosure proceeding had not been
instituted and a judgment entered.
(8) Nothing in this section shall affect a foreclosure
proceeding instituted, or a judgment entered, to foreclose liens
for delinquent taxes against properties subject to foreclosure if
the delinquent taxes include taxes other than those described
under subsection (1) of this section. Such foreclosure
proceedings shall be instituted or continued without regard to
this section and such judgment shall be of full force and effect
as if this section did not exist.
(9) Interest on taxes to which this section applies shall be
determined from the same dates, in the same manner and until paid
as for other property taxes remaining unpaid upon the due dates,
upon preparation of the foreclosure list in accordance with ORS
chapter 312 and subsection (1) of this section and upon entry and
following a judgment of foreclosure.
SECTION 7. ORS 311.693 is amended to read:
311.693. (1) The owner of tax-deferred homestead property
desiring delay in foreclosure on account of delinquent taxes as
provided in ORS 311.691 shall make application for the delay to
the county assessor prior to the date the period of redemption
expires under ORS 312.120. The application shall contain or be
accompanied by a verified statement of { - total household
income, as defined in ORS 310.630, - } { + federal adjusted
gross income + } of the owner for the calendar year immediately
preceding the calendar year in which the application is made.
(2) Upon receipt of an application under subsection (1) of this
section, the county assessor shall approve or deny the
application. If the application is denied, the owner may appeal
to the circuit court in the county where the tax-deferred
homestead property is located within 90 days after notice in
writing of the denial is mailed to the owner by the county
assessor. Orders of the circuit court in an appeal taken under
this subsection may be appealed to the Court of Appeals within
the time and in the manner provided under ORS 312.210.
SECTION 8. { + The amendments to ORS 311.666, 311.668,
311.672, 311.689, 311.691 and 311.693 by sections 2 to 7 of this
2009 Act apply to assessment years beginning on or after January
1, 2010. + }
SECTION 9. { + There is appropriated to the Department of
Revenue, for the biennium beginning July 1, 2009, out of the
General Fund, the amount of $4 million to be deposited to the
credit of the Senior Property Tax Deferral Revolving Account
established under ORS 311.701 to carry out the amendments to ORS
311.666, 311.668, 311.672, 311.689, 311.691 and 311.693 by
sections 2 to 7 of this 2009 Act. + }
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