Chapter 21 Oregon Laws 1999

Session Law

AN ACT

HB 2518

Relating to the correction of erroneous material in Oregon tax law; creating new provisions; amending ORS 198.815, 199.765, 221.040, 223.856, 268.500, 280.060, 280.090, 280.145, 305.490, 305.570, 305.620, 306.220, 307.450, 307.460, 308.159, 308.355, 308.370, 308.792, 308.990, 309.110, 310.055, 310.140, 311.205, 311.216, 311.465, 311.531, 311.683, 314.043, 314.304, 314.518, 314.752, 314.810, 315.154, 315.156, 316.116, 316.162, 317.056, 317.067, 317.070, 317.097, 317.115, 317.991, 318.020, 318.031, 321.352, 321.353, 321.609, 321.810, 321.811, 323.107, 323.455, 323.505, 323.615, 323.625, 330.095, 330.113, 333.205, 341.039, 341.933, 357.430, 357.525, 358.171, 358.831, 368.705, 368.707, 451.490, 457.010, 468A.096, 469.170 and 838.015 and section 21a, chapter 801, Oregon Laws 1993, section 19, chapter 541, Oregon Laws 1997, and section 2, chapter 755, Oregon Laws 1997; and repealing ORS 310.396, 314.304 and 315.148.

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

SECTION 1. ORS 198.815 is amended to read:

198.815. (1) If the required number of written requests for an election are filed with the county board on or before the date of the final hearing or if the petition for formation includes a permanent rate limit for operating taxes for the proposed district, the board shall provide by order for the holding of an election to submit to the electors the question of forming the district. The board shall cause notice of the election to be published by two insertions. If requests for an election are filed by less than the required number of persons and no [tax base] permanent rate limit for operating taxes is included in the petition, the county board shall dismiss the requests and enter an order creating the district.

(2) The order calling an election shall fix the date of the election on the next available election date in ORS 255.345 for which the filing deadline can be met. However, when the proposal for formation includes a permanent rate limit for operating taxes for the proposed district, the election shall be held on the date of the next biennial primary election or general election for which the filing deadline can be met. The order shall also state that at such election members of the district board will be voted for. Candidates to be voted for as members of the first board of a district shall be nominated as provided by ORS chapter 255 and the principal Act of a district.

(3) The order calling the election shall require the county official in charge of elections to include with the ballot for the election a map or other description of the boundaries of the proposed district using streets and other generally recognized features and a statement of the permanent rate, if any, proposed for the district in the petition for formation under ORS 198.750 (1)(g). Such statement shall comply with the requirements of ORS [310.402] 250.035. The map or other description and statement required by this subsection shall be supplied by the county board.

(4)(a) When the proposal for formation includes a permanent rate limit for operating taxes for the proposed district, the ballot title shall clearly indicate that a single question is being proposed which is:

(A) Whether the proposed district shall be formed; and

(B) Whether the permanent rate limit specified in the ballot title shall be adopted as the maximum rate of operating taxes for that district.

(b) The ballot title for the election shall be in compliance with ORS 250.036.

(5) When the proposal for formation includes a permanent rate limit for the proposed district, the district shall be authorized to impose operating taxes not in excess of the permanent rate limit if the proposal is approved by a majority of the votes cast and:

(a) At least 50 percent of registered electors eligible to vote in the election cast a ballot; or

(b) The election is a general election in an even-numbered year.

(6) If a proposed county service district is subject to dissolution unless a determination of public need for continued existence is made, the ballot title shall include the fiscal year in which dissolution will occur and statement that the district will dissolve unless the board of directors determines that there is a public need for continued existence.

NOTE: Corrects terminology; corrects statutory reference.

SECTION 2. ORS 199.765 is amended to read:

199.765. The charter for a city-county shall specify the permanent rate limit for operating taxes for the city-county within the meaning of section 11 (3), Article XI of the Oregon Constitution[, which]. The permanent rate limit shall be a rate that would produce the same tax revenue as would have been cumulatively produced by the cities that are the subject of the consolidation, [and not taking into account any applicable statutory rate limit on operating taxes,] the county and all special districts automatically extinguished under ORS 222.510 or by ORS 199.705 to 199.795, not taking into account any applicable statutory rate limit on operating taxes. To provide for the administration of differential taxation, the charter may establish districts on the basis of services to be provided by the city-county and prescribe operating tax rates for the different districts, except that the operating tax rates may not cumulatively exceed the permanent rate limit established for the city-county under this section. The charter shall provide procedure for modification or dissolution of such districts and for changing such tax rate formula, after the first fiscal year in which the city-county imposes ad valorem property taxes.

NOTE: Clarifies language.

SECTION 3. ORS 221.040 is amended to read:

221.040. (1) When a petition for incorporation described in ORS 221.031 is signed by 20 percent or, in a county with a population over 300,000, by 10 percent, of the electors registered in the area proposed to be incorporated, the petition shall be filed with the county court of the county in which the proposed petition was filed under ORS 221.031. A petition shall not be accepted for filing unless all the signatures on the petition were obtained within the six-month period immediately following the date on which the petitions were filed under ORS 221.031. Upon the filing of the petition, the county court shall fix the time and place for the hearing of such petition and shall give notice thereof by publication once each week for two successive weeks in a newspaper published in the county where the petition is filed and of general circulation within the boundaries, and by posting the notice for the same period of time in three public places in the area proposed to be incorporated. The notice shall state the time and place of the hearing, describe the boundaries set forth in the petition and state the purpose of the petition. If any portion of the proposed incorporation of a city lies within another county or counties, then the notice shall be published in a newspaper of general circulation in each of the counties and in the same time and manner.

(2) At the time and place fixed for the hearing, or at any time and place at which the hearing may be continued or postponed, any person interested may appear and present oral or written objections to the granting of the petition, the forming of the proposed incorporated city or the estimated rate of taxation set forth in the petition. The court may alter the boundaries as set forth in the petition to include all territory which may be benefited by being included within the boundaries of the proposed incorporated city, but shall not modify boundaries so as to exclude any land which would be benefited by the formation of the proposed city. No land shall be included in the proposed city which will not, in the judgment of the court, be benefited. If the court determines that any land has been improperly omitted from the proposed city and the owner has not appeared at the hearing, it shall continue the hearing and shall order notice given to the nonappearing owner requiring the owner to appear before it and show cause, if any the owner has, why the owner's land should not be included in the proposed city. The notice shall be given by publication and posting in the same manner as the original notice for hearing and for the same period. For the purposes of this subsection, "owner" means the legal owner of record except that if there is a vendee under a duly recorded contract, the vendee shall be deemed to be the owner.

(3) Upon the final hearing of the petition, the court, if it approves the petition as originally presented or in an altered form, shall provide by order for the holding of an election relating to the incorporation of the proposed city. The order calling the election shall fix the date of the election on the date of the next biennial primary election or general election that is not sooner than the 90th day after the date of the order. The order shall contain:

(a) A description of the exterior boundaries of the proposed city as determined by the court. The description shall be a metes and bounds or legal description prepared by the county surveyor or county assessor. The description prepared under this paragraph shall accurately describe the exterior boundaries of the proposed city as indicated on the map filed under ORS 221.031 (2) unless those boundaries were altered by the county court, in which case the description shall accurately describe the boundaries as altered;

(b) A provision requiring the county official in charge of elections to include on the ballot for the election a description of the boundaries of the proposed city using streets and other generally recognized features and a statement of the proposed permanent rate limit for operating taxes included in the petition for incorporation of the proposed city as required by ORS 221.031, which statement shall comply with the requirements of ORS [310.402] 250.035; and

NOTE: Corrects statutory reference.

SECTION 4. ORS 223.856 is amended to read:

223.856. (1) A measure authorizing assessments under ORS 223.851 to 223.876 shall specify the services proposed to be financed by the assessments, the maximum amount [which] that may be imposed and the number of years in which assessments will be made.

(2) Each assessment measure shall provide for the operation and maintenance of a single street lighting, street maintenance or street cleaning service. More than one measure may be submitted to the electors at a single election. Assessments for street lighting may include an amount sufficient to pay construction, reconstruction, modification and installation costs as well as operating and maintenance costs.

(3) The measure shall provide that assessments are in lieu of any existing [serial ad valorem tax levy] local option tax for the service to be provided.

NOTE: Corrects terminology.

SECTION 5. ORS 268.500 is amended to read:

268.500. (1) A district may levy annually an ad valorem tax on all taxable property within its boundaries not to exceed in any one year one-half percent (.005) of the real market value of all taxable property within the boundaries of such district, computed in accordance with ORS 308.207. The district may also annually assess, levy and collect a special tax upon all such property in an amount sufficient to pay the yearly interest on bonds previously issued by the district and then outstanding, together with any portion of the principal of such bonds maturing within the year. The special tax shall be applied only in payment of the interest and principal of bonds issued by the corporation, but the corporation may apply any funds it may have towards the payment of principal and interest of any such bonds.

(2) Such taxes shall be levied in each year and returned to the county officer whose duty it is to extend the tax levy by the time required by law for city taxes to be levied and returned. All taxes levied by the district shall become payable at the same time and be collected by the same officer who collects county taxes and shall be turned over to the district according to law. The county officer whose duty it is to extend the county levy shall extend the levy of the district in the same manner as city taxes are extended. Property shall be subject to sale for nonpayment of taxes levied by the corporation in like manner and with like effect as in the case of county and state taxes.

(3) In taxation a district may classify property on the basis of services received from the district and prescribe different tax rates for the different classes of property.

[(4) If the district proposes a tax base measure to the voters of the district, it may perpetually allocate the proposed base to functions or activities of the district. To be binding, the allocation must be stated both in the ordinance or resolution which submits the measure to the voters and in the ballot title. Any constitutionally authorized increase in the tax base subsequently levied by the district shall be apportioned to the functions or activities specified by the district in the ballot title in the same proportion as the original allocation. If the district reduces or ceases to provide a function or activity for which the tax base has been allocated, then the district may use that portion of the tax base for any lawful purpose of the district.]

[(5) If the statement in the resolution or ordinance and in the measure submitted includes an allocation of the proposed base to functions or activities of the district, the statement in the ballot title for the measure must include the following statement, which shall not be counted as part of the 175-word limit established under ORS 310.390 (1)(c):]

[_________________________________________________________________]

Any constitutionally authorized increase in the tax base subsequently levied by the district shall be apportioned to the functions or activities specified by the district in the ballot title in the same proportion as the original allocation. If the district reduces or ceases to provide a function or activity for which the tax base has been allocated, then the district may use that portion of the tax base for any lawful purpose of the district.

[_________________________________________________________________]

NOTE: Deletes obsolete provisions.

SECTION 6. ORS 280.060 is amended to read:

280.060. (1) Upon approval of a majority of the electors of a subdivision in a manner that qualifies under section 11 (8), Article XI of the Oregon Constitution, a subdivision may levy local option taxes [serially] outside the limitation imposed by section 11 (3), Article XI, Oregon Constitution, over the period of time that is authorized by the electors. The amount levied each year shall be:

(a) Uniform, or substantially so, throughout the period during which the taxes are levied; or

(b) Computed annually at the same dollar rate per thousand dollars assessed value in the subdivision, such rate to be declared in and made a part of the ballot measure to be submitted to the electorate.

(2)(a) [If subsection (1)(a) of this section applies,] The period of time authorized by the electors shall not exceed five years or, if the local option tax is for capital projects, the lesser of:

(A) The expected useful life of the capital projects to be financed by the tax; or

(B) Ten years.

(b) A local option tax for capital projects does not exceed the expected useful life of the capital projects financed by the tax if the estimated weighted average life of the tax does not exceed the estimated dollar weighted average of the capital assets comprising the capital projects that are to be financed by the tax. The estimated dollar weighted average life of capital projects shall be calculated under rules of the Department of Revenue that ensure that a local option tax for capital projects is levied for no more than 10 years and no more than the useful life of the component of the capital projects financed by the tax that has the longest useful life.

(3)(a) All local option taxes authorized by ORS 280.040 to 280.145 that are for capital projects and that have a term of more than five years shall be submitted to electors separately from local option taxes with a term of five years or less.

(b) For purposes of this subsection, "capital project" means the acquisition of land upon which to construct a building, the acquisition of a building, the acquisition of an addition to a building which increases the square footage of the building, the construction of a building, the construction of an addition to an existing building which increases the square footage of the building or the acquisition of and installation of machinery and equipment which will become an integral part of a building or an addition to a building, the purchase of furnishings, equipment or other tangible property with an expected useful life of more than one year or a combination of those items.

(4) If a ballot measure authorizing a local option tax states that the taxing district may issue bonds that are payable from that tax, voter approval of the tax shall constitute voter approval of the bonds, except that the approval shall not entitle the taxing district to collect a greater amount of tax than the taxing district would have been entitled to collect if the ballot measure only authorized local option taxes and did not authorize bonds. If the local option tax is approved by voters in a manner that qualifies under section 11 (8), Article XI of the Oregon Constitution, then the taxing body may issue the bonds in a principal amount that, together with the estimated interest to be paid on the bonds while the bonds are outstanding, does not exceed the revenues estimated to be received from the local option tax levy. A taxing district may pledge the revenues received from the local option tax and the taxing district's full faith and credit to pay bonds authorized under this subsection.

NOTE: Corrects internal reference; corrects terminology.

SECTION 7. ORS 280.090 is amended to read:

280.090. If more than one proposal to [levy taxes serially] impose local option taxes is submitted to the electors at the same election, the several ballot measures shall be voted upon separately. However, not more than four separate ballot measures proposing [a serial levy] local option taxes may be submitted to the electors under the provisions of ORS 280.040 to 280.145 within a single calendar year.

NOTE: Corrects terminology.

SECTION 8. ORS 280.145 is amended to read:

280.145. [(1)] Notwithstanding the amendments to ORS 280.040, 280.060, 280.070[,] and 280.080 [and 280.100] by sections 302 to [306] 305, chapter 541, Oregon Laws 1997, a serial levy described in section 11 (7)(b), Article XI of the Oregon Constitution, may be levied by the subdivision, including a school district, as provided in ORS 280.040 to 280.140 (1995 Edition).

[(2) A serial levy described in this section shall be taken into account in determining the district's permanent rate limitation and ad valorem property tax rate for the tax year beginning July 1, 1997, as provided in ORS 310.200 to 310.242.]

NOTE: Corrects statutory reference; deletes obsolete provision.

SECTION 9. ORS 305.288 is added to and made a part of ORS chapter 305.

NOTE: Adds section to chapter.

SECTION 10. ORS 305.490 is amended to read:

305.490. (1) Plaintiffs or petitioners filing a complaint or petition in the tax court shall pay a filing fee for each complaint or petition as follows:

(a) If a small claims procedure is elected, $10.

(b) For a complaint or petition in the magistrate division, $25.

(d) If a complaint or petition is specially designated under ORS 305.501 for hearing in the regular division, a fee of $50.

(2) Neither the State of Oregon, nor any county, school district, municipal corporation or other public corporation therein, nor any officer of any such public political division or corporation, appearing in the representative capacity of the officer of any public political division or corporation, shall be required to pay the fee prescribed under this section. The party entitled to costs and disbursements on such appeal shall recover from the opponent of the party the amount so paid upon order of the court, as in equity suits in the circuit court.

(3)(a) If, in any proceeding before the tax judge involving taxes upon or measured by net income in which an individual taxpayer is a party, or involving inheritance taxes, the court grants a refund claimed by the executor or taxpayer or denies in part or wholly an additional assessment of taxes claimed by the Department of Revenue to be due from the estate or taxpayer, the court may allow the taxpayer, in addition to costs and disbursements, the following:

[(a)] (A) Reasonable attorney fees for the proceeding under this section and for the prior proceeding in the matter, if any, before the magistrate; and

[(b)] (B) Reasonable expenses as determined by the court. Expenses include accountant fees and fees of other experts incurred by the executor or individual taxpayer in preparing for and conducting the proceeding before the tax court judge and the prior proceeding in the matter, if any, before the magistrate.

(b) Payment of attorney fees or reasonable expenses under this section shall be made by the Department of Revenue in the manner provided by ORS 305.790.

(4) All fees and other moneys received or collected by the clerk by virtue of the office of the clerk shall be paid over to the State Treasurer and shall be held by the clerk in the General Fund as miscellaneous receipts.

NOTE: Restructures subsection.

SECTION 11. ORS 305.570 is amended to read:

305.570. (1)(a) Any person, including a county assessor or county tax collector aggrieved by and affected by an order, act, omission or determination of the Department of Revenue, a person, including a county assessor aggrieved by and affected by an order of the county board of property tax appeals and a person whose property is affected by an order of the Department of Revenue made to a county assessor or county tax collector under the authority contained in ORS [305.288 or] 306.115 may appeal to the Oregon Tax Court, and appeal shall be perfected in the manner provided in ORS 305.404 to 305.560.

(b) Except for an appeal brought by a county assessor or county tax collector, the order being appealed under this subsection must affect the person or the property of the person making the appeal or property for which the person making the appeal holds an interest that obligates the person to pay taxes imposed on the property. As used in this paragraph, an interest that obligates the person to pay taxes includes a contract, lease or other intervening instrumentality.

(2) A taxpayer or political subdivision affected by a determination of the Department of Revenue authorized under ORS 305.620 may appeal to the Oregon Tax Court as provided in ORS 305.620.

NOTE: Deletes incorrect reference.

SECTION 12. ORS 305.620 is amended to read:

305.620. (1) Any state agency or department may enter into agreements with any political subdivision of this state for the collection, enforcement, administration and distribution of local taxes of the political subdivision imposed upon or measured by gross or net income, wages or net earnings from self-employment or local general sales and use taxes.

(2) The department or agency shall prescribe the rules by which the agreements entered into under subsection (1) of this section are administered.

(3) The department or agency shall prescribe the rules by which the taxes described by subsection (1) of this section are administered, collected, enforced and distributed.

(4) A political subdivision may appear as an intervenor at any conference held by the Department of Revenue or conference, hearing or proceeding held by another department or agency in connection with a local tax administered by the department or agency. The political subdivision may be represented by its own counsel. The department or agency shall adopt rules governing the procedures to be followed by the political subdivision in making an appearance.

(5) Costs incurred by the department or agency in the administration, enforcement, collection and distribution of taxes under the agreements entered into under subsection (1) of this section shall be first deducted from the taxes collected before distribution is made to the political subdivision which is a party to the agreement.

(6) The Oregon Tax Court shall have exclusive jurisdiction to review determinations of the Department of Revenue or orders of another department or agency relating to the collection, enforcement, administration and distribution of local taxes under agreements entered into under subsection (1) of this section.

(7) A proceeding for refund or to set aside additional taxes or taxes assessed when no return was filed may be initiated before the state agency or department or as provided in ORS [305.490 (2)(a)(G)] 305.514 (1)(g).

(8) An appeal from a determination or an order may be taken by the taxpayer or by the political subdivision whose taxes are in issue, by filing an original and two certified copies of a complaint with the clerk of the Oregon Tax Court at its principal office at the state capital, Salem, Oregon, within 60 days after the notice of the determination of the Department of Revenue or the order of the department or agency is sent to the taxpayer or the political subdivision. The filing of the complaint in the Oregon Tax Court shall constitute perfection of the appeal. Service of the taxpayer's complaint shall be accomplished by the clerk of the tax court by filing a certified copy of the complaint with the administrative head of the department or agency and a certified copy with the political subdivision. Service of the political subdivision's complaint shall be accomplished by the clerk of the tax court by filing a certified copy of the complaint with the administrative head of the department or agency and mailing a certified copy of the complaint to the taxpayer. The complaint of a taxpayer shall be entitled in the name of the person filing as plaintiff and the department or agency as defendant. The complaint of a political subdivision shall be entitled in the name of the political subdivision as plaintiff and the taxpayer and the department or agency as defendants. A copy of the order of the department or agency shall be attached to the original complaint. All procedures shall be in accordance with ORS 305.405 to 305.494.

NOTE: Corrects statutory reference.

SECTION 13. ORS 306.220 is amended to read:

306.220. (1) Every public officer shall comply with any lawful order, rule or regulation of the Department of Revenue made under ORS [305.288,] 306.115, 308.335 or 309.400.

(2) Whenever it appears to the department that any public officer or employee whose duties relate to the assessment or equalization of assessments of property for taxation has failed to comply with any law relating to such duties, or the rules of the department made in pursuance thereof, the department, after an informal conference on the facts, may direct the public officer or employee to comply with such law or rule.

(3) If the public officer or employee, for a period of 10 days after service on the public officer or employee of the department's direction, neglects or refuses to comply therewith, the department may apply to the Oregon Tax Court for an order, returnable within five days from the date thereof, to compel the public officer or employee to comply with the law or rule, or to show cause why the public officer or employee should not be compelled so to do.

(4) Any order issued by the judge pursuant thereto shall be final.

(5) The remedy provided in this section shall be cumulative and shall not preclude the department from exercising any power or rights delegated to it.

NOTE: Deletes incorrect reference.

SECTION 14. ORS 307.450 is amended to read:

307.450. [After December 31, 1969,] The land, but not the improvements to the land, within the area described by ORS 390.770[,] is exempt from taxation.

NOTE: Deletes obsolete clause; corrects punctuation.

SECTION 15. ORS 307.460 is amended to read:

307.460. (1)(a) Upon compliance with subsection (2) of this section, student housing shall be exempt from all ad valorem property taxes levied by a school district, a county education bond district, an education service district, a community college service district or a community college district.

(b) As used in this subsection, "student housing" means housing that is:

(A) Rented exclusively to students of any educational institution, public or private, that offers at least a two-year program acceptable for full credit towards a baccalaureate degree;

(B) Rented upon a nondiscriminatory basis, without regard to race, creed, color or national origin;

(C) Owned by a nonprofit corporation having articles of incorporation that provide that on dissolution or liquidation, the right, title and interest of the corporation in and to all accommodations and facilities with respect to which exemption is sought will be conveyed to the educational institution or institutions whose students are served by the housing, and all its other remaining assets will be conveyed to one or more organizations exempt from federal income tax under Section 501(c) (3) of the Internal Revenue Code;

(D) Owned by a nonprofit corporation that has made legally enforceable arrangements to convey its interest in any property with respect to which exemption is claimed to the educational institution or institutions whose students are served by the housing upon final payment of the mortgage indebtedness incurred in connection with the construction or acquisition of the housing; and

(E) Regulated by federal or state law in regard to rents, charges, development costs and methods of operation. The renting of the property for safekeeping purposes during the summer months shall not disqualify the property from the exemption granted by this section.

(2)(a) Except as provided in paragraph (b) of this subsection, the nonprofit corporation shall apply to the assessor for the exemption on or before April 1 of the assessment year for which the exemption is claimed on forms prescribed by the Department of Revenue. The exemption claim shall include a certification by the university, college or community college attended by a majority of the student occupants that the property is being used for student housing during the current school year. Once an exemption has been granted, the exemption shall continue in effect, without reapplication, until the property fails to meet the qualifications of subsection (1) of this section as exempt student housing.

(b) If the property designated in the claim for exemption under paragraph (a) of this subsection is acquired after March 1 and before July 1, or if there is a change in use of the property qualifying the property for exemption under this section after March 1 and before July 1, the initial claim for exemption shall be filed within 30 days from the date of acquisition or change of use of the property.

(3) When, for any reason, the property or any portion thereof ceases to meet the qualifications of subsection (1) of this section, the owner at the time of the change shall notify the assessor of such change prior to the next January 1, or within 60 days after the date of disqualification, whichever is the earlier.

(4) When property that has received special exemption as student housing under subsection (1) of this section thereafter becomes disqualified for such exemption, and the notice required by subsection (3) of this section is not given, the assessor shall determine the date that the notice should have been given, shall notify the owner thereof and notwithstanding ORS 311.235, there shall be added to the tax extended against the property on the next general property tax roll, to be collected and distributed in the same manner as the remainder of the real property tax, an amount equal to the sum of the following:

(a) The total amount by which taxes assessed against the property would have been increased if it had been subject to tax without regard to subsection (1) of this section during the tax year for which the notice should have been given and each tax year thereafter together with the interest which would have accrued had the taxes been properly assessed and the exemption not been granted in the applicable years; and

(b) A penalty equal to 20 percent of the amount specified in paragraph (a) of this subsection, however, no penalty shall be imposed on any amount attributable to interest.

(5) A fraternity, sorority or cooperative housing organization, or an associated alumni nonprofit corporation organized exclusively for the purpose of owning property housing the fraternity, sorority or cooperative housing organization and providing related financial and operational support, may qualify for the exemption provided by subsection (1) of this section if the requirements of subsection (1)(b)(A) and (B) of this section are met, provided that any of its housing accommodations not occupied by members of the organization shall be open to occupancy by students who are not members of or affiliated with the organization, on a nondiscriminatory basis, without regard to race, creed, color or national origin, under rules or conditions set by the school.

(6) Additional taxes collected under this section shall be deemed to have been imposed in the year to which the additional taxes relate.

NOTE: Adds punctuation.

SECTION 16. ORS 308.159 is amended to read:

308.159. If a lot line adjustment is made with respect to property, the maximum assessed value of the property may be adjusted to reflect the lot line adjustment, but the total maximum assessed value of all property affected by the lot line adjustment may not exceed the total maximum assessed value of the affected property determined under ORS 308.146, or, if applicable, under ORS 308.153 or 308.156[, if applicable].

NOTE: Clarifies meaning.

SECTION 17. ORS 308.355 is amended to read:

308.355. Comparable sales figures utilized by a county assessor in arriving at assessed values of agricultural lands under ORS 308.345 (2) shall be made available by the county assessor to the county board of property tax appeals in the event of any consideration of a petition involving the assessed value of agricultural lands by the board of [equalization] property tax appeals under ORS 309.100.

NOTE: Corrects name of board.

SECTION 18. ORS 308.370 is amended to read:

308.370. Notwithstanding ORS 308.205, 308.232 or 308.235:

(1) Any land [which] that is within a farm use zone established under ORS 215.010 to 215.190 and 215.402 to 215.438 or 227.215 to 227.300, and [which] that is used exclusively for farm use as defined in ORS 215.203 (2), shall, for purposes of assessment, be valued at its value for farm use and not at the assessed value it would have if applied to other than farm use and shall have an assessed value as determined under subsection (6) of this section.

(2) Any land [which] that is not within a farm use zone but [which] that is being used, and has been used for the preceding two years, exclusively for farm use as defined in ORS 215.203 (2) shall, upon compliance with ORS 308.375, for purposes of assessment, be valued at its value for farm use and not at the assessed value it would have if applied to other than farm use and shall have an assessed value as determined under subsection (6) of this section. The provisions of this subsection shall not apply to any land with respect to which the owner has granted, and has outstanding, any lease or option to buy the surface rights for other than farm use except leases:

(a) For the exploration of geothermal resources as defined by ORS 522.005 (11), mineral resources or other subsurface resources, if the exploration or possession does not interfere with the farm use of the farmland; or

(b) For the use of land for hunting, fishing, camping or other recreational use[, if the exploration, use or possession does not interfere with the farm use of the farmland].

(3) The entitlement of farmland to the special assessment provisions of this section shall be determined as of January 1. However, if land so qualified becomes disqualified prior to July 1 of the same assessment year, it shall be valued under ORS 308.232 at its real market value as defined by law without regard to this section and shall be assessed at its assessed value under ORS 308.146 or as otherwise provided by law. If the land becomes disqualified after July 1, its assessment for that tax year shall continue as provided in this section.

(4)(a) The value for farm use of property subject to special assessment for farm use shall be determined as provided under this section.

(b) The county assessor shall develop tables for each assessment year that reflect, for each class and area, the values determined under ORS 308.345 to 308.365 and that express the values as values per acre.

(c) The assessor shall compute the farm use value for each property subject to special assessment for farm use by multiplying the applicable value derived from the table created pursuant to this subsection for the assessment year by the acreage of the property.

(5)(a) The maximum assessed farm use value shall be determined as provided in this subsection.

(b) The assessor shall develop tables for each assessment year that provide, for each class and area, a maximum assessed value per acre that is equal to 103 percent of the maximum assessed value per acre for the previous assessment year.

(6) The assessor shall compute the assessed value of property subject to farm use assessment by taking the lesser of the value per acre applicable to the property under subsection (4) of this section or under subsection (5) of this section and multiplying the value by the acreage of the property.

(7) Property that newly qualifies for special assessment for farm use shall, for the first assessment year for which the special assessment applies, have:

(a) A farm use value as determined under the tables developed under subsection (4) of this section;

(b) A maximum assessed value as determined under the tables developed under subsection (5) of this section; and

NOTE: Conforms structure to legislative form and style; corrects grammar.

SECTION 19. Section 19, chapter 541, Oregon Laws 1997, is amended to read:

Sec. 19. (1) Notwithstanding [sections 9 to 17 of this 1997 Act] ORS 308.149 to 308.166, for the tax year beginning July 1, 1997, the ratio of average maximum assessed value to average real market value solely for purposes of the listing of value on the value notice described in [ORS 308.595] section 211, chapter 541, Oregon Laws 1997, shall be 1.00.

(2) The ratio of average maximum assessed value to average real market value to be used for determining assessed value on the final assessment roll for the tax year beginning July 1, 1997, as prepared under ORS 308.585[,] and 308.590 and [308.595] section 211, chapter 541, Oregon Laws 1997, shall be as provided in [sections 9 to 17 of this 1997 Act] ORS 308.149 to 308.166.

NOTE: Corrects statutory references.

SECTION 20. ORS 308.740 to 308.790 are added to and made a part of ORS chapter 308.

NOTE: Adds series to chapter.

SECTION 21. ORS 308.792 is amended to read:

308.792. As used in ORS 308.792 to 308.803:

(1) "Owner" means the party or parties having the fee interest in land, except that where land is subject to a real estate sales contract, "owner" means the contract vendee under a recorded contract.

(2) "Department" means the State Department of Fish and Wildlife.

[(2)] (3) "Designated riparian land" means the beds of streams, the adjacent vegetation communities, and the land thereunder, which are predominantly influenced by their association with water, not to extend more than 100 feet landward of the line of nonaquatic vegetation, which are privately owned and which qualify for exemption under ORS 308.792 to 308.803.

[(3)] (4) "Urban growth boundary" means an urban growth boundary contained in a city or county comprehensive plan that has been acknowledged by the Land Conservation and Development Commission pursuant to ORS 197.251 or an urban growth boundary that has been adopted by a metropolitan service district council under ORS 268.390 (3).

NOTE: Clarifies meaning of term within series.

SECTION 22. ORS 308.990 is amended to read:

308.990. (1) Violation of ORS 308.320 (3) or of ORS 308.330 is a misdemeanor. The judgment of conviction of any assessor for such a violation shall of itself work a forfeiture of the office of the assessor.

(2) Any taxpayer or managing officer thereof who fails to furnish, after written demand so to do by the assessor or the county board of [equalization] property tax appeals having jurisdiction or the Department of Revenue, any information or, upon like demand, fails to produce any books, records, papers or documents required by ORS 308.285 or 308.335 to be furnished by the taxpayer or managing officer to the county assessor, the county board of property tax appeals or the Department of Revenue, is guilty of a misdemeanor and, upon conviction, is punishable by a fine of not less than $25 nor more than $1,000. Circuit courts shall have jurisdiction in the trial of such offenses.

(3) Any person, firm, association or corporation, or agent or managing officer thereof, who presents or furnishes to the Director of the Department of Revenue any statement, required by ORS 308.335, or required by the director under the authority of ORS 308.335, which statement is willfully false or fraudulent, is liable to a penalty of not less than $100 nor more than $1,000. The penalty shall be recovered by the Attorney General, in the name of the state, by action in any court of competent jurisdiction.

(4) Any person who willfully presents or furnishes to the director any statement, required by ORS 308.505 to 308.665 which statement is false or fraudulent is guilty of perjury and, upon conviction, shall be punished as otherwise provided by law for such crime.

(5) Any willful violation of ORS 308.413 or of any rules adopted under ORS 308.413 is punishable, upon conviction, by a fine not exceeding $10,000, or by imprisonment in the county jail for not more than one year, or by both.

NOTE: Corrects name of board.

SECTION 23. ORS 309.110 is amended to read:

309.110. (1) The disposition of every petition before a board of property tax appeals and the board's determination thereon shall be recorded by formal order and entered in the record of the board. A copy of the order as to each petition shall be sent, by mail, to the petitioner at the post-office address given in the petition. When a copy of a board's order is personally delivered to the petitioner, the requirement to mail a copy of the order is waived. A copy of each order shall be delivered to the assessor and the officer in charge of the roll on the same day that the order is mailed or delivered to the petitioner. The orders of a board shall specify what changes shall be made in the tax roll, if any, and shall direct the officer in charge of the roll to make them. The district attorney shall be available to aid a board in the preparation of its orders.

(2) Notwithstanding subsection (1) of this section, if a petition is filed with the board that is resolved by stipulation under ORS 308.242 prior to the date the board convenes, the stipulation shall be entered into the record of the board. The requirements for mailing and delivery under subsection (1) of this section do not apply to a stipulation entered into the record under this subsection.

(3)(a) A board may issue amended orders to correct clerical errors or errors of jurisdiction appearing in its original orders.

[(4)] (b) As used in this [section] subsection:

[(a)] (A) [A clerical error is] "Clerical error" means an error in the order [which] that either arises from an error in the minutes of a board or [which] that is a failure to correctly reflect the minutes of a board, and [which] that, had it been discovered prior to the order being issued would have been corrected as a matter of course, and the information necessary to make the correction is contained in the minutes of a board. Such errors include, but are not limited to, arithmetic and copying errors and omission or misstatement of identification of property.

[(b)] (B) [An error of jurisdiction is] "Error of jurisdiction" means an error in the order resulting from the board's failure to correctly apply the board's authority as granted under ORS 309.026.

[(5)] (4) Amended orders may [only] be issued only during a board's session, or by call of the chairperson, within 30 days after final adjournment of the session.

[(6)] (5) The provisions of subsection (1) of this section shall apply to amended orders, unless the context requires otherwise. Amended orders shall be mailed to the petitioner and delivered to the assessor and the officer in charge of the roll not later than five days after the adjournment of a board's meetings or five days after the 30-day period provided for in this section, if issued during the 30-day period.

NOTE: Conforms structure to legislative form and style; corrects grammar and syntax.

SECTION 24. ORS 310.055 is amended to read:

310.055. (1) As used in the property tax laws of this state, "operating taxes" means ad valorem property taxes that are subject to a permanent rate limit under section 11, Article XI of the Oregon Constitution, or statutory rate limit under ORS 310.236 (4), if applicable.

(2) For the tax year beginning July 1, 1997, operating taxes consist of the sum of the following (or such lesser amount as is certified to the assessor under ORS 310.206 (4)(b):

(a) The total amount of ad valorem property taxes as provided in ORS 310.200 to 310.242, except that the amount under this paragraph does not include:

(A) Local option taxes;

(B) Ad valorem property taxes used to repay taxing district bond or pension and disability plan obligations described in section 11 (5), Article XI of the Oregon Constitution;

(C) Ad valorem property taxes that would otherwise be subject to this paragraph, except that the taxes are of a taxing district other than a city, county or school district, and are used to support a hospital facility;

(D) Ad valorem property taxes that would otherwise be subject to this paragraph, except that the levy of the taxes was approved by voters prior to December 5, 1996, that met the voter participation requirements in section 11 (8), Article XI of the Oregon Constitution, and that are first imposed in the tax year beginning July 1, 1996, or July 1, 1997;

(E) Serial or one-year levies described in ORS 280.040 to 280.140 (1995 Edition) that replace levies that were imposed in the tax year beginning July 1, 1996, that were approved by voters in an election held after December 4, 1996, and that are first imposed for the tax year beginning July 1, 1997, if the rate or the amount of the levy is not greater than the rate or the amount of the replaced levy;

(F) Taxes imposed to pay principal and interest on exempt bonded indebtedness; and

(G) Urban renewal increment taxes; and

(b) The total amount of the following ad valorem property taxes, without reduction under ORS 310.200 to 310.242:

(A) Ad valorem property taxes of a taxing district other than a city, county or school district that are used to support a hospital facility;

(B) Ad valorem property taxes approved by voters prior to December 5, 1996, that met the voter participation requirements in section 11 (8), Article XI of the Oregon Constitution, and that are first imposed in the tax year beginning July 1, 1996, or July 1, 1997; and

(C) Serial or one-year levies described in ORS 280.040 to 280.140 (1995 Edition) that replace levies that were imposed in the tax year beginning July 1, 1996, that were approved by voters after December 4, 1996, and that are first imposed for the tax year beginning July 1, 1997, if the rate or the amount of the levy is not greater than the rate or the amount of the replaced levy.

(3) For tax years beginning on or after July 1, 1998, operating taxes consist of:

(a) Ad valorem property taxes imposed at the rate established as the permanent rate limit or statutory rate limit, if applicable, for the taxing district for the tax year beginning July 1, 1997, or such lesser [amount] rate as the taxing district certifies to the assessor under ORS 310.060; or

(b) If the district is imposing operating property taxes for the first time, ad valorem property taxes imposed at the rate established in the manner provided for by law as the permanent rate limit for the district or such lesser rate as the taxing district may determine.

NOTE: Corrects terminology.

SECTION 25. ORS 310.140 is amended to read:

310.140. The Legislative Assembly finds that section 11b, Article XI of the Oregon Constitution, was drafted by citizens and placed before the voters of the State of Oregon by initiative petition. Section 11b, Article XI of the Oregon Constitution, uses terms [which] that do not have established legal meanings and require definition by the Legislative Assembly. Section 11b, Article XI of the Oregon Constitution, was amended by section 11 (11), Article XI of the Oregon Constitution. This section is intended to interpret the terms of section 11b, Article XI of the Oregon Constitution, as originally adopted and as amended by section 11 (11), Article XI of the Oregon Constitution, consistent with the intent of the people in adopting these provisions, so that the provisions of section 11b, Article XI of the Oregon Constitution, may be given effect uniformly throughout the State of Oregon, with minimal confusion and misunderstanding by citizens and affected units of government. As used in the revenue and tax laws of this state, and for purposes of section 11b, Article XI of the Oregon Constitution:

(1) "Tax on property" means any tax, fee, charge or assessment imposed by any government unit upon property or upon a property owner as a direct consequence of ownership of that property, but does not include incurred charges or assessments for local improvements. As used in this subsection, "property" means real or tangible personal property, and intangible property that is part of a unit of real or tangible personal property to the extent that such intangible property is subject to a tax on property.

(2) "Direct consequence of ownership" means that the obligation of the owner of property to pay a tax arises solely because that person is the owner of the property, and the obligation to pay the tax arises as an immediate and necessary result of that ownership without respect to any other intervening transaction, condition or event.

(3)(a) "Incurred charge" means a charge imposed by a unit of government on property or upon a property owner that does not exceed the actual cost of providing goods or services [which] and that can be controlled or avoided by the property owner because:

[(a)] (A) [Because] The charge is based on the quantity of the goods or services used, and the owner has direct control over the quantity;

[(b)] (B) [Because] The goods or services are provided only on the specific request of the property owner; or

[(c)] (C) [Because] The goods or services are provided by the government unit only after the individual property owner has failed to meet routine obligations of ownership of the affected property, and such action is deemed necessary by an appropriate government unit to enforce regulations pertaining to health or safety.

[(4)] (b) For purposes of [subsection (3) of this section] this subsection, an owner of property may control or avoid an incurred charge if the owner is capable of taking action to affect the amount of a charge that is or will be imposed or to avoid imposition of a charge even if the owner must incur expense in so doing.

[(5)] (c) For purposes of [subsection (3)(a) of this section] paragraph (a)(A) of this subsection, an owner of property has direct control over the quantity of goods or services if the owner of property has the ability, whether or not that ability is exercised, to determine the quantity of goods or services provided or to be provided.

[(6)] (4) "Specific request" means:

(a) An affirmative act by a property owner to seek or obtain delivery of goods or services;

(b) An affirmative act by a property owner, the legal consequence of which is to cause the delivery of goods or services to the property owner; or

[(7)] (5) "Routine obligations of ownership" means a standard of operation, maintenance, use or care of property established by law, or if established by custom or common law, a standard that is reasonable for the type of property affected.

[(8)] (6) "Assessment for local improvement" means any tax, fee, charge or assessment that does not exceed the actual cost incurred by a unit of government for design, construction and financing of a local improvement.

[(9)] (7)(a) "Local improvement" means a capital construction project, or part thereof, undertaken by a governmental unit, pursuant to ORS 223.387 to 223.399, or pursuant to a local ordinance or resolution prescribing the procedure to be followed in making local assessments for benefits from a local improvement upon the lots [which] that have been benefited by all or a part of the improvement:

[(a)] (A) [Which] That provides a special benefit only to specific properties or rectifies a problem caused by specific properties;

[(b)] (B) The costs of which are assessed against those properties in a single assessment upon the completion of the project; and

[(c)] (C) For which the property owner may elect to make payment of the assessment plus appropriate interest over a period of at least 10 years.

[(10)] (b) For purposes of [subsection (9) of this section] paragraph (a) of this subsection, the status of a capital construction project as a local improvement is not affected by the accrual of a general benefit to property other than the property receiving the special benefit.

[(11)] (8) "Single assessment" means the complete assessment process, including preassessment, assessment or reassessment, for any local improvement authorized by ORS 223.387 to 223.399, or a local ordinance or resolution [which] that provides the procedure to be followed in making local assessments for benefits from a local improvement upon lots [which] that have been benefited by all or part of the improvement.

[(12)] (9) "Special benefit only to specific properties" shall have the same meaning as "special and peculiar benefit" as that term is used in ORS 223.389.

[(13)] (10) "Actual cost" means all direct or indirect costs incurred by a government unit in order to deliver goods or services or to undertake a capital construction project. The "actual cost" of providing goods or services to a property or property owner includes the average cost or an allocated portion of the total amount of the actual cost of making a good or service available to the property or property owner, whether stated as a minimum, fixed or variable amount. "Actual cost" includes, but is not limited to, the costs of labor, materials, supplies, equipment rental, property acquisition, permits, engineering, financing, reasonable program delinquencies, return on investment, required fees, insurance, administration, accounting, depreciation, amortization, operation, maintenance, repair or replacement and debt service, including debt service payments or payments into reserve accounts for debt service and payment of amounts necessary to meet debt service coverage requirements.

[(14)] (11) "Bonded indebtedness" means any formally executed written agreement representing a promise by a unit of government to pay to another a specified sum of money, at a specified date or dates at least one year in the future.

[(15)] (12)(a) "Exempt bonded indebtedness" means:

[(a)] (A) Bonded indebtedness authorized by a specific provision of the Oregon Constitution;

[(b)] (B) Bonded indebtedness incurred or to be incurred for capital construction or capital improvements[,] that was issued as a general obligation of the issuing governmental unit on or before November 6, 1990;

[(c)] (C) Bonded indebtedness incurred or to be incurred for capital construction or capital improvements[,] that was issued as a general obligation of the issuing governmental unit after November 6, 1990, with the approval of the electors of the issuing governmental unit; or

[(d)] (D) Bonded indebtedness incurred or to be incurred for capital construction or capital improvements, if the issuance of the bonds is approved by voters on or after December 5, 1996, in an election that is in compliance with the voter participation requirements of section 11 (8), Article XI of the Oregon Constitution.

[(16)] (b) "Exempt bonded indebtedness" includes bonded indebtedness issued to refund or refinance any bonded indebtedness described in [subsection (15) of this section] paragraph (a) of this subsection.

[(17)] (13) "Capital construction":

(a) For bonded indebtedness issued prior to December 5, 1996, and for the proceeds of any bonded indebtedness approved by electors prior to December 5, 1996, that were spent or contractually obligated to be spent prior to June 20, 1997, means the construction, modification, replacement, repair, remodeling or renovation of a structure, or addition to a structure, [which] that is expected to have a useful life of more than one year, and includes, but is not limited to:

(A) Acquisition of land, or a legal interest in land, in conjunction with the capital construction of a structure.

(B) Acquisition, installation of machinery or equipment, furnishings or materials [which] that will become an integral part of a structure.

(C) Activities related to the capital construction, such as planning, design, acquisition of interim or permanent financing, research, land use and environmental impact studies, acquisition of permits or licenses or other services connected with the construction.

(D) Acquisition of existing structures, or legal interests in structures, in conjunction with the capital construction.

(b) For bonded indebtedness issued on or after December 5, 1996, except for the proceeds of any bonded indebtedness approved by electors prior to December 5, 1996, that were spent or contractually obligated to be spent before June 20, 1997, has the meaning given that term in paragraph (a) of this subsection, except that "capital construction":

(A) Includes public safety and law enforcement vehicles with a projected useful life of five years or more; and

(B) Does not include:

(i) Maintenance and repairs, the need for which could be reasonably anticipated;

(ii) Supplies and equipment that are not intrinsic to the structure; or

(iii) Furnishings, unless the furnishings are acquired in connection with the acquisition, construction, remodeling or renovation of a structure, or the repair of a structure that is required because of damage or destruction of the structure.

[(18)] (14) "Structure" means any temporary or permanent building or improvement to real property of any kind[, which] that is constructed on or attached to real property, whether above, on or beneath the surface.

[(19)] (15) "Capital improvements":

(a) For bonded indebtedness issued prior to December 5, 1996, and for the proceeds of any bonded indebtedness approved by electors before December 5, 1996, that were spent or contractually obligated to be spent before June 20, 1997, means land, structures, facilities, as that term is defined in ORS 288.805, machinery, equipment or furnishings having a useful life longer than one year.

(A) Includes public safety and law enforcement vehicles with a projected useful life of five years or more; and

(B) Does not include:

(i) Maintenance and repairs, the need for which could be reasonably anticipated;

(ii) Supplies and equipment that are not intrinsic to the structure; or

[(20)] (16) "Maintenance and repairs, the need for which could be reasonably anticipated":

(a) Means activities, the type of which may be deducted as an expense under the provisions of the federal Internal Revenue Code, as amended and in effect on December 31, 1996, and that keep the property in ordinarily efficient operating condition, and that do not add materially to the value of the property nor appreciably prolong the life of the property;

(b) Does not include maintenance and repair of property that is required by damage, destruction[,] or defect in design, or that was otherwise not reasonably expected at the time the property was constructed or acquired, or the addition of material that is in the nature of the replacement of property and that arrests the deterioration or appreciably prolongs the useful life of the property; and

[(21)] (17) "Supplies and equipment intrinsic to a structure" means the supplies and equipment that are necessary to permit a structure to perform the functions for which the structure was constructed, or that will, upon installation, constitute fixtures considered to be part of the real property that is comprised, in whole or part, of the structure and land supporting the structure.

[(22)] (18) "Projected useful life" means the useful life, as reasonably estimated by the unit of government undertaking the capital construction or capital improvement project, beginning with the date the property was acquired, constructed or reconstructed and based on the property's condition at the time the property was acquired, constructed or reconstructed.

NOTE: Conforms structure to legislative form and style; corrects grammar.

SECTION 26. ORS 310.396 is repealed.

NOTE: Repeals obsolete provision.

SECTION 27. ORS 311.205 is amended to read:

311.205. (1) After the assessor certifies the assessment and tax roll to the tax collector, the officer in charge of the roll may correct errors or omissions in the roll to conform to the facts, as follows:

(a) The officer may correct a clerical error. A clerical error is an error on the roll which either arises from an error in the ad valorem tax records of the assessor, or the records of the Department of Revenue for property assessed under ORS 306.126, or which is a failure to correctly reflect the ad valorem tax records of the assessor, or the records of the Department of Revenue for property assessed under ORS 306.126, and which, had it been discovered by the assessor or the department prior to the certification of the assessment and tax roll of the year of assessment would have been corrected as a matter of course, and the information necessary to make the correction is contained in such records. Such errors include, but are not limited to, arithmetic and copying errors, and the omission or misstatement of a land, improvement or other property value on the roll.

(b) The officer may not correct an error in valuation judgment, except as provided in ORS 308.242 (2) and (3). Such errors are those where the assessor would arrive at a different opinion of value. The officer may correct any other error or omission of any kind. Corrections that are not corrections of valuation judgment errors include, but are not limited to, the elimination of an assessment to one taxpayer of property belonging to another on the assessment date, the correction of a tax limit calculation, the correction of a value changed on appeal, or the correction of an error in the assessed value of property resulting from an error in the identification of a unit of property, but not an error in a notice filed under ORS 310.060.

(c) The officer shall make any change requested by the Department of Revenue which relates to an assessment of property made by the department under ORS 308.505 to 308.665.

(d) The officer shall make any change ordered by the tax court or the Department of Revenue under ORS 305.288 or 306.115.

(e) The officer shall make any change required under ORS 308.392.

(2)(a) The officer in charge of the roll shall make corrections with the assent and concurrence of the assessor or the department. The direction for the correction shall be made in writing and state the type of error and the statutory authority for the correction. Corrections may be made to the roll for any year or years not exceeding five years prior to the last roll so certified.

(b) Any additional taxes resulting from corrections for years prior to the current year shall be deemed assessed and imposed in the particular year or years as to which the corrections apply. Addition of tax to a prior year's tax roll, due to corrections under this section, shall not be considered in calculating the effect of the tax limitation under section 11b, Article XI of the Oregon Constitution for the current year.

(3) A correction made pursuant to this section shall be made in whatever manner necessary to make the assessment, tax or other proceeding regular and valid. The correction shall be distinguishable upon the roll, shall include the date of the correction and shall identify the officer making the correction. Whenever a correction is to be made after the assessor has delivered the roll to the tax collector, the effect of which is to increase the assessment to which it relates, except where made by order of the department, the procedure prescribed in ORS 311.216 to 311.232 shall be followed; and the provisions therein with respect to appeals shall likewise apply.

(4) Corrections which would result in less than a $1,000 change in valuation shall not change the value for purposes of computing the taxes levied against the property, but shall be made only for purposes of correcting the office records.

(5) The remedies under this section are in addition to other remedies provided by law.

NOTE: Corrects reference.

SECTION 28. ORS 311.216 is amended to read:

311.216. (1) Whenever the assessor discovers or receives credible information, or if the assessor has reason to believe that any real or personal property, including property subject to assessment by the Department of Revenue, or any buildings, structures, improvements or timber on land previously assessed without the same, has from any cause been omitted, in whole or in part, from assessment and taxation on the current assessment and tax rolls or on any such rolls for any year or years not exceeding five years prior to the last roll so returned, the assessor shall give notice as provided in ORS 311.219.

(2)(a) Whenever the assessor discovers or receives credible information[:]

[(a)] that the addition of any building, structure, improvement, machinery or equipment was not reported in a real property return filed under ORS 308.285 or 308.290, [or] the property shall be presumed to be omitted property subject to additional assessment as provided in ORS 311.216 to 311.232.

(b) Whenever the assessor discovers or receives credible information that the cost as of January 1 of any building, structure, improvement, machinery or equipment reported in a real property return required by the assessor under ORS 308.285 or 308.290 exceeds the cost stated in the return, [the property, or] the excess cost adjusted to reflect its contribution to real market value[,] shall be presumed to be omitted property subject to additional assessment as provided in ORS 311.216 to 311.232.

(3) If the tax collector discovers or receives credible information or if the tax collector has reason to believe that any property subject to taxation has been omitted from the tax roll, the tax collector shall immediately bring this to the attention of the assessor by written notice.

NOTE: Clarifies meaning.

SECTION 29. ORS 311.465 is amended to read:

311.465. [(1)(a)] (1) Subsection (2) of this section applies if:

(a) [If] The county assessor discovers personal property subject to assessment for taxation in any year[, the taxes on which for any] and taxes imposed on the property in a prior year are [then] delinquent; or

(b) [If] In the opinion of the assessor it seems probable that personal property may be removed from the county, sold, dissipated or destroyed before the taxes on the property otherwise become due and payable and it further appears that the owner or person liable for the taxes had no property subject to taxation in the county during either of the two preceding tax years, or was delinquent in the payment of any tax imposed during the two preceding tax years in respect to property in any jurisdiction, whether within or without the state, or is not financially responsible or intends to depart from the state before the taxes become due.[,]

(2) The assessor may, immediately after listing and valuing the personal property for assessment and taxation, levy, demand and collect for remittance to the tax collector, or the tax collector may collect, the taxes on the property as follows:

[(A)] (a) If the assessor is able to compute the exact amount of taxes, special assessments, fees and charges [are able to be computed by the assessor], such amount shall be paid to the assessor for remittance to the tax collector or directly to the tax collector[.]; or

[(B)] (b) If the assessor is unable to compute the exact amount at the time, either:

(A) There shall be paid the amount [estimated by the assessor to be] that the assessor estimates is needed to pay the taxes, special assessments, fees and other charges to become due;[,] or

(B) There shall be deposited with the tax collector a bond with a good and sufficient undertaking in the amount that the assessor considers adequate to [insure] ensure payment of the taxes to become due. In no event shall the bond amount exceed twice the amount of the taxes, special assessments, fees and other charges computed by the assessor under this paragraph.

(3) Taxes paid or bonded for under [this paragraph] subsection (2) of this section shall be entitled to the discount provided by ORS 311.505. ORS 311.370 shall apply to the amounts assessed and collected under [this subsection] subsection (2) of this section. Any taxes collected under [this subsection] subsection (2) of this section, and subject to refund on order of the tax court under ORS 311.467, shall be held in the special account mentioned in ORS 311.370 by the county treasurer until the period for petitioning for review of the assessor's action has expired, or, when a review is had, until the review is determined. If the tax court, upon review, orders a refund, the county treasurer shall make the refund from the special account within three days after entry of the department's order.

[(2)] (4) If the owner or person liable for the taxes on the personal property fails to pay the tax on demand by the assessor, the assessor shall certify the assessment and tax levies made under this section to the tax collector of the county. The taxes thereupon shall be collected by the tax collector in the manner of collecting delinquent taxes on personal property. The taxes when so certified by the assessor are delinquent and subject to the provisions of law for the collection of delinquent taxes on personal property.

NOTE: Conforms structure to legislative form and style.

SECTION 30. ORS 311.531 is amended to read:

311.531. (1) On or before August 1 of each year the tax collector shall file with the county clerk a statement, on forms supplied by the Department of Revenue, compiled from the tax rolls, showing separately for each tax year for the prior seven years the following information as to transactions during the past fiscal year ending June 30:

(a) The total amounts certified under ORS 311.105 (1) to be collected by the tax collector, broken down [between] among real property, personal property and property assessed pursuant to ORS 308.505 to 308.665.

(b) The total amount of all adjustments made by the tax collector, in dollars, increasing the total amount to be collected, and a like figure for the decreases.

(c) The total amount collected, exclusive of interest and penalties, the total amount remaining uncollected, broken down [between] among real property, personal property and property assessed pursuant to ORS 308.505 to 308.665.

(d) The total amount of interest and penalties collected, and the total amount of discounts or rebates allowed.

(e) Other matters affecting the statement of the tax collector, striking a balance between the total of the tax roll and the total of collections. [The statement shall be on forms supplied by the Department of Revenue.]

(2) The tax collector then shall make a certificate over the official signature of the collector, to be annexed to the statement, that the facts set forth therein are correct. A copy of the statement shall be filed with the county clerk, a copy filed with the county court and a copy filed with the Department of Revenue. A copy of the statement and also of the certificate shall be retained by the tax collector as a public record.

NOTE: Conforms structure to legislative form and style; corrects grammar.

SECTION 31. ORS 311.683 is amended to read:

311.683. (1) If tax-deferred homestead property is acquired by the [Oregon] Department of Transportation through condemnation, the taxpayer may elect to continue to defer the payment of taxes and interest by:

(a) Filing a written notice of intent to continue deferral with the Department of Revenue on or before 30 days after the date the [Oregon] Department of Transportation has acquired title to the condemned homestead; and

(b) Filing a claim for deferral with respect to a new homestead within one year after the [Oregon] Department of Transportation has acquired title to the condemned homestead.

(2) Upon receipt of a notice of intent to continue deferral of taxes attributable to a condemned homestead, the Department of Revenue shall prepare an estimate of the amount of taxes, interest and fees that have been and, if approved under subsections (3) and (5) of this section, will continue to be deferred upon the release and satisfaction of the lien on the condemned homestead and the recordation of the lien on the new homestead.

(3) After preparing the estimate described in subsection (2) of this section, the Department of Revenue shall grant a temporary deferral of taxes with respect to the condemned homestead not to exceed the length of time described in subsection (1)(b) of this section if:

(a) The [Oregon] Department of Transportation has acquired title to the condemned homestead; and

(b) The taxpayer has a legally enforceable escrow agreement with a title company that:

(A) Provides for an interest-bearing escrow account in which moneys are deposited that are sufficient to pay in full the amount of deferred taxes, interest and fees on the condemned homestead property as estimated under subsection (2) of this section;

(B) Establishes the Department of Revenue as the beneficiary of the escrow agreement;

(C) Provides that the moneys of the escrow account are to be released to the taxpayer upon the Department of Revenue's approval of continued deferral under subsection (5) of this section and the recordation of the lien described in subsection (6) of this section with the county clerk; and

(D) Provides that the full amount of the estimated deferred taxes, interest and fees related to the condemned homestead are to be released to the Department of Revenue if the continued deferral described in subsection (5) of this section is not granted by the Department of Revenue.

(4) The Department of Revenue shall provide a release or satisfaction of the lien on the condemned homestead when an escrow account has been established as provided under subsection (3) of this section.

(5) Upon receipt of a claim for the deferral of taxes for a new homestead that also seeks to continue the deferral of taxes attributable to a condemned homestead for which a temporary deferral has been granted under subsection (3) of this section, the Department of Revenue shall approve the continued deferral of the taxes temporarily deferred under subsection (3) of this section if:

(a) The taxpayer's equity interest in the new homestead equals or exceeds in value the total of the amount of deferred taxes, interest and fees on the condemned homestead as estimated under subsection (2) of this section, plus $10,000;

(b) The taxpayer is entitled to tax deferral under ORS 311.666 to 311.701 with respect to the new homestead; and

(c) The taxpayer consents to the continued deferral of taxes and to the lien on the new homestead property as provided in subsection (6) of this section.

(6) Upon granting the continued deferral under subsection (5) of this section, the Department of Revenue shall have a lien on the new homestead in the amount of the estimate prepared under subsection (2) of this section plus interest and any fees incurred in connection with the recording of the lien. The lien described in this subsection shall be in addition to any other lien under ORS 311.673 that the Department of Revenue shall have with respect to the new homestead. The provisions of ORS 311.679 relating to liens shall apply to the lien described in this subsection. At the time the lien described in this subsection is recorded, the escrow account described in subsection (3) of this section shall be closed and the moneys in the account released to the taxpayer.

(7) The Department of Revenue may prescribe such rules as are needed to implement the provisions of this section.

NOTE: Corrects name of department; clarifies department reference in subsection (4).

SECTION 32. ORS 314.043 is amended to read:

314.043. (1) Except as specifically provided otherwise, the new provisions enacted and amendments and repeals of statutes made by chapter 839, Oregon Laws 1997, apply to transactions or activities occurring on or after January 1, 1997, in tax years beginning on or after January 1, 1997.

(2) The effective and applicable dates, and the exceptions, special rules and coordination with the Internal Revenue Code, as amended, relative to those dates, contained in the ICC Termination Act of 1995 (P.L. 104-88), P.L. 104-117, the Omnibus Consolidated Rescissions and Appropriations Act of 1996 (P.L. 104-134), the Small Business Job Protection Act of 1996 (P.L. 104-188), the Health Insurance Portability and Accountability Act of 1996 (P.L. 104-191) and the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (P.L. 104-193), shall apply for Oregon personal income and corporate excise and income tax purposes, to the extent they can be made applicable, in the same manner as they are applied under the federal Internal Revenue Code and related federal law.

(3)(a) If a deficiency is assessed against any taxpayer for a tax year beginning before January 1, 1997, and the deficiency, or any portion thereof, is attributable to any retroactive treatment under chapter 839, Oregon Laws 1997, then any interest or penalty assessed under ORS chapter 305, 314, 315, 316, 317 or 318 with respect to the deficiency or portion thereof shall be canceled.

(b) If a refund is due any taxpayer for a tax year beginning before January 1, 1997, and the refund or any portion thereof is due the taxpayer on account of any retroactive treatment under chapter 839, Oregon Laws 1997, then notwithstanding ORS 305.270[,] or 314.415 or other law, the refund or portion thereof shall be paid without interest.

(c) Any changes required on account of chapter 839, Oregon Laws 1997, for a tax year beginning prior to January 1, 1997, shall be made by filing an amended return within the time prescribed by law.

(d) If a taxpayer fails to file an amended return under paragraph (c) of this subsection, the Department of Revenue shall make any changes under paragraph (c) of this subsection on the return to which the change or changes relate within the period specified for issuing a notice of deficiency or claiming a refund as otherwise provided by law with respect to that return, or within one year after a 1997 return is filed, whichever period expires later.

NOTE: Conforms statutory reference to legislative form and style.

SECTION 33. ORS 314.304 is amended to read:

314.304. (1) Notwithstanding ORS 314.415 or other law, if a taxpayer has made one or both elections under Treas. Reg. s.1.197-1T for federal income tax purposes, the election or elections shall apply for Oregon tax purposes. The taxpayer shall amend the taxpayer's Oregon return to conform the return with the corresponding federal return affected by the election or elections. The amendment must be made on or before April 15, 1998.

(2) If, for taxable years beginning on or after January 1, 1993, and before January 1, 1995, a taxpayer made the election described in section 179(c) of the Internal Revenue Code, as amended by the Revenue Reconciliation Act of 1993 (P.L. 103-66), on the taxpayer's federal income tax return, the taxpayer may amend the taxpayer's corresponding Oregon return. The amendment shall conform the return to the taxpayer's federal income tax return with respect to amounts subject to the section 179(c) election. Notwithstanding the provisions in section 179(c) and the regulations thereunder that set forth the time for making the election, the taxpayer's amended return must be filed on or before April 15, 1998.

[(3) This section is repealed June 30, 2008.]

NOTE: Conforms statute to legislative form and style. See section 34 of this 1999 Act.

SECTION 34. ORS 314.304 is repealed on June 30, 2008.

NOTE: Conforms statute to legislative form and style. See section 33 of this 1999 Act.

SECTION 35. ORS 314.518 is amended to read:

314.518. (1) A corporation required to make a payment of estimated tax under ORS 314.505 to 314.525 shall make the payment by means of electronic funds transfer if:

(a) For payment periods beginning on or after July 1, 1999, and before July 1, 2000, the corporation's annual total amount of estimated tax liability exceeds $1 million.

(b) For payment periods beginning on or after July 1, 2000, and before July 1, 2001, the corporation's annual total amount of estimated tax liability exceeds $200,000.

(c) For payment periods beginning on or after July 1, 2001, and before July 1, 2002, the corporation's annual total amount of estimated tax liability exceeds $50,000.

(d) For the payment period beginning July 1, 2002, the corporation is required to make federal estimated tax payments electronically.

(2) The Department of Revenue may accept electronically filed payments voluntarily submitted by a corporation that is not required to pay by means of electronic funds transfer.

(3) As used in this section, [the term] "electronic funds transfer" has the meaning given that term in ORS 293.525.

NOTE: Conforms definition to legislative form and style.

SECTION 36. ORS 314.752 is amended to read:

314.752. (1) Except as provided in ORS 314.740 (5)(b), the tax credits allowed or allowable to a C corporation for purposes of ORS chapter 317 or 318 shall not be allowed to an S corporation. The business tax credits allowed or allowable for purposes of ORS chapter 316 shall be allowed or are allowable to the shareholders of the S corporation.

(2) In determining the tax imposed under ORS chapter 316, as provided under ORS 314.734, on income of the shareholder of an S corporation, there shall be taken into account the shareholder's pro rata share of business tax credit (or item thereof) that would be allowed to the corporation (but for subsection (1) of this section) or recapture or recovery thereof. The credit (or item thereof), recapture or recovery shall be passed through to shareholders in pro rata shares as determined in the manner prescribed under section 1377(a) of the Internal Revenue Code.

(3) The character of any item included in a shareholder's pro rata share under subsection (2) of this section shall be determined as if such item were realized directly from the source from which realized by the corporation, or incurred in the same manner as incurred by the corporation.

(4) If the shareholder is a nonresident and there is a requirement applicable for the business tax credit that in the case of a nonresident that the credit be allowed in the proportion provided in ORS 316.117, then that provision shall apply to the nonresident shareholder.

(5) As used in this section, "business tax credit" means a tax credit granted to personal income taxpayers to encourage certain investment, to create employment, economic opportunity or incentive or for charitable, educational, scientific, literary or public purposes that is listed under this subsection as a business tax credit or is designated as a business tax credit by law or by the Department of Revenue by rule and includes but is not limited to the following credits: ORS 315.104 (forestation and reforestation), ORS 315.134 (fish habitat improvement), ORS 315.138 (fish screening, by-pass devices, fishways), [ORS 315.148 (fish gleaning),] ORS 315.156 (crop gleaning), ORS 315.164 (farmworker housing), ORS 315.204 (dependent care assistance), ORS 315.208 (dependent care facilities), ORS 315.234 (child development program contributions), ORS 315.254 (youth apprenticeship sponsorship), ORS 315.304 (pollution control facility), ORS 315.324 (plastics recycling), ORS 315.354 and ORS 469.207 (energy conservation facilities), ORS 315.504 (Oregon Capital Corporation), ORS 315.604 (bone marrow transplant expenses) and ORS 317.115 (fueling stations necessary to operate an alternative fuel vehicle).

NOTE: Deletes reference to obsolete statute.

SECTION 37. ORS 314.810 is amended to read:

314.810. All officers empowered by law to administer oaths, the Director of the Department of Revenue[,] and any agents, auditors and [such] other employees as the [department] director may designate, shall have the power to administer an oath to or take the acknowledgment of any person in respect of any return or report required by statute or the rules and regulations of the department.

NOTE: Clarifies sentence structure.

SECTION 38. ORS 315.148 is repealed.

NOTE: Repeals obsolete statute.

SECTION 39. ORS 315.154 is amended to read:

315.154. As used in ORS 315.156:

(1) "Gleaning" means the harvesting in Oregon of an agricultural crop or a portion of a crop grown primarily to be sold for cash that is donated by the grower of the crop to a gleaning cooperative at such a time that the crop is still usable as food for human beings and would otherwise go to waste because:

(a) The grower of the crop has supplied any crop contract quota with the wholesale or retail buyer; [or]

(b) If the grower of the crop is a party to a contingent supply contract, the wholesale or retail buyer reduces the crop quota that was reasonably anticipated to be supplied by the grower; or

[(d) The crop would otherwise go to waste.]

(2) "Gleaning cooperative" means a nonprofit federally tax exempt organization that is organized to provide and distribute produce to individuals who meet the low-income eligibility guidelines of the federal State Community Services Program established pursuant to the federal Community Services Act of 1974 (Public Law 93-744).

(3) "Wholesale market price" means the market price for the produce determined either by:

(a) The amount paid to the grower by the last previous cash buyer of the particular crop; or

(b) In the event there is no previous cash buyer, a market price determined by the gleaning cooperative based upon the market price of the nearest regional wholesale buyer or the regional u-pick market price.

NOTE: Clarifies meaning.

SECTION 40. ORS 315.156 is amended to read:

315.156. (1) A taxpaying individual or corporation who is a grower of a crop and who permits the gleaning of the crop shall be allowed a credit against the taxes otherwise due under ORS chapter 316 or, if the taxpayer is a corporation, under ORS chapter 317 or 318, as follows:

(a) In the case of a donation made under circumstances described in ORS 315.154 (1)(a) and (b), the amount of the credit shall be 10 percent of the value of the quantity of the crop donated computed at the wholesale market price.

(b) In the case of a donation made under circumstances described in ORS 315.154 (1)(c) [and (d)], the amount of the credit shall be 10 percent of the value of the quantity of the crop donated computed at the wholesale market price that the grower would have received had the quantity of the crop donated been salable.

(2) At the time of donation, the director, supervisor or other appropriate official of the gleaning cooperative to which a donation is made shall supply to the grower of the crop donated two copies of a form prescribed by the Department of Revenue. The forms shall contain:

(a) The name and address of the grower;

(b) The description and quantity of the donated crop;

(c) The signature of the director, supervisor or other appropriate official of the gleaning cooperative verifying that the produce was or will be distributed to low-income individuals meeting the guidelines described in ORS 315.154 (2);

(d) The wholesale market price determined by the gleaning cooperative, in the event there is no previous cash buyer of the crop; and

(e) Other information required by the Department of Revenue by rule.

(3) Tax claim for tax credit shall be substantiated by submission with the tax return, of the form described in subsection (2) of this section, a statement verified by the taxpayer that the donation was made under circumstances described in ORS 315.154 (1) and a copy of an invoice or other statement identifying the price received by the grower for the crops of comparable grade or quality if there is a previous cash buyer. The requirement for substantiation may be waived partially, conditionally or absolutely, as provided under ORS 315.063.

(4) Any tax credit otherwise allowable under this section which is not used by the taxpayer in a particular tax year may be carried forward and offset against the taxpayer's tax liability for the next succeeding tax year. Any credit remaining unused in such next succeeding tax year may be carried forward and used in the second succeeding tax year, and likewise, any credit not used in that second succeeding tax year may be carried forward and used in the third succeeding tax year, but may not be carried forward for any tax year thereafter.

NOTE: Corrects statutory reference.

SECTION 41. ORS 316.116 is amended to read:

316.116. (1)(a) A resident individual shall be allowed a credit against the taxes otherwise due under this chapter for costs paid or incurred for construction or installation of an alternative energy device in a dwelling.

(b) A resident individual shall be allowed a credit against the taxes otherwise due under this chapter for costs paid or incurred to modify or purchase an alternative fuel vehicle or related equipment.

(2)(a) Except in the case of an alternative fuel device, the credit shall be based upon the first year energy yield of the alternative energy device that qualifies under ORS 469.160 to 469.180. The amount of the credit shall be the same whether for collective or noncollective investment.

(b) The credit allowed under this section for each dwelling shall not exceed the lesser of:

(A) $1,500 or the first year energy yield in kilowatt hours per year multiplied by 60 cents per dwelling utilizing the alternative energy device used for space heating, cooling, electrical energy or domestic water heating for tax years beginning on or after January 1, 1990, and before January 1, 1996.

(B) $1,200 or the first year energy yield in kilowatt hours per year multiplied by 48 cents per dwelling utilizing the alternative energy device used for space heating, cooling, electrical energy or domestic water heating for tax years beginning on or after January 1, 1996, and before January 1, 1998.

(C) $1,500 or the first year energy yield in kilowatt hours per year multiplied by 60 cents per dwelling utilizing the alternative energy device used for space heating, cooling, electrical energy or domestic water heating for tax years beginning on or after January 1, 1998.

(c) For an alternative energy device used for swimming pool, spa or hot tub heating, the credit allowed under this section shall be based upon 50 percent of the cost of the device or the first year's energy yield in kilowatt hours per year multiplied by 15 cents, whichever is lower, up to:

(A) $1,500 for tax years beginning on or after January 1, 1990, and before January 1, 1996.

(B) $1,200 for tax years beginning on or after January 1, 1996, and before January 1, 1998.

(d) For an alternative fuel device, the credit allowed under this section is 25 percent of the cost of the alternative fuel device but the total credit shall not exceed $750 if the device is placed in service on or after January 1, 1998.

(3)(a) In the case of a credit for an alternative energy device that is an energy efficient appliance, the credit allowed to a resident individual under this section shall equal:

(A) 48 cents per first year kilowatt hour saved, or the equivalent for other fuel saved, not to exceed $1,200 for each tax year beginning on or after January 1, 1998, and before January 1, 1999; and

(B) 40 cents per kilowatt hour saved, or the equivalent for other fuel saved, not to exceed $1,000 for each tax year beginning on or after January 1, 1999.

(b) Notwithstanding paragraph (a) of this subsection, the credit allowed for an energy efficient appliance shall not exceed 25 percent of the cost of the appliance.

(4)(a) To qualify for a credit under this section, all of the following are required:

(A) The alternative energy device must be purchased, constructed, installed and operated in accordance with ORS 469.160 to 469.180 and a certificate issued thereunder.

(B)(i) Except as provided under sub-subparagraph (ii) of this subparagraph, the taxpayer who is allowed the credit must be the owner or contract purchaser of the dwelling or dwellings served by the alternative energy device or the tenant of the owner or of the contract purchaser.

(ii) In the case of an alternative fuel device, if the device is a fueling station necessary to operate an alternative fuel vehicle, unless the verification form and certificate are transferred as authorized under ORS 469.170 [(7)] (8), the taxpayer who is allowed the credit must be the contractor who constructs the dwelling that incorporates the fueling station into the dwelling or installs the fueling station in the dwelling. If the alternative energy device is an alternative fuel vehicle, the credit must be claimed by the owner as defined under ORS 801.375 or contract purchaser. If the alternative energy device is related equipment, the credit may be claimed by the owner or contract purchaser.

(C) Except in the case of an alternative fuel device, and except as provided in paragraph (b) of this subsection, the taxpayer who is allowed the credit must use the dwelling or dwellings served by the alternative energy device as a principal or secondary residence.

(D) Notwithstanding subparagraph (B) or (C) of this paragraph, the taxpayer must both own and occupy the principal or secondary residence, if the basis of the credit is the installation of an energy efficient appliance.

(E)(i) Except as provided in sub-subparagraph (ii) of this subparagraph, the credit must be claimed for the tax year during which the alternative energy device which has been certified under ORS 469.160 to 469.180 first is placed in service or the immediately succeeding tax year.

(ii) For tax years beginning on or after January 1, 1990, the credit may be claimed for the tax year in which the alternative energy device was purchased if the system is operational by April 1 of the next following tax year.

(b) Notwithstanding the requirements of paragraph (a)(C) of this subsection, a taxpayer who otherwise qualifies for the credit allowed under this section but who does not use the dwelling or dwellings served by the alternative energy device as a principal or secondary residence, shall be allowed the credit if the taxpayer rents or leases the dwelling or dwellings to a tenant who uses the dwelling or dwellings as a principal or secondary residence. This paragraph does not apply if the basis for the credit under this section is the installation of an energy efficient appliance.

(5) The credit provided by this section shall not affect the computation of basis under this chapter.

(6) The credit allowed under this section in any one year shall not exceed the tax liability of the taxpayer.

(7) Any tax credit otherwise allowable under this section which is not used by the taxpayer in a particular year may be carried forward and offset against the taxpayer's tax liability for the next succeeding tax year. Any credit remaining unused in such next succeeding tax year may be carried forward and used in the second succeeding tax year, and likewise any credit not used in that second succeeding tax year may be carried forward and used in the third succeeding tax year, and any credit not used in that third succeeding tax year may be carried forward and used in the fourth succeeding tax year, and any credit not used in that fourth succeeding tax year may be carried forward and used in the fifth succeeding tax year, but may not be carried forward for any tax year thereafter.

(8) A nonresident shall be allowed the credit under this section in the proportion provided in ORS 316.117.

(9) If a change in the taxable year of a taxpayer occurs as described in ORS 314.085, or if the Department of Revenue terminates the taxpayer's taxable year under ORS 314.440, the credit allowed by this section shall be prorated or computed in a manner consistent with ORS 314.085.

(10) If a change in the status of a taxpayer from resident to nonresident or from nonresident to resident occurs, the credit allowed by this section shall be determined in a manner consistent with ORS 316.117.

(11) A husband and wife who file separate returns for a taxable year may each claim a share of the tax credit that would have been allowed on a joint return in proportion to the contribution of each. However, a husband or wife living in a separate principal residence may claim the tax credit in the same amount as permitted a single person.

(12) As used in this section, unless the context requires otherwise:

(a) "Collective investment" means an investment by two or more taxpayers for the acquisition, construction and installation of an alternative energy device for one or more dwellings.

(b) "First year energy yield" has the meaning given in ORS 469.160.

(c) "Noncollective investment" means an investment by an individual taxpayer for the acquisition, construction and installation of an alternative energy device for one or more dwellings.

(13) As used in this section, "taxpayer" includes a transferee of a verification form under ORS 469.170 [(7)] (8).

(14) Notwithstanding any provision of subsection (1) or (2) of this section, the sum of the credit allowed under subsection (1) of this section plus any similar credit allowed for federal income tax purposes shall not exceed the cost to the taxpayer for the acquisition, construction and installation of the alternative energy device.

NOTE: Corrects statutory reference.

SECTION 42. ORS 316.162 is amended to read:

316.162. As used in ORS 316.162 to 316.212:

(1) "Internal Revenue Code" means the federal Internal Revenue Code, as amended and in effect on December 31, 1996.

(2) "Number of withholding exemptions claimed" means the number of withholding exemptions claimed in a withholding exemption certificate in effect under ORS 316.182, except that if no such certificate is in effect, the number of withholding exemptions claimed is considered to be zero.

(3) "Wages" means remuneration for services performed by an employee for an employer, including the cash value of all remuneration paid in any medium other than cash, except that "wages" does not include remuneration paid:

(a) For active service in the Armed Forces of the United States as to which no withholding is required by the Internal Revenue Code.

(b) To an employee of a common carrier to the extent that [sections 40116 and 14503, title 49, United States Code prohibits] 49 U.S.C. 14503 and 40116 prohibit the remuneration from withholding for state income taxes.

(d) For casual labor not in the course of the employer's trade or business.

(e) To an employee whose services to the employer consist solely of labor in connection with the planting, cultivating or harvesting of seasonal agricultural crops if the total amount paid to such employee is less than $300 annually.

(f) To seamen who are exempt from garnishment, attachment or execution under title 46 of the United States Code.

(g) To persons temporarily employed as emergency forest fire fighters.

(h) To employees' trusts exempt from tax under provisions of the federal Internal Revenue Code.

(i) For services performed by a duly ordained, commissioned or licensed minister of a church in the exercise of the minister's ministry or by a member of a religious order in the exercise of religious duties required by such order, which duties are not commercial in nature.

(j) For services performed by an independent contractor, as that term is defined in ORS 670.600.

(4) "Employer" means:

(a) A person who is in such relation to another person that the person may control the work of that other person and direct the manner in which it is to be done; or

(b) An officer or employee of a corporation, or a member or employee of a partnership, who as such officer, employee or member is under a duty to perform the acts required of employers by ORS 316.167, 316.182, 316.197, 316.202 and 316.207.

NOTE: Conforms reference to legislative form and style; corrects grammar.

SECTION 43. ORS 317.056 is amended to read:

317.056. Except as otherwise required by federal law, every financial corporation located within this state shall be subject to county, city, district, political subdivision and all other local taxes imposed generally on a nondiscriminatory basis throughout the jurisdiction of the taxing authority, at the same rates and in all respects in the same manner and to the same extent as are mercantile, manufacturing and business corporations, and shall pay annually to the state an excise tax according to or measured by its Oregon taxable income, to be computed in the manner provided by this chapter at the [rates] rate provided in ORS 317.061.

NOTE: Corrects word form.

SECTION 44. ORS 317.067 is amended to read:

317.067. A tax is hereby imposed for each taxable year on the homeowners association taxable income of every homeowners association at the [rates] rate provided in ORS 317.061 and as though the homeowners association were a corporation.

NOTE: Corrects word form.

SECTION 45. ORS 317.070 is amended to read:

317.070. Every centrally assessed corporation, the property of which is assessed by the Department of Revenue under ORS 308.505 to 308.665, and every mercantile, manufacturing and business corporation doing or authorized to do business within this state, except as provided in ORS 317.080 and 317.090, shall annually pay to this state, for the privilege of carrying on or doing business by it within this state, an excise tax according to or measured by its Oregon taxable income, to be computed in the manner provided by this chapter, at the [rates] rate provided in ORS 317.061.

NOTE: Corrects word form.

SECTION 46. ORS 317.097 is amended to read:

317.097. (1) A credit against taxes otherwise due under this chapter for the taxable year shall be allowed to a lending institution in an amount equal to the difference between:

(a) The amount of finance charge charged by the lending institution during the taxable year at an annual rate less than the market rate for a loan that is made on or after January 1, 1990, and before January 1, 2000, that complies with the requirements of this section; and

(b) The amount of finance charge that would have been charged during the taxable year by the lending institution for the loan for housing construction, development or rehabilitation measured at the annual rate charged by the lending institution for nonsubsidized loans made under like terms and conditions at the time the loan for housing construction, development or rehabilitation is made.

(2) The maximum difference between the amounts described in subsection (1)(a) and (b) of this section shall not exceed four percent of the average unpaid balance of the loan during the tax year for which the credit is claimed.

(3) Any tax credit otherwise allowable under this section that is not used by the taxpayer in a particular year may be carried forward and offset against the taxpayer's tax liability for the next succeeding tax year. Any credit remaining unused in such next succeeding tax year may be carried forward and used in the second succeeding tax year, and likewise, any credit not used in that second succeeding tax year may be carried forward and used in the third succeeding tax year, and any credit not used in that third succeeding tax year may be carried forward and used in the fourth succeeding tax year, and any credit not used in that fourth succeeding tax year may be carried forward and used in the fifth succeeding tax year, but may not be carried forward for any tax year thereafter.

(4) In order to be eligible for the tax credit allowed under subsection (1) of this section, the loan shall be:

(a) Made to an individual or individuals who own the dwelling, participate in an owner-occupied community rehabilitation program and are certified by the local government or its designated agent as having an income level at the time the loan is made of less than 80 percent of the area median income; or

[(a)(A)] (b)(A) Made to a qualified borrower;

(B) Used to finance construction, rehabilitation or development of housing; and

(i) Housing created by the loan is or will be occupied by households earning less than 80 percent of the area median income; and

(ii) Full amount of savings from the reduced interest rate provided by the lending institution is or will be passed on to the tenants in the form of reduced housing payments, regardless of other subsidies provided to the housing project[; or].

[(b) Made to an individual or individuals who own the dwelling, participate in an owner occupied community rehabilitation program and are certified by the local government or its designated agent as having an income level at the time the loan is made of less than 80 percent of the area median income; or]

[(c)] (5) A loan made to refinance a loan that meets the criteria stated in [paragraph (a) or (b) of this] subsection (4) of this section shall be treated the same as a loan that meets the criteria stated in subsection (4) of this section.

[(5)] (6) In order to be eligible for the tax credit allowed under subsection (1) of this section, the loan also shall be accompanied by a written certification by the Housing and Community Services Department that:

(a) Specifies the period, as determined by the Housing and Community Services Department, during which the loan is eligible for the tax credit under subsection (1) of this section; and

(b) States that the loan is within the limitation imposed by subsection [(6)] (7) of this section.

[(6)(a)] (7)(a) The Housing and Community Services Department may certify loans that are eligible under subsection (4) of this section if the total credits attributable to all loans eligible for credits under subsection (1) of this section and then outstanding do not exceed $4 million for any year. In making loan certifications, the Housing and Community Services Department shall attempt to distribute the tax credits statewide, but shall concentrate the tax credits in those areas of the state that are determined by the State Housing Council to have the greatest need for affordable housing.

(b) The certification under subsection [(5)] (6) of this section shall state the period for which the credit will be allowed, which shall not exceed 20 years.

[(7)] (8) The credit allowed in this section shall not be affected by the applicant's receipt of a credit under section 42 of the Internal Revenue Code (low-income housing tax credit program).

[(8)] (9) A loan meeting the requirements of subsections (4) and [(5)] (6) of this section may be sold to a qualified assignee with or without the lending institution's retaining servicing of the loan so long as a designated lending institution maintains records annually verified by a loan servicer that establish the amount of tax credit earned by the taxpayer throughout each year of eligibility.

[(9)] (10) As used in this section[, the following definitions shall apply]:

(a) "Annual rate" means the yearly interest rate specified on the note, and not the annual percentage rate, if any, disclosed to the applicant to comply with the federal Truth in Lending Act.

(b) "Finance charge" means the total of all interests, loan fees and other charges related to the cost of obtaining credit and includes any interest on any loan fees financed by the lending institution.

(d) "Lending institution" means any insured institution, as that term is defined in ORS 706.008, or any mortgage banking company that maintains an office in this state. "Lending institution" also includes any community development corporation that is organized under the Oregon Nonprofit Corporation Law.

(e) "Qualified assignee" means any investor participating in the secondary market for real estate loans.

(f) "Qualified borrower" means any borrower that is a sponsoring entity that has a controlling interest in the real property that is financed by the loan described in subsection (4) of this section. Such a controlling interest includes, but is not limited to, a controlling interest in the general partner of a limited partnership that owns the real property.

(g) "Sponsoring entity" means a nonprofit corporation, state governmental entity, local unit of government as defined in ORS 466.706, housing authority or any person as defined in ORS 174.100, including, but not limited to, an employer making housing available to low-income employees and other low-income persons, provided that the person has agreed to restrictive covenants imposed by a nonprofit corporation, state governmental entity, local unit of government or housing authority.

[(10)] (11) Notwithstanding any other provision of law, a lending institution that is a community development corporation organized under the Oregon Nonprofit Corporation Law may transfer any part or all of any tax credit arising under subsection (1) of this section to one or more other lending institutions that are stockholders or members of the community development corporation or that otherwise participate through the community development corporation in the making of one or more loans that generate the tax credit under subsection (1) of this section.

[(11)] (12) The lending institution shall file an annual statement with the Housing and Community Services Department, specifying that it has conformed with all requirements imposed by law to qualify for this tax credit.

[(12)] (13) The Housing and Community Services Department and the Department of Revenue may adopt rules to carry out the provisions of this section.

NOTE: Conforms structure to legislative form and style; clarifies references to department.

SECTION 47. ORS 317.115 is amended to read:

317.115. (1) A business tax credit is allowed against the taxes otherwise due under this chapter based upon costs paid or incurred for construction or installation in a dwelling of a fueling station necessary to operate an alternative fuel vehicle. The credit is allowed to the contractor who constructs the dwelling in which the fueling station is incorporated or installs the fueling station in the dwelling but may be taken by an investor owned utility under the circumstances described in ORS 469.170 [(9)] (10) and the rules adopted thereunder.

(2) The credit is 25 percent of the cost of the fueling station but the total credit shall not exceed $750 if the fueling station is placed in service on or after January 1, 1998.

(3) To qualify for a credit under this section, all of the following are required:

(a) The fueling station must be constructed, installed and operated in accordance with ORS 469.160 to 469.180 and a certificate issued thereunder.

(b) The contractor must present with the claim for credit a verification form signed not only by the contractor but by the owner, contract purchaser or tenant authorizing the contractor to claim the credit and indicating that the owner, contract purchaser or tenant will not claim a credit based upon the cost of the same fueling station under ORS 316.116 or this section.

(c) The credit must be claimed for the tax year in which the fueling station that has been certified under ORS 469.160 to 469.180 first is placed in service or the immediately succeeding tax year.

(4) The credit allowed under this section shall not affect the computation of basis for purposes of this chapter, nor shall the credit affect the computation or be in lieu of any depreciation deduction for the fueling station.

(5) The credit allowed under this section in any one year shall not exceed the tax liability of the taxpayer for that year.

(6) Any tax credit otherwise allowable under this section that is not used by the taxpayer in a particular year may be carried forward and offset against the taxpayer's tax liability for the next succeeding tax year. Any credit remaining unused in such next succeeding tax year may be carried forward and used in the second succeeding tax year, and likewise any credit not used in that second succeeding tax year may be carried forward and used in the third succeeding tax year, and any credit not used in that third succeeding tax year may be carried forward and used in the fourth succeeding tax year, and any credit not used in that fourth succeeding tax year may be carried forward and used in the fifth succeeding tax year, but may not be carried forward for any tax year thereafter.

(7) The certificate and verification form described under ORS 469.170 may be transferred by the contractor to the first purchaser of the dwelling that incorporates the fueling station if the purchaser intends to use the dwelling as a principal or secondary residence or, in the case of construction or installation of a fueling station in an existing dwelling, the current owner, if the current owner intends to use, or uses, the dwelling as a principal or secondary residence. A certificate and verification form so transferred may be used by the purchaser to claim a credit under ORS 316.116.

NOTE: Corrects statutory reference.

SECTION 48. ORS 317.991 is amended to read:

317.991. (1) The [administrator] Director of the Housing and Community Services Department may assess a civil penalty against any project owner in an amount not to exceed three times the value of the tax credit available in any year on a project during which the owner does not comply with the provisions of ORS 317.097 and the rules promulgated thereunder.

(2) Notwithstanding the provisions of any other law, an order of the director assessing such a civil penalty shall be deemed final, unless review from the director is requested in writing within 30 days of receipt of notice thereof. The request shall specify the grounds upon which the project owner contests the proposed order of assessment.

(3) The issuance of orders assessing civil penalties pursuant to this section, the conduct of hearings and the judicial review thereof shall be as provided in ORS 183.310 to 183.550.

(4) When an order assessing a civil penalty becomes final by operation of law or on appeal, unless the amount of penalty is paid within 10 days after the order becomes final, the order constitutes a judgment and may be recorded with the county clerk in any county of this state. The clerk shall thereupon record the name of the project owner incurring the penalty and the amount of the penalty in the County Clerk Lien Record. The penalty provided in the order so recorded shall become a lien upon the title to any interest in property owned by the project owner against whom the order is entered, and execution may be issued upon the order in the same manner as execution upon a judgment of a court of record.

(5) Civil penalties, and judgments entered thereon, due to the director under this section from any project owner shall be deemed preferred to all general claims in all bankruptcy proceedings, trustee proceedings and proceedings for the administration of estates and receiverships involving the project owner liable therefor or the property of such project owner.

(6) All moneys collected under this section shall be paid into the Housing Finance Fund.

(7) All costs of enforcement and collection, including attorney fees, may be paid by the director directly from the Housing Finance Fund without further authorization of law.

(8) As used in this section, "director" means the Director of the Housing and Community Services Department.

NOTE: Clarifies references to director.

SECTION 49. ORS 318.020 is amended to read:

318.020. (1) There hereby is imposed upon every corporation for each taxable year a tax at the [rates] rate provided in ORS 317.061 upon its Oregon taxable income derived from sources within this state, other than income for which the corporation is subject to the tax imposed by the Corporation Excise Tax Law of 1929 (ORS chapter 317) according to or measured by its Oregon taxable income.

(2) Income from sources within this state includes income from tangible or intangible property located or having a situs in this state and income from any activities carried on in this state, regardless of whether carried on in intrastate, interstate or foreign commerce.

NOTE: Corrects word form.

SECTION 50. ORS 318.031 is amended to read:

318.031. It being the intention of the Legislative Assembly that this chapter and the Corporation Excise Tax Law of 1929 shall be administered as uniformly as possible (allowance being made for the difference in imposition of the taxes and the operative date of this chapter), the provisions of ORS 305.140, 305.150, ORS chapter 314 and of the following sections of ORS chapter 315 or 317, as amended on or before August 3, 1955, and as they may thereafter be amended, are incorporated into this chapter by this reference and made a part hereof: ORS 315.104, 315.134, [315.148,] 315.156, 315.204, 315.208, 315.234, 315.254, 315.304, 315.504 and 315.604 (all only to the extent applicable for a corporation) and ORS 317.010, 317.013, 317.018 to 317.022, 317.030, 317.035, 317.038, 317.080, 317.152 to 317.154, 317.259 to 317.303, 317.310 to 317.386, 317.476 to 317.485, 317.510 to 317.635 and 317.705 to 317.725 and section 40, chapter 835, Oregon Laws 1997.

NOTE: Deletes reference to obsolete statute.

SECTION 51. Section 21a, chapter 801, Oregon Laws 1993, is amended to read:

Sec. 21a. [(1) On or before February 1, 1995, the Department of Revenue shall evaluate the forestland values proposed by sections 17, 17a, 20, 33a and 34 of this Act. Having made the evaluation, the Department of Revenue shall submit the information in written form to the Sixty-eighth Legislative Assembly.]

[(2)] In [the year] 2000, and every six years thereafter, the Department of Revenue shall review Oregon forestland values proposed by ORS 321.348, 321.353 and 321.811 and [present the review, in written form,] pursuant to ORS 192.245 shall report its findings to the Legislative Assembly during the period of its regular session next to convene.

NOTE: Deletes obsolete provision.

SECTION 52. ORS 321.352 is amended to read:

321.352. (1) Notwithstanding ORS 308.205, for the tax year beginning July 1, 1993, and the tax year beginning July 1, 1994, forestland in western Oregon shall be assessed at its value for forest use. For each of those years, the value of forestland shall be the previous year's value as adjusted by the moving average percentage change calculated under subsection (2) of this section.

(2) Each year, the Department of Revenue shall determine a percentage change in the average stumpage value of young growth Douglas fir timber, classes B, C and D, for the current and two preceding years when compared with a similar calculation made in the previous year. For purposes of obtaining the averages required by this subsection:

(a) In computing the increase or decrease in stumpage value for any year, the stumpage values established for that year by the department under ORS 321.282 for severance tax purposes shall be used.

(b) The standards for classes B, C and D shall be the standards used by the department for valuing timber under ORS 321.622 (1975 Replacement Part).

(3) For purposes of determining forestland values pursuant to subsections (1) and (2) of this section, forestland in western Oregon shall be divided into those land market areas as the department shall establish by rule.

(4) Prior to July 1 of each year, the department shall determine and certify to the appropriate county assessor the values of forestland as provided in subsections (1) to (3) of this section. The county assessor shall use the value so certified in the preparation of the assessment and tax rolls of the county each tax year.

(5) At any time after the certification of values pursuant to subsection (4) of this section, but not later than August 1, five or more taxpayers owning in the aggregate not less than five percent of the total forestland acreage subject to ad valorem taxation in a single land market area may appeal any or all of the values in that area directly to the tax court by filing a joint petition with the tax court in the manner provided for appeals from orders of the county boards of [equalization] property tax appeals. Notice of the appeal shall be made in each county having values affected by the appeal, either by personal service, by certified mail on each taxpayer affected, or by publication made once a week for two consecutive weeks in a newspaper of general circulation in the county. The notice shall designate the values appealed, and include a statement of the provisions of subsection (6) of this section. The petition shall designate one of the group as the representative of all, and all proceedings before the tax court and any appeal from its determination shall be conducted procedurally as though the designated representative were the only petitioner.

(6) If the tax court increases or reduces any of the values under appeal, the judgment of the court shall apply to the valuation of all forestland in the designated market area for that year. An appeal may be taken to the Oregon Supreme Court from the judgment of the tax court. Unless changed upon appeal to the Supreme Court, the tax court determination shall be binding upon the department and upon each assessor and taxpayer affected by such determination of value.

(7) All other appeals from the application of the forestland values certified by the department under subsection (4) of this section shall be taken in the time and manner otherwise provided by law for such property tax appeals.

NOTE: Corrects name of board.

SECTION 53. ORS 321.353 is amended to read:

321.353. (1) The assessed value of forestland in western Oregon shall be determined as provided in subsection (8) of this section.

(2) Notwithstanding ORS 308.205, 308.232, 321.352, 321.357 or other law and subject to subsection (3) of this section, for the tax year beginning July 1, 1995, and for each tax year thereafter, forestland in western Oregon shall be considered to have a specially assessed value per acre in accordance with the following schedule:

___________________________________________________________________

Land Class Value Per Acre

FA............................................. $720

FB............................................. $619

FC............................................. $396

FD............................................. $299

FE............................................. $171

FF.............................................. $42

FG............................................. $7

FX............................................. $1

___________________________________________________________________

(3)(a) For the tax year beginning July 1, 1995, and for each tax year thereafter, the values per acre of forestland as determined under subsection (2) of this section shall be adjusted according to the change calculated under this subsection.

(b) The Department of Revenue shall determine the assessed values of forestland by multiplying the assessed values of the forestland for the previous year by the value index calculated by the department and certified to the appropriate county assessors under subsection (4) of this section. For the tax year beginning July 1, 1995, the "assessed values of the forestland for the previous year" means the values set forth in subsection (2) of this section.

(c) As used in this subsection, "value index" means the number 1.0 plus the decimal equivalent of 50 percent of the change, whether positive or negative, in the Average Western Oregon Log Value for:

(A) The current and seven preceding six-month periods when compared with a similar calculation made one year previously for the tax year beginning July 1, 1995;

(B) The current and nine preceding six-month periods when compared with a similar calculation made one year previously for the tax year beginning July 1, 1996;

(C) The current and 11 preceding six-month periods when compared with a similar calculation made one year previously for the tax year beginning July 1, 1997; and

(D) The current and 13 preceding six-month periods when compared with a similar calculation made one year previously for all tax years beginning on or after July 1, 1998.

(d) As used in this subsection, "current" means the six-month period last ending before the calculation is made.

(e) For purposes of determining forestland values under this section, forestland in western Oregon shall be divided into those land market areas as the department shall establish by rule.

(4) Prior to July 1 of each tax year, the department shall determine and certify to the appropriate county assessor the values of forestland in western Oregon. Except as provided in ORS 321.352 [(7)] (6), the county assessor shall use the value so certified in the preparation of the assessment and tax rolls of the county each tax year.

(5) ORS 321.352 (5) to [(9)] (7) apply to the forestland values determined under this section.

(6) For the tax year beginning July 1, 1995, and for each tax year thereafter, forestland in western Oregon shall be subject to ad valorem taxation at the same rates as nonforestland similarly situated. However, the assessed value for taxation of such forestland shall not exceed 20 percent of its value determined under ORS 321.352 to 321.381.

(7) For each land class described in subsection (2) of this section, the forestland maximum assessed value per acre shall equal 103 percent of the forestland maximum assessed value per acre for the preceding assessment year.

(8) The assessor shall compute the assessed value of forestland by taking the lesser of the value established under subsection (6) of this section or subsection (7) of this section and multiplying the value by the acreage of the forestland.

(9) For the first assessment year for which property is designated as forestland, the forestland's assessed value shall be determined as provided in subsection (8) of this section.

NOTE: Corrects statutory references.

SECTION 54. ORS 321.390 is added to and made a part of ORS 321.257 to 321.381.

NOTE: Adds statute to appropriate series.

SECTION 55. ORS 321.609 is amended to read:

321.609. (1) ORS 321.005 to 321.185, 321.257 to 321.381, 321.405 to 321.520 and 321.560 to 321.600 shall be enforced and the taxes imposed by ORS 321.005 to 321.185, 321.257 to 321.381, 321.405 to 321.520 and 321.560 to 321.600 shall be collected by the Department of Revenue, which shall have the power to prescribe forms and to adopt rules for the ascertainment, assessment and collection of the taxes imposed by ORS 321.005 to 321.185, 321.257 to 321.381, 321.405 to 321.520 or 321.560 to 321.600.

(2) For the purpose of determining the taxes imposed by ORS 321.005 to 321.185, 321.257 to 321.381, 321.405 to 321.520 or 321.560 to 321.600, the department may:

(a) Require any person to furnish any information deemed necessary.

(b) Examine the books, records and files of such person.

(d) Enter upon and inspect the land of any owner of the land from which any timber has been harvested.

NOTE: Corrects punctuation.

SECTION 56. ORS 321.810 is amended to read:

321.810. (1) Notwithstanding ORS 308.205 and 308.235, for the tax year beginning July 1, 1993, and the tax year beginning July 1, 1994, and for purposes of ORS 308.232, the value of forestland shall be determined under this section. Land which has been designated as forestland under ORS 321.805 to 321.825 shall be valued as forestland under this section and shall be noted on the assessment and tax roll as being forestland potentially subject to additional taxes under ORS 321.825 (1).

(2) Each tax year, the value of forestland shall be determined by multiplying the value of the forestland for the previous tax year by the forestland index calculated by the Department of Revenue and certified to the appropriate county assessors under subsection (3) of this section.

(3) The Department of Revenue shall calculate, and certify to each county assessor on or before August 15 of each year the forestland index to be used in the calculation of the value of forestland as of the preceding July 1 assessment date. The county assessor shall use the index so certified in the preparation of the assessment and tax rolls.

(4) As used in this section, "forestland index" means the number 1.0 plus the decimal equivalent of 50 percent of the percentage change, whether positive or negative, in the sum of the yearly average immediate harvest value of timber determined by the department for the previous five years compared to the sum of the five yearly average immediate harvest values beginning one year prior to the most recent five-year harvest dates. The average immediate harvest value for each year shall be calculated by the Department of Revenue by dividing the total of the immediate harvest values on the returns by the total of the volumes on the returns. The volumes and immediate harvest values used to determine the index shall be based upon those volumes reported in thousand board feet or in the unit of measure in which the preponderance of volume has been reported. The returns used shall be the privilege tax returns timely filed under ORS 321.435.

(5) At any time after the certification of the index pursuant to subsection (3) of this section, but not later than September 15, five or more taxpayers owning in the aggregate not less than five percent of the total forestland acreage subject to ad valorem taxation in eastern Oregon may appeal the values directly to the tax court by filing a joint petition with the tax court in the manner provided for appeals from orders of the county boards of [equalization] property tax appeals. Notice of the appeal shall be made in each county having values affected by the appeal, either by personal service, by certified mail on each taxpayer affected, or by publication made once a week for two consecutive weeks in a newspaper of general circulation in the county. The notice shall designate the values appealed, and include a statement of the provisions of subsection (6) of this section. The petition shall designate one of the group as the representative of all, and all proceedings before the tax court and any appeal from its determination shall be conducted procedurally as though the designated representative were the only petitioner.

(6) If the tax court increases or reduces any of the values under appeal, the judgment of the court shall apply to the valuation of all forestland for that year. An appeal may be taken to the Oregon Supreme Court from the judgment of the tax court. Unless changed upon appeal to the Supreme Court, the tax court determination shall be binding upon the department and upon each assessor and taxpayer affected by such determination of value.

(7) All other appeals from the application of the forestland index certified by the department under subsection (3) of this section shall be taken in the time and manner otherwise provided by law for such property tax appeals.

NOTE: Corrects name of board.

SECTION 57. ORS 321.811 is amended to read:

321.811. (1) The assessed value of forestland in eastern Oregon shall be determined as provided in subsection (10) of this section.

(2) Notwithstanding ORS 308.205 and 308.235, and for purposes of ORS 308.232, the specially assessed value of forestland shall be determined under subsections (2) to (8) of this section. Land that has been designated as forestland under ORS 321.805 to 321.825 shall be valued as forestland under subsections (2) to (7) of this section and shall be noted on the assessment and tax roll as being forestland potentially subject to additional taxes under ORS 321.825 (1).

(3) Subject to subsection (4) of this section, for tax years beginning on or after July 1, 1995, forestland shall be considered, for purposes of ORS 321.805 to 321.825, to have a value of $42 per acre.

(4) Each tax year beginning on or after July 1, 1995, the value of forestland shall be determined by multiplying the value of the forestland for the previous tax year by the forestland index calculated by the Department of Revenue and certified to the appropriate county assessors under subsection (5) of this section. As used in this subsection, for the tax year beginning July 1, 1995, "value of the forestland for the previous tax year" means $42.

(5) The Department of Revenue shall calculate, and certify to each county assessor on or before August 15, 1995, and on or before August 15 of each tax year thereafter, the forestland index to be used in the calculation of the value of forestland as of the July 1 assessment date immediately preceding. Except as provided in ORS 321.810 [(7)] (6), the county assessor shall use the index so certified in the preparation of the assessment and tax roll.

(6) As used in subsections (2) to (7) of this section, "forestland index" means the number 1.0 plus the decimal equivalent of 50 percent of the percentage change, whether positive or negative, in the sum of the yearly average immediate harvest value of timber determined by the department for the previous five years compared to the sum of the five yearly average immediate harvest values beginning one year prior to the most recent five-year harvest dates. The average immediate harvest value for each year shall be calculated by the Department of Revenue by dividing the total of the immediate harvest values on the returns by the total of the volumes on the returns. The volumes and immediate harvest values used to determine the index shall be based upon those volumes reported in thousand board feet or in the unit of measure in which the preponderance of volume has been reported. The returns used shall be the privilege tax returns timely filed under ORS 321.435.

(7) ORS 321.810 (5) to [(9)] (7) apply to the forestland values determined under subsections (2) to (7) of this section.

(8) For the tax year beginning July 1, 1995, and for each tax year thereafter, forestland shall be subject to ad valorem property taxation at the same rates as nonforestland similarly situated. However, the assessed value for taxation of such forestland shall not exceed 20 percent of its value determined under subsections (2) to (7) of this section.

(9) Forestland shall have a maximum assessed value per acre equal to 103 percent of the forestland's maximum assessed value per acre for the preceding assessment year.

(10) The assessor shall compute the assessed value of forestland by taking the lesser of the value established under subsection (8) of this section or subsection (9) of this section and multiplying the value by the acreage of the forestland.

(11) For the first assessment year for which property is designated as forestland, the forestland's assessed value shall be determined as provided in subsection (10) of this section.

NOTE: Corrects statutory references.

SECTION 58. ORS 323.107 is amended to read:

323.107. (1) Every person desiring to engage in the sale of cigarettes as a wholesaler shall file with the Department of Revenue an application, in such form as the department may prescribe, for a wholesaler's license. No person shall engage in business as a wholesaler without a license. A wholesaler's license may be revoked or reinstated by the department as in the case of a distributor's license pursuant to ORS 323.140.

(2) A wholesaler is subject to all the requirements of [this 1967 Act] ORS 323.005 to 323.455 and 323.990 imposed upon distributors relating to making, preserving and supplying records necessary to effective administration by the department.

NOTE: Corrects statutory reference.

SECTION 59. ORS 323.455 is amended to read:

323.455. (1) All moneys received by the Department of Revenue from the tax imposed by ORS 323.030 (1) shall be paid over to the State Treasurer to be held in a suspense account established under ORS [203.445] 293.445. After the payment of refunds, 89.65 percent shall be [credited] appropriated to the General Fund, 3.45 percent [is] shall be appropriated to the cities of this state, 3.45 percent [is] shall be appropriated to the counties of this state and 3.45 percent [is continuously] shall be appropriated to the Department of Transportation for the purpose of financing and improving transportation services for elderly and disabled individuals as provided in ORS 391.800 to 391.830.

(2) The moneys so appropriated to cities and counties shall be paid on a monthly basis within 35 days after the end of the month for which a distribution is made. Each city shall receive such share of the money appropriated to all cities as its population, as determined under ORS 190.510 to 190.590 last preceding such apportionment, bears to the total population of the cities of the state, and each county shall receive such share of the money as its population, determined under ORS 190.510 to 190.590 last preceding such apportionment, bears to the total population of the state.

(3) The moneys appropriated to the Department of Transportation under subsection (1) of this section shall be distributed and transferred to the Elderly and Disabled Special Transportation Fund established by ORS [291.800] 391.800 at the same time as the cigarette tax moneys are distributed to cities and counties under this section.

(4) Of the moneys appropriated to the General Fund under this section 51.92 percent shall be dedicated to funding the maintenance and expansion of the number of persons eligible for medical assistance under the Oregon Health Plan, or to funding the maintenance of the benefits available under the Oregon Health Plan, or both, and 5.77 percent shall be credited to the Tobacco Use Reduction Account established under ORS 431.832.

NOTE: Corrects statutory references; makes language consistent.

SECTION 60. ORS 323.505 is amended to read:

323.505. (1) A tax is hereby imposed upon the sale, storage, use, consumption, handling or distribution of all tobacco products in this state at the rate of 65 percent of the wholesale sales price of such tobacco products. The tax shall be imposed on distributors at the time the distributor:

(a) Brings, or causes to be brought, into this state from without the state tobacco products for sale, storage, use or consumption;

(b) Makes, manufactures or fabricates tobacco products in this state for sale, storage, use [of] or consumption in this state; or

(c) Ships or transports tobacco products to retail dealers in this state, to be sold, stored, used or consumed by those retail dealers.

(2) If the tax imposed under this section does not equal an amount calculable to a whole cent, the tax shall be equal to the next highest whole cent. However, the amount remitted to the Department of Revenue by the taxpayer for each quarter shall be equal only to 98.5 percent of the total taxes due and payable by the taxpayer for the quarter.

(3) No tobacco product shall be subject to the tax if the base product or other intermediate form thereof has previously been taxed under this section.

(4) Notwithstanding any provision of the Tobacco Products Tax Act to the contrary, the tax imposed by this section may be paid by the manufacturer or any other person or entity instead of the taxpayer from whom such tax would otherwise be due. In the event of payment by another person or entity, the taxpayer shall be excused from payment of the amount of the tax which has been so paid if, together with the return required under ORS 323.510, the taxpayer supplies evidence satisfactory to the department or in a form prescribed by the department showing that such tax has been so paid.

NOTE: Corrects word choice.

SECTION 61. ORS 323.615 is amended to read:

323.615. (1) The Director of the Department of Revenue is authorized to enter into a tobacco products tax refund agreement with the governing body of any Indian reservation in Oregon. The agreement may provide for a mutually agreed upon amount as a refund to the governing body of any tobacco tax collected under the Tobacco Products Tax Act in connection with the sale, use, storage or consumption of tobacco products on the Indian reservation. This provision is in addition to other laws allowing tax refunds.

(2) There is annually appropriated to the director from the suspense account established under ORS 293.445 and 323.625, the amounts necessary to make the refunds provided by subsection (1) of this section.

NOTE: Clarifies reference to director.

SECTION 62. ORS 323.625 is amended to read:

323.625. All [money] moneys received by the Department of Revenue under the Tobacco Products Tax Act shall be deposited in the State Treasury and credited to a suspense account established under ORS 293.445. After payment of administration expenses incurred by the department in the administration of the Tobacco Products Tax Act and of refunds or credits arising from erroneous overpayments, the balance of the money shall be credited to the General Fund. Of the amount credited to the General Fund under this section 41.54 percent shall be dedicated to funding the maintenance and expansion of the number of persons eligible for medical assistance under the Oregon Health Plan, or to funding the maintenance of the benefits available under the Oregon Health Plan, or both, and 4.62 percent shall be credited to the Tobacco Use Reduction Account established under ORS 431.832.

NOTE: Conforms terminology to legislative form and style.

SECTION 63. ORS 330.095 is amended to read:

330.095. (1) Subject to ORS 332.118, the request or petition for proposed change or merger in school districts shall:

(a) Be directed to the district boundary board of the county or counties having jurisdiction over the affected school districts;

(b) Contain the names and numbers of districts affected by the change;

(c) Contain a concise statement of the type of change requested and, if only a portion of the school district is involved, contain a legal description thereof; and

(d) If a petition of electors from affected districts is involved, contain the signatures and resident addresses of the petitioners and the names of the school districts in which they reside.

(2) If a merger is requested or petitioned, the request or petition shall also contain proposals for[:]

[(a)] distribution of debt[, if any; and].

[(b) Retirement of unexpired serial levies, if any, or continuance of such levies against all of the taxable property in the enlarged district.]

(3) When any proposed boundary change or merger affects school districts under the jurisdiction of different district boundary boards, the proposed change or merger shall first be acted upon by the district boundary board of the county in which lies the most populous district, and must be submitted to the district boundary board of the other affected county or counties.

(4) Any proposed merger may contain a recommendation that the new district retain the same name and number as the most populous school district in the merger or a recommendation for a new name for the district, a request for the formation of school committees as described in ORS 330.425 and a request that the number of members of the district school board be increased to seven members.

NOTE: Deletes obsolete language.

SECTION 64. ORS 330.113 is amended to read:

330.113. (1) When two or more school districts are merged as provided by law, the affected districts shall be considered merged into the most populous district and:

(a) Unless the district school boards or the petitioners requesting the merger recommend that the enlarged school district retain the same name and number which was previously assigned to the most populous district included in the merger, the district boundary board shall give the enlarged district the new name recommended under ORS 330.095, and the county assessor shall assign a new number that has not previously been used. However, if the boundaries of the enlarged school district are the same as the boundaries of the county, the official name of the enlarged school district shall be _____ (name of county) County School District.

(b) The school districts included in the merger shall become identified with the newly named district or the most populous district.

(c) The employees of the component districts shall be considered to be employees of the enlarged district, which shall succeed the other districts in such merger as a party to their respective contracts of employment.

(d) No school district employee shall be deprived of seniority or accumulated sick leave solely because the duties of the employee have been assumed or acquired by another school district as a result of a merger or boundary change.

(2) The board of directors of the most populous district shall constitute the board of directors of the enlarged district and the terms of all other directors of component districts shall expire on the effective date of the merger except that the number of directors may be increased to seven members and school committees may be authorized pursuant to ORS 330.425.

(3) All real and personal property belonging to the districts within the enlarged district shall become the property of the enlarged district.

(4) When a petition or request for a merger of school districts contains proposals for distribution of debt [or continuance of unexpired serial levies] as provided in ORS 330.095 and the district boundary board in the manner provided in ORS 330.101 declares such merger effective, the district school board of the enlarged district is authorized to levy taxes in conformity with such proposals.

(5) Notwithstanding ORS 328.555, school districts requesting a boundary change in response to chapter 393, Oregon Laws 1991, shall, as part of the boundary change request under ORS 330.092, provide for the distribution of existing debt, if any.

NOTE: Deletes obsolete language.

SECTION 65. Section 2, chapter 755, Oregon Laws 1997, is amended to read:

Sec. 2. (1) Notwithstanding any other provision of law, the Columbia School District 5J may divide into two smaller school districts that offer education programs in kindergarten through grade 12 by changing the boundaries of the school district pursuant to the provisions of ORS 330.092 to 330.101. The district boundary board shall, by changing the boundaries of the district, divide the district into two smaller school districts:

(a) On the request of the district school board; or

(b) On petition of five percent or 500 electors of the affected district, whichever is less.

(2) The request or petition submitted to the district boundary board shall contain a proposal for the distribution of assets and liabilities based on the expected average daily membership (ADM) of the new school districts. The district boundary board shall divide the assets and debt of the school district based on the average daily membership of the new school districts. Any real or personal property of the former school district shall be transferred to the new school district in which the property is located.

(3) The district school board of the former district shall be considered to be the board of any new smaller district until a new board is elected and takes office. The district school board may take such action as is essential in order that the new districts may carry out their required functions when the division takes effect, including the preparation and adoption of a budget for each district, the reference of questions relating to the budgets to the electors of the districts and the provision for electing a district school board for each of the new school districts pursuant to ORS 332.118 to 332.138. Expenditures of the board under this section shall be charged to each new school district in the manner provided in ORS 330.123. The terms of the board of the former district shall expire on the date that the new board takes office.

(4) When the school district is divided by a boundary change, the new districts shall be considered created and:

(a) Unless the district school board or the petitioners requesting the change recommend that one of the school districts retain the same name and number that were previously assigned to the divided school district, the most populous district shall retain the same name and number that were previously assigned to the divided school district and the district boundary board shall give the least populous district a new name, and the county assessor shall assign a new number that has not previously been used.

(b) The employees of the divided school district shall be considered to be employees of one of the new school districts as determined by the district school board, which shall succeed the old district as a party to their respective contracts of employment.

(c) No school district employee shall be deprived of seniority or accumulated sick leave solely because the duties of the employee have been assumed or acquired by a new school district.

(5) All real and personal property belonging to the divided district shall become the property of the new smaller districts pursuant to ORS 330.123 and this section.

(6) If a petition or request for a division of the school district contains proposals for distribution of debt [or continuance of unexpired serial levies] as provided in ORS 330.095 and this section and the district boundary board in the manner provided in ORS 330.101 declares such change effective, the district school boards of the newly created districts are authorized to levy taxes in conformity with such proposals.

NOTE: Deletes obsolete language.

SECTION 66. ORS 333.205 is amended to read:

333.205. (1) The effective date of the formation of or consolidation involving the county school district shall be July 1 following the election of the county school board except that if the election was held between January 1 and July 1 the effective date shall be July 1 of the following year.

(2) The term of each director shall be deemed to run from the effective date of the formation or consolidation but during the period following the election and prior to the effective date, the county school board, so elected, shall have authority to take any action which is essential in order that the school district may carry out its required functions after the effective date, including the preparation and adoption of a budget and the reference of questions relating to the budget [or serial levies] to the electors of the district and the employment of personnel.

NOTE: Deletes obsolete language.

SECTION 67. ORS 341.039 is amended to read:

341.039. (1) A petition submitted pursuant to ORS 341.025 may specify that the proposed district be organized as a community college service district.

(2)(a) If formed, a community college service district shall in all respects be governed by the laws applicable to community college districts.

(b) Notwithstanding paragraph (a) of this subsection, the Klamath Community College Service District may not incur bonded indebtedness for any purpose. This limitation shall not be construed to prohibit [serial levy] indebtedness funded by local option taxes, lease-purchase arrangements, or other lawful forms of capital financing. The service district may hold and own buildings and grounds acquired through gift or financing methods authorized by this section.

(3) The board of education for a community college service district shall annually review the programs and services of the district. This review shall have as its purpose a determination of which district services can most effectively and economically be delivered directly and which services can best be delivered through contracting arrangements. The direct hiring of faculty and staff is expressly permitted.

(4) The formation of a community college service district shall comply with the provisions of ORS 341.025 to 341.125. A petition affecting a territory that, in the judgment of the Commissioner for Community College Services, will not generate an annual enrollment in excess of 1,000 full-time equivalent students after three years of operation shall be considered to be a petition for the formation of a community college service district.

(5) A community college service district may submit to the electors of the district the question of whether the district shall operate as a community college district.

(6) Prior to submitting the question to the electors, the community college service district must have been in operation for three years, and must have secured the approval of the State Board of Education to hold the election. Before granting approval, the state board must find:

(a) The service district has acquired stability as demonstrated by a continuity of management, regularly adopted policies and procedures and adequate financial resources; and

(b) The service district has adopted a sound comprehensive plan that sets out the district's instructional and capital plans for five years.

NOTE: Corrects terminology.

SECTION 68. ORS 341.933 is amended to read:

341.933. The State Board of Education shall adopt by rule standards governing the distribution of state funds to community college districts for capital construction projects. The standards shall include, but need not be limited to, the following provisions:

(1) No state funds shall be used for the construction of student or faculty housing, facilities for spectators at athletic events, recreational facilities, student health facilities or noninstructional portions of student centers; and

(2) State funds shall be matched by substantial contributions from nonstate sources, which may include tuition, property taxes, bond issues, [serial levies,] gifts and grants.

NOTE: Deletes obsolete terminology.

SECTION 69. ORS 357.430 is amended to read:

357.430. If a governing body acts under ORS 357.417 (1)(a) or (c), its order shall state the manner in which the local government unit proposes to finance the library, including the estimated amount of any annual tax levy necessary to provide for the library. If the governing body determines that financing may be had only through a [serial levy] local option tax to be submitted to the electors pursuant to ORS 357.525, the order shall so state. The notice, time and manner of election shall be governed by the applicable provisions of ORS chapters 250 and 255 [and 310].

NOTE: Corrects terminology; corrects statutory reference.

SECTION 70. ORS 357.525 is amended to read:

357.525. (1) A [serial levy] local option tax for any of the purposes stated in ORS 357.410, 357.417 or 357.490 shall be submitted at an election as provided in this section. The governing body of the local government unit:

(a) May order the election on its own resolution; or

(b) Shall order the election when a petition is filed as provided in this section.

(2) The resolution or the petition calling the election under this section shall state the purpose for which the funds are to be expended, the period during which the proposed taxes are to be levied and the amount to be levied each year, which amount shall be uniform throughout the period of levy.

(3) Except as provided in subsections (4) and (5) of this section, the requirements for preparing, circulating and filing a petition under this section shall be as provided for an initiative petition:

(a) In the case of a county, in ORS 250.165 to 250.235.

(b) In the case of a city, in ORS 250.265 to 250.346.

(4) If ORS 250.265 to 250.346 applies to a city, then notwithstanding ORS 250.325, the city governing body shall submit the [serial levy] local option tax question to the electors without first considering its adoption or rejection.

(5) If ORS 250.155 makes ORS 250.165 to 250.235 inapplicable to a county or if ORS 250.255 makes ORS 250.265 to 250.346 inapplicable to a city, the requirements for preparing, circulating and filing a petition under this section shall be as provided for an initiative petition under the county or city charter or an ordinance adopted under the county or city charter.

(6) The notice, time and manner of election shall be governed by the applicable provisions of ORS [310.310 to 310.404] chapter 250 and:

(a) In the case of a county or city, ORS chapters 246 to 260.

(b) In the case of any other local government unit, ORS chapter 255.

(7) Upon approval by a majority of the electors voting at the election, the taxing unit shall levy each year during the approved period the amount so approved. The tax [levy] proceeds shall be handled as provided by ORS 357.410 or 357.430, or as otherwise provided by law.

NOTE: Corrects terminology; corrects statutory reference.

SECTION 71. ORS 358.171 is amended to read:

358.171. (1) This section establishes the procedure for determining whether a county historical fund should be created. The question shall be decided by election. The governing body of a county:

(a) May order the election on its own resolution; or

(b) Shall order the election when a petition is filed as provided in this section.

(2) An election under this section shall determine:

(a) Whether a county historical fund should be created; and

(b) The amount of taxes to be levied annually for the fund.

(3) The resolution or the petition calling an election under this section shall designate the amount of taxes to be levied annually for the county historical fund.

(4) The requirements for preparing, circulating and filing a petition calling an election under this section shall be as provided for an initiative petition in ORS 250.165 to 250.235.

(5) Notwithstanding subsection (4) of this section, if ORS 250.155 makes ORS 250.165 to 250.235 inapplicable to a county, the requirements for preparing, circulating and filing a petition under this section shall be as provided for an initiative petition under the county charter or an ordinance adopted under the county charter.

(6) The notice, time and manner of election shall be governed by the applicable provisions of ORS chapters 246 to 260 [and ORS 310.310 to 310.404].

(7) An election under this section may be held only on the date of a statewide general election.

NOTE: Corrects statutory reference.

SECTION 72. ORS 358.831 is amended to read:

358.831. (1) This section establishes the procedure for submitting to election a tax levy for any of the purposes stated in ORS 358.820. The governing body of a city:

(a) May order the election on its own resolution; or

(b) Shall order the election when a petition is filed as provided in this section.

(2) A petition filed under this section shall request submission of the tax levy to the city electors.

(3) The requirements for preparing, circulating and filing a petition under this section shall be as provided for an initiative petition in ORS 250.265 to 250.346, except that notwithstanding ORS 250.325 a city governing body shall submit the tax levy question to the electors without first considering its adoption or rejection.

(4) Notwithstanding subsection (3) of this section, if ORS 250.255 makes ORS 250.265 to 250.346 inapplicable to a city, the requirements for preparing, circulating and filing a petition under this section shall be as provided for an initiative petition under the city charter or an ordinance adopted under the city charter.

(5) The notice, time and manner of election shall be governed by the applicable provisions of ORS chapters 246 to 260 [and ORS 310.310 to 310.404].

(6) An election under this section shall be held only at the time of a statewide general election.

NOTE: Corrects statutory reference.

SECTION 73. ORS 368.705 is amended to read:

368.705. (1) In addition to a tax authorized by the electors of a county as provided by ORS 280.040 to 280.145 and by subsection (3) of this section, the county governing body of each county may levy an ad valorem tax on all taxable property within the county, which shall be set apart in the county treasury as a general road fund. The tax shall be paid in money. The tax shall be levied and collected in the same manner as other county taxes and subject to the limits set forth in ORS 310.150.

(2) The general road fund mentioned in subsection (1) of this section shall be used:

(a) In establishing, laying out, opening, surveying, altering, improving, constructing, maintaining and repairing county roads and bridges on county roads; or

(b) In like manner alone or in cooperation with the state on roads within the county known as state roads, or such roads or any portion thereof built in cooperation with the United States in accordance with the Act of July 11, 1916, entitled "An act to provide that the United States shall aid the states in the construction of rural post roads and for other purposes," or any other Act of Congress, rule or regulation of any department of the United States.

(3) Taxes levied pursuant to ORS 369.020 may be levied under the authority of this section if the county governing body transmits to the county assessor and county clerk with its notice of levy a certificate of the levy made pursuant to ORS 369.020 for the previous tax year together with its request to continue the former levy for market road purposes as a levy for county road purposes.

(4) No county funds derived from any ad valorem tax levy other than those mentioned in subsections (1) and (3) of this section shall be used or expended by the county governing body upon any roads or bridges except local option taxes levied [serially] under ORS 280.040 to 280.145.

NOTE: Corrects terminology.

SECTION 74. ORS 368.707 is amended to read:

368.707. Local option taxes levied [serially] as provided by ORS 280.040 to 280.145 shall be apportioned and transferred to cities as provided by ORS 368.710.

NOTE: Corrects terminology.

SECTION 75. ORS 451.490 is amended to read:

451.490. The district may, in accordance with the order adopted under ORS 451.485, finance the construction, operation or maintenance of service facilities for a district by:

(1) Use of funds from a fund established under ORS 280.055 or 451.540 to be repaid by the district without interest.

(2) Assessments against the property in the district with or without issuance of bonds authorized under ORS 223.205, 223.210 to 223.295 and 223.770.

(3) Service or user charges in the district.

(4) Connection charges.

(5) District ad valorem taxes.

(6) Sale of bonds.

(7) Funds obtained under ORS 280.040, 280.050, 280.060, 280.070, 280.080 and 280.090. A district [serial levy] local option tax adopted under ORS 280.060 shall not authorize a [levy] tax in any fiscal year later than the fiscal year in which the district is subject to dissolution under ORS 451.620 (1) and (2).

(8) Any combination of the provisions of subsections (1) to (7) of this section.

NOTE: Corrects terminology.

SECTION 76. ORS 457.010 is amended to read:

457.010. As used in this chapter, unless the context requires otherwise:

(1) "Blighted areas" means areas [which] that, by reason of deterioration, faulty planning, inadequate or improper facilities, deleterious land use or the existence of unsafe structures, or any combination of these factors, are detrimental to the safety, health or welfare of the community. A blighted area is characterized by the existence of one or more of the following conditions:

(a) The existence of buildings and structures, used or intended to be used for living, commercial, industrial or other purposes, or any combination of those uses, [which] that are unfit or unsafe to occupy for those purposes because of any one or a combination of the following conditions:

(A) Defective design and quality of physical construction;

(B) Faulty interior arrangement and exterior spacing;

(D) Inadequate provision for ventilation, light, sanitation, open spaces and recreation facilities; or

(E) Obsolescence, deterioration, dilapidation, mixed character or shifting of uses;

(b) An economic dislocation, deterioration or disuse of property resulting from faulty planning;

(c) The division or subdivision and sale of property or lots of irregular form and shape and inadequate size or dimensions for property usefulness and development;

(d) The laying out of property or lots in disregard of contours, drainage and other physical characteristics of the terrain and surrounding conditions;

(e) The existence of inadequate streets and other rights of way, open spaces and utilities;

(f) The existence of property or lots or other areas [which] that are subject to inundation by water;

(g) A prevalence of depreciated values, impaired investments and social and economic maladjustments to such an extent that the capacity to pay taxes is reduced and tax receipts are inadequate for the cost of public services rendered;

(h) A growing or total lack of proper utilization of areas, resulting in a stagnant and unproductive condition of land potentially useful and valuable for contributing to the public health, safety[,] and welfare; or

(i) A loss of population and reduction of proper utilization of the area, resulting in its further deterioration and added costs to the taxpayer for the creation of new public facilities and services elsewhere.

(2) "Certified statement" means the statement prepared and filed pursuant to ORS 457.430 or an amendment to the certified statement prepared and filed pursuant to ORS 457.430.

(3) "City" means any incorporated city.

(4)(a) "Existing urban renewal plan" means an urban renewal plan that provides for a division of ad valorem property taxes as described under ORS 457.420 to 457.460 adopted by ordinance before December 6, 1996, that:

(A) Except for an amendment made on account of ORS 457.190 (3) and subject to paragraph (b) of this subsection, is not changed by substantial amendment, as described in ORS 457.085 (2)(i)(A) or (B), on or after December 6, 1996; and

(B) For tax years beginning on or after July 1, 1998, includes the limit on indebtedness as described in ORS 457.190 (3).

(b) If, on or after July 1, 1998, [if an existing urban renewal plan is on or after July 1, 1998, changed by substantial amendment to adopt or change] the maximum limit on indebtedness (adopted by ordinance before July 1, 1998, pursuant to ORS 457.190)[,] of an existing urban renewal plan is changed by substantial amendment, then "indebtedness issued or incurred to carry out the existing urban renewal plan" for purposes of ORS 457.435 includes only the indebtedness within the indebtedness limit adopted by ordinance under ORS 457.190 (3)(c) before July 1, 1998.

(5) "Fiscal year" means the fiscal year commencing on July 1 and closing on June 30.

(6) "Governing body of a municipality" means, in the case of a city, the common council or other legislative body thereof, and, in the case of a county, the board of county commissioners or other legislative body thereof.

(7) "Housing authority" or "authority" means any housing authority established pursuant to the Housing Authorities Law.

(8) "Increment" means that part of the assessed value of a taxing district attributable to any increase in the assessed value of the property located in an urban renewal area, or portion thereof, over the assessed value specified in the certified statement.

(9) "Maximum indebtedness" means the amount of the principal of indebtedness included in a plan pursuant to ORS 457.190 and does not include indebtedness incurred to refund or refinance existing indebtedness.

(10) "Municipality" means any county or any city in this state. "The municipality" means the municipality for which a particular urban renewal agency is created.

(11) "Taxing body" or "taxing district" means the state, city, county or any other taxing unit which has the power to levy a tax.

(12) "Urban renewal agency" or "agency" means an urban renewal agency created under ORS 457.035 and 457.045.

(13) "Urban renewal area" means a blighted area included in an urban renewal plan or an area included in an urban renewal plan under ORS 457.160.

(14) "Urban renewal project" or "project" means any work or undertaking carried out under ORS 457.170 in an urban renewal area.

(15) "Urban renewal plan" or "plan" means a plan, as it exists or is changed or modified from time to time for one or more urban renewal areas, as provided in ORS 457.085, 457.095, 457.105, 457.115, 457.120, 457.125, 457.135 and 457.220.

NOTE: Removes redundant language; corrects grammar and syntax.

SECTION 77. ORS 468A.096 is amended to read:

468A.096. (1) Any person may apply for certification under ORS 468A.098 of the cost of production technologies or processes installed at a business location within this state and producing emission levels and types not subject to regulation under [section 112 of the Clean Air Act of 1990 (P.L. 101-549)] 42 U.S.C. 7412 if:

(a) The technologies or processes are installed in replacement of technologies or processes that produce emission levels and types that are subject to or are installed in lieu of systems that would produce emission levels and types subject to regulation under:

(A) 40 CFR 63.320 to 63.325 (national perchloroethylene air emission standards for dry cleaning facilities);

(B) 40 CFR 63.340 to 63.347 (national emission standards for chromium emissions from hard and decorative chromium anodizing tanks); or

(b) The technologies or processes are installed on or after January 1, 1996, and on or before December 31, 1999; and

(c) The cost of the technologies and processes does not qualify for certification under ORS 468.165 and 468.170. Subject to any applicable limits on credit amounts, the granting of certification of a pollution control facility under ORS 468.165 and 468.170 shall not prevent an application under this section for the cost of technologies and processes not included in the pollution control facility.

(2) The application shall be made in writing in a form prescribed by the Department of Environmental Quality and shall contain information on the actual cost of the technologies or processes for which a certificate is sought and a statement explaining how the technologies or processes used will prevent or eliminate emissions regulated under 40 CFR 63.320 to 63.325, 63.340 to 63.347 or 63.460 to 63.469.

(3) The Director of the Department of Environmental Quality may require any further information that the director considers necessary before a certificate is issued.

(4) The application shall be accompanied by a fee established under subsection (5) of this section. The fee may be refunded if the application for certification is rejected.

(5) By rule and after hearing, the Environmental Quality Commission may adopt a schedule of reasonable fees that the department may require of applicants for certificates issued under this section. Before the adoption or revision of the fees, the commission shall estimate the total cost of the program to the department. The fees shall be based on the anticipated cost of filing, investigating, granting and rejecting the applications and shall be designed not to exceed the total cost estimated by the commission. Any excess fees shall be held by the department and shall be used by the commission to reduce any future fee increases. The fees may vary according to the complexity of the technology or process. The fees shall not be considered by the commission as part of the cost to be certified.

(6) The application shall be submitted within one year of installation of the technologies or processes. Failure to file a timely application shall make the cost of a technology or process ineligible for certification. An application shall not be considered filed until it is complete and ready for processing. The commission may grant an extension of time, not exceeding one year, to file an application when circumstances beyond the control of the applicant would make a timely filing unreasonable.

NOTE: Corrects statutory reference.

SECTION 78. ORS 469.170 is amended to read:

469.170. (1) Any person may claim a tax credit under ORS 316.116 (or ORS 317.115, if the person [meets the requirements under ORS 316.116 or, if the person] is a corporation) if the person:

(a) Meets the requirements of ORS 316.116 (or [, under] ORS 317.115, [and] if applicable);

(b) Meets the requirements of ORS 469.160 to 469.180; and[,]

(c) Pays, subject to subsection [(9)] (10) of this section, [if that person pays] all or a portion of the costs of an alternative energy device.

(2) A credit under ORS 317.115 may be claimed only if the alternative energy device is a fueling station necessary to operate an alternative fuel vehicle.

[(2)] (3) In order to be eligible for a tax credit under ORS 316.116 or 317.115, a person claiming a tax credit for construction or installation of an alternative energy device (including a fueling station) shall have the system certified by the Office of Energy or constructed or installed by a contractor certified by the Office of Energy under subsection [(4)] (5) of this section. This subsection does not apply to an alternative fuel vehicle or to related equipment. Certification of an alternative fuel vehicle or related equipment shall be accomplished under rules that shall be adopted by the administrator of the Office of Energy.

[(3)] (4) Verification of the purchase, construction or installation of an alternative energy device shall be made in writing on a form provided by the Department of Revenue and, if applicable, shall contain:

(a) The location of the alternative energy device;

(b) A description of the type of device;

(c) If the device was constructed or installed by a contractor, evidence that the contractor has any license, bond, insurance and permit required to sell and construct or install the alternative energy device;

(d) If the device was constructed or installed by a contractor, a statement signed by the contractor that the applicant has received:

(A) A statement of the reasonably expected energy savings of the device;

(B) A copy of consumer information published by the Office of Energy;

(D) A copy of the contractor's certification certificate or alternative energy device system certificate as appropriate;

(e) If the device was not constructed or installed by a contractor, evidence that:

(A) The Office of Energy has issued an alternative energy device system certificate for the device; and

(B) The taxpayer has obtained all building permits required for construction or installation of the device;

(f) A statement, signed by both the taxpayer claiming the credit and the contractor if the device was constructed or installed by a contractor, that the construction or installation meets all the requirements of ORS 469.160 to 469.180 or, if the device is a fueling station and the taxpayer is the contractor, a statement signed by the contractor that the construction or installation meets all of the requirements of ORS 469.160 to 469.180;

(g) The date the alternative energy device was purchased;

(h) The date the alternative energy device was placed in service; and

(i) Any other information that the administrator of the Office of Energy or the Department of Revenue determines is necessary.

[(4)(a)] (5)(a) When the Office of Energy finds that an alternative energy device can meet the standards adopted under ORS 469.165, the administrator of the Office of Energy may issue a contractor system certification to the person selling and constructing or installing the alternative energy device.

(b) Any person who sells or installs more than 12 alternative energy devices in one year shall apply for a contractor system certification. An application for a contractor system certification shall be made in writing on a form provided by the Office of Energy and shall contain:

(A) A statement that the contractor has any license, bonding, insurance and permit that is required for the sale and construction or installation of the alternative energy device;

(B) A specific description of the alternative energy device, including, but not limited to, the material, equipment and mechanism used in the device, operating procedure, sizing and siting method and construction or installation procedure;

(D) The range of installed costs to purchasers of the device;

(E) Any important construction, installation or operating instructions; and

(F) Any other information that the Office of Energy determines is necessary.

(c) A new application for contractor system approval shall be filed when there is a change in the information supplied under paragraph (b) of this subsection.

(d) The Office of Energy may issue contractor system certificates to each contractor who on October 3, 1989, has a valid dealer system certification, which shall authorize the sale and installation of the same domestic water heating alternative energy devices authorized by the dealer certification.

(e) If the Office of Energy finds that an alternative energy device can meet the standards adopted under ORS 469.165, the administrator may issue an alternative energy device system certificate to the taxpayer constructing or installing or having an alternative energy device constructed or installed.

(f) An application for an alternative energy device system certificate shall be made in writing on a form provided by the Office of Energy and shall contain:

(A) A specific description of the alternative energy device, including, but not limited to, the material, equipment and mechanism used in the device, operating procedure, sizing, siting method and construction or installation procedure;

(B) The constructed or installed cost of the device; and

[(5)] (6) To claim the tax credit, the verification form described in subsection [(3)] (4) of this section shall be submitted with the taxpayer's tax return for the year the alternative energy device is placed in service or the immediately succeeding tax year. A copy of the contractor's certification certificate, alternative energy device system certificate or alternative fuel vehicle or related equipment certificate also shall be submitted.

[(6)] (7) The verification form and contractor's certificate, alternative energy device system certificate or alternative fuel vehicle or related equipment certificate described under this section shall be effective for purposes of tax relief allowed under ORS 316.116 or 317.115.

[(7)] (8) The verification form and contractor's certificate described under this section may be transferred to the first purchaser of a dwelling or, in the case of construction or installation of a fueling station in an existing dwelling, the current owner, who intends to use or is using the dwelling as a principal or secondary residence.

[(8)] (9) A tax credit under ORS 316.116 or 317.115 is allowed only with respect to an alternative energy device that is placed in service on or before December 31, 2001.

[(9)] (10) An investor owned utility that pays to a contractor the present value to the utility of the tax credit granted for a fueling station under ORS 316.116 or 317.115 shall be entitled to claim the credit in the manner and subject to rules adopted by the Department of Revenue to carry out the purposes of this subsection.

NOTE: Conforms sentence structure to legislative form and style; corrects statutory references.

SECTION 79. ORS 838.015 is amended to read:

838.015. A permanent rate limit for operating taxes within the meaning of section 11 (3), Article XI of the Oregon Constitution, may be established for a district at the same election at which the district is established or at the first election of district board members, where that election is held after district establishment. If the petition or resolution for initiating proceedings to establish the district contains both requests authorized by ORS 838.010 (2), the county governing body that calls the election shall confer about the proposed permanent rate limit with the governing bodies of all counties and cities having territory in the proposed district and shall then determine the rate limit to be proposed for the district. The proposition submitted to the electors of the district for the purpose of establishing the district shall propose the rate limit specified by the county governing body. The rate limit so proposed shall be the initial permanent rate limit for operating taxes of the district within the meaning of section 11 (3), Article XI of the Oregon Constitution, if the district is established at the election.

NOTE: Corrects grammar; corrects constitutional reference.

Approved by the Governor April 16, 1999

Filed in the office of Secretary of State April 19, 1999

Effective date October 23, 1999

__________