Chapter 314 Oregon Laws 1999

Session Law

AN ACT

SB 248

Relating to property tax special assessments; creating new provisions; amending ORS 215.236, 215.273, 215.306, 215.311, 215.808, 270.005, 270.015, 270.100, 270.120, 270.155, 305.270, 305.275, 305.280, 307.560, 308.025, 308.345, 308.350, 308.355, 308.360, 308.365, 308.372, 308.373, 308.374, 308.375, 308.376, 308.377, 308.378, 308.380, 308.390, 308.392, 308.397, 308.400, 308.401, 308.403, 308.404, 308.406, 308.801, 310.160, 310.165, 311.280, 311.370, 311.740, 321.347, 321.349, 321.358, 321.359, 321.364, 321.390, 321.760, 321.795, 321.805, 321.810, 321.811, 321.815, 321.820, 321.822, 321.825, 321.830, 358.543, 496.340, 522.005, 522.405, 522.505, 656.027, 658.715 and 836.625 and section 2, chapter 796, Oregon Laws 1989; and repealing ORS 215.207, 308.229, 308.370, 308.382, 308.384, 308.387, 308.391, 308.395, 308.396, 308.398, 308.399, 308.407, 321.364, 321.372, 321.960 and 321.970 and section 10, chapter [Vetoed], Oregon Laws 1999 (Enrolled House Bill 2452).

STATEMENT OF LEGISLATIVE INTENT

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

SECTION 1. The Legislative Assembly recognizes that agriculture and related land uses contribute significantly to Oregon's character and economy. The Legislative Assembly finds that providing the means for agriculture to continue and prosper is in the interest of all citizens of this state, who benefit directly or indirectly from agricultural production and stewardship of farmlands and ranchlands. Valuation of farm properties based upon market data from sales for investment or other purposes not connected with bona fide farm use encourages the conversion of agricultural land to other uses. The identification of agricultural land for farm use, as provided by law, substantially limits alternative uses of such land and justifies the valuation of that land based on its agricultural production capability. Therefore, it is the declared intent of the Legislative Assembly that bona fide farm properties be assessed for ad valorem property tax purposes at a value that is exclusive of values attributable to urban influences or speculative purposes.

QUALIFICATION FOR

FARM USE ASSESSMENT

(Definitions)

SECTION 2. As used in ORS 308.345 to 308.406:

(1) "Exclusive farm use zone" means a zoning district established by a county or a city under the authority granted by ORS chapter 215 or 227 that is consistent with the farm use zone provisions set forth in ORS 215.203 to 215.311, 215.438, 215.448, 215.452, 215.455, 215.700 to 215.780 or 215.800 to 215.808.

(2) "Exclusive farm use zone farmland" means land that qualifies for special assessment under section 5 of this 1999 Act.

(3) "Homesite" means the land, including all tangible improvements to the land under and adjacent to a dwelling and other structures, if any, that are customarily provided in conjunction with a dwelling.

(4) "Nonexclusive farm use zone farmland" means land that is not within an exclusive farm use zone but that qualifies for farm use special assessment under section 7 of this 1999 Act.

(Definition of "Farm Use")

SECTION 3. (1) As used in ORS 308.345 to 308.406, "farm use" means the current employment of land for the primary purpose of obtaining a profit in money by:

(a) Raising, harvesting and selling crops;

(b) Feeding, breeding, managing or selling livestock, poultry, fur-bearing animals or honeybees or the produce thereof;

(c) Dairying and selling dairy products;

(d) Stabling or training equines, including but not limited to providing riding lessons, training clinics and schooling shows;

(e) Propagating, cultivating, maintaining or harvesting aquatic species and bird and animal species to the extent allowed by the rules adopted by the State Fish and Wildlife Commission;

(f) On-site constructing and maintaining equipment and facilities used for the activities described in this subsection;

(g) Preparing, storing or disposing of, by marketing or otherwise, the products or by-products raised for human or animal use on land described in this section; or

(h) Using land described in this section for any other agricultural or horticultural use or animal husbandry or any combination thereof.

(2) "Farm use" does not include the use of land subject to timber and forestland taxation under ORS chapter 321, except land used exclusively for growing cultured Christmas trees or land described in ORS 321.267 (1)(e) or 321.415 (5) (relating to land used to grow certain hardwood timber, including hybrid cottonwood).

(3) For purposes of this section, land is currently employed for farm use if the land is:

(a) Farmland, the operation or use of which is subject to any farm-related government program;

(b) Land lying fallow for one year as a normal and regular requirement of good agricultural husbandry;

(c) Land planted in orchards or other perennials, other than land specified in paragraph (d) of this subsection, prior to maturity;

(d) Land not in an exclusive farm use zone that has not been eligible for assessment at special farm use value in the year prior to planting the current crop and has been planted in orchards, cultured Christmas trees or vineyards for at least three years;

(e) Wasteland, in an exclusive farm use zone, dry or covered with water, neither economically tillable nor grazeable, lying in or adjacent to and in common ownership with farm use land and that is not currently being used for any economic farm use;

(f) Except for land under a single family dwelling, land under buildings supporting accepted farming practices, including the processing facilities allowed by ORS 215.213 (1)(y) and 215.283 (1)(v);

(g) Water impoundments lying in or adjacent to and in common ownership with farm use land;

(h) Any land constituting a woodlot, not to exceed 20 acres, contiguous to and owned by the owner of land specially valued for farm use even if the land constituting the woodlot is not utilized in conjunction with farm use;

(i) Land lying idle for no more than one year when the absence of farming activity is the result of the illness of the farmer or a member of the farmer's immediate family, including injury or infirmity, regardless of whether the illness results in death;

(j) Land described under ORS 321.267 (1)(e) or 321.415 (5) (relating to land used to grow certain hardwood timber, including hybrid cottonwood); or

(k) Land used for the primary purpose of obtaining a profit in money by breeding, raising, kenneling or training greyhounds for racing.

(4) As used in this section:

(a) "Accepted farming practice" means a mode of operation that is common to farms of a similar nature, necessary for the operation of these similar farms to obtain a profit in money and customarily utilized in conjunction with farm use.

(b) "Cultured Christmas trees" means trees:

(A) Grown on lands used exclusively for that purpose, capable of preparation by intensive cultivation methods such as plowing or turning over the soil;

(B) Of a marketable species;

(C) Managed to produce trees meeting U.S. No. 2 or better standards for Christmas trees as specified by the Agricultural Marketing Service of the United States Department of Agriculture; and

(D) Evidencing periodic maintenance practices of shearing for Douglas fir and pine species, weed and brush control and one or more of the following practices:

(i) Basal pruning;

(ii) Fertilizing;

(iii) Insect and disease control;

(iv) Stump culture;

(v) Soil cultivation; or

(vi) Irrigation.

SECTION 4. ORS 308.380 is amended to read:

308.380. (1) The Department of Revenue shall provide by [regulation] rule for a more detailed definition of farm use, consistent with the general definition in [ORS 215.203 (2)] section 3 of this 1999 Act, to be used by county assessors in determining [entitlement to] qualification for special assessment under [ORS 308.370 (2).] section 7 of this 1999 Act. The rules [Such regulations] shall not be designed to exclude from the special assessment those lands [which] that are in farm use as defined in [ORS 215.203 (2)] section 3 of this 1999 Act for which tax relief is intended.

(2) In determining [entitlement to] qualification for special assessment under [ORS 308.370 (2)] section 7 of this 1999 Act, the county assessor shall consider the use of the land by the owner, renter or operator thereof together with any other lands that are a part of one farming unit being operated by [such] the owner, renter or operator.

(Exclusive Farm Use Zone Farmland)

SECTION 5. (1) Any land that is within an exclusive farm use zone and that is used exclusively for farm use shall qualify for farm use special assessment under ORS 308.345 to 308.406, unless disqualified under other provisions of law.

(2) Whether farmland qualifies for special assessment under this section shall be determined as of January 1 of the assessment year. However, if land so qualified becomes disqualified prior to July 1 of the same assessment year, the land 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 on or after July 1, the land shall continue to qualify for special assessment as provided in this section for the current tax year.

SECTION 6. ORS 308.403 is amended to read:

308.403. (1) Upon written request of the county assessor or county governing body, the [each district attorney] county counsel shall [annually] review the zoning ordinances of the county [of the district attorney] that purport to establish exclusive farm use zones to determine if any [farm use zone] zone mentioned in the ordinance is not [a qualified] an exclusive farm use zone [allowing for automatic assessment of farmland within the zone at its farm use value under ORS 308.370 (1)]. If the [district attorney] county counsel is in doubt as to whether a [farm use] zone is [a qualified] an exclusive farm use zone, the [district attorney] county counsel shall request the assistance of the Department of Revenue under ORS 305.110. The [district attorney] county counsel shall promptly notify the county assessor and county governing body by letter of the findings of the [district attorney] county counsel.

(2) If the assessor discovers any land [which] that has been granted farm use special assessment under [ORS 308.370 (1)] section 5 of this 1999 Act that is not qualified for such assessment because the zone is not [a qualified] an exclusive farm use zone, the assessor shall immediately notify the county governing body of this fact.

(3) Within six months from the date the county governing body receives notice from the assessor or from the Land Conservation and Development Commission that a farm use zone is not [a qualified] an exclusive farm use zone [within the meaning of ORS 308.370 (1)], the county governing body shall qualify the zone as an exclusive farm use zone within the meaning of [ORS 308.370 (1)] section 5 of this 1999 Act. The assessor shall continue to assess the land at the special assessment provided in [ORS 308.370 (1)] section 20 of this 1999 Act until the county governing body qualifies the zone or the land is disqualified under ORS 308.397.

(4) Subsections (1) to (3) of this section shall provide the exclusive procedure for correcting the erroneous granting of farm use special assessment as [zoned] exclusive farm use zone farmland when the zone [is not a qualified] does not meet the definition of an exclusive farm use zone under [ORS 308.370 (1)] section 2 of this 1999 Act.

(Nonexclusive Farm Use Zone Farmland)

SECTION 7. (1) Any land that is not within an exclusive farm use zone but that is being used, and has been used for the preceding two years, exclusively for farm use shall qualify for farm use special assessment:

(a) If the land meets the income requirements set forth in ORS 308.372; and

(b) Upon compliance with the application requirements set forth in ORS 308.375.

(2)(a) The provisions of this section 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.

(b) This subsection does not apply in the case of a lease or option to buy surface rights:

(A)(i) For the exploration of geothermal resources, as defined by ORS 522.005, mineral resources or other subsurface resources; or

(ii) For the use of land for hunting, fishing, camping or other recreational use; and

(B) If the exploration, use or possession engaged in pursuant to the lease or option to buy does not interfere with the farm use of the farmland.

(3) Whether farmland qualifies for special assessment under this section shall be determined as of January 1 of the assessment year. However, if land so qualified becomes disqualified prior to July 1 of the same assessment year, the land 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 on or after July 1, the land shall continue to qualify for special assessment as provided in this section for the current tax year.

SECTION 8. ORS 308.372 is amended to read:

308.372. (1) For purposes of ORS [215.203, 215.213, 215.283, 215.284, 308.345 to 308.365 and 308.370 to 308.407] 308.345 to 308.406, farmland or a farm parcel that is not within an area zoned for exclusive farm use [under ORS chapter 215] is not used exclusively for farm use unless all of the [following] prerequisites of subsections (2) to (5) of this section are met. [:]

(2)(a) Except as provided in subsection [(4)] (6) of this section, in three out of the five full calendar years immediately preceding the assessment date, the farmland or farm parcel was operated as a part of a farm unit that has produced a gross income from farm uses in the [amount provided in ORS 308.407 (2), and if applicable, the farm parcel was operated in a manner that meets the income requirements of ORS 308.407 (3).] following amount for a calendar year:

(A) If the farm unit consists of six acres or less, the gross income from farm use shall be at least $650.

(B) If the farm unit consists of more than six acres but less than 30 acres, the gross income from farm use shall be at least equal to the product of $100 times the number of acres and any fraction of an acre of land included.

(C) If the farm unit consists of 30 acres or more, the gross income from farm use shall be at least $3,000.

(b) For purposes of determining the number of acres to be considered under paragraph (a) of this subsection, the land described in section 3 (3) of this 1999 Act and the land, not exceeding one acre, used as a homestead shall not be included.

(c) If a farm parcel is operated as part of a farm unit and the farmland of the farm unit is not all under the same ownership, the gross income requirements applicable to the farm parcel shall be as provided under paragraph (a) of this subsection. In addition, the gross income from farm use of a farm parcel described under this paragraph must be at least:

(A) One-half of the gross income requirements described under paragraph (a) of this subsection that would be required if the farm parcel were the only farmland of the farm unit; or

(B) A cash or net share crop rental of one-quarter of the gross income requirements described under paragraph (a) of this subsection that would be required if the farm parcel were the only farmland of the farm unit. For purposes of this subparagraph, "net share crop rental" means the value of any crop received by the owner of the farm parcel less any costs borne by the owner of the farm parcel.

[(b)] (3) Excise or income tax returns are filed with the Department of Revenue for purposes of ORS chapter 316, 317 or 318 by the farmland owner or the operator of the farm unit that include a Schedule F and, if applicable, by the owner of a farm parcel that include a schedule or schedules showing rental income received by the owner of the farm parcel, during the years to which the income requirements of [paragraph (a) of this subsection] this section apply.

[(c)] (4) Upon request, a copy of the returns or the schedules of the returns showing the gross income received from farm use is furnished by the taxpayer to the county assessor.

[(2)(a) As used in this section, "gross income" includes the value of any crop or livestock that is used by the owner personally or in the farming operation of the owner, but shall not include the value of any crop or livestock so used unless records accurately reflecting both value and use of the crop or livestock are kept by the owner in a manner consistent with generally accepted accounting principles.]

[(b)] (5) The burden of proving the gross income of the farm unit for the years described in subsection [(1)] (2) of this section is upon the person claiming special assessment for the land.

[(c) In determining gross income, the purchase cost of livestock shall be deducted from gross income.]

[(3)(a)(A) Land under dwellings customarily provided in conjunction with the farm use of farmland described in subsection (1) of this section shall be assessed at the value determined under ORS 308.377 if the farmland was operated as a part of a farm unit that produced over one-half of the adjusted gross income of the owner or owners in the year prior to the year an application is filed under this subsection.]

[(B) Wasteland, dry or covered with water, neither economically tillable nor grazeable, lying in or adjacent to and in common ownership with farmland described in subsection (1) of this section, and which is not currently being used for any economic farm use shall be assessed at farm use value if the farmland was operated as part of a farm unit that produced over one-half of the adjusted gross income of the owner or owners in the year prior to the year an application is filed under this subsection. For purposes of determining adjusted gross income of an owner or owners under this paragraph, "owner" means any person described in ORS 308.375 (2)(b)(A), (B) or (E) and the owner's spouse.]

[(b) To qualify for such assessment, the owner or owners shall file an application with the county assessor on or before April 15 of each year such assessment is desired. The application shall be made on forms prepared by the Department of Revenue and supplied by the assessor and shall include such information as may be reasonably required to determine the entitlement of the applicant, including copies of applicable state income tax returns. Such information shall be confidential information of the assessor's office and shall be used for purposes of this subsection only, including determinations made under administrative and court proceedings where entitlement is in issue.]

[(c) There shall be annexed to each application the affidavit or affirmation of the applicant that the statements contained therein are true.]

[(d) For purposes of this subsection, "owner" or "owners" means the person or persons entitled to file for special assessment under ORS 308.375 (2)(b).]

[(4)] (6) The failure of a farm unit to produce the amount of gross income required by [ORS 308.407] subsection (2) of this section shall not prevent the farm unit from meeting the qualifications of [subsection (1) of] this section if:

(a) The failure is [due to] because:

(A) The effect of flooding [that] substantially precludes normal and reasonable farming during the year; or

(B) Severe drought conditions are declared under ORS 536.700 to 536.780; and

(b) The farm unit produces the required amount of gross income in three out of the last five nonflood or nondrought years.

(7) As used in this section:

(a) "Farm parcel" means the contiguous land under the same ownership, whether assessed as one or more than one tax lot.

(b) "Owner" or "ownership" means any person described under ORS 308.375 (2)(b)(A), (B), (D) or (E) and spouse or other person who is also an owner as tenant in common or other joint ownership interest.

(c) "Gross income" includes the value of any crop or livestock that is used by the owner personally or in the farming operation of the owner, but does not include:

(A) The value of any crop or livestock so used unless records accurately reflecting both value and use of the crop or livestock are kept by the owner in a manner consistent with generally accepted accounting principles; and

(B) The purchase cost of livestock.

SECTION 9. (1) Wasteland, dry or covered with water, neither economically tillable nor grazeable, lying in or adjacent to and in common ownership with nonexclusive farm use zone farmland described in section 7 of this 1999 Act, and that is not currently being used for any economic farm use shall qualify for farm use special assessment under section 7 of this 1999 Act if the farmland was operated as part of a farm unit that produced more than one-half of the adjusted gross income of the owner or owners in the year prior to the year an application is filed under this section.

(2)(a) An owner of wasteland shall make annual application to qualify the wasteland as nonexclusive farm use zone farmland under section 7 of this 1999 Act.

(b) The application shall be filed with the county assessor on or before April 15 of each year qualification is desired. The application shall be made on forms prepared by the Department of Revenue and supplied by the county assessor and shall include any information as may be reasonably required to determine qualification, including copies of applicable state income tax returns. All information provided, including determinations made under administrative and court proceedings relating to the assessment of the wasteland, shall be confidential information of the assessor's office and shall be used only for purposes of ORS 308.345 to 308.406.

(c) There shall be attached to each application an affidavit or affirmation from the applicant providing that the statements contained in the application are true.

(3) For purposes of this section, "owner" or "owners" means the person or persons entitled to file for special assessment under ORS 308.375 (2)(b).

SECTION 10. ORS 308.375 is amended to read:

308.375. (1) Any owner of nonexclusive farm use zone farmland entitled to special assessment under [ORS 308.370 (2)] section 7 of this 1999 Act must, to secure [such] the assessment, make application therefor to the county assessor on or before April 1 of the first year in which [such] the assessment is desired.

(2)(a) The application shall be made upon forms prepared by the Department of Revenue and supplied by the county assessor and shall include [such] any information as may reasonably be required to determine the entitlement of the applicant.

(b) The application may be signed by any one of the following:

(A) The owner of the farmland who holds an estate therein in fee simple or for life.

(B) Any one of tenants in common or tenants by the entirety, holding an estate in the farmland in fee simple or for life.

(C) Any person of legal age, duly authorized in writing to sign an application on behalf of any person described in subparagraph (A) or (B) of this paragraph.

(D) The guardian or conservator of an owner, or the executor or administrator of an owner's estate.

(E) The purchaser of the fee simple or life estate of an owner under a contract of sale.

(c) The assessor or the deputy of the assessor shall not approve an application signed by a person whose authority to sign is not a matter of public record unless there is filed with the assessor a true copy of the deed, contract of sale, power of attorney or other appropriate instrument evidencing the signer's interest or authority. When filed with the assessor only, such instrument shall not constitute a public record.

(3) There shall be annexed to each application the affidavit or affirmation of the applicant that the statements contained therein are true.

SECTION 11. ORS 308.374 is amended to read:

308.374. (1) [Notwithstanding ORS 308.205 or 308.235, for purposes of assessment, upon application,] Acquired land shall [be valued at its value] qualify for farm use special assessment if:

(a) The acquired land:

(A) Is not in an exclusive farm use zone;

(B) Is, immediately upon acquisition, put into farm use; and

(b) The original land:

(A) Is owned by the purchaser of the acquired land;

(B) Is in farm use;

(D) Produced gross income of at least $10,000 in the calendar year prior to acquisition.

(2) Land [which] that qualifies for farm use special assessment under subsection (1) of this section shall, for purposes of the gross income requirement under ORS 308.372, be added to and treated as a part of the entire farming unit upon acquisition.

(3) In order for acquired land described in this section to qualify under section 7 of this 1999 Act, an application must be filed under ORS 308.375 on or before April 1 of the first year following acquisition in which farm use special assessment is sought for the acquired land.

(Effect of Qualification Generally)

SECTION 12. In the case of exclusive farm use zone farmland that qualifies for special assessment under section 5 of this 1999 Act or nonexclusive farm use zone farmland that qualifies for special assessment under section 7 of this 1999 Act, the county assessor shall enter on the assessment and tax roll the notation "potential additional tax liability" until the land is disqualified under ORS 308.390 or 308.397.

(Requalification)

SECTION 13. (1) Any land that has been disqualified from farm use special assessment under ORS 308.345 to 308.406 may requalify for special assessment under ORS 308.345 to 308.406 at the same time and in the same manner and under the same provisions of law as land initially qualifies for farm use special assessment under ORS 308.345 to 308.406.

(2) Land that requalifies under this section must meet applicable qualification requirements as of the assessment date for the tax year for which special assessment of the requalified land under ORS 308.345 to 308.406 is sought.

(3) This section does not apply to the requalification of land that was disqualified and that is described:

(a) In the case of land in an exclusive farm use zone, under ORS 215.236 (relating to nonfarm dwellings) and section 35 (1)(a) of this 1999 Act (relating to compatible nonuse);

(b) In the case of nonexclusive farm use zone farmland, under section 35 (1)(a) of this 1999 Act (relating to compatible nonuse), ORS 308.390 (4) (relating to subdivision), 308.392 (relating to requalification during first year of disqualification) or 308.406 (relating to abatement for failure to meet income requirements); and

(c) Under section 35 (1)(d) of this 1999 Act (relating to change in special assessment).

SECTION 14. ORS 308.392 is amended to read:

308.392. (1) Notwithstanding [ORS 308.391] section 41 of this 1999 Act, land that was nonexclusive farm use zone farmland and that has been disqualified by the county assessor from farm use special assessment [as farmland] for the reason that the land is no longer in farm use as described under ORS 308.390 [(2)(c)] (1)(c) may be requalified for farm use special assessment [as farmland] for the first year in which the disqualification is in effect.

(2) Disqualified farmland may requalify for special assessment under this section upon compliance with the following:

(a) The owner shall make application for requalification to the county assessor on or before December 15 of the tax year for which the disqualification is first in effect.

(b) The application shall be made upon forms prepared by the Department of Revenue and supplied by the county assessor.

(c) The application shall contain the information necessary to determine that the property meets the requirements of ORS 308.372 and the other requirements for property to receive a farm use special assessment [for farmland] under ORS [308.370 to 308.407] 308.345 to 308.406.

(d) The application shall be signed by the owner and shall be accompanied by a filing fee of:

(A) $1 for each $1,000 (or fraction of $1,000) of real market value of the property as determined under ORS 308.232.

(B) Not less than $10 or more than $250.

(e) There shall be annexed to each application for requalification the affidavit or affirmation of the applicant that the statements contained therein are true.

(3) Upon receipt of the application, the county assessor shall determine if the property meets the requirements of ORS 308.372 and the other requirements for farm use special assessment under ORS [308.370 to 308.407] 308.345 to 308.406 for the year in which the disqualification is first in effect.

(4) Upon approval of the application the county assessor shall notify the officer in charge of the assessment and tax roll of the requalification for special assessment under [ORS 308.370 (2)] section 7 of this 1999 Act. The officer shall correct the current assessment and tax roll to reflect the special assessment, as provided under ORS 311.205 (1)(e).

(5)[(a)] Upon disapproval of the application, the county assessor shall notify the owner of the application's disapproval and the land's continued disqualification. [Disapproval under this subsection shall result in land being disqualified for special assessment as farmland as of January 1 of the assessment year.]

[(b) Paragraph (a) of this subsection shall apply only if notice of continued disqualification is mailed by the county assessor prior to April 15 of the tax year.] If notice of disapproval is not mailed prior to April 15 of the tax year, the application shall be considered approved.

(6) As used in this section, "owner" means the person or persons entitled to file for special assessment under ORS 308.375 (2)(b).

VALUATION

(Establishing Value for

Farm use; Procedure)

SECTION 15. ORS 308.345 is amended to read:

308.345. [(1) Many farm properties throughout the state are being valued for ad valorem purposes based upon market data information which does not represent the sale of comparable property for comparable uses and the particular sales which are utilized as indicators of the value of other farm properties, upon independent investigation, have been shown to represent sales for investment or other purposes not connected with bona fide farm use. It is the legislative intent that bona fide properties shall be assessed at a value that is exclusive of values attributable to urban influences or speculative purchases.]

(1) This section and ORS 308.350 set forth the procedures by which the values for farm use are established for both:

(a) Exclusive farm use zone farmland that qualifies for special assessment under section 5 of this 1999 Act; and

(b) Nonexclusive farm use zone farmland that qualifies for special assessment under section 7 of this 1999 Act.

[(2) Notwithstanding the provisions of ORS 308.205, agricultural lands, when devoted exclusively to farm use as defined in ORS 215.203, shall be valued upon the basis of such farm use whether zoned for exclusive farm use under existing statutes or whether constituting farmlands not within an exclusive farm use zone under ORS 308.370, and When comparable sales figures are utilized in arriving at assessed values of agricultural lands, the county assessors and the Department of Revenue shall make sufficient investigation to ascertain that the sales so utilized in fact represent sales for bona fide farm use. The sales so used, when the potential operation of the agricultural land is examined under accepted agricultural accounting procedures and typical agricultural practices and land use in the county, shall be under conditions that justify the purchase of such agricultural land by a prudent investor for farm use.]

[(3)] (2) [When comparable sales figures cannot be utilized in arriving at assessed values of agricultural lands as provided in subsection (2) of this section by reason of insufficient sales meeting the criteria set forth in subsection (2) of this section, the assessed values of agricultural lands shall be arrived at by] The values for farm use of farmland shall be determined utilizing an income approach. In utilizing the income approach, the capitalization rate shall be the effective rate of interest charged in Oregon by the Federal [Land Bank] Farm Credit Bank system at the time of closing on loans for farm properties estimated as an average over the [immediate] past five reported calendar years, plus a component for the local tax rate. The Department of Revenue annually shall determine and specify [such] the rate according to the best information available, and shall certify [such] the rate to the county assessors.

[(4) For purposes of this section, a "prudent investor for farm use" is a person who purchases agricultural lands with the reasonable expectation that the person will be able to realize an average annual return on capital not less than the current rate of interest charged by the Federal Land Bank on first mortgages of farmland in the county in which the agricultural lands are located.]

(3) The county assessors shall develop tables for each assessment year that reflect, for each class and area, the values determined under this section and that express the values as values per acre.

SECTION 16. ORS 308.350 is amended to read:

308.350. (1) [Comparable sales figures or] Income-approach factors being utilized by a county assessor in arriving at [assessed values] the values for farm use of [agricultural lands] farmland under ORS 308.345 shall be submitted by the county assessor to a county board of review. The board of review shall advise the county assessor as to whether the [figures or] factors being so utilized are proper under ORS 308.345.

(2) The county board of review shall consist of:

(a) Two members appointed by the county court sitting for the transaction of county business, board of county commissioners or other county governing body of the county.

(b) Two members appointed by the county assessor.

(c) One member appointed by the four members appointed as provided in paragraphs (a) and (b) of this subsection, who shall serve for a term of one year.

(3) Each member of the county board of review appointed under subsection (2)(a) and (b) of this section shall serve for a term ending two years after the date of the expiration of the term for which the predecessor of the member was appointed, except that a person appointed to fill a vacancy occurring prior to the expiration of the term shall be appointed for the remainder of the term.

(4) Members of the county board of review must be persons knowledgeable and experienced in [agricultural land] farmland values [and sales figures].

(5) Members of the county board of review shall be reimbursed by the county for their actual and necessary expenses incurred in the performance of their functions as members.

SECTION 17. ORS 308.355 is amended to read:

308.355. [Comparable sales figures] Data utilized by a county assessor in arriving at [assessed values] the values for farm use of [agricultural lands] farmland 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] farmland by the board of [equalization] property tax appeals under ORS 309.100.

SECTION 18. ORS 308.360 is amended to read:

308.360. Any group or organization representing owners of farm properties may petition the Department of Revenue under ORS 305.105 for a declaratory ruling with respect to rules [and regulations] promulgated under ORS 308.345 [to 308.365] and 308.350 and may obtain judicial review of [such] the declaratory ruling in the manner provided by ORS 305.445.

SECTION 19. ORS 308.365 is amended to read:

308.365. ORS 308.345 [to 308.365] and 308.350 shall be construed liberally to effectuate their intended purpose. However, except as expressly [set out in such sections] provided and to the extent necessary to carry out [such sections] their terms, nothing contained in [such sections] ORS 308.345 and 308.350 shall be construed to alter or modify, by implication or otherwise, any of the tax laws of this state.

(Maximum Assessed Value and

Assessed Value of Farmland)

SECTION 20. (1) The value for farm use, maximum assessed value and assessed value shall be determined under this section for both:

(a) Exclusive farm use zone farmland that qualifies for special assessment under section 5 of this 1999 Act; and

(b) Nonexclusive farm use zone farmland that qualifies for special assessment under section 7 of this 1999 Act.

(2) The value for farm use for each property subject to special assessment under this section shall equal the applicable value derived from the tables created pursuant to ORS 308.345 for the assessment year multiplied by the acreage of the property within the applicable class and area.

(3)(a) The maximum assessed value for property subject to special assessment under this section shall be determined as provided in this subsection.

(b) The county 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.

(4) Property subject to special assessment under this section shall have an assessed value for the assessment year equal to the lesser of the value per acre applicable to the property under subsection (2) of this section or under subsection (3) of this section and multiplying the value by the acreage of the property within the applicable class and area.

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

(a) A value for farm use as determined under subsection (2) of this section;

(b) A maximum assessed value as determined under the tables developed under subsection (3) of this section; and

(c) An assessed value as determined under subsection (4) of this section.

(Real Property Improvements and Machinery)

SECTION 21. Except for property that is exempt or specially assessed under other provisions of law, real property improvements and machinery or other personal property on, attached to or in any other respect connected with property subject to assessment under ORS 308.345 to 308.406, including property used in operations that constitute farm use operations, shall have an assessed value determined under ORS 308.146. Real property improvements and machinery and personal property may not be assessed as provided in ORS 308.345 to 308.406.

DISQUALIFICATION

(Exclusive Farm Use Zone Farmland)

SECTION 22. ORS 308.397 is amended to read:

308.397. [(1) The county assessor shall assess land within an exclusive 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 is used exclusively for farm use as defined in ORS 215.203 (2), at the special assessment provided in ORS 308.370 (1) and also shall enter on the assessment and tax roll the notation "potential additional tax liability," until the land becomes disqualified for such assessment.]

[(2)] (1) Land within an exclusive farm use zone shall be disqualified from special assessment under section 5 of this 1999 Act by:

(a) Removal of the special assessment by the assessor upon the discovery that the land is no longer being used as farmland; [or]

(b) Removal of the land from any exclusive farm use zone; or

(c) Establishing a nonfarm dwelling on the land under ORS 215.236.

[(3)] (2) Notwithstanding subsection [(2)(a)] (1)(a) of this section, the county assessor shall not disqualify land that has been receiving special assessment if the land is not being farmed because [of]:

(a) The effect of flooding [that] substantially precludes normal and reasonable farming during the year; or

(b) Severe drought conditions are declared under ORS 536.700 to 536.780.

(3)(a) Notwithstanding ORS 308.210, 311.405 or 311.410 or section 5 of this 1999 Act, if disqualification occurs as a result of the discovery that the land is no longer in farm use, then, regardless of when during the assessment year discovery is actually made, disqualification by the county assessor shall occur as of the January 1 assessment date of the assessment year in which discovery is made.

(b) Paragraph (a) of this subsection shall apply only if the notice of disqualification required under section 39 of this 1999 Act is mailed by the county assessor prior to August 15 of the tax year for which the disqualification of the land is asserted.

(4) Upon disqualification, additional taxes shall be determined as provided in sections 33 to 41 of this 1999 Act.

(Nonexclusive Farm Use Zone Farmland)

SECTION 23. ORS 308.390 is amended to read:

308.390. [(1) Upon approval of an application, the county assessor shall assess land approved under ORS 308.375 at the special assessment provided in ORS 308.370 (2) and shall also enter on the assessment and the tax roll the notation "potential additional tax liability" until the land is disqualified for special assessment under subsection (2) of this section.]

[(2)] (1) Nonexclusive farm use zone farmland qualified for special assessment under section 7 of this 1999 Act shall be disqualified from such special assessment [The county assessor shall disqualify land for special assessment approved under subsection (1) of this section] upon:

(a) Notification by the taxpayer to the assessor to remove the special assessment;

(b) Sale or transfer to an ownership making it exempt from ad valorem property taxation;

(c) Removal of the special assessment by the assessor upon the discovery that the land is no longer in farm use for failure to meet the income requirements under ORS 308.372 or is no longer in farm use; or

(d) The act of recording a subdivision plat [after September 9, 1971,] under the provisions of ORS chapter 92.

[(3)] (2) The county assessor shall not disqualify the land that has been receiving special assessment upon the sale or transfer to a new owner or transfer by reason of death of a former owner to a new owner if the land continues to be used [exclusively] solely for farm use [as defined in ORS 215.203 (2)].

[(4) The county assessor shall not disqualify land that has been receiving special assessment or deny approval of an application for special assessment solely because the land is included in a subdivision platted and recorded under ORS chapter 92.]

[(5)] (3) When, for any reason, the land or any portion thereof ceases to be used [exclusively] solely for farm use [as defined in ORS 215.203 (2)], the owner at the time of the change in use shall notify the assessor of [such] the change prior to the next January 1 assessment date.

[(6)] (4) If under subsection [(2)(d)] (1)(d) of this section, the county assessor disqualifies land for special assessment upon the act of platting the land, the land, or a part of the land, may be requalified for special assessment upon:

(a) Payment of all additional tax, interest or penalty that remains due and owing on the land;

(b) Submission by the owner of an application for special assessment under ORS 308.375;

(c) Meeting all of the qualifications for [special] farm use special assessment under [ORS 308.370 (2)] section 7 of this 1999 Act; and

(d) Meeting the requirements, if any, of applicable local government zoning ordinances with regard to minimum lot or parcel acreage for farm use.

[(7)] (5) The county assessor shall not disqualify land that has been receiving special assessment if the land is not being farmed because [of]:

(a) The effect of flooding [that] substantially precludes normal and reasonable farming during the year; or

(b) Severe drought conditions are declared under ORS 536.700 to 536.780.

(6)(a) Notwithstanding ORS 308.210, 311.405 or 311.410 or section 7 of this 1999 Act, if disqualification occurs as a result of the discovery that the land is no longer in farm use, then, regardless of when during the assessment year discovery is actually made, disqualification by the county assessor shall occur as of the January 1 assessment date of the assessment year in which discovery is made.

(7) Upon disqualification, additional taxes shall be determined as provided in sections 33 to 41 of this 1999 Act.

(Abatement)

SECTION 24. ORS 308.404 is amended to read:

308.404. (1) If on January 1 of any year any farmland assessed under [ORS 308.370 (2)] section 7 of this 1999 Act has become disqualified for farm use special assessment [as farm use] because of any gross income or other requirement of ORS 308.372 [and 308.407], the collection of the additional taxes [and interest] under [ORS 308.395] sections 33 to 41 of this 1999 Act shall be deferred, but only if each year for a period of five consecutive years (or such lesser number of years in which farm use assessment was in effect prior to disqualification) beginning on January 1 of the first year the land became so disqualified, the land is used as farmland ([which includes] including, for the purposes of this section, the growing of forest products). As the limited use is continued and completed each year, additional taxes [and interest] are abated on the basis of an abatement of one year's additional tax for each year of limited use beginning with the oldest year for which additional taxes are due for up to five years (or the number of years for which farm use assessment was in effect, whichever is less). Beginning on the January 1 the land became so disqualified the land shall be assessed at its assessed value under ORS 308.146 or as otherwise provided by law without regard to any special assessment laws.

(2) If at any time prior to the expiration of the five-year (or lesser) period specified in subsection (1) of this section the land is used for a higher and better use than farmland, the abatement process shall terminate, and there shall be added to the tax extended against the land on the next general property tax roll, (to be collected and distributed in the same manner as the remainder of the real property tax) the additional taxes [and interest] that still remain deferred and unabated under subsection (1) of this section.

(3) When land described in this section is used for a higher and better use than farmland during the five-year (or lesser) period described in subsection (1) of this section, the owner shall notify the county assessor before the following January 1 of the change in use. [If notice is not given, the assessor shall add a penalty of 20 percent of the amount computed under subsection (2) of this section to the total amount computed.]

(4) The amount determined to be due under this section may be paid to the tax collector prior to the completion of the next general property tax roll, pursuant to ORS 311.370.

SECTION 25. ORS 308.406 is amended to read:

308.406. If during the period specified in ORS 308.404, the farmland again meets the [test] gross income or other requirements of ORS 308.372 [and 308.407], the owner may apply to the assessor on or before April 1 of the next calendar year, in the manner provided in ORS 308.375, for farm use special assessment. If satisfied that the requirements of ORS 308.372 [and 308.407] have been met, the assessor shall restore farm use special assessment to the land. The potential additional taxes [and interest] for all years not already abated under ORS 308.404 shall continue as a potential liability against the land under ORS [308.395 and] 308.404 and section 35 of this 1999 Act, except that each oldest year of potential liability shall abate as the total of all other years of potential additional tax liability for prior years reaches five.

MISCELLANEOUS

SECTION 26. ORS 308.400 is amended to read:

308.400. [(1)] Any land that has received special assessment as [farmland pursuant to ORS 308.370 (1)] exclusive farm use zone farmland, has been used as a cemetery at any time between 1810 to 1950, contains fewer than 50 marked graves, is less than one acre in size and was issued a patent, whether recorded or unrecorded, before 1900 may be partitioned from a parcel that shall continue to qualify for special assessment. The parcel that continues in special assessment and the partitioned cemetery shall not be subject to the provisions of [ORS 308.399] section 34 of this 1999 Act as a result of partitioning under this section.

[(2) Notwithstanding the procedures set forth in ORS 376.155 to 376.200, a way of necessity for nonmotorized conveyance is established to any parcel that meets the criteria described in subsection (1) of this section.]

SECTION 27. ORS 308.401 is amended to read:

308.401. (1) Except as otherwise provided in subsection (2) of this section, the assessments and levies of the following taxing units and special districts shall not be imposed while [such lands remain] land is qualified for special assessment [for farm use] as exclusive farm use zone farmland under [ORS 308.370 (1)] section 5 of this 1999 Act:

(a) Sanitary districts formed under ORS 450.005 to 450.245.

(b) Domestic water supply districts formed under ORS chapter 264.

(2) Subsection (1) of this section does not apply to:

[(a) Benefit assessments or special ad valorem tax levies imposed prior to October 5, 1973.]

[(b)] (a) Benefit assessments or special ad valorem tax levies imposed upon homesites situated within a parcel of farm use land. As used in this paragraph, "homesite" means not more than one acre of land upon which are constructed nonfarm dwellings and appurtenances[.]; or

[(c)] (b) Benefit assessments or special ad valorem tax levies imposed subsequent to disqualification of lands for farm use special assessment under [ORS 308.370 (1)] section 5 of this 1999 Act.

SECTION 28. Sections 1 to 3, 5, 7, 9, 12, 13, 20 and 21 of this 1999 Act are added to and made a part of ORS 308.345 to 308.406.

SECTION 28a. ORS 308.345 to 308.406 are added to and made a part of new ORS chapter 308A.

FARM AND FOREST HOMESITES

(Definitions)

SECTION 29. As used in ORS 308.376 to 308.378:

(1) "Exclusive farm use zone" has the meaning given that term in section 2 of this 1999 Act.

(2) "Forestland" means forestland that is a parcel of land of more than 10 acres that has been zoned in the comprehensive plan for exclusive farm use, forest use or farm and forest use and that is, as of the assessment date for which value for the forest homesite is being determined:

(a) Land that has as its highest and best use the growing and harvesting of trees of a marketable species;

(b) Land that has been designated as forestland under ORS 321.257 to 321.381 or 321.805 to 321.825; or

(c) Land that has been classified under ORS 321.705 to 321.765.

(3) "Homesite" means land described in ORS 308.376, including all tangible improvements to the land under and adjacent to a dwelling and other structures, if any, that are customarily provided in conjunction with the dwelling.

(4) "Nonexclusive farm use zone farmland" has the meaning given that term in section 2 of this 1999 Act.

(5) "Owner" or "owners" means:

(a) The person who holds an estate in the homesite in fee simple or for life.

(b) Any one of tenants in common or tenants by the entirety, holding an estate in the homesite in fee simple or for life.

(c) Any person of legal age, duly authorized in writing to act on behalf of any person described in paragraph (a) or (b) of this subsection in filing an application for special assessment of nonexclusive farm use zone farmland.

(d) The guardian or conservator of an owner, or the executor or administrator of an owner's estate.

(e) The purchaser of the fee simple or life estate of an owner under a contract of sale.

SECTION 29a. Section 29 of this 1999 Act is added to and made a part of ORS 308.376 to 308.378.

(Qualification)

SECTION 29b. ORS 308.376 is amended to read:

308.376. (1) Land under a dwelling that is used in conjunction with the activities customarily carried on in the management and operation of forestland held or used for the predominant purpose of growing and harvesting trees of a marketable species shall qualify for special assessment under ORS 308.377.

(2) Land under dwellings located within an exclusive farm use zone and used in conjunction with farm use shall qualify for special assessment under ORS 308.377.

(3) Land under dwellings used in conjunction with the farm use of nonexclusive farm use zone farmland shall qualify for special assessment under ORS 308.377 if the farmland was operated as a part of a farm unit that produced more than one-half of the adjusted gross income of the owner or owners in the year prior to the year an application is filed under this section.

(4) For purposes of ORS 308.376 to 308.378, the use of a dwelling "in conjunction with the activities customarily carried on in the management and operation of forestland" includes but is not limited to use of the dwelling under circumstances as follows:

(a) The dwelling is owned and occupied by a person who is engaged in the operation of the forestland, is occupied by an employee of the owner of forestland who is employed in connection with the forest operation or is occupied by a person who is involved in the forest operation; or

(b) The dwelling is owned and occupied by a person who is no longer engaged in the forest operation but:

(A) Whose principal source of income is derived from the harvest of timber from the forestland on which the dwelling is located;

(B) Who owned and occupied the dwelling, and was engaged in the forest operation, during the five consecutive tax years before the tax year in which engagement in the forest operation ended; and

(C) Who has owned and occupied the dwelling continuously during the period since engagement in the forest operation ended. For purposes of this subparagraph, "continuous" includes any period in which the dwelling is unoccupied because of health, vacation or other reason, if during the period the dwelling is not leased or rented to another person.

(5) For purposes of ORS [308.372 (3), 308.377 and] 308.376 to 308.378, the use of a dwelling "in conjunction with farm use" of farm use land includes but is not limited to use of the dwelling under circumstances as follows:

[(1)] (a) The dwelling is owned and occupied by a person who is engaged in the operation of the farm use land, is occupied by an employee of the owner of farm use land who is employed in connection with the farming operation or is occupied by a person who is involved in the farming operation; or

[(2)] (b) The dwelling is owned and occupied by a person who is no longer engaged in the farm operation on the farm use land but:

[(a)] (A) Whose principal source of income is from the farm operation on the farm use land on which the dwelling is located;

[(b)] (B) Who owned and occupied the dwelling, and was engaged in the farm operation, during the five consecutive tax years before the tax year in which engagement in the farm operation ended; and

[(c)] (C) Who has owned and occupied the dwelling continuously during the period since engagement in the farm operation ended. For purposes of this [paragraph] subparagraph, "continuous" includes any period in which the dwelling is unoccupied [due to] because of health, vacation or other reason, if during the period the dwelling is not leased or rented to another person.

(6)(a) In order for land described in subsection (3) of this section to qualify for assessment under ORS 308.376 to 308.378, the owner or owners shall file an application with the county assessor on or before April 15 of each year the assessment is desired. The application shall be made on forms prepared by the Department of Revenue and supplied by the assessor and shall include any information as may be reasonably required to determine the entitlement of the applicant, including copies of applicable state income tax returns. All information provided, including determinations made under administrative and court proceedings where entitlement is in issue, shall be confidential information of the assessor's office and shall be used only for purposes of this subsection.

(b) There shall be attached to each application an affidavit or affirmation from the applicant providing that the statements contained in the application are true.

(Maximum Assessed Value and

Assessed Value of Homesites)

SECTION 30. ORS 308.377 is amended to read:

308.377. (1) The maximum assessed value and assessed value of a homesite shall be determined as provided in this section.

(2) A homesite shall have an assessed value for ad valorem property tax purposes for the assessment year equal to the lesser of the homesite's maximum assessed value or homesite value.

(3) The homesite value for purposes of ORS [308.345, 308.372 and this section is:] 308.376 to 308.378 shall equal the real market value [as provided in ORS 308.205 for] of the bare land of the total parcel and contiguous acres under same ownership, as determined under ORS 308.205, divided by the number of acres in the total parcel and contiguous acres under the same ownership, plus the lesser of:

(a) $4,000; or

(b) The depreciated replacement cost of land improvements necessary to establish the homesite[, whichever is less].

(4) For the purposes of establishing a homesite value, the value of one acre of land for each homesite, as determined in subsection (3) of this section shall be used.

(5) The homesite's maximum assessed value shall equal 103 percent of the property's maximum assessed value for the previous assessment year.

(6) For the first assessment year for which property constitutes a homesite under this section, the homesite's maximum assessed value shall equal the homesite's value as determined under subsection [(2)] (3) of this section multiplied by the ratio of average maximum assessed value to real market value of the residential property class in the county.

[(7) As used in this section, "homesite" means the land, including all tangible improvements to the land and all intangible assets to the land, under and adjacent to a dwelling and other structures, if any, which are customarily provided in conjunction with the dwelling.]

(Disqualification)

SECTION 31. ORS 308.378 is amended to read:

308.378. (1) A homesite shall be disqualified from assessment under ORS 308.377 and shall be assessed at the assessed value under ORS 308.146 if the dwelling:

(a) Is not being used in conjunction with the activities customarily carried on in the management and operation of forestland held or used for the predominant purpose of growing and harvesting trees of a marketable species; or

[(a)] (b)(A) Is not being used in conjunction with farm use; and

[(b)] (B) Is used for a nonfarm purpose; however, vacancy does not constitute a change in use.

(2) If a homesite becomes disqualified from special assessment under the provisions of subsection (1) of this section, except for [partition as allowed by ORS 215.263 (4)] establishing a nonfarm dwelling pursuant to ORS 215.236, no additional tax shall be imposed [under ORS 308.395 or 308.399 upon the owner of that land] following disqualification. The remaining qualifying portion of the parcel shall be valued as specially assessed.

(3) If the owner establishes a nonfarm dwelling in an exclusive farm use zone under ORS 215.236, additional taxes shall be imposed as provided in sections 33 to 41 of this 1999 Act.

(Miscellaneous)

SECTION 32. (1) ORS 308.376 to 308.378 are added to and made a part of new ORS chapter 308A.

(2) Notwithstanding any other provision of law, ORS 308.376 to 308.378 shall not be considered to have been added to or made a part of ORS 308.345 to 308.406, or any series therein, for the purpose of statutory compilation or for the application of definitions, penalties or administrative provisions applicable to statute sections in that series.

ADDITIONAL TAXES, PROCEDURES

APPLICABLE TO CERTAIN LAND

SPECIAL ASSESSMENT PROGRAMS

(Additional Taxes)

SECTION 33. As used in sections 33 to 41 of this 1999 Act:

(1) "Disqualification" includes the removal of forestland designation under ORS 321.359 or 321.820 or the declassification from Western Oregon Small Tract Optional Tax classification under ORS 321.760.

(2) "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 under ORS 268.390 (3).

SECTION 34. (1) This section applies to land upon the land's disqualification from special assessment under any of the following sections:

(a) Exclusive farm use zone farmland under ORS 308.397;

(b) Nonexclusive farm use zone farmland under ORS 308.390;

(c) Western Oregon designated forestland under ORS 321.359;

(d) Eastern Oregon designated forestland under ORS 321.820;

(e) Western Oregon Small Tract Optional Tax classification under ORS 321.760; or

(f) Wildlife habitat open space use assessment under ORS 215.808.

(2) Following a disqualification listed in subsection (1) of this section, an additional tax shall be added to the tax extended against the land on the next assessment and tax roll, to be collected and distributed in the same manner as other ad valorem property tax moneys. The additional tax shall be equal to the difference between the taxes assessed against the land and the taxes that would otherwise have been assessed against the land, for each of the number of years determined under subsection (3) of this section.

(3) The number of years for which additional taxes shall be calculated shall equal the lesser of the number of consecutive years the land had qualified for the special assessment program for which disqualification has occurred or:

(a) Ten years, in the case of exclusive farm use zone farmland, but only if the land, immediately following disqualification, remains outside an urban growth boundary;

(b) Ten years, in the case of wildlife habitat open space use assessment land within an exclusive farm use zone, but only if the land, immediately following disqualification, remains outside an urban growth boundary; or

(c) Five years, in the case of:

(A) Nonexclusive farm use zone farmland;

(B) Western Oregon designated forestland;

(C) Eastern Oregon designated forestland;

(D) Western Oregon Small Tract Optional Tax classified forestland;

(E) Exclusive farm use zone farmland that is not described in paragraph (a) of this subsection; or

(F) Wildlife habitat open space use special assessment land that is not described in paragraph (b) of this subsection.

(4) The additional taxes described in this section shall be deemed assessed and imposed in the year to which the additional taxes relate.

(5) If the disqualification of the land is the result of the sale or transfer of the land to an ownership making the land exempt from ad valorem property taxation, the lien for additional taxes shall attach as of the day preceding the sale or transfer.

(6) The amount determined to be due under this section may be paid to the tax collector prior to the time of the next general property tax roll, pursuant to the provisions of ORS 311.370.

(7) If additional taxes are imposed under this section as a result of the disqualification of Western Oregon Small Tract Optional Tax classified forestland, the following amounts shall be added to and considered a part of the additional taxes otherwise due under this section, to be collected in the same manner in which additional taxes are collected:

(a) The amount of privilege taxes that would have been payable under ORS 321.257 to 321.322, during the five years immediately preceding the extension of additional taxes on the tax roll; and

(b) Interest on the amounts of taxes added pursuant to paragraph (a) of this subsection at the rate of six percent a year from the date at which such increased taxes would have been payable if the forestland had been valued without regard to ORS 321.720.

(8) The Department of Revenue shall provide the amounts described in subsection (7) of this section to the county assessor.

SECTION 35. (1) Notwithstanding that land may have been disqualified from special assessment, the additional taxes described under section 34 of this 1999 Act shall not be imposed and shall remain a potential tax liability if, as of the date the disqualification is taken into account on the assessment and tax roll, the land is any of the following:

(a) Disqualified exclusive farm use zone farmland or nonexclusive farm use zone farmland that:

(A) Is not being used as farmland; and

(B) Is not being used for industrial, commercial, residential or other use that is incompatible with a purpose to return the land to farm use.

(b) Acquired by a governmental agency or body as a result of an exchange of the land for land of approximately equal value held by the governmental agency or body.

(c) Acquired and used for natural heritage purposes and all of the following additional requirements are met:

(A) The land is registered under ORS 273.581 as a natural heritage conservation area;

(B) The land is acquired by a private nonprofit corporation;

(C) The land is retained by the corporation, or transferred to the state by the corporation, for the purpose of educational, scientific and passive recreational use consistent with conservation of the ecological values and natural heritage elements of the area;

(D) If the land is retained by the corporation, it remains open to the public without charge for the uses described in subparagraph (C) of this paragraph; and

(E) The land is managed pursuant to a voluntary management agreement under ORS 273.581 (5).

(d) Qualified for special assessment under:

(A) Section 5 of this 1999 Act, relating to farm use special assessment of land in an exclusive farm use zone;

(B) Section 7 of this 1999 Act, relating to farm use special assessment of nonexclusive farm use zone farmland;

(C) ORS 321.358, relating to classification as designated forestland in western Oregon;

(D) ORS 321.730, relating to classification as Western Oregon Small Tract Optional Tax forestland;

(E) ORS 321.815, relating to classification as designated forestland in eastern Oregon; or

(F) ORS 215.808, relating to wildlife habitat open space use assessment.

(e) Declassified Western Oregon Small Tract Optional Tax forestland that is considered to be western Oregon designated forestland under ORS 321.347 (4).

(f) Disqualified nonexclusive farm use zone farmland, to the extent the additional taxes are deferred or abated as provided in ORS 308.404.

(2) In any case where the additional tax is deferred under the provisions of this section but may subsequently be imposed under section 37 of this 1999 Act, the county assessor shall continue to enter the notation "potential additional tax liability" on the assessment and tax roll.

SECTION 36. Notwithstanding that land may have been disqualified from special assessment, no additional taxes may be imposed under section 34 of this 1999 Act if, as of the date the disqualification is taken into account on the assessment and tax roll, the land is any of the following:

(1) Acquired by a governmental agency as a result of the lawful exercise of the power of eminent domain or the threat or imminence thereof, except that in the case of disqualified forestland, only if acquisition was for use as a park or recreation area.

(2) Acquired by purchase, agreement or donation under ORS 390.121 (relating to State Parks and Recreation Commission acquisitions).

(3) Acquired by a city, county, metropolitan service district created under ORS chapter 268 or park and recreation district organized under ORS chapter 266 for public recreational purposes or for the preservation of scenic or historic places.

(4) Acquired for wildlife management purposes under ORS 496.146.

(5) Public property that was leased or rented to a taxable owner as described in ORS 307.110 at the time of disqualification, and the reason for the disqualification was the termination of the lease under which the land was assessed.

(6) Land that ceases to be located within the boundaries of an exclusive farm use zone as the result of a change in the boundaries of the zone or removal of the zone following an action by the governing body of the county or city that:

(a) Was not requested or initiated by the owner of the land; or

(b) Was requested by:

(A) The State Parks and Recreation Department for public park purposes under ORS 390.121; or

(B) The State Fish and Wildlife Commission for wildlife management purposes under ORS 496.146.

(7) Declassified as Western Oregon Small Tract Optional Tax forestland under ORS 321.760 (1)(c) and (d) because:

(a) The State Forester has determined that the predominant use of the land is for the production of cultured Christmas trees; or

(b) Notwithstanding ORS 321.727, the land is transferred to an owner who, upon completion of the transfer, has a total ownership of forestland in western Oregon of less than 10 acres.

SECTION 37. (1) If the disqualification of land from special assessment results in the deferral of additional taxes under section 35 of this 1999 Act:

(a) The amount of deferred additional taxes shall be determined as provided for in this section in lieu of section 34 of this 1999 Act; and

(b) The deferred additional taxes shall be added to the assessment and tax roll for the year in which the event described in subsections (2) to (6) of this section is first taken into account for property tax purposes, to be collected and distributed in the same manner as other ad valorem property taxes.

(2) If additional taxes are deferred under section 35 (1)(a) of this 1999 Act (relating to compatible nonuse of farmland) and subsequently the land is changed to an industrial, commercial, residential or other use incompatible with a return of the land to farm use, then:

(a) The amount of additional tax due for each year to which the additional tax applies shall be the difference between the taxes assessed against the land and the taxes that would have been assessed against the land in that year had the land not been in special assessment; and

(b) The number of years for which the additional tax shall be collected shall be the total number of years (whether or not continuous) that the farm use special assessment was in effect for the land, not to exceed:

(A) In the case of disqualified exclusive farm use zone farmland located outside an urban growth boundary, 10 tax years, or such lesser number of years, corresponding to the number of years of farm use zoning applicable to the property; or

(B) In the case of all other farmland disqualified from farm use special assessment, five tax years.

(3)(a) If additional taxes are deferred under section 35 (1)(b) of this 1999 Act (relating to government exchange of land), additional taxes shall be collected when the land acquired as a result of the exchange is disqualified from special assessment. The additional taxes shall equal the total amount of additional taxes under section 34 (2) of this 1999 Act attributable to the number of years the land transferred to the governmental agency or body received the special assessment before the exchange plus the number of years, if any, the land acquired from the governmental agency or body received a special assessment after the exchange.

(b) The total number of years taken into account shall not exceed the maximum number of years for which additional taxes may be collected under the provision of law applicable to either the exchanged land (immediately before the exchange) or the acquired land, whichever is greater.

(4) If additional taxes are deferred under section 35 (1)(c) of this 1999 Act (relating to natural heritage), the additional taxes that would have been imposed under section 34 of this 1999 Act at the time of disqualification shall be collected when the land is no longer used as described in section 35 (1)(c) of this 1999 Act.

(5) If additional taxes are deferred under section 35 (1)(d) of this 1999 Act (relating to change in special assessment), the additional taxes that would have been collected at the time of disqualification shall be collected at the time the land is disqualified from any other special assessment law listed in section 35 (1)(d) of this 1999 Act. The total amount of additional tax shall be calculated as follows:

(a) The amount of the additional tax due for each year to which the additional tax applies shall be the difference between the taxes assessed against the land and the taxes that would have been assessed against the land in that year had the land not been in special assessment; and

(b) The number of years for which the additional tax shall be collected shall be the total number of continuous tax years that a special assessment listed in section 35 (1)(d) of this 1999 Act was in effect for the land, not to exceed:

(A) Five tax years; or

(B) If the property had, within the past 10 tax years, been disqualified from a special assessment program described in section 34 (3)(a) or (b) of this 1999 Act and had been continuously subject to special assessment, then 10 tax years. However, the number of continuous preceding years of special assessment under the special assessment programs listed in section 34 (3)(c) of this 1999 Act that may be taken into consideration for purposes of computing the additional tax may not exceed five years.

(6) In determining the additional tax under subsection (5) of this section:

(a) The number of continuous preceding years of special assessment counted shall not include those years in which the land was specially assessed under any of the special assessment laws listed in section 35 (1)(d) of this 1999 Act prior to a disqualification of the land for special assessment as exclusive farm use zone farmland under the conditions described in section 36 (6) of this 1999 Act.

(b) The number of continuous preceding years of special assessment counted shall not include those years of special assessment under ORS 321.705 to 321.765 if the land was disqualified under the conditions described in section 36 (7) of this 1999 Act.

SECTION 38. (1) Notwithstanding that additional taxes otherwise due under section 34 of this 1999 Act are deferred under section 35 of this 1999 Act, the additional taxes may be imposed at any time after disqualification of the property from special assessment if the property owner so requests.

(2) A request for imposition of tax under this section shall be made in writing to the county assessor.

(3) If the request for imposition of tax under this section is made prior to August 15 of the assessment year, the additional tax shall be added to the current general property tax roll to be collected and distributed in the same manner as other real property tax. If the request for imposition of tax is made on or after August 15 of the assessment year, the additional tax shall be added to the next general property tax roll to be collected in the same manner as other ad valorem property taxes.

(Disqualification Notification Procedures)

SECTION 39. (1) The county assessor shall send notice as provided in this section if land is disqualified under any of the following special assessment programs:

(a) Farm use special assessment under ORS 308.345 to 308.406.

(b) Farm or forest homesite special assessment under ORS 308.376 to 308.378.

(c) Western Oregon designated forestland special assessment under ORS 321.347, 321.348, 321.353, 321.358 and 321.359.

(d) Eastern Oregon designated forestland special assessment under ORS 321.805 to 321.825.

(2) Notwithstanding that a change in use described in this section is not a disqualification, the assessor shall send notice as provided in this section when the highest and best use of land changes from forestland to a different highest and best use.

(3) Within 30 days after the date that land is disqualified from special assessment, the assessor shall notify the taxpayer in writing of the disqualification and shall state the reason for the disqualification.

(4) Following receipt of the notification, the taxpayer may appeal the assessor's determination to the Oregon Tax Court within the time and in the manner provided in ORS 305.404 to 305.560.

(5)(a) When any land has been granted special assessment under any of the special assessment laws listed in subsection (1) of this section and the land is disqualified from such special assessment, the county assessor shall furnish the owner with a written explanation summarizing:

(A) Section 35 (1)(d) of this 1999 Act (relating to change in special assessment);

(B) ORS 321.795 (relating to change in use to open space use special assessment for certain golf courses);

(C) The administrative act necessary under section 41 of this 1999 Act to change the property to another classification described in this paragraph; and

(b) The written explanation required by this subsection shall be given in conjunction either with the notice of disqualification required under this section or with an order or notice of disqualification otherwise provided by law.

(c)(A) If no notice of disqualification is required to be made by this section or other provision of law, the written explanation required by this subsection shall be made by the county assessor.

(B) A written explanation made under this paragraph shall be made by the assessor within 30 days of the effective date of the disqualification.

(6) Subsections (1) to (5) of this section do not apply if the reason for the disqualification is:

(a) The result of a request for disqualification by the property owner; or

(b) Because the property is being acquired by a government or tax-exempt entity.

SECTION 40. (1) Upon receipt of a notice of declassification of Western Oregon Small Tract Optional Tax forestland issued by the State Forester under ORS 321.760, the county assessor shall prepare a statement of the total amount of additional tax due under section 34 of this 1999 Act as a result of the declassification.

(2) The assessor shall mail or deliver the statement described in this section to the owner within 30 days of the receipt of the notice of declassification from the State Forester.

(Change of Special Assessment)

SECTION 41. (1)(a) In order for additional taxes imposed under section 34 of this 1999 Act to be deferred under section 35 (1)(d) of this 1999 Act (relating to change in special assessment), the owner must file an application or claim for classification under another special assessment law.

(b) If the disqualification is effective prior to July 1 in any year, the owner shall file the required claim or application on or before August 1 of that year.

(c) If the disqualification is effective on or after July 1 in any year, the county taxing authorities shall continue the classification on the current assessment and tax rolls, and the owner shall file the required claim or application in the next calendar year in accordance with the laws governing the particular special assessment program.

(2) If an owner of land disqualified under one of the special assessment laws listed in section 35 (1)(d) of this 1999 Act seeks to qualify for farm use special assessment of nonexclusive farm use zone farmland under section 7 of this 1999 Act, the owner shall have five years, beginning with the first year in which application is made under this section, to qualify for the two-year farm use requirement of section 7 of this 1999 Act and the income requirement under ORS 308.372.

(3) Notwithstanding subsection (1) of this section, an owner may make application under this section at any time within 30 days of the date notice of disqualification is sent by the assessor under section 39 of this 1999 Act or declassification certification is made by the State Forester under ORS 321.760.

SECTION 42. ORS 321.795 is amended to read:

321.795. (1) Land specially assessed under any of the special assessment laws listed in [ORS 321.960 (2) beginning on or after January 1, 1982,] section 35 (1)(d) of this 1999 Act shall be changed to [special] open space use special assessment under ORS 308.740 to 308.790 if:

(a) Application for [special] open space use special assessment is or has been made under ORS 308.750;

(b) The land qualifies for [such special] open space use special assessment;

(c) The application for [special] open space use special assessment is or has been approved under ORS 308.755 and 308.760;

(d) The open space use is for a golf course open to the general public with or without payment of fee or charge; and

(e) All or a portion of the land is within or is contiguous to an urban growth boundary [as defined in ORS 308.399].

(2) Land described in subsection (1) of this section shall not, upon the change from farm or forest use to open space use, be subject to any of the additional taxes[, penalties or interest] ordinarily applicable when land specially assessed under one of the special assessment laws listed under [ORS 321.960 (2)] section 35 (1)(d) of this 1999 Act is disqualified, declassified or otherwise removed from such special assessment.

(3) When land that has been changed from special assessment as farm or forest land to [special] open space use special assessment under subsections (1) and (2) of this section is later withdrawn or otherwise removed from [such] open space use special assessment, all the provisions of ORS 308.740 to 308.790 shall apply except that there shall be added to the amount of additional taxes imposed under ORS 308.770 or 308.775 and computed under ORS 308.760 (3), the amount of the additional taxes[, interest and penalties] that, except for subsections (1) and (2) of this section, would have been added at the time of the change. However, in making the computation of the amount to be added under this subsection, the number of years specified in [ORS 308.395, 308.399, 321.372, 321.760 (3)(a) and (b), 321.825 or 321.960, whichever is applicable,] section 34 of this 1999 Act shall be reduced by the number of continuous years of open space use special assessment in effect for the land pursuant to the change. At the time of the change to open space use and each year thereafter, the assessor shall determine and note upon the assessment and tax rolls the added amount of potential additional taxes, if any, that may become due under this subsection.

(4) For purposes of ORS 308.780 and in construing any other provision of ORS 308.740 to 308.790, the amount of additional taxes [and interest] added under subsection (3) of this section shall be treated as additional taxes imposed under ORS 308.770 or 308.775.

(5) Upon receipt of any application for [special] open space use special assessment under ORS 308.740 to 308.790, [in addition to the notice required under ORS 308.025,] the public official or agency shall notify the owner of the provisions of this section.

SECTION 43. ORS 308.373 is amended to read:

308.373. (1) If land specially valued under [ORS 308.370 (1) or (2),] section 5 or 7 of this 1999 Act or ORS 321.272 (2), 321.420 or 321.720 is acquired by a governmental agency or body as a result of an exchange of the land for land of approximately equal value held by the governmental agency or body[, then notwithstanding ORS 308.390 (2)(b), 308.397, 321.359 (1)(a)(B), 321.760 (2) or 321.820 (1)(a)(B), no additional taxes, interest or penalties shall be imposed under ORS 308.395, 308.399, 321.372, 321.760 (3), 321.825 or 321.960 on account of the exchange. As of the day preceding the date of the exchange, the potential additional tax liability shall cease to exist as a contingent lien or liability against the property acquired by the governmental agency or body as a result of the exchange and shall be transferred to and be noted on the assessment and tax roll as potential additional tax liability against the land acquired by the other party to the exchange.]

[(2) If, upon an exchange described under subsection (1) of this section,] and the land acquired from the governmental agency or body is not farm use land located within an exclusive farm use zone or is not land, the highest and best use of which is the growing and harvesting of trees of a marketable species, the owner shall make application for special valuation as farm or forest land in the manner provided under ORS 308.375, 321.358, 321.730 or 321.815, whichever is applicable, as follows:

(a) If the exchange takes place prior to July 1, the owner shall file the application on or before August 1.

(b) If the exchange takes place on or after July 1, the owner shall file the application on or before April 1 of the following year.

(2) Failure to file an application as required under this [subsection] section, or failure to otherwise meet the qualification for special valuation under the special assessment law for which application is made shall disqualify the land [for purposes of ORS 308.395, 308.399, 321.372, 321.760 or 321.825, whichever is applicable] under section 34 of this 1999 Act. However, the amount of additional taxes [and interest] imposed upon the disqualification under this subsection shall be equal to those that would have been imposed against the land transferred to the governmental agency or body on account of the exchange were it not for [subsection (1) of this] section 35 (1)(b) of this 1999 Act.

[(3) For purposes of computing additional taxes and interest under ORS 308.395, 308.399, 321.372, 321.760, 321.825 or 321.960 upon subsequent disqualification of land acquired as a result of an exchange described in subsection (1) of this section, the number of years of special assessment shall be equal to the number of years the land transferred to the governmental agency or body received the special assessment before the exchange plus the number of years, if any, the land acquired from the governmental agency or body received a special assessment after the exchange. In all other respects, the additional taxes and interest shall be as determined under ORS 308.395, 308.399, 321.372, 321.760, 321.825 or 321.960, whichever is applicable.]

[(4)] (3) If an application filed under [subsection (2) of] this section is for classification for [special] farm use special assessment under [ORS 308.370 (2)] section 7 of this 1999 Act, the owner shall have five years beginning with the first year of classification to meet the income requirements under ORS 308.372 and need not meet the two-year farm use requirements of [ORS 308.370 (2)] section 7 of this 1999 Act.

[(5)] (4) This section shall not apply to an exchange of forestland to which [ORS 321.359 (1)(d) or 321.820 (1)(d)] section 35 (1)(b) of this 1999 Act (relating to governmental exchange) applies.

SECTION 44. ORS 308.025 is amended to read:

308.025. (1) Where any property has been granted special assessment for the purposes of property taxation under any of the special assessment laws listed in subsection (2) of this section, and the owner or other qualified person applies for a change in the classification under another special assessment law, [from under one special assessment law to another, the public official or agency responsible for the administrative acts necessary to change the property to its requested new classification, with the assistance of any public official or agency that would be required to compute any additional taxes or penalty resulting from the change in classification, shall first send to the applicant by certified mail a notice that taxes or a penalty might be owing and due by reason of the change in classification, and that the applicant will have 30 days after mailing of the notice within which to withdraw the application, if the applicant so desires.] the applicant shall have 30 days thereafter within which to withdraw the application, by giving written notice to the public official or agency [that sent the notice, and no change in classification shall thereafter be made] to whom the applicant applied for the change in classification. If no [such] notice of withdrawal is given by the applicant, the application shall be acted upon and the change in classification made, as otherwise provided by law.

(2) [The provisions of subsection (1) of this section shall apply with respect] This section applies to the following special assessment laws:

(a) ORS [215.203, 215.213, 215.283, 215.284, 308.345 to 308.365 and 308.370 to 308.407] 308.345 to 308.406 (relating to special assessment at value for farm use).

(b) ORS 321.347, 321.348, 321.353, 321.358[,] and 321.359 [and 321.362] (relating to special assessment as designated forestland in western Oregon).

(d) ORS 321.705 to 321.765 (relating to classification as Western Oregon Small Tract Optional Tax forestland).

[(e) ORS 308.670 (relating to special assessment as single family residence).]

(e) [(f)] ORS 308.740 to 308.790 (relating to classification as open space land).

[(g) ORS 358.475 to 358.545 (relating to classification as historic property).]

(f) [(h)] ORS 308.792 to 308.803 (relating to designation as riparian land).

(Miscellaneous)

SECTION 45. (1) Sections 33 to 41 of this 1999 Act are added to and made a part of new ORS chapter 308A.

(2) ORS 308.025, 308.373 and 321.795 are added to and made a part of sections 33 to 41 of this 1999 Act.

SECTION 45a. ORS chapter 308A is added to and made a part of ORS chapters 305 to 324.

CONFORMING AMENDMENTS

SECTION 46. Notwithstanding any other provision of ORS 376.150 to 376.200, a way of necessity for nonmotorized conveyance is established to any parcel that meets the criteria described in ORS 308.400.

SECTION 47. Section 46 of this 1999 Act is added to and made a part of ORS 376.150 to 376.200.

SECTION 48. When any property has been classified and assessed as historic property under ORS 358.475 to 358.545 and the owner or other qualified person applies for a change in the classification under another special assessment program, the applicant shall have 30 days thereafter within which to withdraw the application, by giving written notice to the public official or agency to whom the applicant applied for the change in classification. If no notice of withdrawal is given by the applicant, the application shall be acted upon and the change in classification made, as otherwise provided by law.

SECTION 49. Section 48 of this 1999 Act is added to and made a part of ORS 358.475 to 358.545.

SECTION 50. ORS 308.801 is amended to read:

308.801. (1) Land [that is being assessed under any of the special assessment laws listed under ORS 308.025 (2)(a) to (d) and (f), including ORS 308.370 (1),] may be designated as riparian upon application and approval of the application under ORS 308.794 and 308.795 if the land is being assessed under any of the following special assessment programs:

(a) ORS 308.345 to 308.406 (relating to farm use special assessment).

(b) ORS 321.347, 321.348, 321.353, 321.358 and 321.359 (relating to special assessment as designated forestland in western Oregon).

(c) ORS 321.805 to 321.825 (relating to special assessment as designated forestland in eastern Oregon).

(d) ORS 321.705 to 321.765 (relating to classification as Western Oregon Small Tract Optional Tax forestland).

(e) ORS 308.740 to 308.790 (relating to classification as open space land).

(2) Notwithstanding the provisions of any of the special assessment laws listed [under ORS 308.025 (2)(a) to (d) and (f), including 308.370 (1)] in subsection (1) of this section, the additional taxes, penalties and interest that would be due as a result of a change of designation to riparian shall be abated and shall not be collected.

SECTION 51. ORS 321.359 is amended to read:

321.359. (1)(a) When land has once been designated as forestland either as a result of an application being filed therefor or through the application of ORS 321.347 (3) or (4), it shall be valued as such until the assessor removes the forestland designation under paragraph (b) of this subsection.

(b) The county assessor shall remove the forestland designation upon:

(A) Notification by the taxpayer to the assessor to remove the designation;

(B) Sale or transfer to an ownership making it exempt from ad valorem property taxation;

(D) The act of recording a subdivision plat under ORS chapter 92.

[(c) Within 30 days after removal of a designation of forestland, the assessor shall so notify in writing the taxpayer and shall specify the reasons for the removal.]

[(d) Paragraph (b) of this subsection does not apply to any forestland that ceases to be devoted to forestland use because it is transferred to a government entity in exchange for other forestland located within the State of Oregon.]

(2) A taxpayer whose application filed under ORS 321.358 has been denied in whole or in part, or a taxpayer whose forestland has had the designation thereof removed in whole or in part, may appeal to the tax court within the time and in the manner provided in ORS 305.404 to 305.560.

(3) If, under subsection (1)(b)(D) of this section, the county assessor removes the forestland designation upon the act of recording a subdivision plat, the land, or a part of the land, may be requalified for forestland designation upon:

(a) Payment of all additional tax and applicable interest that remains due and owing on the land;

(b) Submission by the owner of an application for designation as forestland as provided in ORS 321.257 to 321.381;

(d) Meeting the requirements, if any, of applicable local government zoning ordinances with regard to minimum lot or parcel acreage for forest use.

SECTION 52. ORS 321.390 is amended to read:

321.390. [(1) ORS 321.274 and the amendments to ORS 215.203, 307.320 and 321.267 by sections 5 to 7, chapter 887, Oregon Laws 1989, apply on or after January 1, 1990, and to timber harvested on or after January 1, 1990.]

[(2) Nothing in the amendments to ORS 215.203, 307.320 or 321.267 by sections 5 to 7, chapter 887, Oregon Laws 1989, shall be construed to subject any land to the disqualification penalties imposed under ORS 321.372 or 321.960 or other law. However, if land described in ORS 321.267 (1)(e), as amended by section 5, chapter 887, Oregon Laws 1989, becomes disqualified for special assessment at its value for farm use on or after January 1, 1990, or on or after that date is changed to assessment under another law under ORS 321.960 and is thereafter declassified or disqualified for special assessment, then any years prior to 1990 for which special assessment under a law listed under ORS 321.960 (2) was in effect for the land shall be included in determining the additional taxes due to disqualification or declassification as otherwise provided by law.]

(1) Land described in ORS 321.267 (1)(e) (relating to hardwood timberland, including hybrid cottonwood timberland) shall be assessed as farm use land under ORS 308.345 to 308.406, unless the owner of the land makes the election under ORS 321.274.

[(3)(a)] (2)(a) [If on January 1, 1990, or upon any date thereafter,] If land is or becomes land described under ORS 321.267 (1)(e) and the land is not located within an exclusive farm use zone, the owner shall make application for special valuation as farm use land in the manner provided under ORS 308.375, as follows:

(A) If the change in use takes place on or after July 1, the owner shall file the application on or before April 1 of the following year.

(B) If the change in use takes place prior to July 1, the owner shall file the application on or before August 1 of the same year.

(b) If an application is filed as provided under this subsection, the owner shall have seven years beginning with the first year of classification to meet the income requirements of ORS 308.372 and need not meet the two-year farm use requirements of [ORS 308.370 (2)] section 7 of this 1999 Act.

SECTION 53. ORS 321.820 is amended to read:

321.820. (1)(a) When land has once been designated as forestland as a result of an application being filed therefor it shall be valued as such until the county assessor removes the forestland designation under paragraph (b) of this subsection.

(b) The county assessor shall remove the forestland designation upon:

(A) Notification by the taxpayer to the assessor to remove the designation;

(B) Sale or transfer to an ownership making it exempt from ad valorem property taxation;

(D) The act of recording a subdivision plat under ORS chapter 92.

[(c) Within 30 days after removal of a designation of forestland, the assessor shall so notify in writing the taxpayer and shall specify the reasons for the removal.]

(2) A taxpayer whose application filed under ORS 321.815 has been denied in whole or in part, or a taxpayer whose forestland has had the designation thereof removed in whole or in part, may appeal to the Oregon Tax Court within the time and in the manner provided in ORS 305.404 to 305.560.

(a) Payment of all additional tax and interest that remains due and owing with respect to the land;

(b) Submission by the owner of an application for designation as forestland as provided in this section;

(d) Meeting the requirements, if any, of applicable local government zoning ordinances with regard to minimum lot or parcel acreage for forest use.

SECTION 54. ORS 321.822 is amended to read:

321.822. (1)[(a)] Notwithstanding ORS 308.210, 311.405 or 311.410 but subject to [paragraph (b) of this subsection] subsection (2) of this section, removal under ORS 321.820 (1)(b)(C) by the county assessor of land from designation as forestland for the reason that the land is no longer forestland shall occur as of the [July] January 1 assessment date of the tax year in which the county assessor discovers that the land is no longer forestland.

[(b)] (2) [Paragraph (a) of this subsection] This section shall apply only if notice of removal is mailed by the county assessor prior to August 15 of the tax year for which the removal of the land is asserted.

[(2) Notwithstanding ORS 321.960 (3), if, pursuant to subsection (1) of this section, land is removed from designation as forestland for a tax year, application may be made for purposes of ORS 321.960 at any time within 30 days after the date on the notice of removal of designation.]

SECTION 55. ORS 321.805 is amended to read:

321.805. As used in ORS 321.805 to 321.825, unless the context requires otherwise:

(1) "Forestland" means land east of the summit of the Cascade Mountains which is not assessed as farmland pursuant to ORS 308.345 to [308.365 and 308.370 to 308.407] 308.406 and is not assessed by the Department of Revenue pursuant to ORS 308.505 to 308.665 or 308.805 to 308.820; and which either is being held or used for the predominant purpose of growing and harvesting trees of a marketable species and has been designated as forestland under ORS 321.805 to 321.825, or is land the highest and best use of which is the growing and harvesting of such trees. Forestland is the land alone. Forestland often contains isolated openings [which] that because of rock outcrops, river wash, swamps, chemical conditions of the soil, brush and other like conditions prevent adequate stocking of such openings for the production of trees of a marketable species. If such openings in their natural state are necessary to hold the surrounding forestland in forest use through sound management practices, they are deemed forestland.

(2) "Owner" means any individual or combination of individuals, partnership, firm, corporation or association of whatever nature owning or controlling forestland.

(3) The "summit of the Cascade Mountains" shall be considered to be a line beginning at the intersection of the northern boundary of the State of Oregon and the western boundary of Wasco County, thence southerly along the western boundaries of the counties of Wasco, Jefferson, Deschutes and Klamath to the southern boundary of the State of Oregon.

SECTION 56. ORS 215.273 is amended to read:

215.273. Nothing in ORS 215.130, 215.203, 215.213, 215.243 to 215.273, 215.283, 215.284, [308.370 to 308.407] 308.345 to 308.406 and 316.844 is intended to affect the authority of the Energy Facility Siting Council in determining suitable sites for the issuance of site certificates for thermal power plants, as authorized under ORS 469.300 to 469.563, 469.590 to 469.619 and 469.930.

SECTION 57. ORS 658.715 is amended to read:

658.715. (1) No person shall operate a farmworker camp unless:

(a) The person is a farm labor contractor licensed under ORS 658.405 to 658.503 and 658.830, and the contractor first obtains an indorsement to do so as provided in ORS 658.730; or

(b) The person:

(A) Has a substantial ownership interest in the real property, subject to [special] farm use special assessment under ORS 308.345 to [308.365 and 308.370 to 308.407] 308.406, on which the camp is located or has any form of ownership interest in a business organization that operates the farmworker camp and files a schedule F as part of an income tax return in the preceding tax year; or

(B) Is related by blood or marriage to any person who has a substantial ownership interest in the real property, subject to [special] farm use special assessment under ORS 308.345 to [308.365 and 308.370 to 308.407] 308.406, on which the camp is located or has any form of ownership interest in the business organization that operates the farmworker camp and files a schedule F as part of an income tax return in the preceding tax year.

(2) Nothing in ORS 658.705 to 658.850 requires a permanent employee of a farmworker camp operator, who has no financial interest in the camp other than the wages paid to the employee, to obtain a camp indorsement.

SECTION 58. ORS 215.236 is amended to read:

215.236. (1) As used in this section, "dwelling" means a single-family residential dwelling not provided in conjunction with farm use.

(2) The governing body or its designate shall not grant final approval of an application made under ORS 215.213 (3) or 215.284 (1), (2), (3) or (4) for the establishment of a dwelling on a lot or parcel in an exclusive farm use zone that is, or has been, receiving special assessment without evidence that the lot or parcel upon which the dwelling is proposed has been disqualified for special assessment at value for farm use under ORS [308.370] 308.345 to 308.406 or other special assessment under ORS 308.765, 321.257 to 321.381, 321.730 or 321.815 and any additional tax imposed as the result of disqualification has been paid.

(3) The governing body or its designate may grant tentative approval of an application made under ORS 215.213 (3) or 215.284 (1), (2), (3) or (4) for the establishment of a dwelling on a lot or parcel in an exclusive farm use zone that is specially assessed at value for farm use under ORS [308.370] 308.345 to 308.406 upon making the findings required by ORS 215.213 (3) or 215.284 (1), (2), (3) or (4). An application for the establishment of a dwelling that has been tentatively approved shall be given final approval by the governing body or its designate upon receipt of evidence that the lot or parcel upon which establishment of the dwelling is proposed has been disqualified for special assessment at value for farm use under ORS [308.370] 308.345 to 308.406 and any additional tax imposed as the result of disqualification has been paid.

(4) The owner of a lot or parcel upon which the establishment of a dwelling has been tentatively approved as provided by subsection (3) of this section shall, before final approval, simultaneously:

(a) Notify the county assessor that the lot or parcel is no longer being used as farmland;

(b) Request that the county assessor disqualify the lot or parcel for special assessment under ORS [308.370] 308.345 to 308.406, 308.765, 321.257 to 321.381, 321.730 or 321.815; and

(5) A lot or parcel that has been disqualified pursuant to subsection (4) of this section shall not requalify for special assessment unless, when combined with another contiguous lot or parcel, it constitutes a qualifying parcel.

(6) When the owner of a lot or parcel upon which the establishment of a dwelling has been tentatively approved notifies the county assessor that the lot or parcel is no longer being used as farmland and requests disqualification of the lot or parcel for special assessment at value for farm use, the county assessor shall:

(a) Disqualify the lot or parcel for special assessment at value for farm use under ORS [308.370] 308.345 to 308.406 or other special assessment by removing the special assessment;

(b) Provide the owner of the lot or parcel with written notice of the disqualification; and

(7) The Department of Consumer and Business Services, a building official, as defined in ORS 455.715 (1), or any other agency or official responsible for the administration and enforcement of the state building code, as defined in ORS 455.010, shall not issue a building permit for the construction of a dwelling on a lot or parcel in an exclusive farm use zone without evidence that the owner of the lot or parcel upon which the dwelling is proposed to be constructed has paid the additional tax, if any, imposed by the county assessor under subsection (6)(c) of this section.

SECTION 59. ORS 215.306 is amended to read:

215.306. (1) The limitations on uses made of land in exclusive farm use zones described in ORS 215.213, 215.283, 215.284 and 215.705 to 215.780 and limitations imposed by or adopted pursuant to ORS 197.040 do not apply to activities described in this section.

(2) The provisions of this section do not affect the eligibility of a zone for special assessment as provided in ORS [308.370 and 308.404] 308.345 to 308.406.

(3)(a) On-site filming and activities accessory to on-site filming may be conducted in any area zoned for exclusive farm use without prior approval of local government but subject to ORS 30.930 to 30.947.

(b) Notwithstanding paragraph (a) of this subsection, on-site filming and activities accessory to on-site filming that exceed 45 days on any site within a one-year period or involve erection of sets that would remain in place for longer than 45 days may be conducted only upon approval of the governing body or its designee in any area zoned for exclusive farm use subject to ORS 215.296. In addition to other activities described in subsection (4) of this section, these activities may include office administrative functions such as payroll and scheduling, and the use of campers, truck trailers or similar temporary facilities. Temporary facilities may be used as temporary housing for security personnel.

(4) For purposes of this section, "on-site filming and activities accessory to on-site filming":

(a) Includes:

(A) Filming and site preparation, construction of sets, staging, makeup and support services customarily provided for on-site filming.

(B) Production of advertisements, documentaries, feature film, television services and other film productions that rely on the rural qualities of an exclusive farm use zone in more than an incidental way.

(b) Does not include:

(A) Facilities for marketing, editing and other such activities that are allowed only as a home occupation; or

(B) Construction of new structures that requires a building permit.

(5) A decision of local government issuing any permits necessary for activities under subsection (3)(a) of this section is not a land use decision.

SECTION 60. ORS 215.311 is amended to read:

215.311. (1) The limitations on uses of land in exclusive farm use zones described in ORS 215.283, 215.284 and 215.705 to 215.780 and limitations imposed by or adopted pursuant to ORS 197.040 do not apply to log truck parking under this section.

(2) The provisions of this section do not affect the eligibility of a zone for special assessment as provided in ORS [308.370 and 308.404] 308.345 to 308.406.

(3) Notwithstanding any other provision of law except for health and safety provisions, parking no more than seven log trucks shall be allowed in an exclusive farm use zone unless the local government determines that log truck parking on a lot or parcel will:

(a) Force a significant change in accepted farm or forest practices on surrounding lands devoted to farm or forest use; or

(b) Significantly increase the cost of accepted farm or forest practices on surrounding lands devoted to farm or forest use.

SECTION 61. ORS 215.808 is amended to read:

215.808. (1) The State Department of Fish and Wildlife shall review and approve plans submitted under ORS 215.802 (1) for compliance with the standards set forth in the rules adopted under ORS 215.806.

(2) When a plan is approved by the department and is implemented, the owner of the land subject to the plan may make application to the county assessor for open space use assessment under ORS 308.740 to 308.790 for that land, except that, if approved, the land shall be assessed at its value for farm use under ORS [308.370] 308.345 to 308.406. Application shall be made as provided in ORS 308.740 to 308.790 except that:

(a) The granting authority shall be the State Department of Fish and Wildlife. The department shall approve the plan relating to the land of the applicant and determine compliance with the plan in accordance with rules adopted under ORS 215.806. The department shall not conduct the hearing required under ORS 308.755.

(b) The owner, in lieu of designating the paragraph of ORS 308.740 (1) under which the open space use falls, shall designate the open space use as wildlife habitat conservation and management under ORS 215.800 to 215.808.

(c) Applications for open space use assessment under this section shall be made to the county assessor not later than August 1 in the calendar year preceding the first tax year for which such assessment is requested.

(d) The application shall include a certified copy of the department's declaration that the land described in the application is subject to a wildlife habitat conservation and management plan approved by the department and that the plan is being implemented.

(e) When the application for open space use assessment includes a certified copy of the declaration described in paragraph (d) of this subsection, the county assessor shall not refer the application to the planning commission or to the county governing body under ORS 308.755 (1), but shall assess the land described in the application at its value for farm use under the provisions of [ORS 308.370] section 20 of this 1999 Act. In each year in which the land is assessed under the provisions of this section, the county assessor shall also enter on the assessment roll, as a notation, the assessed value of the land were it not so assessed.

(3) An approved wildlife habitat conservation and management plan shall be reviewed by the department at least once in each two-year period to determine continued compliance with the plan. If the plan is not being implemented as approved, the department shall notify the owner and require compliance measures to be taken within six months. If the plan is still not being implemented as required by the department at the end of the six-month period, the department shall notify the county assessor of the county in which the affected land is situated. The county assessor shall withdraw the land from open space use classification as provided in ORS 308.775 (1), except that notice of the withdrawal shall be given to the governing body of the county in which the land is situated.

(4) Notwithstanding [ORS 308.395, 308.399] sections 33 to 41 of this 1999 Act and ORS 215.236, land that is assessed under ORS [308.370] 308.345 to 308.406 shall not be subject to any additional taxes when the land is changed to open space use assessment based on wildlife habitat conservation and management as provided in ORS 215.800 to 215.808 and shall be allowed to return to assessment under ORS [308.370] 308.345 to 308.406, if otherwise qualified, without payment of any additional taxes. However, the land shall be subject to additional taxes when such land becomes disqualified or declassified from special assessment under ORS [308.370] 308.345 to 308.406 or open space use assessment based on wildlife habitat in conservation and management as provided in ORS 215.800 to 215.808 and does not become qualified in the next assessment year for assessment under ORS [308.370] 308.345 to 308.406 or open space use under ORS 308.740 to 308.790. The additional taxes shall be determined and collected as provided in [ORS 321.960 (3), (4)(b) to (d), (5), (6) and (7)] sections 33 to 41 of this 1999 Act. No other additional tax shall be imposed on such land at the time of disqualification or declassification.

SECTION 62. ORS 305.275 is amended to read:

305.275. (1) Any person may appeal under this subsection to the Oregon Tax Court as provided in ORS 305.280 and 305.560, if all of the following criteria are met:

(a) The person must be aggrieved by an act or omission of:

(A) The Department of Revenue in its administration of the revenue and tax laws of this state;

(B) A county board of property tax appeals other than an order of the board;

(C) A county assessor or other county official, including but not limited to the denial of a claim for exemption, the denial of special assessment under [ORS 308.370 or other] a special assessment statute, or the denial of a claim for cancellation of assessment; or

(D) A tax collector.

(b) The act or omission must affect 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) Except as otherwise provided by law, any person having a statutory right of appeal under the revenue and tax laws of the state may appeal to the tax court as provided in ORS 305.404 to 305.560.

(3) Subject to ORS 305.403, if a taxpayer may appeal to the board of property tax appeals under ORS 309.100, then no appeal shall be allowed under this section. The appeal under this section is from an order of the board as a result of the appeal filed under ORS 309.100 or from an order of the board that certain corrections, additions to or changes in the roll be made.

(4) A county assessor who is aggrieved by an order of the county board of property tax appeals may appeal from the order as provided in this section, ORS 305.280 and 305.560.

SECTION 63. ORS 307.560 is amended to read:

307.560. (1) If, after an exemption under ORS 307.550 is granted, the county assessor discovers that the property or portion of the property is not managed in compliance with the management agreement entered into between the owner and the State Land Board or that the property otherwise fails to qualify for the exemption, the board shall be notified and following review and recommendation by the council:

(a) The exemption granted under ORS 307.550 may be terminated immediately, without right of notice or appeal;

(b) The property or portion shall be assessed and taxed as other property similarly situated is assessed and taxed; and

(c) Notwithstanding ORS 311.235, there shall be added to the general property tax roll for the tax year next following the discovery, to be collected and distributed in the same manner as other real property tax, an amount equal to the amount of tax that would have been due on the property had it not been exempt under ORS 307.550 for each of the years, not to exceed the last five years, during which the property was exempt from taxation under ORS 307.550.

(2) The assessment and tax rolls shall show "potential additional tax liability" for each property granted exemption under ORS 307.550.

(3) No additional taxes shall be imposed under subsection (2) of this section if the property becomes disqualified for exemption under ORS 307.550 because:

(a) The property is destroyed by fire, act of God or other natural disaster; or

(b) The Natural Heritage Advisory Council determines that the property is no longer needed as a natural heritage conservation area.

(4)(a) Property that is being assessed under any of the special assessment laws listed under ORS 308.025, [including ORS 308.370 (1),] may be granted the exemption provided under ORS 307.550, upon application filed as provided under ORS 307.550 (2).

(b) Notwithstanding the provisions of any of the special assessment laws listed under ORS 308.025, [including ORS 308.370 (1),] the additional taxes, penalties and interest that would be due as a result of the change to exemption under ORS 307.550 shall be abated and shall not be collected.

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

SECTION 64. ORS 310.160 is amended to read:

310.160. (1) For purposes of determining whether the taxes on property to be imposed on any property exceed the limits imposed by section 11b, Article XI of the Oregon Constitution, the unit of property to be considered shall consist of all contiguous property within a single code area in the county under common ownership that is used and appraised for a single integrated purpose, whether or not that property is taxed as a single account or multiple accounts.

(2) In the case of real property that is specially assessed under ORS [308.370,] 308.377, 308.765 or 321.257 to 321.381 or section 20 of this 1999 Act or any other law, or partially exempt from tax under ORS 307.250, 307.370 or 358.485 or any other law, the unit of property shall consist of all components of land and improvements in a single operating unit.

(3) In the case of timeshare properties, the unit of property shall consist of all real property components associated with all timeshare property within a timeshare plan as described in ORS 94.808.

(4) In the case of personal property that is not part of an operating unit consisting of both real and personal property, the unit of property shall consist of all items of personal property identified in a single property tax account.

(5) In the case of land upon which an improvement is located, and the land and the improvement are owned by different persons, if the land and improvements are a single operating unit, the unit of property shall consist of the entire improved parcel.

SECTION 65. ORS 310.165 is amended to read:

310.165. (1) For any unit of property partially exempt from tax under ORS 307.250, 307.370, 308.459, 308.670 or 358.485 or any other law, the assessor shall determine the maximum amount of taxes on property to be imposed on such property under ORS 310.150, by using the lesser of the real market value or the taxable value of the property after the exemption has been applied.

(2) For any land that is specially assessed for ad valorem tax purposes under ORS [308.229,] 308.345 to 308.406, 308.376 to 308.378, [308.370, 308.377,] 308.670, 308.765, 321.257 to 321.381, [321.720] 321.705 to 321.765 or 321.805 to 321.825, the assessor shall determine the maximum amount of taxes on property to be imposed on such property under ORS 310.150 by using the lesser of the real market value or the specially assessed value of the property.

(3) In the case of any unit of property of which a part of the unit is exempt from taxation, and that part may be identified both as to value and physical description, the real market value of the unit shall not include the value of the exempt part of the unit.

(4) If any unit of property described in subsection (1) or (2) of this section for which the maximum amount of taxes imposed has been determined under this section is subject to imposition of additional taxes due to disqualification from special assessment or partial exemption, the determination of the maximum amount of additional taxes that may be imposed due to disqualification shall be made on the basis of the real market value of the property for the year to which the additional taxes relate.

SECTION 66. ORS 321.349 is amended to read:

321.349. (1) Subject to subsection (3) of this section, land that is changed [under ORS 321.960] from farm use special assessment [at its value for farm use under ORS 308.370 (1) or (2)] under ORS 308.345 to 308.406 to special assessment as forestland under ORS 321.257 to 321.381, at the election of the owner made under rules adopted by the Department of Revenue, shall not be valued under ORS 308.205, 308.232 and 321.257 to 321.381 for the tax year of the change and years thereafter in which such special forestland assessment is in effect for the land, but shall be valued under ORS 308.345 to 308.406, if:

(a) The land has been assessed under ORS 308.345 to 308.406 [308.370 (1) or (2)] for at least the 10 consecutive years immediately prior to the year for which the change is first effective;

(b) The planting of the timber takes place after October 15, 1983, and qualifies for the current tax year for special assessment as forestland under ORS 321.272 (2);

(d) The land is held by an owner having a total ownership of forestland in western Oregon not in excess of 2,000 acres, as determined under subsection (4) of this section.

(2) If land described in subsection (1) of this section was classified as reforestation land under ORS 321.255 to 321.360 (1975 Replacement Part) on July 1, 1977, the percentage provided in ORS 321.357 shall be applied to the value determined under subsection (1) of this section.

(3) If timber on land valued under subsection (1) of this section reaches, for any tax year, an average age of 40 years or more, this section shall cease to apply. However, without application and without any additional tax, interest or penalty, the land shall for that tax year and for each year thereafter for which the land is qualified, be valued under ORS 308.205, 308.232 and 321.257 to 321.381.

(4) In computing a forestland owner's acreage for purposes of subsection (1) of this section, all of the owner's forestland, as defined in ORS 321.257, in western Oregon shall be included. As used in this subsection, "total ownership" includes (a) forestland owned by the owner individually; and (b) forestland owned by any corporate or other group owner in which the owner holds a share of ownership of 10 percent or more. No owner may have forestland valued under subsection (1) of this section if the owner, or any individual having a share in the owner, has a spouse, brother, sister, ancestor or lineal descendant who is an owner, or who holds a share in an owner having forestland valued under subsection (1) of this section. However, the county assessor may grant exceptions to this requirement if the owner satisfactorily demonstrates that the combination of ownership with the indicated relatives arose from bona fide business reasons other than a desire to circumvent the 2,000 acre limitation imposed under subsection (1) of this section.

SECTION 67. ORS 311.740 is amended to read:

311.740. As used in ORS 311.740 to 311.780:

(1) "Commissioners" means the county court, board of county commissioners or other governing body of a county.

(2) "Department" means the Department of Revenue.

(3) "Disaster area" means an area within the State of Oregon which the Governor of the State of Oregon has named and declared to be a disaster area.

(4) "Land" means agricultural land or range land under farm use as defined in ORS 215.203 or section 3 of this 1999 Act.

(5) "Taxes" means ad valorem taxes, assessments, fees and charges entered on the assessment and tax roll against land as defined in this section.

(6) "Taxpayer" means the person or persons who pay taxes upon land as defined in this section.

SECTION 68. ORS 321.347 is amended to read:

321.347. For the purposes of ORS 321.257 to 321.381:

(1) All land in western Oregon valued as forestland for ad valorem tax purposes on January 1, 1977, shall retain that classification for the purposes of ORS 321.257 to 321.381 unless it is specifically excluded from the provisions thereof or unless it is removed from that classification as provided in ORS 321.359 or is no longer land the highest and best use of which is forestland.

(2) Land designated as forestland pursuant to ORS 321.605 to 321.680 (1975 Replacement Part) shall retain the original date of such designation.

(3) Lands classified as reforestation lands as of July 1, 1977, pursuant to ORS 321.255 to 321.360 (1975 Replacement Part) shall be considered to have been designated as forestland from the date of original classification as reforestation lands. Any lands so classified prior to February 1, 1972, shall be presumed to have been designated not earlier than February 1, 1972, for the purposes of additional taxes imposed by [ORS 321.372] sections 33 to 41 of this 1999 Act.

(4) Pursuant to the election of the owner, as provided in section 45, chapter 892, Oregon Laws 1977, land which, as of January 1, 1977, was designated under the provisions of ORS 321.705 to 321.765 shall be considered to have been designated as forestland for the purposes of ORS 321.257 to 321.381 from the date of the original designation under those provisions. Any lands so designated prior to January 1, 1972, shall be presumed to have been designated not earlier than January 1, 1972, for the purposes of additional taxes imposed by [ORS 321.372] sections 33 to 41 of this 1999 Act.

SECTION 68a. ORS 321.347, as amended by section 68 of this 1999 Act, is amended to read:

321.347. For the purposes of ORS 321.257 to 321.381:

(2) Land designated as forestland pursuant to ORS 321.605 to 321.680 (1975 Replacement Part) shall retain the original date of such designation.

(3) Lands classified as reforestation lands as of July 1, 1977, pursuant to ORS 321.255 to 321.360 (1975 Replacement Part) shall be considered to have been designated as forestland from the date of original classification as reforestation lands. Any lands so classified prior to February 1, 1972, shall be presumed to have been designated not earlier than February 1, 1972[, for the purposes of additional taxes imposed by sections 33 to 41 of this 1999 Act].

SECTION 69. ORS 321.760 is amended to read:

321.760. (1) The State Forester shall certify to the owner involved, and to the appropriate county assessor or assessors, the removal from classification of any forestland previously classified under ORS 321.705 to 321.765 when:

(a) The owner requests such declassification in writing. A request for declassification under this paragraph shall apply to all of the forestlands that are classified under ORS 321.705 to 321.765 and located within a single tax lot.

(b) The State Forester determines, after investigation, that the forestland is no longer entitled to classification under ORS 321.705 to 321.765.

(c) Pursuant to ORS 321.705, the State Forester determines that the predominant use of the land is for the production of cultured Christmas trees.

(d) Notwithstanding ORS 321.727, the land is transferred to an owner who, upon completion of the transfer, has a total ownership of forestland in western Oregon of less than 10 acres.

(e) Pursuant to ORS 92.102, the State Forester receives notification from the county assessor that a subdivision plat has been recorded under ORS chapter 92.

(f) The forestland is sold or transferred to an ownership making the forestland exempt from ad valorem property taxation.

(2)[(a) Forestland shall be declassified upon sale or transfer to an ownership making it exempt from ad valorem property taxation. Except as provided by this paragraph,] The sale or transfer of forestland to a new owner under subsection (1)(f) of this section or the transfer by reason of death of a former owner to a new owner shall not operate to declassify the land so long as the land continues to meet all of the eligibility requirements under ORS 321.725 and 321.730, except that the land need not meet the requirement that the predominant size of timber on the forestland be eight inches in diameter (breast high), outside the bark or of an average age of less than 40 years. However, the county assessor shall notify the State Forester if a sale or transfer of the forestland occurs for the purpose of determining the continued eligibility of the forestland for classification under ORS 321.705 to 321.765.

[(b) The lien for increased taxes and interest on land declassified shall attach on the day preceding a sale or transfer of the land making it exempt from ad valorem taxation or on the day preceding a sale or transfer that follows or is connected with a division of the land that results in its declassification.]

[(c) The additional taxes determined under this section shall be deemed assessed and imposed in the year to which the additional taxes relate.]

[(3) Upon declassification there shall be added to the tax extended against the land, on the next property assessment and tax roll, to be collected and distributed in the same manner as ad valorem taxes on real property, an amount equal to the sum of:]

[(a) An additional tax in the amount of the difference between the taxes assessed against the land and the taxes that would otherwise have been assessed against the land had the land not been designated as forestland for each of the last five years (or such lesser number of years, corresponding to the number of years of small tract optional tax classification applicable to the property) preceding the year in which the land was disqualified for special classification;]

[(b) The amount of privilege taxes which would have been payable under ORS 321.257 to 321.322, during the five years immediately preceding such extension on the tax roll; and]

[(c) Interest on the amounts of taxes added pursuant to paragraph (b) of this subsection at the rate of six percent a year from the date at which such increased taxes would have been payable if the forestland had been valued without regard to ORS 321.720.]

(3) Upon declassification under this section, additional taxes, if any, shall be determined and imposed as provided in sections 33 to 41 of this 1999 Act.

(4)(a) Declassifications certified under this section shall take effect as of the date that the notice of declassification is sent by certified mail or delivered by the State Forester to the owner. If the declassification is effective before July 1, the declassification shall apply for the ensuing tax year. However, if the declassification is effective on or after July 1, classification shall continue for the current tax year and declassification shall apply for the tax year beginning the following July 1.

(b) A notice of declassification mailed or delivered by the State Forester to the owner under this section shall [inform the owner of the land of ORS 321.960 and the opportunity, if qualified to do so, to change to classification or designation under one of the other special assessment laws listed in ORS 321.960.] contain a written explanation summarizing:

(A) Section 35 (1)(d) of this 1999 Act (relating to change in special assessment);

(B) ORS 321.795 (relating to change in use to open space use special assessment for certain golf courses);

(C) The administrative act necessary under section 41 of this 1999 Act to change the property to another classification described in this paragraph; and

(D) The imposition of any penalties that would result from the disqualification if no requalification or reclassification is made under one of the other special assessment laws listed in this paragraph. [The notice shall be in lieu of any further notice required under ORS 321.960 (5) and shall contain the information required in a notice given under ORS 321.960 (5).]

(c) The State Forester shall include within the notice of declassification sent to the owner:

(A) A statement explaining that the amount of privilege taxes that would have been payable under ORS 321.257 to 321.322 during the five years immediately preceding declassification, and interest on the privilege taxes at the rate of six percent a year, are to be added to the additional taxes due as a result of the declassification; and

(B) A statement that the total amount of additional taxes due as a result of the declassification is to be determined by the county assessor and will be provided to the owner pursuant to section 40 of this 1999 Act.

[(5) The amount determined to be due under subsection (3) of this section may be paid to the tax collector prior to completion of the next general property tax roll, pursuant to ORS 311.370.]

[(6)] (5) No additional tax shall be imposed under [subsection (3)(a) or (b) of this section] sections 33 to 41 of this 1999 Act if[:]

[(a)] the forestland or portion thereof that is declassified is designated as forestland at the election of the owner pursuant to ORS 321.347 (4) and section 45, chapter 892, Oregon Laws 1977. If the land is later removed from designation under ORS 321.257 to 321.381, however, the land shall be subject to [the back] additional taxes imposed by [ORS 321.372] section 34 of this 1999 Act in the manner provided in ORS 321.347 (4) (relating to computation of the period of classification as designated forestland).

[(b) The land is changed to assessment under ORS 308.370 or 321.257 to 321.381 pursuant to ORS 321.960. If the land is later removed from special assessment as farm or forest land, however, the additional tax under ORS 321.960 (4) shall apply.]

[(c) The forestland is declassified under subsection (1)(c) or (d) of this section.]

SECTION 70. 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)] sections 33 to 41 of this 1999 Act.

(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. 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.

SECTION 71. 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)] sections 33 to 41 of this 1999 Act.

(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), 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) 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.

SECTION 72. ORS 321.830 is amended to read:

321.830. [(1) ORS 321.426 and the amendments to ORS 215.203, 307.320 and 321.415 by sections 1, 4 and 5, chapter 714, Oregon Laws 1991, apply to tax years beginning on or after July 1, 1992, and to timber harvested on or after July 1, 1992.]

[(2) Nothing in the amendments to ORS 215.203, 307.320 or 321.415 by sections 1, 4 and 5, chapter 714, Oregon Laws 1991, shall be construed to subject any land to the additional taxes due to disqualification imposed under ORS 321.825 or 321.960 or other law. However, if land described in ORS 321.415 (5), as amended by section 1, chapter 714, Oregon Laws 1991, becomes disqualified for special assessment on or after July 1, 1992, or on or after that date is changed to assessment under another law under ORS 321.960 and is thereafter declassified or disqualified for special assessment, then any years prior to 1992 for which special assessment under a law listed under ORS 321.960 (2) was in effect for the land shall be included in determining the additional taxes due to disqualification or declassification as otherwise provided by law.]

(1) Land described in ORS 321.415 (5) (relating to hardwood timberland, including hybrid cottonwood timberland) shall be assessed as farm use land under ORS 308.345 to 308.406, unless the owner of the land makes the election under ORS 321.426.

[(3)(a)] (2)(a) [If on July 1, 1992, or upon any date thereafter,] If land is or becomes land described under ORS 321.415 (5) and the land is not located within an exclusive farm use zone, the owner shall make application for special valuation in the manner provided under ORS 308.375, as follows:

(A) If the change in use takes place on or after July 1, the owner shall file the application on or before April 1 of the following tax year.

(B) If the change in use takes place prior to July 1, the owner shall file the application on or before August 1 of the tax year.

SECTION 73. ORS 496.340 is amended to read:

496.340. (1) Except as provided in subsection (3) of this section, whenever real property owned by the State Fish and Wildlife Commission is exempt from taxation on January 1 of any year by reason of its ownership by the state, the commission shall pay to the county in which the property is situated an amount equal to the ad valorem taxes which would have been charged against the property if it had been assessed to a taxable owner as of January 1 of such year as provided in subsection (2) of this section. The county assessor shall determine the value of such property and shall notify the commission of the determination of the county assessor. Upon request of the commission, the Department of Revenue shall review the determination of value and shall redetermine the value if it concludes the value initially determined was substantially incorrect.

(2)(a) Except as provided in paragraph (b) or (c) of this subsection, the value of the property shall be computed at its assessed value [for farm use as provided in ORS 308.370] under section 20 of this 1999 Act or for forestland use, whichever is applicable.

(b) Paragraph (a) of this subsection shall not apply to any property upon which open field burning takes place. If open field burning takes place on any property described in this section, the property shall be valued at its highest and best use rather than the values authorized in paragraph (a) of this subsection on the January 1 following the date of the open field burning. If in the next year, the open field burning is discontinued, paragraph (a) of this subsection shall apply the next January 1 and each year thereafter as long as no open field burning occurs.

(c) Paragraph (a) of this subsection shall not apply to any property acquired by the commission after September 9, 1971, if such property was valued [for ad valorem tax purposes at its value for farm use as provided in ORS 308.370 or for] under farm use or forestland use special assessment provisions, at the time the property was acquired by the commission. However, no payments in lieu of taxes made to a county pursuant to this section prior to January 1, 1974, shall be refunded to the commission.

(3) This section does not apply to real property used for bird farms, fish hatcheries, office quarters, fishing access sites or impoundments, capital improvements or real property acquired pursuant to the Act of May 19, 1948 (62 Stat. 240), Public Law 80-537.

(4) The amount prescribed in subsection (1) of this section shall be determined annually by the assessor of the county in which the property is situated and certified by the assessor to the county court or the board of county commissioners. A notice of the determination, signed by the county judge or the chairman of the board of county commissioners, shall be mailed to the principal office of the commission not later than October 15. The notice shall contain a statement of the value of the property and a complete explanation of the method used in computing the amount claimed pursuant to subsection (1) of this section. Not later than November 15, the commission shall pay each amount, less a discount equivalent to that which is provided in ORS 311.505. Payment shall be made to the county treasurer who shall distribute the payment to the taxing districts of the county in accordance with the schedule of percentages computed under ORS 311.390.

(5) Notwithstanding any other provision of the wildlife laws, there is appropriated annually from the moneys in the State Wildlife Fund in the State Treasury such amounts as are necessary for the purpose of making the payments to counties required by this section.

SECTION 74. ORS 522.005 is amended to read:

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

(1) "Board" means the governing board of the State Department of Geology and Mineral Industries.

(2) "By-product" means any mineral or minerals, exclusive of helium or of oil, hydrocarbon gas or other hydrocarbon substances, which are found in solution or in association with geothermal resources and which have a value of less than 75 percent of the value of the geothermal resource or are not, because of quantity, quality, or technical difficulties in extraction and production, of sufficient value to warrant extraction and production by themselves.

(3) "Completed geothermal well" means a well producing geothermal resources for which the operator has received the department's written assurance that the manner of drilling of and producing geothermal resources from the well are satisfactory.

(4) "Cooperative agreement" means an agreement or plan of development and operation for the production or utilization of geothermal resources in which separate ownership units independently operate without allocation of production.

(5) "Correlative rights" means the right of each owner in a geothermal area to obtain that owner's just and equitable share of the underlying geothermal resource, or an economic equivalent of that share of the resource, produced in a manner and in an amount that does not injure the reservoir to the detriment of others.

(6) "Department" means the State Department of Geology and Mineral Industries.

(7) "Drilling" includes drilling, redrilling and deepening of a geothermal well.

(8) "Enhanced recovery" means the increased recovery from a reservoir achieved by artificial means or by the application of energy extrinsic to the reservoir. The artificial means include, but are not limited to, reinjection of hot brine, fluid or water into a reservoir.

(9) "Geothermal area" means any parcel of land that is, or reasonably appears to be, underlaid by geothermal resources.

(10) "Geothermal reinjection well" means any well or converted well constructed to dispose of geothermal fluids derived from geothermal resources into an underground reservoir.

(11) "Geothermal resources" means the natural heat of the earth, the energy, in whatever form, below the surface of the earth present in, resulting from, or created by, or which may be extracted from, the natural heat, and all minerals in solution or other products obtained from naturally heated fluids, brines, associated gases, and steam, in whatever form, found below the surface of the earth, exclusive of helium or of oil, hydrocarbon gas or other hydrocarbon substances, but including, specifically:

(a) All products of geothermal processes, embracing indigenous steam, hot water and hot brines;

(b) Steam and other gases, hot water and hot brines resulting from water, gas, or other fluids artificially introduced into geothermal formations;

(d) Any by-product derived from them.

(12) "Geothermal well" includes any excavation made for producing geothermal resources and any geothermal reinjection well as defined in subsection (10) of this section.

(13) "Land" means both surface and mineral rights.

(14) "Operator" means the person:

(a) Who possesses the legal right to drill a geothermal well;

(b) Who has obtained a drilling permit pursuant to ORS 522.135; or

(c) Who possesses the legal right to operate a completed geothermal well as defined in subsection (3) of this section or who has been granted the authority to operate the well by that person.

(15) "Prospect well" includes any well drilled as a geophysical test well, seismic shot hole, mineral exploration drilling, core drilling or temperature gradient test well, less than 2,000 feet in depth, and drilled in prospecting for geothermal resources. "Prospect well" does not include a geothermal well as defined in subsection (12) of this section.

(16) "Reservoir" means an aquifer or combination of aquifers or zones containing a common geothermal or ground water resource. "Reservoir" includes, but is not limited to, a hot dry rock conductive system.

(17) "Royalty interest" means a right or interest in geothermal resources produced from land or in the proceeds of the first sale of those resources.

(18) "Unit agreement" means an agreement or plan of development and operation developed under the provisions of ORS 273.775, [308.370] 308.345 to 308.406, 522.015, 522.405 to 522.545, 522.815, 522.990 and this section for the production or use of geothermal resources in separately owned interests as a single consolidated unit and which provides for the allocation of costs and benefits.

(19) "Unit area" means the area described in a unit agreement which constitutes the land subject to development under the agreement.

(20) "Unit operator" means the person designated in the unit agreement to manage and conduct the operation involving unitized land.

(21) "Unit production" means all geothermal resources produced from a unit area from the effective date of a unit agreement approved by the board under ORS 522.405.

(22) "Waste" means any physical waste, including, but not limited to, underground waste resulting from the inefficient, excessive or improper use or dissipation of reservoir energy or resulting from the location, spacing, drilling, equipping, operation or production of a geothermal resource well in such a manner that reduces or tends to reduce the ultimate economic recovery of the geothermal resources within a reservoir; and surface waste resulting from the inefficient storage of geothermal resources and the location, spacing, drilling, equipping, operation or production of a geothermal resource well in such a manner that causes or tends to cause the unnecessary or excessive surface loss or destruction of geothermal resources released from a reservoir.

(23) "Working interest" means an interest in geothermal resources or in land containing them which is held under a lease, operating agreement, fee title or otherwise and under which, except as otherwise provided in a unit or cooperative agreement, the owner of the interest has the right to explore for, develop, produce or utilize the resources. "Working interest" does not include a right delegated to a unit operator as such by a unit agreement.

SECTION 75. ORS 522.405 is amended to read:

522.405. (1) When two or more separately owned tracts of land are within an area under which a reservoir is located or reasonably believed to be located, or when there are separately owned interests in all or part of such an area, the governing board of the State Department of Geology and Mineral Industries, upon its own motion may or upon the application of an interested person or state or local governmental governing body, special district or agency, shall review the need for unitization of the area. The board by rule or order may require the development of a unit agreement for the geothermal resource area if it finds:

(a) Unitized management, operation and development of the geothermal resources in a reservoir is necessary to increase the ultimate recovery of the resources;

(b) The application of unitized methods of operation will prevent waste and aid efficient production and utilization of the resource; or

(c) Unitization and the unitized method of operation are in the public interest and reasonably necessary to protect the correlative rights of owners.

(2) When the board requires the development of a unit agreement under this section, it shall encourage the development of a voluntary agreement between the affected parties. In the absence of a voluntary agreement, the board shall itself develop or cause to be developed a unit agreement that satisfies the provisions of ORS 273.775, [308.370] 308.345 to 308.406, 522.005, 522.015, 522.405 to 522.545, 522.815 and 522.990. In adopting a rule or entering an order for a unit agreement, the board shall consider any plant dedicated area agreement in effect and shall not contravene or interfere with that agreement unless it finds that a term or condition of that agreement violates the policies stated in ORS 522.015. The board shall require the development of the resource in accordance with a proposed unit agreement if it finds that the agreement conforms with the provisions of ORS 273.775, [308.370] 308.345 to 308.406, 522.005, 522.015, 522.405 to 522.545, 522.815 and 522.990.

(3) The development of a unit agreement under subsections (1) and (2) of this section shall be conducted as a rulemaking proceeding in accordance with ORS 183.310 to 183.550 unless an interested party requests that it be conducted as a contested case in accordance with ORS 183.310 to 183.550. In either event, notice shall be given in accordance with the applicable provisions of ORS 183.310 to 183.550.

(4) As used in this section, "plant dedicated area agreement" means a contractual relationship in geothermal energy development between a geothermal resource owner and a customer which makes a specific surface area and related resource base available exclusively to that customer.

SECTION 76. ORS 522.505 is amended to read:

522.505. (1) The operation of a geothermal well in a unit area by anyone other than by a person or state or local governing body, special district or agency acting under the unit's authority shall be unlawful. That operation is prohibited from the effective date of the board rule or order creating the unit and prescribing the unitization plan or the unit agreement, except in the manner and to the extent provided in the unitization plan or agreement.

(2) The provisions of ORS 273.775, [308.370] 308.345 to 308.406, 522.005, 522.015, 522.405 to 522.545, 522.815 and 522.990 shall not affect the ability of a ground water user to exercise a water right that existed before the initiation of a unit agreement.

SECTION 77. ORS 836.625 is amended to read:

836.625. (1) The limitations on uses made of land in exclusive farm use zones described in ORS 215.213 and 215.283 do not apply to the provisions of ORS 836.600 to 836.630 regarding airport uses.

(2) The provisions of this section do not affect the eligibility of a zone for special assessment [as provided in ORS 308.370 and 308.404] under ORS 308.345 to 308.406.

SECTION 78. ORS 311.370 is amended to read:

311.370. (1)(a) For all taxes, penalties and other charges collected by the tax collector under, including, but not limited to, ORS 92.095, 100.110, 308.260, [308.395, 308.399,] 308.404, 308.780, 308.865, 311.165, 311.415, 311.465, [321.372, 321.760, 321.825, 321.960,] 354.690, 358.525 and 454.225 and sections 33 to 41 of this 1999 Act, the tax collector shall issue receipts similar in form to the receipts issued on payment of taxes regularly charged on the tax roll.

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

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

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

(4) Any sum collected by the tax collector which is in excess of the amount extended on the tax roll as provided in subsection (1)(b) of this section shall be disposed of by the tax collector as follows:

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

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

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

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

SECTION 79. ORS 270.005 is amended to read:

270.005. For purposes of ORS 184.634, 270.005 to 270.015, 270.100 to 270.190, 273.416, 273.426 to 273.436[,] and 273.551 [and 308.396]:

(1) "Department" means the Oregon Department of Administrative Services.

(2) "Improvements" means any and all structures on or attachments to state-owned real property, but excluding public improvements as defined in ORS 279.011.

(3) "Real property" means all real property together with any and all improvements thereon.

(4) "Surplus real property" means all state-owned real property and improvements surplus to agency and state need.

SECTION 80. ORS 270.015 is amended to read:

270.015. (1) The power granted by ORS 184.634, 270.005 to 270.015, 270.100 to 270.190, 273.416, 273.426 to 273.436[,] and 273.551 [and 308.396] is vested in the State of Oregon. The power is self-operating, without the necessity of further legislation.

(2) In carrying out the provisions of ORS 184.634, 270.005 to 270.015, 270.100 to 270.190, 273.416, 273.426 to 273.436[,] and 273.551 [and 308.396], the state shall act by and through its duly constituted board, commission or agency. The state by statute or through its respective board, commission or agency may provide rules necessary in carrying out the provisions of ORS 184.634, 270.005 to 270.015, 270.100 to 270.190, 273.416, 273.426 to 273.436[,] and 273.551 [and 308.396].

SECTION 81. ORS 270.100 is amended to read:

270.100. (1)(a) Before offering for sale any real property or equitable interest therein owned by the state, the state agency acting for the state in such transaction shall report its intent of sale or transfer to the Oregon Department of Administrative Services. The department, or the agency specifically designated by the department, shall notify other state agencies authorized to own real property of the intended sale or transfer to determine whether acquisition of the real property or interest therein would be advantageous to another state agency.

(b) The department shall give political subdivisions, as defined in ORS 271.005, the first opportunity after other state agencies to acquire, purchase, exchange or lease real property to be sold or disposed of by the State of Oregon. The state agency responsible for selling or transferring the property may require at the time of the sale or transfer that any state real property sold or transferred to a political subdivision, as defined in ORS 271.005, shall be for use for a public purpose or benefit, and not be for resale to a private purchaser.

(c) If property is not disposed of under paragraph (a) or (b) of this subsection, in accordance with rules adopted by the department, the state agency desiring to sell or transfer the property shall cause it to be appraised by one or more competent and experienced appraisers. Except as provided in ORS 273.825, if such property has an appraised value exceeding $5,000 it shall not be sold to any private person except after notice calling for such proposals as set forth in ORS 270.130.

(d) The department shall adopt rules to carry out the provisions of this section.

(2) Before acquisition of any real property or interest therein by any state agency, except for highway right of way acquired by the Department of Transportation and park properties acquired by the State Parks and Recreation Department and property within the approved projected campus boundaries for institutions of the Department of Higher Education, the state agency shall report its intent of acquisition to the Oregon Department of Administrative Services. The department shall notify other state agencies owning land of the intended acquisition to determine whether another state agency desires to sell or transfer property which would meet the needs of the purchasing agency. In accordance with rules adopted by the Oregon Department of Administrative Services, if no other state agency desires to sell or transfer property which would meet the needs of the agency, the agency may acquire the real property or interest therein, consistent with applicable provisions of law.

(3) Before any terminal disposition of real property or an interest in real property, the state agency acting for the state in the transaction must secure approval of the transaction from the Oregon Department of Administrative Services.

(4) Subsection (3) of this section does not apply to terminal disposition of the following real property:

(a) Property controlled by the State Department of Fish and Wildlife;

(b) State forestlands controlled by the State Forestry Department;

(d) Property controlled by the Division of State Lands;

(e) Property controlled by the Department of Higher Education;

(f) Property controlled by the legislative or judicial branches of state government; and

(g) Property controlled by the State Parks and Recreation Department.

(5) Notwithstanding the provisions of subsection (4) of this section, prior approval by the Oregon Department of Administrative Services is required for the terminal disposition of public land for less than the fair market value of that land.

(6) The provisions of ORS 184.634, 270.005 to 270.015, 270.100 to 270.190, 273.416, 273.426 to 273.436[,] and 273.551 and [308.396] section 36 (1) to (4) of this 1999 Act do not apply to a home or farm acquired, sold, or both, by the Director of Veterans' Affairs under ORS 88.720, 273.388, 406.050, 407.135, 407.145, 407.375 and 407.377.

SECTION 82. ORS 270.120 is amended to read:

270.120. (1) In exercising certain of its functions under ORS 184.634, 270.005 to 270.015, 270.100 to 270.190, 273.416, 273.426 to 273.436[,] and 273.551 [and 308.396], the Oregon Department of Administrative Services shall be advised by an advisory committee consisting of seven members appointed by the Governor.

(2) The advisory committee appointed under subsection (1) of this section shall consist of two members of the Legislative Assembly, one person who is licensed under ORS 696.020, two persons who serve in the executive branch of state government, one person qualified as a land use planner, and one person qualified as a real estate management expert.

(3) Members of the advisory committee shall meet at such times and places and elect such officers and make such rules for the conduct of committee business as the committee may specify.

(4) Members of the advisory committee who are not members of the Legislative Assembly are entitled to compensation under ORS 292.495. Members of the advisory committee who are members of the Legislative Assembly shall be paid compensation and expense reimbursement as provided in ORS 171.072, payable from funds appropriated to the Legislative Assembly.

(5) Expenses of the committee shall be paid from funds appropriated to the department to carry out subsection (6) of this section.

(6)(a) The advisory committee shall advise the department on the acquisition, exchange or disposal of real property valued at $100,000 or more.

(b) The department may request the advice of the committee involving any real property transaction valued less than $100,000.

SECTION 83. ORS 270.155 is amended to read:

270.155. In addition to authority granted to the Oregon Department of Administrative Services under ORS 184.634, 270.005 to 270.015, 270.100 to 270.190, 273.416, 273.426 to 273.436[,] and 273.551 [and 308.396], the department, pursuant to an agreement under ORS 190.110, may undertake the management of any real property, and improvements thereon, that is the property of or within the management jurisdiction of any state agency. Reimbursement of department costs shall be made subject to terms of the agreement.

SECTION 84. ORS 321.364 is amended to read:

321.364. (1)[(a)] Notwithstanding ORS 308.210, 311.405 or 311.410 but subject to [paragraph (b) of this subsection] subsection (2) of this section, removal under ORS 321.359 (1)(b)(C) by the county assessor of land from designation as forestland for the reason that the land is no longer forestland shall occur as of the January 1 assessment date for the tax year in which the county assessor discovers that the land is no longer forestland.

SECTION 85. ORS 321.825 is amended to read:

321.825. [(1)] Sections 33 to 41 of this 1999 Act apply whenever land designated as forestland as a result of an application being filed therefor under ORS 321.805 to 321.825 thereafter becomes disqualified. [, there shall be added to the tax extended against the land on the next property assessment and tax roll, to be collected and distributed in the same manner as the remainder of the real property tax, an additional tax equal to the difference between the taxes assessed against the land and the taxes that would otherwise have been assessed against the land had the land not been designated as forestland for each of the last five years (or such lesser number of years, corresponding to the number of years of forestland designation applicable to such property) preceding the year in which the land was disqualified for forestland designation.]

[(2) In cases where the designation of forestland is removed as a result of a sale or transfer described in ORS 321.820 (1)(b)(B), the lien for such increased taxes and interest shall attach as of the day preceding such sale or transfer.]

[(3) The amount determined to be due under subsection (1) of this section may be paid to the tax collector prior to the time of the next general property tax roll, pursuant to the provisions of ORS 311.370.]

[(4) The additional taxes shall be deemed assessed and imposed in the year to which the additional taxes relate.]

SECTION 86. ORS 311.280 is amended to read:

311.280. (1) Any person desiring to pay taxes on any part of any real estate assessed as one parcel or tract may do so by applying to the county assessor or deputy county assessor. The county assessor shall determine the relative or proportionate value such part bears to the value of the whole tract assessed, and shall file a statement thereof with the tax collector, on which basis the assessment shall be divided and taxes shall be collected accordingly.

(2) The assessor or tax collector shall not divide an assessment under this section unless the person calling for the division of assessment owns, or holds a mortgage or other lien on that part only of such area on which the person desires to pay the taxes, and has filed with the assessor a true copy of the deed, contract of sale, mortgage or other instrument evidencing the interest in the part; provided that whenever such instrument is otherwise recorded in the county records, such filing shall not be required.

(3) The assessor or tax collector shall not divide an assessment under this section unless all ad valorem taxes, fees and other charges required to be placed upon the tax roll that have been certified for collection under ORS 311.105 and 311.110 and become a lien upon the entire parcel of property have been paid. However, if the applicant for the division is a public body, only the portion of such taxes, fees and other charges apportionable to the part of the real estate owned by the public body, or on which the public body holds a mortgage or other lien, need be paid. As used in this subsection, "public body" means the United States, its agencies and instrumentalities, the state, a county, city, school district, irrigation or drainage district, a port, a water district and all other public or municipal corporations in the state exempt from tax under ORS 307.040 or 307.090.

(4) In the case of a parcel or tract of real estate which is being assessed under one of the special assessment laws listed in ORS 308.025 (2) or under ORS 358.475 to 358.545, the assessor or tax collector shall not divide the assessment unless the portion of any additional taxes or penalty apportionable to the part of the property disqualified from special assessment is paid.

(5) In the case of property within the jurisdiction of a city or county which has adopted minor land partition regulations pursuant to ORS 92.046, the assessor shall not divide an assessment unless the person calling for the division of assessment has filed with the assessor evidence that the division has been approved as required by such regulations.

(6) Whenever a manufactured structure is assessed as real property under ORS 308.875 or 820.510, and the security interest holder of the manufactured structure is a person different from the owner of the parcel of land upon which it is situated, the security interest holder may apply to the assessor for a division of the value of the entire parcel between the value of the manufactured structure and the value of the remainder of the parcel. Using this value division, the tax collector shall allocate the taxes between the manufacture structure and the remainder of the parcel, and the security interest holder of the manufactured structure may pay the taxes on the value attributable to the manufactured structure and thereby free the manufactured structure from the lien of those taxes. If a division is made and the manufactured structure moved without payment of taxes, the lien of the tax on the manufactured structure is on both the manufactured structure and the parcel from which it was removed; however, payment of taxes on the manufactured structure will reduce, in the amount of taxes paid, the taxes against the remainder of the parcel, and payment of the taxes assessed against the entire parcel will remove the lien of taxes against the manufactured structure.

(7) If protest is filed to the division, the matter shall be heard by the county commissioners or the county court (as defined in ORS 306.005) at its next regular session for transaction of county business, who shall make a final division of the assessment, and the tax collector shall collect and receipt for the taxes as so determined and ordered.

(8) No person shall apply in any year under this section for a division of the assessment of a subdivision made on the assessment roll prepared as of January 1 of the year in which the subdivision is finally approved.

SECTION 87. ORS 358.543 is amended to read:

358.543. (1) Any additions made that are historically accurate reconstructions of once extant features or necessary for safety or disabled access or required by building code requirements may be classified as not being "new construction" by the State Historic Preservation Officer if the State Historic Preservation Officer so determines after request is made by the owner.

(2) If new construction takes place on or after October 15, 1983, with respect to property for which a certificate already has been filed under ORS 358.495 (2) pursuant to application filed under ORS 358.485 or 358.487, the new construction shall not be considered classified as historic nor shall the new construction receive the special valuation accorded historic property under ORS 358.505. The new construction shall be valued for ad valorem property tax purposes at its real market value and shall be assessed at the percentage of its real market value provided in ORS 308.232.

(3) Any notice required under [ORS 308.025] section 48 of this 1999 Act to be sent by a public official or agency with regard to a change in classification to or from historic property classification shall be given by the county assessor and to the State Historic Preservation Officer.

(4) As used in this section, "new construction" includes, but is not limited to:

(a) An additional new building, structure or other improvement outside the building envelope, including but not limited to a parking area to be or in use for commercial purposes.

(b) An enlargement of the exterior perimeters of an existing building, structure or improvement.

SECTION 88. Section 2, chapter 796, Oregon Laws 1989, as amended by section 11, chapter 748, Oregon Laws 1995, and section 2, chapter 782, Oregon Laws 1997, is amended to read:

Sec. 2. (1) As used in this section and sections 3 to 7, chapter 796, Oregon Laws 1989:

(a) "Department" means the Department of Revenue.

(b) "Expenditures" has the meaning given the term for purposes of ORS 294.305 to 294.520 and may be further defined by rule of the department. "Expenditures" does not include any item or class of items that cannot reasonably be allocated to an organizational unit.

(c) "Expenditures for assessment and taxation" means expenditures for any of the activities, functions or services required of a county in the assessment, equalization, levy, collection or distribution of property taxes under ORS chapters 305, 306, 307, 308, 308A, 309, 310, 311, 312 and 321. "Expenditures for assessment and taxation" specifically includes expenditures for appraising principal or secondary industrial properties, the responsibility for the making of which has been delegated by the department to a county under ORS 306.126 (3).

(d) "Grant" has the meaning given the term for purposes of ORS 294.305 to 294.520, and is further described under section 3, chapter 796, Oregon Laws 1989.

(2) On or before May 1 of each year, each county shall file with the department a true copy of its estimates of expenditures for assessment and taxation for the ensuing year as prepared for purposes of ORS 294.352 but in accordance with any rules adopted by the department.

(3) Upon receipt of the estimate, the department shall review the estimate to determine its adequacy to provide the resources needed to achieve compliance with ORS 308.027, 308.232, 308.234, ORS chapter 309 and other laws requiring equality and uniformity in the system of property taxation within the county in order that the same equality and uniformity may be achieved throughout the state.

(4) If, upon initial review of the estimate, the department determines that the proposed expenditures, or any of them, are not at the level or of the type needed to achieve adequacy, the department shall notify the county governing body. The notice shall contain an explanation of the reasons for the determination and may describe specific items or classifications of expenditure which the department has determined are required, or are not required, in order to achieve adequacy. The notice shall fix the date upon which a conference with the county governing body or representatives of the county governing body shall be held.

(5)(a) Subject to paragraph (b) of this subsection, if, upon initial review, or upon or after conference held on the date specified in the notice under subsection (4) of this section, or another date or dates convenient to the department and the county governing body, the department determines that the expenditures as initially filed, or that the expenditures as agreed upon at the conference, are at the level and of the type needed to achieve adequacy for that year or over a period of years under a plan presented as described under section 4, chapter 796, Oregon Laws 1989, the department shall certify to the county governing body that its estimate of expenditures for assessment and taxation so determined are adequate and that the county will be included in the computation made under section 3, chapter 796, Oregon Laws 1989, for the purpose of determining the amount of that county's quarterly grant. The department shall include in the certification an estimate of the percentage share of the funds available in the County Assessment Function Funding Assistance Account that the county will receive under section 3, chapter 796, Oregon Laws 1989, and an estimate of the total amount of the grant that will be forthcoming to the county from that account for the ensuing year on account of the certification.

(b) The department shall not certify expenditures under this subsection that the department determines are in excess of the expenditures necessary to meet the requirements of subsection (3) of this section.

(6) Any certification issued under subsection (5) of this section shall be issued as of the June 15 following the filing of the estimate of expenditures under subsection (2) of this section. If, as of June 15, agreement has not been reached between the department and the county governing body upon the estimate, the department shall issue a denial of certification.

(7) A county may appeal the determination of the department under subsection (5)(b) of this section or the denial of certification issued under subsection (6) of this section to the Director of the Oregon Department of Administrative Services. Appeal shall be filed within 10 days after the date that the denial of certification is issued. The sole issue upon appeal shall be the adequacy of expenditures for assessment and taxation as filed with the department under subsection (2) of this section, and the determination, if any, made by the department under subsection (5)(b) of this section. If the Oregon Department of Administrative Services does not issue an order approving the expenditures before July 1 of the fiscal year for which the expenditures are proposed, the certification for purposes of sections 1 to 7, chapter 796, Oregon Laws 1989, shall be considered denied.

SECTION 89. ORS 305.270 is amended to read:

305.270. (1) If the amount of the tax shown as due on a report or return originally filed with the Department of Revenue with respect to a tax imposed under ORS chapter 118, 308, 308A, 310, 314, 316, 317, 318 or 321, or collected pursuant to ORS 305.620, or as corrected by the department, is less than the amount theretofore paid, or if a person files a claim for refund of any tax paid to the department under such laws within the period specified in subsection (2) of this section, any excess tax paid shall be refunded by the department with interest as provided in this section and ORS 314.415.

(2) The claim shall be made on a form prescribed by the department, except that an amended report or return showing a refund due and filed within the time allowed by this subsection for the filing of a claim for refund, shall constitute a claim for refund. The claim shall be filed within the period specified in ORS 314.415 (1)(b) for taxes imposed under ORS chapters 310, 314, 316, 317 and 318, or collected pursuant to ORS 305.620 (except where any applicable ordinance specifies another period), within the period specified in ORS 118.100 (2) for taxes imposed under ORS chapter 118 and within two years of the payment of any tax under ORS chapter 308, 308A or 321.

(3) Upon receipt of a claim for refund, or original report or return claiming a refund, the department shall either refund the amount requested or send to the claimant a notice of any proposed adjustment to the refund claim, stating the basis upon which the adjustment is made. A proposed adjustment may either increase or decrease the amount of the refund claim or result in the finding of a deficiency. If the proposed adjustment results in a determination by the department that some amount is refundable, the department may send the claimant the adjusted amount with the notice.

(4) The claimant may, within 30 days of the date of the notice of proposed adjustment, advise the department in writing of objections to the refund adjustment and may request a conference with the department, which shall be held within one year of the date of the notice. The department shall notify the claimant of a time and place for the conference, and appoint a conference officer to meet with the claimant for an informal discussion of the claim. After the conference, the conference officer shall send to the claimant, by certified mail, a determination of the matter, and include therewith either a notice of refund denial or payment of any amount found to be refundable, together with any applicable interest provided by this section. If the conference officer determines that a deficiency exists, the officer shall include a notice of assessment with the determination.

(5) If no conference is requested, and the adjustments have not resulted in the finding of a deficiency, the following shall apply:

(a) If written objections have been made by the claimant, the department shall consider the objections, determine any issues raised and send the claimant a notice of refund denial or payment of any amount found to be refundable, together with any interest provided by this section.

(b) If no written objections are made, the notice of any proposed adjustment shall be final after the period for requesting a conference or filing written objections has expired.

(6) If no conference is requested, and the notice of proposed adjustment has asserted a deficiency, the department shall consider any objections made by the person denied the refund, make a determination of any issues raised, pay any refunds found due, with applicable interest, or assess any deficiency and mail a notice thereof within one year from the date of the notice of deficiency, unless an extension of time is agreed upon as described in subsection (7) of this section.

(7) If, prior to the expiration of any period of time prescribed in subsection (6) of this section for giving of notice of assessment, the department and the person consent in writing to the deficiency being assessed after the expiration of such prescribed period, such deficiency may be assessed at any time prior to the expiration of the period agreed upon. The period so agreed upon may be extended by subsequent agreements in writing made before the expiration of the period agreed upon.

(8) If the department refunds the amount requested as provided in subsection (3) of this section, without examination or audit of the refund claim, the department shall give notice of this to the claimant at the time of making the refund. Thereafter, the department shall have one year in which to examine or audit the refund claim, and send the notice of proposed adjustment provided for in subsection (3) of this section, in addition to any time permitted in ORS 314.410 or 314.415.

(9) The failure to hold a requested conference within the one-year period prescribed in subsection (4) of this section shall not invalidate any assessment of deficiency made within the one-year period pursuant to subsection (8) of this section or within any extension of time made pursuant to subsection (7) of this section, but shall invalidate any assessment of interest or penalties attributable to the deficiency. After an assessment has been made, the department and the person assessed may still hold a conference within 90 days from the date of assessment. If a conference is held, the 90-day period under ORS 305.280 (2) shall run from the date of the conference officer's written determination of the issues.

(10) The claimant may appeal any notice of proposed adjustment, refund denial or notice of assessment in the manner provided in ORS 305.404 to 305.560. The failure to file written objections or to request or have a conference shall not affect the rights of appeal so provided. All notices and determinations shall set forth rights of appeal.

SECTION 90. ORS 305.280 is amended to read:

305.280. (1) Except as otherwise provided in this section, an appeal under ORS 305.275 (1) or (2) shall be filed within 90 days after the act or omission becomes actually known to the person, but in no event later than one year after the act or omission has occurred. An appeal under ORS 308.505 to 308.665 shall be filed within the time prescribed under ORS 308.595. An appeal from a supervisory order or other order or determination of the Department of Revenue shall be filed within 90 days after the date a copy of the order or determination or notice of the order or determination has been served upon the appealing party by mail as provided in ORS 306.805.

(2) An appeal under ORS 323.416 or from any notice of assessment or refund denial issued by the Department of Revenue with respect to a tax imposed under ORS chapter 118, 308, 308A, 310, 314, 316, 317, 318, 321 or this chapter, or collected pursuant to ORS 305.620, shall be filed within 90 days after the date of the notice. An appeal from a proposed adjustment under ORS 305.270 shall be filed within 90 days after the date the notice of adjustment is final.

(3) Except as provided in subsection (2) of this section or as specifically provided in ORS chapter 321, an appeal to the tax court under ORS chapter 321 or from an order of a county board of property tax appeals shall be filed within 30 days after the date of the notice of the determination made by the department or date of mailing of the order, date of publication of notice of the order or date of mailing of the notice of the order to the taxpayer, whichever is applicable.

(4) If the tax court denies an appeal made pursuant to this section on the grounds that it does not meet the requirements of this section or ORS 305.275 or 305.560, the tax court shall issue a written decision rejecting the petition and shall set forth in the decision the reasons the tax court considered the appeal to be defective.

SECTION 91. ORS 656.027 is amended to read:

656.027. All workers are subject to this chapter except those nonsubject workers described in the following subsections:

(1) A worker employed as a domestic servant in or about a private home. For the purposes of this subsection "domestic servant" means any worker engaged in household domestic service by private employment contract, including, but not limited to, home health workers.

(2) A worker employed to do gardening, maintenance, repair, remodeling or similar work in or about the private home of the person employing the worker.

(3)(a) A worker whose employment is casual and either:

(A) The employment is not in the course of the trade, business or profession of the employer; or

(B) The employment is in the course of the trade, business or profession of a nonsubject employer.

(b) For the purpose of this subsection, "casual" refers only to employments where the work in any 30-day period, without regard to the number of workers employed, involves a total labor cost of less than $500.

(4) A person for whom a rule of liability for injury or death arising out of and in the course of employment is provided by the laws of the United States.

(5) A worker engaged in the transportation in interstate commerce of goods, persons or property for hire by rail, water, aircraft or motor vehicle, and whose employer has no fixed place of business in this state.

(6) Workers of any city having a population of more than 200,000 that provides by ordinance or charter compensation equivalent to compensation under this chapter except for the provisions of ORS 656.802 to 656.807.

(7)(a) Sole proprietors, except those described in paragraph (b) of this subsection. When labor or services are performed under contract, the sole proprietor must qualify as an independent contractor.

(b) Sole proprietors actively registered under ORS 671.525 or 701.035. When labor or services are performed under contract for remuneration, notwithstanding ORS 656.005 (30), the sole proprietor must qualify as an independent contractor. Any sole proprietor registered under ORS 671.525 or 701.035 and involved in activities subject thereto is conclusively presumed to be an independent contractor.

(8) Except as provided in subsection (23) of this section, partners who are not engaged in work performed in direct connection with the construction, alteration, repair, improvement, moving or demolition of an improvement on real property or appurtenances thereto. When labor or services are performed under contract, the partnership must qualify as an independent contractor.

(9) Except as provided in subsection (25) of this section, members, including members who are managers, of limited liability companies, regardless of the nature of the work performed. However, members, including members who are managers, of limited liability companies with more than one member, while engaged in work performed in direct connection with the construction, alteration, repair, improvement, moving or demolition of an improvement on real property or appurtenances thereto, are subject workers. When labor or services are performed under contract, the limited liability company must qualify as an independent contractor.

(10) Except as provided in subsection (24) of this section, corporate officers who are directors of the corporation and who have a substantial ownership interest in the corporation, regardless of the nature of the work performed by such officers, subject to the following limitations:

(a) If the activities of the corporation are conducted on land that receives farm use tax assessment pursuant to ORS [215.203 and ORS chapter 308] chapter 308A, corporate officer includes all individuals identified as directors in the corporate bylaws, regardless of ownership interest, and who are members of the same family, whether related by blood, marriage or adoption.

(b) If the activities of the corporation involve the commercial harvest of timber and all officers of the corporation are members of the same family and are parents, daughters or sons, daughters-in-law or sons-in-law or grandchildren, then all such officers may elect to be nonsubject workers. For all other corporations involving the commercial harvest of timber, the maximum number of exempt corporate officers for the corporation shall be whichever is the greater of the following:

(A) Two corporate officers; or

(B) One corporate officer for each 10 corporate employees.

(11) A person performing services primarily for board and lodging received from any religious, charitable or relief organization.

(12) A newspaper carrier utilized in compliance with the provisions of ORS 656.070 and 656.075.

(13) A person who has been declared an amateur athlete under the rules of the United States Olympic Committee or the Canadian Olympic Committee and who receives no remuneration for performance of services as an athlete other than board, room, rent, housing, lodging or other reasonable incidental subsistence allowance, or any amateur sports official who is certified by a recognized Oregon or national certifying authority, which requires or provides liability and accident insurance for such officials. A roster of recognized Oregon and national certifying authorities will be maintained by the Department of Consumer and Business Services, from lists of certifying organizations submitted by the Oregon School Activities Association and the Oregon Park and Recreation Society.

(14) Volunteer personnel participating in the ACTION programs, organized under the Domestic Volunteer Service Act of 1973, P.L. 93-113, known as the Foster Grandparent Program and the Senior Companion Program, whether or not the volunteers receive a stipend or nominal reimbursement for time and travel expenses.

(15) A person who has an ownership or leasehold interest in equipment and who furnishes, maintains and operates the equipment. As used in this subsection "equipment" means:

(a) A motor vehicle used in the transportation of logs, poles or piling.

(b) A motor vehicle used in the transportation of rocks, gravel, sand, dirt or asphalt concrete.

(16) A person engaged in the transportation of the public for recreational down-river boating activities on the waters of this state pursuant to a federal permit when the person furnishes the equipment necessary for the activity. As used in this subsection, "recreational down-river boating activities" means those boating activities for the purpose of recreational fishing, swimming or sightseeing utilizing a float craft with oars or paddles as the primary source of power.

(17) A person who performs volunteer ski patrol activities who receives no wage other than noncash remuneration.

(18) A person 19 years of age or older who contracts with a newspaper publishing company or independent newspaper dealer or contractor to distribute newspapers to the general public and perform or undertake any necessary or attendant functions related thereto.

(19) A person performing foster parent or adult foster care duties pursuant to ORS chapter 411, 418, 430 or 443.

(20) A person performing services on a volunteer basis for a nonprofit, religious, charitable or relief organization, whether or not such person receives meals or lodging or nominal reimbursements or vouchers for meals, lodging or expenses.

(21) A person performing services under a property tax work-off program established under ORS 310.800.

(22) A person who performs service as a caddy at a golf course in an established program for the training and supervision of caddies under the direction of a person who is an employee of the golf course.

(23)(a) Partners who are actively registered under ORS 671.525 or 701.035 and who have a substantial ownership interest in a partnership. If all partners are members of the same family and are parents, spouses, sisters, brothers, daughters or sons, daughters-in-law or sons-in-law or grandchildren, all such partners may elect to be nonsubject workers. For all other partnerships registered under ORS 671.510 to 671.710 or ORS chapter 701, the maximum number of exempt partners shall be whichever is the greater of the following:

(A) Two partners; or

(B) One partner for each 10 partnership employees.

(b) When labor or services are performed under contract for remuneration, notwithstanding ORS 656.005 (30), the partnership qualifies as an independent contractor. Any partnership registered under ORS 671.525 or 701.035 and involved in activities subject thereto is conclusively presumed to be an independent contractor.

(24)(a) Corporate officers who are directors of a corporation actively registered under ORS 671.525 or 701.035 and who have a substantial ownership interest in the corporation, regardless of the nature of the work performed. If all officers of the corporation are members of the same family and are parents, spouses, sisters, brothers, daughters or sons, daughters-in-law or sons-in-law or grandchildren, all such officers may elect to be nonsubject workers. For all other corporations registered under ORS 671.510 to 671.710 or ORS chapter 701, the maximum number of exempt corporate officers shall be whichever is the greater of the following:

(A) Two corporate officers; or

(B) One corporate officer for each 10 corporate employees.

(b) When labor or services are performed under contract for remuneration, notwithstanding ORS 656.005 (30), the corporation qualifies as an independent contractor. Any corporation registered under ORS 671.525 or 701.035 and involved in activities subject thereto is conclusively presumed to be an independent contractor.

(25)(a) Limited liability company members who are members of a company actively registered under ORS 671.525 or 701.035 and who have a substantial ownership interest in the company, regardless of the nature of the work performed. If all members of the company are members of the same family and are parents, spouses, sisters, brothers, daughters or sons, daughters-in-law or sons-in-law or grandchildren, all such members may elect to be nonsubject workers. For all other companies registered under ORS 671.510 to 671.710 or ORS chapter 701, the maximum number of exempt company members shall be whichever is the greater of the following:

(A) Two company members; or

(B) One company member for each 10 company employees.

(b) When labor or services are performed under contract for remuneration, notwithstanding ORS 656.005 (30), the company qualifies as an independent contractor. Any company registered under ORS 671.525 or 701.035 and involved in activities subject thereto is conclusively presumed to be an independent contractor.

SECTION 92. ORS 321.358 is amended to read:

321.358. (1) An owner of land desiring that it be designated as forestland shall make application to the county assessor on or before April 1 of the assessment year for which special assessment as forestland is first desired, and the owner may also do so within 30 days of receipt of notice of its assessment as omitted property.

(2) Notwithstanding subsection (1) of this section, an owner of land may apply to the county assessor by December 15 to have the land designated as forestland for the assessment year if:

(a) For the prior assessment year the land had been forestland under ORS 321.257 (3) by reason of the land being highest and best use forestland; and

(b) For the current assessment year the land is being assessed at a value reflecting a use other than highest and best use forestland.

(3) The application shall be made upon forms prepared by the Department of Revenue and supplied by the county assessor, and shall include the following:

(a) A description of all land the applicant desires to be designated as forestland.

(b) Date of acquisition.

(c) Whether the land is being held or used for the predominant purpose of growing and harvesting trees of marketable species.

(d) Whether there is a forest management plan for it.

(e) If so, whether the plan is being implemented, and the nature and extent of implementation.

(f) Whether the land is used for grazing.

(g) Whether the land has been platted under ORS chapter 92.

(h) Whether the land is timberland subject to ORS chapter 477, and if it is not, the reasons therefor.

(i) Whether the land, or any of it, is subject to a lease or option which permits it to be used for any purpose other than the growing and harvesting of trees.

(j) A summary of past experience and activity of the applicant in growing and harvesting trees.

(k) A summary of current and continuing activity of the applicant in growing and harvesting trees.

(L) A statement that the applicant is aware of the potential tax liability involved when the land ceases to be designated as forestland.

(m) An affirmation that the statements contained in the application are true.

(a) The application states the land is not being held or used for the predominant purpose of growing and harvesting trees of marketable species; or

(b) Subject to the provisions of ORS 321.257, the land does not substantially meet minimum stocking or acreage requirements under rules adopted by the department. Otherwise, the determination whether the land is properly classifiable as forestland shall be made with due regard to all relevant evidence and without any one or more items of evidence necessarily being determinative.

(5) The application shall be deemed to have been approved unless, within three months of the date such application was delivered to the assessor or prior to [July 1] August 15, whichever is later, the assessor shall notify the applicant in writing of the extent to which the application is denied.

SECTION 93. ORS 321.815 is amended to read:

321.815. (1) An owner of land desiring that it be designated as forestland for purposes of ORS 321.805 to 321.825 shall make application to the county assessor on or before April 1 of the assessment year for which special assessment as forestland is first desired, and the owner may also do so within 30 days of receipt of notice of its assessment as omitted property.

(2) Notwithstanding subsection (1) of this section, an owner of land may apply to the county assessor by December 15 to have the land designated as forestland for the assessment year if:

(a) For the prior assessment year the land had been forestland under ORS 321.257 (3) by reason of the land being highest and best use forestland; and

(b) For the current assessment year the land is being assessed at a value reflecting a use other than highest and best use forestland.

(3) The application shall be made upon forms prepared by the Department of Revenue and supplied by the county assessor, and shall include the following:

(a) A description of all land the applicant desires to be designated as forestland.

(b) Date of acquisition.

(c) Whether the land is being held or used for the predominant purpose of growing and harvesting trees of marketable species.

(d) Whether there is a forest management plan for it.

(e) If so, whether the plan is being implemented, and the nature and extent of implementation.

(f) Whether the land is being held or used for the predominant purpose of grazing or raising of livestock.

(g) Whether the land has been platted under ORS chapter 92.

(h) Whether a permit has been granted for harvesting for excepted purposes under the Oregon Forest Practices Act.

(i) Whether the land is timberland subject to ORS chapter 477, and if it is not, the reasons therefor.

(j) Whether the land, or any of it, is subject to a lease or option which permits it to be used for any purpose other than the growing and harvesting of trees.

(k) A summary of past experience and activity of the applicant in growing and harvesting trees.

(L) A summary of current and continuing activity of the applicant in growing and harvesting trees.

(m) A statement that the applicant is aware of the potential tax liability involved when the land ceases to be designated as forestland.

(n) An affirmation that the statements contained in the application are true.

(4) The county assessor shall approve an application for forestland designation if the assessor finds that the land is properly classifiable as forestland. The county assessor shall not find land properly classifiable as forestland if the application states the land is not being held or used for the predominant purpose of growing and harvesting trees of marketable species. Otherwise, the determination whether the land is properly classifiable as forestland shall be made with due regard to all relevant evidence and without any one or more items of evidence necessarily being determinative.

(5) The application shall be considered to have been approved unless, within three months of the date such application was delivered to the assessor or prior to [July 1] August 15, whichever is later, the assessor shall notify the applicant in writing of the extent to which the application is denied.

REPEALER

SECTION 94. (1) ORS 215.207, 308.229, 308.370, 308.382, 308.384, 308.387, 308.391, 308.395, 308.396, 308.398, 308.399, 308.407, 321.364, 321.372, 321.960 and 321.970 are repealed on July 1, 2000.

(2) Nothing in the repeal of the statutes listed in subsection (1) of this section shall cause property otherwise eligible for special assessment to be disqualified therefrom, to the extent the property continues to qualify for special assessment under ORS 308.345 to 308.406, 308.376 to 308.378, 321.347, 321.348, 321.353, 321.358, 321.359, 321.362, 321.705 to 321.765 or 321.805 to 321.825 or other applicable special assessment statutes as those statutes are amended and in effect on July 1, 2000.

SECTION 95. If House Bill 2452 becomes law, section 10, chapter [Vetoed], Oregon Laws 1999 (Enrolled House Bill 2452) (amending ORS 321.970), is repealed.

MISCELLANEOUS

SECTION 96. Except as otherwise specifically provided, the amendments to statutory law and new provisions of law contained in this 1999 Act apply to tax years beginning on or after July 1, 2000.

SECTION 97. The unit captions used in this 1999 Act are provided only for the convenience of the reader and do not become part of the statutory law of this state or express any legislative intent in the enactment of this 1999 Act.

Approved by the Governor June 23, 1999

Filed in the office of Secretary of State June 24, 1999

Effective date October 23, 1999

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