Chapter 632 Oregon Laws 1999

Session Law

AN ACT

SB 1201

Relating to municipal financial administration; creating new provisions; amending ORS 280.040, 280.070, 294.311, 294.316, 294.326, 294.361, 294.381, 294.401, 294.406, 294.411, 294.421, 294.425, 294.435, 294.450, 294.460, 294.480, 294.485, 294.525, 294.630, 294.645, 294.655, 294.665 and 310.060; and repealing ORS 294.465 and 371.344.

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

SECTION 1. ORS 294.311 is amended to read:

294.311. As used in ORS 294.305 to 294.565, unless the context requires otherwise:

(1) "Accrual basis" means the recording of the financial effects on a municipal corporation of transactions and other events and circumstances that have cash consequences for the municipal corporation in the periods in which those transactions, events and circumstances occur, rather than only in the periods in which cash is received or paid by the municipal corporation.

(2) "Activity" means a specific and distinguishable service performed by one or more organizational components of a municipal corporation to accomplish a function for which the municipal corporation is responsible.

(3) "Appropriation" means an authorization granted by the governing body to make expenditures and to incur obligations for specific purposes, and shall be limited to a single fiscal year.

(4) "Basis of accounting" means the cash basis, the modified accrual basis or the accrual basis.

(5) "Budget" means a plan of financial operation embodying an estimate of expenditures for a given period or purpose and the proposed means of financing the estimated expenditures.

(6) "Budget document" means the estimates of expenditures and budget resources as set forth on the estimate sheets, tax levy and the financial summary.

(7) "Budget resources" means resources to which recourse can be had to meet obligations and expenditures during the fiscal year covered by the budget.

(8) "Cash basis" means a basis of accounting under which transactions are recognized only in the period during which cash is received or disbursed.

(9) "Current year" means the fiscal year in progress.

(10) "Encumbrance accounting" means the method of accounting under which outstanding encumbrances are recognized as reductions of appropriations and the related commitments are carried in a reserve for encumbrances until liquidated, either by replacement with an actual liability or by cancellation. This method of accounting may be used as a modification to the accrual basis of accounting in accordance with generally accepted accounting principles.

(11) "Encumbrances" means obligations in the form of purchase orders, contracts or salary commitments which are chargeable to an appropriation and for which a part of the appropriation is reserved. Obligations cease to be encumbrances when paid or when the actual liability is set up.

(12) "Ensuing year" means the fiscal year following the current year.

(13) "Expenditure" means, if the accounts are kept on the accrual basis or the modified accrual basis, decreases in net financial resources and may include encumbrances. If the accounts are kept on the cash basis, the term covers only actual disbursement, the drawing of the check or warrant for these purposes and not encumbrances, except that deferred employee compensation shall be included as a personal service expenditure where an approved deferred employee compensation plan is in effect for a municipal corporation.

(14) "Fiscal year" means for municipal corporations with the power to impose ad valorem property taxes, the fiscal year commencing on July 1 and closing on June 30, and for all other municipal corporations, an accounting period of 12 months ending on the last day of any month.

(15) "Fund balance" means the excess of the assets of a fund over its liabilities and reserves except in the case of funds subject to budgetary accounting where, prior to the end of a fiscal period, it represents the excess of the fund's assets and estimated revenues for the period over its liabilities, reserves and appropriations for the period.

(16) "Governing body" means the city council, board of commissioners, board of directors, county court or other managing board of a municipal corporation including a board managing a municipally owned public utility or a dock commission.

(17) "Grant" means a donation or contribution of cash to a governmental unit by a third party.

(18) "Imprest cash account" means an account for handling minor disbursements whereby a fixed amount of money, designated as petty cash, is set aside for this purpose.

(19) "Intergovernmental entity" means an entity created under ORS 190.010 (5). The term includes any council of governments created prior to the enactment of ORS 190.010 (5).

[(19)] (20) "Internal service fund" means a fund properly authorized to finance, on a cost reimbursement basis, goods or services provided by one organizational unit of a municipal corporation to other organizational units of the municipal corporation.

[(20)] (21) "Liabilities" means probable future sacrifices of economic benefits, arising from present obligations of a municipal corporation to transfer assets or provide services to other entities in the future as a result of past transactions or events. The term does not include encumbrances.

[(21)(a)] (22)(a) "Modified accrual basis" means the accrual basis of accounting adapted to the governmental fund-type measurement focus. Under this basis of accounting, revenues and other financial resource increments, such as bond proceeds, are recognized when they become susceptible to accrual, that is, when they become both measurable and available to finance expenditures in the current period.

(b) As used in this subsection, "available" means collectible in the current period or soon enough thereafter to be used to pay liabilities of the current period. Under this basis of accounting, expenditures are recognized when the fund liability is incurred except for:

(A) Inventories of material and supplies that may be considered expenditures either when purchased or when used; and

(B) Prepaid insurance and similar items that may be considered expenditures either when paid for or when consumed.

[(22)] (23) "Municipal corporation" means any county, city, port, school district, union high school district, community college district and all other public or quasi-public corporations including a municipal utility or dock commission operated by a separate board or commission.

[(23)] (24) "Net working capital" means the sum of the cash, cash equivalents, investments, accounts receivable expected to be converted to cash during the ensuing year, inventories, supplies and prepaid expenses less current liabilities and, if encumbrance accounting is adopted, reserve for encumbrances. The term is not applicable to the cash basis of accounting.

[(24)] (25) "Object" means, as used in expenditure classification, articles purchased including, but not limited to, land, buildings, equipment and vehicles, or services obtained including, but not limited to, administrative services, clerical services, professional services, property services and travel, as distinguished from the results obtained from expenditures.

[(25)] (26) "Object classification" means a grouping of expenditures on the basis of goods or services purchased, including, but not limited to, personal services, materials, supplies and equipment.

[(26)] (27) "Operating taxes" has the meaning given that term in ORS 310.055.

[(27)] (28) "Organizational unit" means any administrative subdivision of a municipal corporation, especially one charged with carrying on one or more functions or activities.

[(28)] (29) "Population" means the number of inhabitants of a municipal corporation according to certified estimates of population made by the State Board of Higher Education.

[(29)] (30) "Program" means a group of related activities aimed at accomplishing a major service or function for which the municipality is responsible.

[(30)] (31) "Public utility" means those public utility operations authorized by ORS chapter 225.

[(31)] (32) "Publish" or "publication" means any one or more of the following methods of giving notice or making information or documents available to members of the general public:

(a) Publication in one or more newspapers of general circulation within the jurisdictional boundaries of the municipal corporation.

(b) Posting through the United States Postal Service by first class mail, postage prepaid, to each street address within the jurisdictional boundaries of the municipal corporation.

[(32)] (33) "Receipts" means cash received unless otherwise qualified.

[(33)] (34) "Reserve for encumbrances" means a reserve representing the segregation of a portion of a fund balance to provide for unliquidated encumbrances.

[(34)] (35) "Revenue" means the gross receipts and receivables of a governmental unit derived from taxes, licenses, fees and from all other sources, but excluding appropriations, allotments and return of principal from investment of surplus funds.

[(35)] (36) "Special revenue fund" means a fund properly authorized and used to finance particular activities from the receipts of specific taxes or other revenues.

SECTION 2. ORS 294.316 is amended to read:

294.316. The provisions of ORS 294.305 to 294.565 do not apply to the following municipal corporations:

(1) Drainage districts organized under ORS chapter 547;

(2) District improvement companies organized under ORS chapter 554;

(3) Highway lighting districts organized under ORS chapter 372;

(4) Irrigation districts organized under ORS chapter 545;

(5) Road districts organized under ORS chapter 371;

(6) Soil and water conservation districts organized under ORS chapter 568 [which do] that will not levy an ad valorem tax during the ensuing year;

(7) Municipal public utilities operating under separate boards or commissions, authorized under ORS chapter 225 and city charters, and people's utility districts organized under ORS chapter 261, both operating without ad valorem tax support during the ensuing year;

(8) Housing authorities organized under ORS 446.515 to 446.547 and ORS chapter 456 that are not carrying out urban renewal activities using a division of ad valorem taxes under ORS 457.440 during the ensuing year;

(9) Water control districts organized under ORS chapter 553 [which do] that will not levy an ad valorem tax during the ensuing year;

(10) Hospital financing authorities organized under ORS 441.525 to 441.595;

(11) Export trading corporations organized under ORS 777.755 to 777.800; and

(12) Diking districts organized under ORS chapter 551.

SECTION 3. ORS 294.326 is amended to read:

294.326. (1) Except as provided in subsections (3) to (11) of this section, it is unlawful for any municipal corporation to expend money or to certify to the assessor an ad valorem tax rate or estimated amount of ad valorem taxes to be imposed in any year unless the municipal corporation has complied with ORS 294.305 to 294.565.

(2) To the extent that any of subsections (3) to (11) of this section apply in a given case, the municipal corporation need not comply with ORS 294.305 to 294.565.

(3) Subsection (1) of this section shall not apply to the expenditure in the year of receipt of grants, gifts, bequests or devises transferred to a municipal corporation in trust for specific purposes or to other special purpose trust funds at the disposal of municipal corporations. However, subsection (1) of this section shall apply to the expenditure of grants, gifts, bequests or devises transferred to a municipal corporation for undesignated general purposes or to the expenditure of grants, gifts, bequests or devises transferred to a municipal corporation in trust for specific purposes which were received in a prior year. Expenditure of grants, gifts, bequests and devises exempt from subsection (1) of this section by this subsection shall be lawful only after enactment by the governing body of the municipal corporation of appropriation ordinances or resolutions authorizing the expenditure.

(4) Subsection (1) of this section shall not apply whenever the governing body of a municipal corporation has declared the existence of an unforeseen occurrence or condition which could not have been foreseen at the time of the preparation of the budget for the current year or could not have foreseen a pressing necessity for the expenditure or has received a request for services or facilities, the cost of which shall be supplied by a private individual, corporation or company or by another governmental unit necessitating a greater expenditure of public money for any specific purpose or purposes than the amount budgeted therefor in order to provide the services for which it was responsible. Such governing body may make excess expenditures for such specific purpose or purposes beyond the amount budgeted and appropriated therefor to the extent that maintenance, repair or self-insurance reserves authorized by ORS 294.366 or nontax funds are available or may be made available. Such expenditures shall be lawful only after the enactment of appropriate appropriation ordinances or resolutions authorizing the expenditures. The ordinance or resolution shall state the need for the expenditure, the purpose for the expenditure and the amount appropriated.

(5) Subsection (1) of this section shall not apply to the expenditure during the current year of the proceeds of the sale of the following bonds or other obligations, or to the expenditure during the current year of other funds to pay debt service on the following bonds or other obligations:

(a) Bonds that are issued under the Uniform Revenue Bond Act, ORS 288.805 to 288.945, for which the 60-day period described in ORS 288.815 (2) ended after the preparation of the current year's budget;

(b) Bonds or other obligations that were approved by the electors during the current year; or

(6) Notwithstanding subsection (5) of this section, subsection (1) of this section shall not apply to:

(a) Expenditures of funds received from the sale of conduit revenue bonds issued for private business or nonprofit corporations by cities, counties, county service districts, port districts, special districts, the Port of Portland or the State of Oregon or to pay debt service on such bonds;

(b) Expenditures of funds that have been irrevocably placed in escrow for the purpose of defeasing and paying bonds; or

(c) Expenditures of assessments or other revenues to redeem bonds or other obligations that are payable from such assessments or other revenues, when such assessments or other revenues are received as a result of prepayments or other unforeseen circumstances.

(7) Subsection (1) of this section shall not apply to expenditures of funds received from assessments against benefited property for local improvements as defined in ORS 223.001 to the extent that the cost of such improvements is to be paid by owners of benefited property.

(8) Subsection (1) of this section shall not apply to the expenditure of funds accumulated to pay deferred employee compensation.

(9) Subsection (1) of this section shall not apply to refunds or the interest on them granted by counties under ORS 311.806.

(10) Subsection (1) of this section shall not apply to refunds, received by a municipal corporation when purchased items are returned after an expenditure has been made. Expenditure of refunded amounts to which this subsection applies shall be lawful only after the governing body of the municipal corporation has enacted, after public hearing, appropriate appropriation ordinances or resolutions authorizing such expenditure.

(11) Subsection (1) of this section shall not apply to a newly formed municipal corporation during the fiscal year in which it was formed. If a new municipal corporation is formed between March 1 and June 30, subsection (1) of this section shall not apply to the municipal corporation during the fiscal year immediately following the fiscal year in which it was formed.

SECTION 4. ORS 294.361 is amended to read:

294.361. (1) Each municipal corporation shall estimate in detail its budget resources for the ensuing year by funds and sources.

(2) Budget resources include but are not limited to: The balance of cash, cash equivalents and investments (in the case of a municipal corporation on the cash basis) or the net working capital (in the case of a municipal corporation on the accrual or modified accrual basis of accounting) which will remain in each fund on the last day of the current year; taxes; fees; licenses; fines; forfeited bail; interest on deposits or on securities of any kind; endowments; annuities; penalties; sales of property or other assets or products of any kind; delinquent taxes; judgments; damages; rent; premiums on sales of bonds; reimbursement for services, road or other work performed for others; transfer or reverter of unused balances of any kind; reimbursement for services provided other funds; rebates; refunds of moneys heretofore paid on any account; apportionment, grant, contribution, payment or allocation from the federal or state government or any unit of government; taxes for the ensuing year [computed in accordance with ORS 294.381]; interfund revenue transfers; and revenues from any and all other sources of whatsoever kind or character.

(3) Budget resources shall not include:

(a) The estimate for the ensuing year of discounts under ORS 311.505.

(b) The estimate of uncollectible amounts of taxes, fees or charges for the ensuing year.

(c) Moneys accumulated under an approved employee deferred compensation plan[,] and interest or investment returns earned on such moneys[,].

(d) Grants, gifts, bequests or devises transferred to a municipal corporation in trust for specific uses in the year of transfer. However, such grants, gifts, bequests or devises shall be included as budget resources if, by the time the budget committee approves the budget, the amount thereof that will be received in the ensuing year can be reasonably estimated. Such grants, gifts, bequests or devises may be placed in a trust and agency fund, to then be appropriated from such fund or funds.

SECTION 5. ORS 294.381 is amended to read:

294.381. (1) Each municipal corporation [which] that has the power to levy an ad valorem property tax shall estimate, in the manner provided in this section, the amount of revenues that will be [raised] received in the ensuing year through the imposition of taxes upon the taxable property within the municipal corporation. [The estimate shall be computed as follows:]

[(1) Add the estimated unappropriated ending balances referred to in ORS 294.371 to the estimate of expenditures.]

[(2) To the sum obtained in subsection (1) of this section add the amounts of moneys reserved pursuant to ORS 294.366 or any other law.]

[(3) From the sum obtained in subsection (2) of this section, subtract the estimate of budget resources excluding the amount for taxes to be certified to the assessor for the ensuing year.]

[(4) To the remainder obtained in subsection (3) of this section, add an estimate of the discount allowed by ORS 311.505 and an allowance for taxes which will be imposed but not collected in the ensuing year. For purposes of this subsection, no allowance for discounts or uncollectibility shall be made for the amounts of offset which will be received by the district in full, and only the statutory discount amount allowed to the municipal corporation shall be added to the estimate provided in this subsection for any taxes which are paid by the federal or state government.]

[(5) The sum obtained in subsection (4) of this section is the preliminary estimate of ad valorem property taxes.]

[(6) The preliminary estimate of ad valorem property taxes shall be compared to the amount of projected revenues to be raised by imposing on the assessed value the total rate of the following:]

[(a) The permanent rate limit or statutory rate limit, if applicable, determined under ORS 310.200 to 310.242, or a lesser rate of operating taxes proposed by the municipal corporation.]

[(b) The total rate of local option taxes proposed to be certified to the assessor for the ensuing tax year.]

[(c) The total rate for all taxes imposed to pay principal and interest on bonded indebtedness or imposed to meet obligations described in section 11 (5), Article XI of the Oregon Constitution.]

[(7) If the estimates determined under subsections (5) and (6) of this section differ, the estimates shall be reconciled by making adjustments to any of the following:]

[(a) The estimate of expenditures used in subsection (1) of this section;]

[(b) The estimate of budget resources other than ad valorem property taxes used in subsection (3) of this section;]

[(c) The operating tax rate, to the extent the operating tax rate does not exceed the municipal corporation's permanent rate limit or statutory rate limit, if applicable; or]

[(d) The local option taxes to be certified to the assessor.]

[(8) The reconciled amount determined under subsection (7) of this section shall be the municipal corporation's estimate of ad valorem property taxes to be certified to the assessor for imposition for the ensuing year.]

[(9) For purposes of this section, if an ad valorem property tax is to be certified to the assessor as an amount, the rate of the tax shall be the amount divided by the assessed value of property that was used in making the estimate under subsection (6) of this section.]

(2) Subject to the additional adjustments required under subsection (3) of this section, the estimated ad valorem taxes that will be received in the ensuing year is the sum of the following:

(a) The amount derived by multiplying the estimated assessed value for the ensuing year of the taxable property within the municipal corporation by whichever of the following is applicable to the municipal corporation:

(A) The municipal corporation's permanent rate limit on operating taxes, as defined in ORS 310.202 (8), or such lesser rate as the municipal corporation may determine to use for purposes of levying such ad valorem taxes; or

(B) The municipal corporation's statutory rate limit on operating taxes, as defined in ORS 310.202 (10), or such lesser rate as the municipal corporation may determine to use for purposes of levying such ad valorem taxes.

(b) If the municipal corporation is authorized to levy a local option tax that was authorized by the electors as a dollar amount, the dollar amount of such local option tax that is authorized to be levied in the ensuing year.

(c) If the municipal corporation is authorized to levy a local option tax that was authorized by the electors as a tax rate, the amount derived by multiplying the authorized rate of such local option tax for the ensuing year by the estimated assessed value for the ensuing year of the taxable property within the municipal corporation.

(d) An amount equal to the principal and interest on all bonded indebtedness of the municipal corporation that is due and payable in the ensuing year, divided by the annual average percentage of taxes collected in the county in which the taxable property of the municipal corporation is located.

(3) The sum of the amounts determined under subsection (2)(a), (b) and (c) of this section shall be reduced by an amount equal to the estimated amount of such taxes that will not be collected as a result of:

(a) The discounts allowed under ORS 311.505;

(b) The limits imposed under ORS 310.150 (3); and

(c) The failure of taxpayers to pay such taxes in the year for which they are levied.

(4) The estimated ad valorem taxes determined in accordance with subsections (2) and (3) of this section shall be used by the municipal corporation for purposes of complying with the requirements of ORS 310.060 (1).

SECTION 6. ORS 294.401 is amended to read:

294.401. (1) The budget committee shall hold one or more meetings for the following purposes:

(a) Receiving the budget message and the budget document; and

(b) Providing members of the public with an opportunity to ask questions about and comment upon the budget document.

(2) When more than one meeting of the budget committee is held under subsection (1) of this section, the first meeting shall be the meeting at which the budget message and the budget document are received by the budget committee. The budget committee may provide members of the public with an opportunity to ask questions about and comment upon the budget document at the first meeting of the budget committee. If such opportunity is not provided at the first meeting, the budget committee shall provide the public with the opportunity to ask questions and make comments upon the budget document at subsequent meetings.

(3) The budget officer shall publish prior notice of each meeting of the budget committee held for the purpose of satisfying the requirements of subsection (1) of this section. The published notice shall contain the information required under subsection (4) of this section. However:

(a) If more than one meeting of the budget committee is held [under] for the purpose of meeting the requirements of subsection (1) of this section, the budget officer may publish a single notice containing the required information for all of the meetings [or a separate notice for each meeting.] to be held for the purpose of meeting the requirements of subsection (1) of this section; and

(b) If the budget committee holds two or more meetings under subsection (1)(b) of this section for the purpose of taking questions and comments from the public, then:

(A) Only notice of the first meeting held for the purpose of taking questions and comments from the public need be published in accordance with the requirements of this subsection, and notice of any subsequent meeting held for the purpose of taking questions and comments from the public may be given as provided in ORS 294.406 (2); and

(B) If notice is published for a meeting to be held for the purpose of taking questions and comments from the public and it is subsequently determined that the meeting is not needed, notice of cancellation of the meeting shall be published as provided in ORS 294.406 (2).

(4) A notice meets the requirements of this subsection when it states:

(a) The purpose, time and place of the meeting or meetings to which the notice relates and the place where the budget document is available;

(b) That the meeting is a public meeting where deliberations of the budget committee will take place; and

(c) If the meeting described in the notice is a meeting at which the budget committee will receive questions and comments from members of the public, that any person may ask questions about and comment on the budget document at that time.

[(4)] (5) When notice of a meeting of the budget committee is published by publication in a newspaper, the notice satisfies the requirements of this section if the notice is published on not fewer than two occasions separated by at least [seven] five days, with the first publication not earlier than 30 days prior to the meeting date and the final publication not later than five days prior to the meeting date. When notice of a meeting of the budget committee is published by mailing or by hand delivery, the notice satisfies the requirements of this section if the notice is placed with the United States Postal Service or hand delivered not later than 10 days prior to the meeting date.

[(5)] (6) [Not more than 10 days] At any time prior to the meeting of the budget committee at which the budget committee will receive the budget message and the budget document, the budget officer may provide a copy of the budget document to each member of the budget committee for the information and use of the individual member.

[(6)] (7) Except when copies of the budget document were provided to the members of the budget committee under subsection [(5)] (6) of this section, the budget officer shall submit to the members of the budget committee the budget document at the first meeting held under subsection (1) of this section for their use and consideration.

[(7)] (8) The budget officer shall file a copy of the budget document in the office of the governing body of the municipal corporation immediately following presentation of the budget document to the members of the budget committee under subsection [(5) or] (6) or (7) of this section. The copy shall become a public record of the municipal corporation.

[(8)] (9) The governing body shall either provide the means of duplicating the budget or part thereof, in those situations where the budget document or portion thereof may be quickly reproduced, or shall provide copies of the budget document or part thereof so that a copy of the budget document or part thereof may be readily obtained by any individual interested in the affairs of the municipal corporation.

SECTION 7. ORS 294.406 is amended to read:

294.406. (1) The budget committee shall approve the budget document as submitted by the budget officer or the budget document as revised and prepared by the budget committee. The budget document as approved by the budget committee shall specify the ad valorem property [taxes] tax amount or rate for all funds.

(2) In addition to the meetings held under ORS 294.401 (1), the budget committee may meet from time to time at its discretion. All meetings of the budget committee shall be open to the public. Except for a meeting of the budget committee held under ORS 294.401 (1), prior notice of each meeting of the budget committee shall be given at the same time as is required for notice of meetings of the governing body of the municipal corporation and may be given in the same manner as notice of meetings of the governing body or by any one or more of the methods described in ORS 294.311 [(31)] (32).

(3) The budget committee may demand and receive from any officer, employee or department of the municipal corporation any information the committee requires for the revision and preparation of the budget document. The budget committee may compel the attendance of any such officer or employee at its meetings.

SECTION 8. ORS 294.411 is amended to read:

294.411. (1) Each municipal corporation having a population not exceeding 200,000, located in a county having a tax supervising and conservation commission and not submitting its budget document to the tax supervising and conservation commission for a public hearing, pursuant to ORS 294.430 (3), shall submit its approved budget document to the tax supervising and conservation commission in the county at least [20] 30 days prior to the date of [publication of the budget document in accordance with ORS 294.421] the public hearing in accordance with ORS 294.430. If its territory lies in two or more counties, the municipal corporation shall submit its budget to the commission if the real market value of all property subject to taxation by the municipal corporation in the county having a commission is greater than the real market value of all property subject to taxation by the municipal corporation in any other county. Real market value is the real market value computed according to ORS 308.207 from the assessment rolls last in the process of collection.

(2) Before [approving] adopting the budget [document], the [budget committee] governing body for a municipal corporation described in subsection (1) of this section[,] shall consider and take appropriate action on any orders, recommendations or objections made by the tax supervising and conservation commission.

SECTION 9. ORS 294.421 is amended to read:

294.421. (1) Subject to subsections (3) to (6) of this section, the summary of the budget document approved by the budget committee shall be published at least once prior to the time appointed for the proposed meeting of the governing body in accordance with ORS 294.430.

(2) Subject to subsections (3) to (6) of this section, the notice of the time and place at which the budget document as approved by the budget committee may be discussed shall be published by one or more of the methods described in ORS 294.311 [(31)] (32) not less than five days and not more than [25] 30 days prior to the date of the meeting required by ORS 294.430.

[(3) Notwithstanding any other provision of law, in a county having a tax supervising and conservation commission, municipal corporations having a population not exceeding 200,000, according to certified estimates of population, shall publish their summary of the budget document approved by the budget committee in accordance with subsection (1) of this section.]

[(4)] (3) If no newspaper is published in the municipal corporation, a municipal corporation whose aggregate of estimated budget expenditures for the ensuing fiscal year does not exceed $50,000 may, in lieu of the publication and notice provided in subsections (1) [to (3)] and (2) of this section and in lieu of publication by one or more of the methods described in ORS 294.311 [(31)] (32), post the summaries and notices provided by ORS 294.416 or 294.418 in three conspicuous places in the municipal corporation for at least 20 days prior to the date of the meeting provided in ORS 294.430 and publish the notice provided by subsection [(5)] (4) of this section.

[(5)] (4) If notice is given as provided in subsection [(4)] (3) of this section, the municipal corporation shall publish, by one or more of the methods described in ORS 294.311 [(31)] (32), a notice of the following:

(a) The date, time and place of the meeting provided by ORS 294.430;

(b) The place where the complete budget document is available for inspection by the general public during regular office hours;

(d) Changes in the amount or rate of proposed ad valorem property taxes; and

(e) The place where copies of the complete budget or parts thereof may be obtained.

[(6)] (5) The notice provided in subsection [(5)] (4) of this section shall be published not less than five days and not more than 30 days prior to the date of the meeting provided in ORS 294.430.

[(7)] (6) A municipal corporation having a population exceeding 200,000 inhabitants, or a municipal corporation with 200,000 or fewer inhabitants that requests the tax supervising and conservation commission to conduct the public hearing outlined in ORS 294.430, shall, in lieu of the publication and notice prescribed in subsection (1) of this section, submit its budget document, as approved by the budget committee, to the tax supervising and conservation commission within its county, if there is such a commission, at least 20 days prior to the legal date of the public hearing before the tax supervising and conservation commission on the budget, and the budget document shall thereupon be open to inspection by any taxpayer or citizen. The municipal corporation shall also publish a notice as provided in subsections (4) and (5) [and (6)] of this section.

SECTION 10. ORS 294.425 is amended to read:

294.425. (1) When a notice, budget summary or other document is required to be published under any provision of ORS 294.305 to 294.565, publication of the document shall be considered sufficient for all purposes if a good faith effort is made by the budget officer of the municipal corporation to publish by any one or more of the methods described in ORS 294.311 [(31)] (32), notwithstanding any defect in the publication, including but not limited to:

(a) Typographical or scriveners' errors in the published material;

(b) Failure of the published materials to be mailed or hand delivered to each street address within the jurisdictional boundaries of the municipal corporation;

(d) Calculations of ad valorem property taxes not made in accordance with the applicable requirements of law; or

(e) Failure to publish within the time periods required by law.

(2) At the first regularly scheduled meeting of the governing body of the municipal corporation that is held following the discovery of any publication error described in subsection (1)(a), (c) or (d) of this section, the budget officer shall advise the governing body in writing of the error and shall correct the error by testimony before the governing body at the meeting. If the error relates to the calculation of ad valorem property taxes, the budget officer shall immediately notify the county assessor of the error in writing, identifying the correct ad valorem property tax.

SECTION 11. ORS 294.435 is amended to read:

294.435. (1) After the public hearing provided for in ORS 294.430 (1) has been held, the governing body shall enact the proper ordinances or resolutions to adopt the budget[;], to make the appropriations[;], to determine, make and declare the ad valorem property [taxes] tax amount or rate to be certified to the assessor for the ensuing year[;] and to itemize and categorize the ad valorem property [taxes] tax amount or rate as provided in ORS 310.060. Consideration shall be given to matters discussed at the public hearing. The budget estimates and proposed ad valorem property [taxes] tax amount or rate as shown in the budget document may be amended prior to adoption and may also be amended by the governing body following adoption if such amendments are adopted prior to the commencement of the fiscal year to which the budget relates. However, the amount of estimated expenditures for each fund shall not be increased by more than $5,000 or 10 percent of the estimated expenditures, whichever is greater, and the amount or rate of the total ad valorem property taxes to be certified by the municipal corporation to the assessor shall not exceed the amount approved by the budget committee, unless the amended budget document is republished as provided by ORS 294.416 or 294.418 and 294.421 for the original budget and another public hearing is held as provided by ORS 294.430 (1).

(2) After the public hearing provided for in ORS 294.430 (2) or (3) has been held and the certification of the tax supervising and conservation commission received, if such certification is required, the governing body shall enact the proper ordinances or resolutions to adopt the budget[;], to make the appropriations[;], to determine, make and declare the ad valorem property [taxes;] tax amount or rate and to itemize and categorize the ad valorem property [taxes] tax amount or rate as provided in ORS 310.060. Consideration shall be given any orders, recommendations or objections made by the tax supervising and conservation commission in accordance with law. The action taken on each order, recommendation or objection after such consideration by the governing body, with the reasons for such action, shall be included in the ordinance or resolution adopting the budget. A certified copy of the ordinance or resolution shall be sent to the commission within 15 days after the date the ordinance or resolution is adopted. The budget estimates, appropriations and ad valorem property [taxes] tax amount or rate as shown in the budget document may be amended prior to adoption and may also be amended by the governing body following adoption if such amendments are adopted prior to the commencement of the fiscal year to which the budget relates. However, the amount of estimated expenditures for each fund shall not be increased by more than $5,000 or 10 percent of the estimated expenditures, whichever is greater, and the amount or rate of the total ad valorem property taxes to be certified by the municipal corporation to the assessor shall not exceed the amount shown in the budget document at the time of the budget hearing, unless the amended budget document is resubmitted to the tax supervising and conservation commission for another public hearing, and for recommendations or objections of that body.

(3) The appropriations required by subsections (1) and (2) of this section shall, as a minimum, contain one amount for each organizational unit or program of each fund. In addition, separate amounts shall be appropriated in each fund for debt service, special payments, interfund revenue transfers, capital outlay, operating expenses which cannot be allocated to an organizational unit or program and operating contingencies. If the governing body so desires, it may appropriate separate amounts for activities within an organizational unit or program. For those municipal corporations where the term "organizational unit" has no application, the appropriations shall contain separate amounts for personal services, materials and services, capital outlay, debt service, special payments, interfund revenue transfers and operating contingency for each fund.

(4) Thereafter no greater expenditure, or encumbrance if encumbrance accounting is used, of public money shall be made for any specific purpose other than the amount appropriated therefor except as provided in ORS 294.326, 294.440, 294.450 and 294.480.

(5) The determination of the amount or rate of ad valorem property taxes to be certified shall be entered in the proper records of the governing body. No greater tax than that so entered upon the record shall be certified by the municipal corporation proposing the tax for the purpose or purposes indicated.

(6) Nothing contained in this section shall preclude a governing body during the fiscal year by appropriate ordinance or resolution, after public hearing, from adjusting budgeted resources and reducing appropriations to reflect a decrease in available resources.

(7)(a) The governing body shall determine, make and declare ad valorem property taxes under subsections (1) and (2) of this section as a rate per $1,000 of assessed value if the taxes are operating taxes or rate-based local option taxes as a rate per $1,000 of assessed value.

(b) The governing body shall determine, make and declare ad valorem property taxes under subsections (1) and (2) of this section as an amount if the taxes are being certified as amount-based local option taxes, to pay principal and interest on exempt bonded indebtedness or to pay other government obligations described in section 11 (5), Article XI of the Oregon Constitution.

SECTION 12. ORS 294.450 is amended to read:

294.450. Subject to the provisions contained in the charter of any city or county or in any law relating to municipal corporations:

(1) Except as provided in subsection (2) of this section, transfers of appropriations may be made within a given fund when authorized by official resolution or ordinance of the governing body. The resolution or ordinance shall state the need for the transfer, the purpose for the authorized expenditure and the amount of appropriation transferred.

(2) Transfers of general operating contingency appropriations which in aggregate during a fiscal year exceed 15 percent of the total appropriations of the fund may be made only after adoption of a supplemental budget prepared for that purpose. All other transfers of general operating contingencies are subject to subsection (1) of this section.

(3) Transfers of appropriations or of appropriations and a like amount of budget resources may be made from the general fund of the municipal corporation to any other fund when authorized by an official resolution or ordinance of the governing body. The resolution or ordinance shall state the need for the transfer, the purpose for the authorized expenditures embodied in the appropriation and the amount of appropriation transferred.

(4) It shall be unlawful to transfer appropriations from any special revenue fund to the general fund or any other special revenue fund.

(5) The transfers referred to in this section apply to transfers which occur after the budget has been approved and which are made during the year for which the appropriations are made. Nothing in this section shall prohibit or regulate lawful transfers which have been budgeted in accordance with the local budget law.

(6) When a municipal corporation imposes taxes, fees or charges that, in accordance with applicable law or an intergovernmental agreement under ORS chapter 190, are required to be paid, on a pass-through basis, to another municipal corporation, the municipal corporation that imposes the taxes, fees or charges shall include the taxes, fees or charges in its budget and shall appropriate the estimated amount generated thereby. The appropriation shall take the form of an expense of the municipal corporation that imposes the taxes, fees or charges. If the actual amount collected from the taxes, fees or charges during a fiscal year exceeds the estimated amount included in the imposing municipal corporation's budget for the fiscal year, then upon determining that such excess exists the municipal corporation imposing the taxes, fees or charges shall appropriate such excess by means of a resolution or ordinance of its governing body, and no further action shall be required under ORS 294.305 to 294.565 to lawfully budget, appropriate or expend such excess.

SECTION 13. ORS 294.460 is amended to read:

294.460. (1) It shall be lawful to loan money from any fund to any other fund of the municipal corporation whenever the loan is authorized by official resolution or ordinance of the governing body[, except loans shall not be made from funds created for the purpose of retiring indebtedness unless otherwise provided by the charter of any city or county or in any statute relating to municipal corporations. The resolution or ordinance shall state the need for the loan and provide that the money so loaned shall be returned to the fund from which it was borrowed by the end of the ensuing year. The payment of any loans not repaid in the year in which the loan is made shall be budgeted as a requirement in the ensuing year]. The loans shall be made in compliance with the applicable requirements and limitations of this section. Loans made under this section shall not be made from:

(a) Debt service reserve funds created to provide additional security for outstanding bonds or other borrowing obligations that the municipal corporation has covenanted with the holders of such bonds or other borrowing obligations to maintain at certain specified levels. However, nothing in this paragraph is intended or shall be construed to prohibit loans from any such debt service reserve fund to the extent that the aggregate outstanding amount of the loans does not exceed the amount by which the amount in such debt service reserve fund exceeds the amount the municipal corporation has covenanted to maintain in the reserve fund with the holders of the related bonds or other borrowing obligations;

(b) Debt service funds created to account for moneys needed to make annual debt service payments on outstanding bonds or other borrowing obligations; or

(c) Moneys credited to any fund when, under applicable constitutional provisions, the moneys are restricted to specific uses unless the purpose for which the loan is to be made is a use allowed under such constitutional provisions.

(2) The resolution or ordinance authorizing any interfund loan permitted under this section shall:

(a) State the fund from which the loan is to be made, the fund to which the loan is to be made, the purpose for which the loan is to be made and the principal amount of the loan.

(b) If the interfund loan is a capital loan, set forth a schedule under which the principal amount of the loan, together with interest thereon at the rate provided for in paragraph (c)(B) of this subsection, is to be budgeted and repaid to the lending fund. The schedule shall provide for the repayment in full of the loan over a term not to exceed five years from the date the loan is made.

(c) If the interfund loan is a capital loan, provide that the loan shall bear interest at an annual rate equal to:

(A) The rate of return on moneys invested in the local government investment pool under ORS 294.805 to 294.895, as reported under ORS 294.875, immediately prior to the adoption of the ordinance or resolution authorizing the loan; or

(B) Such other rate as the governing body may determine.

(d) If the interfund loan is an operating loan, provide that the money loaned shall be budgeted and repaid to the fund from which the money was borrowed by the end of the ensuing year.

(3) The payment of any operating loans not repaid in the year in which the operating loan was made shall be budgeted as a requirement in the ensuing year.

[(2)] (4) It shall be lawful to commingle cash balances of funds so long as all such fund moneys are segregated in the budget and accounting records.

(5) As used in this section:

(a) "Capital loan" means any interfund loan, or portion thereof, made for the purpose of financing the design, acquisition, construction, installation or improvement of real or personal property and not for the purpose of paying operating expenses.

(b) "Operating loan" means any interfund loan, or portion thereof, that is not a capital loan, including any interfund loan, or portion thereof, made for the purpose of paying operating expenses.

SECTION 14. ORS 294.480 is amended to read:

294.480. (1) Notwithstanding requirements as to estimates of and limitation on expenditures, the governing body of any municipal corporation may make a supplemental budget for the fiscal year for which the regular budget has been prepared under one or more of the following circumstances:

(a) An occurrence or condition which had not been ascertained at the time of the preparation of a budget for the current year which requires a change in financial planning.

(b) A pressing necessity which was not foreseen at the time of the preparation of the budget for the current year which requires prompt action.

(c) Funds were made available by another unit of federal, state or local government and the availability of such funds could not have been ascertained at the time of the preparation of the budget for the current year.

(d) A request for services or facilities, the cost of which shall be supplied by a private individual, corporation or company or by another governmental unit and the amount of the request could not have been accurately ascertained at the time of the preparation of the budget for the current year.

(e) Proceeds from the involuntary destruction, involuntary conversion, or sale of property has necessitated the immediate purchase, construction or acquisition of different facilities in order to carry on the governmental operation.

(f) Ad valorem property taxes are received during the fiscal year in an amount sufficiently greater than the amount estimated to be collected that the difference will significantly affect the level of government operations to be funded by those taxes as provided in the budget for the current year.

(2) A supplemental budget shall not extend beyond the end of the fiscal year during which it is submitted.

(3) When the estimated expenditures contained in a supplemental budget for a fiscal year differ by less than 10 percent of any one of the individual funds contained in the regular budget for that fiscal year that is being changed in the supplemental budget, the governing body of the municipal corporation may adopt the supplemental budget at a regular meeting of the governing body. Notice of such regular meeting, including sufficient detail on revenues and expenditures, shall be published by one or more of the methods permitted under ORS 294.311 [(31)] (32) not less than [seven] five days prior to the meeting. Following such meeting, the governing body shall make additional appropriations and may thereafter make additional expenditures as authorized by such appropriations. [Following the action taken by the governing body, a press release shall be provided to the news media concerning the effect of the additional appropriation.]

(4)[(a)] When the estimated expenditures contained in a supplemental budget for a fiscal year differ by 10 percent or more of any one of the individual funds contained in the regular budget for that fiscal year that is being changed in the supplemental budget, the supplemental budget, or a summary thereof, shall be published, or, in counties having a tax supervising and conservation commission, shall be submitted to the tax supervising and conservation commission within the county. The governing body, or, where applicable, the tax supervising and conservation commission shall then hold a public hearing on the supplemental budget. Publication of the budget and notice of the hearing shall be given in the manner provided in ORS 294.421[, except that publication of the notice shall be not less than 14 days and not more than 20 days prior to the date of the hearing]. Following such hearing, the governing body shall make additional appropriations and may thereafter make additional expenditures as authorized by such appropriations.

[(b) If, within 10 days after the date of publication of the budget and notice of hearing, 10 or more interested taxpayers request in writing that the governing body refer the supplemental budget to the budget committee, the governing body shall reconvene the budget committee. The budget committee shall conduct the hearing for which notice was given. No additional notice of the meeting is required. The budget committee shall make its recommendations to the governing body at or after the hearing. Upon receipt of the budget committee recommendations, the governing body shall adopt whatever changes it considers necessary and adopt the supplemental budget.]

(5) The making of a supplemental budget shall not authorize the governing body to increase the municipal corporation's total ad valorem property taxes above the amount or rate published with the annual budget and certified to the assessor under ORS 310.060 for the fiscal year to which the supplemental budget applies.

SECTION 15. ORS 294.485 is amended to read:

294.485. (1) Any ad valorem property tax made contrary to the provisions of ORS 294.305 to 294.565 or any other law relating to the making of tax levies shall be voidable as provided in subsection (2) of this section and ORS 310.070.

(2) The county assessor, county court, board of county commissioners, the Department of Revenue, tax supervising and conservation commission or [an] 10 or more interested [taxpayer] taxpayers may appeal to the Oregon Tax Court and such appeal shall be perfected in the following manner only:

(a) Within 30 days after the certification of ad valorem property taxes is filed with the county assessor under ORS 310.060, the appealing party shall file an original and two certified copies of a complaint with the clerk of the Oregon Tax Court at its principal office in Salem, Oregon. Such filing in the Oregon Tax Court shall constitute the perfection of the appeal. Service upon the Department of Revenue shall be accomplished by the clerk of the tax court filing a certified copy of the complaint with the Director of the Department of Revenue and with the secretary or clerk of the municipal corporation. When a complaint is filed under this section by 10 or more interested taxpayers, if following perfection of the court's jurisdiction to hear the case:

(A) One or more of the taxpayers withdraws from the proceedings, and five or more of the taxpayers do not withdraw, the court shall nevertheless retain jurisdiction to hear the matter; or

(B) One or more of the taxpayers withdraws from the proceedings, and fewer than five of the taxpayers remain parties and do not withdraw, the court shall not retain jurisdiction to hear the matter but shall dismiss the case with prejudice.

(b) The complaint shall state the facts and the grounds upon which the plaintiff contends the tax should be voided or modified. The case shall proceed thereafter in the manner provided in ORS 305.405 to 305.494.

(3) If the court finds that the budget and the tax certification in question were not prepared and made in substantial compliance with ORS 294.305 to 294.565 and any other applicable law relating to the making of ad valorem property taxes, it shall declare void or modify any such tax and shall direct that such action be taken, all as in the circumstances it shall deem appropriate.

SECTION 16. ORS 294.525 is amended to read:

294.525. (1) Any municipal corporation, by ordinance or resolution of its governing body, may establish one or more reserve funds to hold moneys to be accumulated and expended for the purposes specified in ORS 280.050, without submitting the question of establishing the reserve fund to a vote of the electors. The municipal corporation may cause to be credited to any reserve fund all or any portion of the revenues derived from taxes levied under ORS 280.060 and any other taxes, charges or revenues as the governing body may determine. The municipal corporation may also limit the crediting of such taxes, charges or revenues to a reserve fund to a specific period of time designated by the governing body.

[(2) All ad valorem tax revenues received by any municipal corporation as a result of a levy under ORS 280.040 to 280.090 shall be:]

[(a) Kept by the treasurer or other financial officer in a fund, including but not limited to a reserve fund established under subsection (1) of this section, that is separate and distinct from other funds of the municipal corporation.]

[(b) Except for the unexpended balance of a fund or reserve fund that is transferred to another fund as provided in subsection (3) of this section, retained or expended only for the purpose for which the taxes were imposed.]

[(3)] (2) Not less frequently than every 10th anniversary of the date upon which a reserve fund is established under subsection (1) of this section, the governing body of the municipal corporation shall review the reserve fund and determine whether the fund will be continued or abolished. When the governing body determines, by resolution, that it is no longer necessary to maintain such a reserve fund [or a fund referred to in subsection (2)(a) of this section]:

(a) Commencing with the next succeeding fiscal year, the political subdivision shall discontinue the levy of any taxes under ORS 280.060 that would otherwise be required to be credited to such fund; and

(b) There shall be transferred to the general fund or any other fund of the political subdivision that the governing body determines is appropriate:

(A) Any unexpended balance in the fund to be abolished that is not required to be held for subsequent expenditure for the purposes for which the fund was established; and

(B) Any subsequent receipts from tax levies that are otherwise required to be credited to such fund, together with any penalties and interest thereon.

[(4)] (3) This section does not apply to system development charges imposed under ORS 223.297 to 223.314, and no system development charges shall be credited to any reserve fund established under this section.

SECTION 17. ORS 294.645 is amended to read:

294.645. (1) After the hearings have been held the commission shall carefully consider the proposed budgets and shall by majority vote of the members of the commission certify in writing to the levying board of any municipal corporation, on or before June 25 of each year, any objections which the commission may have to the adoption of the budget, or any item therein, or any recommendations which the commission may desire to make regarding the budget. If the commission does not desire to make any recommendations or objections, it shall certify that fact to the levying board. The responsibility of the commission shall be advisory only.

(2) Certification of a budget for a municipal corporation holding its own [hearings] hearing shall be made in the same manner as required by subsection (1) of this section, except that any recommendations or objections shall be certified to the levying board prior to the date of [publication of the budget by the municipal corporation. The levying board shall then convey any recommendations or objections to the budget committee for the municipal corporation] the hearing.

SECTION 18. ORS 294.655 is amended to read:

294.655. The commission shall conduct public hearings on all special tax levies and bond issues proposed for elector approval by the levying boards. Any levying board proposing to ask elector approval of a special tax levy or of a bond issue shall notify the commission in writing of its proposal not less than [55] 30 days prior to the filing date [of] for the election and set forth its reasons therefor[;], but the commission in its discretion may permit such notification to be filed in such shorter period of time as it sees fit. Upon the receipt of the notification the commission shall fix the time and place of hearing and notify the levying board to attend the hearing and discuss the proposed special tax levy or bond issue with the commission. The hearings provided for in this section shall be in addition to the regular budget hearings provided for by ORS 294.640.

SECTION 19. ORS 294.665 is amended to read:

294.665. The levying board of each municipal corporation under the jurisdiction of the commission [shall, on or before the 90th day following the end of its fiscal year submit a complete and accurate report of its expenditures and revenues for the fiscal year in the same detail as in its budget for that year and of its bonded indebtedness as of the last day of the fiscal year, and copies of its balance sheets showing all assets and liabilities of all funds as of the last day of the fiscal year. The levying board] shall annually submit [copies of its own annual financial report and of annual financial reports] a copy of the full report of its independent [auditors] auditor under ORS 297.425, or a copy of the financial statements submitted to the Secretary of State under ORS 297.435, as soon as [practical] practicable after the close of each fiscal year.

SECTION 20. ORS 294.630 is amended to read:

294.630. There hereby is created an account to be known as the tax supervising and conservation commission account in the general fund of each county subject to ORS 294.605 to 294.705. The tax supervising and conservation commission shall on or before April 1 of each year submit certified budgets for the ensuing fiscal year to the county court or board of county commissioners. The budget shall contain a complete and detailed estimate of the proposed expenditures of the commission for all purposes. Following the receipt of the budget the county court or board of county commissioners shall include the budget as submitted as a part of the county budget and shall make an appropriation for the tax supervising and conservation commission account sufficient to cover the proposed expenditures[;], but no appropriation shall be made in any county in any year for such purpose in excess of [$230,000] $280,000. The county court or board of county commissioners shall not reduce the amount of the budget as presented by the tax supervising and conservation commission, within the amount stated in this section, nor shall it refuse to approve any lawful request for disbursement of money from the tax supervising and conservation commission account.

SECTION 21. ORS 280.040 is amended to read:

280.040. (1) As used in ORS 280.040 to 280.145:

[(1)] (a) "Local option tax" means a tax described under section 11 (4) or (7)(c), Article XI of the Oregon Constitution.

[(2)] (b) "Subdivision" includes only such counties, municipal corporations, quasi-municipal corporations and civil or political corporations or subdivisions as are empowered by law to levy ad valorem property taxes, except that "subdivision" does not include a common or union high school district or an education service district.

(2) All ad valorem tax revenues that are received by any subdivision as a result of a levy under ORS 280.040 to 280.090 and that are derived from an ad valorem tax levied for purposes other than general operations shall be:

(a) Kept by the treasurer or other financial officer in a fund that is separate and distinct from other funds of the subdivision.

(b) Expended only for the purpose for which the taxes were imposed.

SECTION 22. ORS 280.070 is amended to read:

280.070. (1) An election within a county for the purpose of approving a tax levy or tax rate under ORS 280.060 shall be called by the county court or board of county commissioners and shall be held on a date specified in ORS 203.085.

(2) An election within a city for the purpose of approving a tax levy or tax rate under ORS 280.060 or under section 11 (3)(c), Article XI of the Oregon Constitution, shall be called by the governing body of the city and held on a date specified in ORS 221.230.

(3) An election within a political subdivision other than a county or city for the purpose of approving a tax levy or tax rate under ORS 280.060 or under section 11 (3)(c), Article XI of the Oregon Constitution, shall be called by the governing body of the subdivision and held on a date specified in ORS 255.345.

(4)(a) The ballot title for [an election] a measure authorizing the imposition of local option taxes shall contain the following additional statement:

___________________________________________________________________

This measure may cause property taxes to increase more than three percent.

___________________________________________________________________

[(b) The ballot title shall also state the length, in years, that the proposed local option tax is to be imposed.]

[(c)] (b) The statements required by this subsection shall not be considered for purposes of the word count limitations under ORS 250.035.

[(d)] (c) The statements required by this subsection shall be placed after the question on the ballot title.

[(5) If the election is to be conducted by mail, the front of the outer envelope in which the ballot title is mailed shall state, clearly and boldly printed in red, "CONTAINS VOTE ON PROPOSED TAX INCREASE."]

(5) As part of the question, the ballot title for a measure authorizing the imposition of local option taxes shall state:

(a) The length in years of the period during which the proposed local option tax will be imposed.

(b) The first fiscal year in which the proposed local option tax will be imposed.

(6) As part of the question, the ballot title for a measure authorizing the establishment of a permanent rate limitation shall contain the following information:

(a) The tax rate per $1,000 of assessed value of the proposed permanent rate limitation.

(b) The first fiscal year in which the proposed permanent rate limitation will be imposed.

[(6)] (7) The ballot title for [an election] a measure authorizing the imposition of local option taxes or a permanent rate limitation shall be in compliance with ORS 250.036.

SECTION 23. ORS 310.060 is amended to read:

310.060. (1) Not later than July 15 of each year, every city, school district or other public corporation authorized to levy or impose a tax on property shall file a written notice certifying the ad valorem property tax rate or the estimated amount of ad valorem property taxes to be imposed by the taxing district and any other taxes on property imposed by the taxing district on property subject to ad valorem property taxation that are required or authorized to be placed on the assessment and tax roll for the current fiscal year. The notice shall be accompanied by a copy of a lawfully adopted ordinance or resolution that categorizes the tax, fee, charge, assessment or toll as subject to or not subject to the limits of section 11b, Article XI of the Oregon Constitution, identified by the categories set forth in ORS 310.150.

(2) For any ad valorem property taxes levied by the taxing district, the notice shall state as separate items:

(a) The taxing district's rate of ad valorem property taxation that is within the permanent rate limitation imposed by section 11 (3), Article XI of the Oregon Constitution, or within the statutory rate limit determined in ORS 310.236 (4)(b), if applicable;

(b) The total rate or amount of the taxing district's local option taxes imposed pursuant to ORS 280.040 to 280.145 that have a term of five years or less and that are not for capital projects;

(d) The total amount levied for the payment of bonded indebtedness or interest thereon that is not subject to limitation under section 11 (11) or section 11b, Article XI of the Oregon Constitution; and

(e) The total amount levied that is subject to section 11b, Article XI of the Oregon Constitution, but that is not subject to the permanent ad valorem property tax rate limit described in section 11 (3), Article XI of the Oregon Constitution, because the amount levied is to be used to repay:

(A) Principal and interest for any bond issued before December 5, 1996, and secured by a pledge or explicit commitment of ad valorem property taxes or a covenant to levy or collect ad valorem property taxes;

(B) Principal and interest for any other formal, written borrowing of moneys executed before December 5, 1996, for which ad valorem property tax revenues have been pledged or explicitly committed, or that are secured by a covenant to levy or collect ad valorem property taxes;

(C) Principal and interest for any bond issued to refund an obligation described in subparagraph (A) or (B) of this paragraph; or

(D) Local government pension and disability plan obligations that commit ad valorem property taxes.

(3)(a) The notice shall also list each rate or amount subject to the limits of section 11b, Article XI of the Oregon Constitution, identified by the categories set forth in ORS 310.150.

(b) If an item described in subsection (2) of this section is allocable to more than one category described in ORS 310.150, the notice shall list separately the portion of each item allocable to each category.

(4) For any other taxes on property imposed by the taxing district, the notice shall state:

(a) The total amount of money to be raised by each other tax, in the aggregate or on a property by property basis, as appropriate.

(b) Each amount that is subject to the limits of section 11b, Article XI of the Oregon Constitution, identified by the categories set forth in ORS 310.150.

(5) For any district authorized by law to place any other fees, charges, assessments or tolls on the assessment and tax roll, the notice shall state the total amount of money to be raised on a property by property basis.

(6) In addition to the notice required under subsection (1) of this section, any taxing district that is subject to the Local Budget Law shall also provide the documents required by ORS 294.555 (2).

(7) Not later than July 15 of each year, the taxing district shall give the notice and documents described in this section to the assessor [and clerk] of the county in which the principal office of the taxing district is located[. If the taxing district is located in more than one county, it shall give the notice and documents described in this section to the assessor and clerk of each county wherein any part of the district is located] and, if the taxing district is located in more than one county, to the assessor of each county in which any part of the taxing district is located. Not later than September 30 of each year, the taxing district shall provide a complete copy of the budget document to the clerk of the county in which the principal office of the taxing district is located and, if the taxing district is located in more than one county, to the clerk of each county in which any part of the taxing district is located.

(8) The Department of Revenue shall prescribe the form of notice required by this section. All amounts shall be stated in dollars and cents or ad valorem property tax rates in dollars and cents per thousand dollars of assessed value, as required by law. If the notice is given to the assessor and the clerk of more than one county, a copy of each other such notice given shall accompany every notice given. Upon the giving of the notice, every school district located in a county to which ORS 334.350 to 334.400 apply immediately shall supply a copy thereof to the school superintendent of the county wherein the district is located. Immediately upon receipt thereof every such notice and copy shall be filed in the office of the receiving officer.

(9) For good and sufficient reason, the county assessor may extend the time for the giving of the notice or correcting an erroneous certification for the current year up to but not later than October 1 as the county assessor considers reasonable.

SECTION 24. Section 25 of this 1999 Act is added to and made a part of ORS chapter 250.

SECTION 25. In addition to meeting other applicable requirements of this chapter:

(1) The ballot title for a measure authorizing the imposition of local option taxes shall contain the statement required by ORS 280.070 (4)(a) and the information required by ORS 280.070 (5);

(2) The ballot title for a measure authorizing the establishment of a permanent rate limitation shall contain the information required by ORS 280.070 (6); and

(3) If the election on a measure authorizing the imposition of local option taxes or the establishment of a permanent rate limitation is to be conducted by mail, the front of the outer envelope in which the ballot title is mailed shall state, clearly and boldly printed in red, "CONTAINS VOTE ON PROPOSED TAX INCREASE."

SECTION 26. Section 27 of this 1999 Act is added to and made a part of ORS chapter 287.

SECTION 27. Notwithstanding any other law, the governing body of each city, county and district shall ascertain and levy annually, in addition to all other taxes, a direct ad valorem tax on all the taxable property within the city, county or district in an amount that, when added to other amounts available for such purpose and after taking into account expected discounts and delinquencies in the payment of such tax, will be sufficient to pay when due the principal of and interest on all outstanding general obligation bonds issued by such city, county or district.

SECTION 28. Notwithstanding ORS 294.305 to 294.565, if, on June 30, 1999, the Banks School District has an accumulated negative general fund balance and insufficient unrestricted reserve funds to provide a positive general fund balance, the Banks School District shall budget estimated revenues and expenditures so as to reduce the negative general fund balance by not less than 25 percent during each of the following four consecutive fiscal years, beginning with the fiscal year commencing July 1, 1999.

SECTION 29. Section 28 of this 1999 Act is repealed on December 31, 2003.

SECTION 30. ORS 294.465 and 371.344 are repealed.

Approved by the Governor July 12, 1999

Filed in the office of Secretary of State July 12, 1999

Effective date October 23, 1999

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