Chapter 968 Oregon Laws 1999

Session Law

AN ACT

HB 2114

Relating to State Forestry Department financing; creating new provisions; amending ORS 321.015, 321.017, 321.145, 321.152 and 321.307 and section 2, chapter 8, Oregon Laws 1997; and providing for revenue raising that requires approval by a three-fifths majority.

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

SECTION 1. ORS 321.015 is amended to read:

321.015. (1) For the calendar years beginning January 1, 1998, and January 1, 1999, there is levied a privilege tax of 55 cents per thousand feet, board measure, upon taxpayers for the privilege of harvesting of all merchantable forest products harvested on forestlands. Subject to ORS 321.145, the proceeds of the tax shall be transferred as provided in ORS 321.152 (2) to the Forest Research and Experiment Account for use for the forest resource research, experimentation and studies described in ORS 526.215 and for the Forest Research Laboratory established under ORS 526.225.

(2) Except as provided in ORS 477.760, in addition to the tax levied by subsection (1) of this section, there hereby is levied a forest products harvest tax upon taxpayers of 50 cents per thousand feet, board measure, for the privilege of harvesting all merchantable forest products harvested on forestlands for the payment of benefits related to fire suppression as provided in ORS 321.005 to 321.185, 321.560 to 321.600 and 477.440 to 477.460.

(3) For the calendar years beginning January 1, 1998, and January 1, 1999, in addition to the taxes levied under subsections (1) and (2) of this section, there hereby is levied a privilege tax upon taxpayers for the privilege of harvesting all merchantable forest products harvested on [forestland] forestlands in the amount of 70 cents per thousand feet, board measure, for the purpose of administering the Oregon Forest Practices Act in an amount not to exceed 40 percent of the total expenditures approved by the Legislative Assembly for this purpose, including salary adjustments approved by the Legislative Assembly for fiscal years 1998 and 1999.

(4) For the calendar years beginning January 1, 2000, and January 1, 2001, in addition to the taxes levied under subsections (1) to (3) of this section, there hereby is levied a privilege tax upon taxpayers for the privilege of harvesting all merchantable forest products harvested on forestlands in the amount of 15 cents per thousand feet, board measure, for the purpose of providing assistance to nonindustrial private landowners described in ORS 526.425 and 526.450 to 526.475. All revenues received under this subsection and any interest earned on the cash balance shall be credited to the State Forestry Department Account and may be expended only for assistance to the nonindustrial private forest landowners.

[(4)] (5) Subject to subsection [(5)] (6) of this section, the taxes shall be measured by and be applicable to each per thousand feet, board measure, on the total quantity of forest products harvested in this state measured by use of any log scale which is or may be in general use in the logging industry and which is designed to measure total volume of merchantable forest products in board feet. However, if the Department of Revenue finds that the scale used by any taxpayer in computing the taxes due under ORS 321.005 to 321.185 and 321.560 to 321.600 does not accurately reflect the total quantity of merchantable forest products harvested by the taxpayer, it may require the taxpayer to adopt another log scale in general use in the industry which in the department's opinion will accurately reflect merchantable harvest in board feet.

[(5)] (6) The first 25,000 feet, board measure, of forest products harvested annually by any taxpayer during each calendar year shall be excluded from the total quantity of harvested forest products which constitutes the measure of the taxes under ORS 321.005 to 321.185 and 321.560 to 321.600.

SECTION 1a. ORS 321.015, as amended by section 1 of this 1999 Act, is amended to read:

(3) For the calendar years beginning January 1, 1998, and January 1, 1999, in addition to the taxes levied under subsections (1) and (2) of this section, there hereby is levied a privilege tax upon taxpayers for the privilege of harvesting all merchantable forest products harvested on forestlands in the amount of 70 cents per thousand feet, board measure, for the purpose of administering the Oregon Forest Practices Act in an amount not to exceed 40 percent of the total expenditures approved by the Legislative Assembly for this purpose, including salary adjustments approved by the Legislative Assembly for fiscal years 1998 and 1999.

(5) [Subject to subsection (6) of this section,] The taxes shall be measured by and be applicable to each per thousand feet, board measure, on the total quantity of forest products harvested in this state measured by use of any log scale which is or may be in general use in the logging industry and which is designed to measure total volume of merchantable forest products in board feet. However, if the Department of Revenue finds that the scale used by any taxpayer in computing the taxes due under ORS 321.005 to 321.185 and 321.560 to 321.600 does not accurately reflect the total quantity of merchantable forest products harvested by the taxpayer, it may require the taxpayer to adopt another log scale in general use in the industry which in the department's opinion will accurately reflect merchantable harvest in board feet.

[(6) The first 25,000 feet, board measure, of forest products harvested annually by any taxpayer during each calendar year shall be excluded from the total quantity of harvested forest products which constitutes the measure of the taxes under ORS 321.005 to 321.185 and 321.560 to 321.600.]

SECTION 2. ORS 321.017 is amended to read:

321.017. (1) In addition to the taxes levied under ORS 321.015 (1) to [(3)] (4), there hereby is levied a privilege tax upon taxpayers on the harvesting of all merchantable forest products harvested on [forestland] forestlands on or after July 1, 1991, in the amount provided in subsection (2) of this section.

(2) The rate of tax levied in subsection (1) of this section shall be established annually at the beginning of each calendar year by the board of directors of the institute, at a rate not to exceed 75 cents per thousand feet, board measure, on all merchantable forest products harvested on forestlands. The maximum tax rate prescribed by this subsection may be increased by the board of directors in an amount equal to the previous year's increase in the Consumer Price Index (Portland area -- all items) as published by the Bureau of Labor Statistics of the United States Department of Labor for the Portland, Oregon area.

(3) The tax shall be measured by and be applicable to each per thousand feet, board measure, and such shall be subject to and determined by the procedures and provisions of ORS 321.015 [(4) and (5)] (5) and (6).

(4) The tax levied by subsection (1) of this section shall be due and payable to the Department of Revenue in the manner and procedure, including penalties and interest, as set forth for the collection of the privilege tax in ORS 321.005 to 321.185.

(5) The revenue from the tax levied by subsection (1) of this section shall be remitted to the State Treasurer who shall deposit it in a suspense account established under ORS 321.145 (1). After payment of refunds, which shall be paid in the same manner as other forest products harvest tax refunds are paid in ORS 321.145 (2), the balance of the additional tax imposed under subsection (1) of this section shall be deposited in the Oregon Forest Resources Institute Fund.

SECTION 2a. ORS 321.017, as amended by section 2 of this 1999 Act, is amended to read:

321.017. (1) In addition to the taxes levied under ORS 321.015 (1) to (4), there hereby is levied a privilege tax upon taxpayers on the harvesting of all merchantable forest products harvested on forestlands on or after July 1, 1991, in the amount provided in subsection (2) of this section.

SECTION 2b. The amendments to ORS 321.015 and 321.017 by sections 1a and 2a of this 1999 Act apply to forest products harvested in calendar years beginning on or after January 1, 2002.

SECTION 3. ORS 321.145 is amended to read:

321.145. (1) The revenue from the taxes levied by ORS 321.005 to 321.185 and 321.560 to 321.600 shall be remitted to the State Treasurer who shall deposit it in a suspense account established under the provisions of ORS 293.445.

(2) Notwithstanding the provisions of ORS 291.238, the amount of moneys necessary to pay refunds of the taxes levied under ORS 321.015 (1)[, (2) and (3)] to (4) hereby is appropriated continuously to the Department of Revenue from the suspense account referred to in subsection (1) of this section, and shall be used by the department for the payment of all refunds of taxes levied under ORS 321.015 (1)[, (2) and (3) which] to (4) that have been audited and approved by the department. Any penalties, interest and taxes then due from the taxpayer shall be applied in that order in computing any refund, and only the balance due the taxpayer, if any, shall be refunded. The department shall on its records charge each refund against the revenue from the tax with respect to which the refund is made.

SECTION 4. ORS 321.152 is amended to read:

321.152. (1) Subject to ORS 321.145 (2), moneys remaining in the Department of Revenue's suspense account referred to in ORS 321.145 on February 10, May 10, August 10 and November 10 of each year shall be transferred to the various appropriation accounts described in subsections (2), (3) and (4) of this section.

(2) That part of the moneys derived from taxes levied by ORS 321.015 (1) shall be transferred to the Forest Research and Experiment Account described in ORS 321.185.

(3) That part of the moneys derived from taxes levied by ORS 321.015 (3) shall be transferred to the State Forestry Department Account referred to in ORS 526.060. Notwithstanding ORS 291.238, the moneys transferred to the State Forestry Department Account under this section are appropriated continuously for and shall be used by the State Forester, under the supervision and direction of the State Board of Forestry, for the purposes of administering the Oregon Forest Practices Act and the forest practices monitoring program.

(4) That part of the moneys derived from taxes levied by ORS 321.015 (2) shall be transferred to the Oregon Forest Land Protection Fund described in ORS 477.750.

(5) That part of the moneys derived from taxes levied by ORS 321.015 (4) shall be transferred to the State Forestry Department Account referred to in ORS 526.060. Notwithstanding ORS 291.238, the moneys transferred to the State Forestry Department Account under this section are appropriated continuously for and shall be used by the State Forester, under the supervision and direction of the State Board of Forestry, for the purposes of administering nonindustrial private forest landowner assistance.

SECTION 5. Section 2, chapter 8, Oregon Laws 1997, is amended to read:

Sec. 2. (1) For the calendar years beginning January 1, 1998, and January 1, 1999, in addition to the taxes levied under ORS 321.015 (1) to (3) and 321.017, there hereby is levied a privilege tax upon taxpayers on the harvesting of all merchantable forest products harvested on forestland.

(a) The tax rate for forest products harvested in the calendar year beginning January 1, 1998, will be $1.75 per thousand feet, board measure.

(b) The tax rate for forest products harvested in the calendar year beginning January 1, 1999, shall be established, on or before December 31, 1998, by the Department of Revenue. This rate shall not exceed $2 per thousand feet, board measure, and shall be based on the projected forest products volume to be harvested and the anticipated amount necessary to collect the total amount identified in subsection (5) of this section.

(2) The tax shall be measured by and be applicable to each per thousand feet, board measure, and such shall be subject to and determined by the procedures and provisions of ORS 321.015 (4) and (5) (1997 Edition).

(3) The tax levied by subsection (1) of this section shall be due and payable to the Department of Revenue in the manner and procedure, including penalties and interest, as set forth for the collection of the privilege tax in ORS 321.005 to 321.185.

(4) The revenue from the tax levied by subsection (1) of this section shall be remitted to the State Treasurer, who shall deposit it in a suspense account established under ORS 321.145 (1). After payment of refunds, which shall be paid in the same manner as other forest products harvest tax refunds are paid in ORS 321.145 (2), the balance of the additional tax imposed under subsection (1) of this section shall be deposited into the Watershed Improvement Grant Fund created under [section 4 of this 1997 Act] ORS 541.397.

(5) If after receipt of quarterly estimated payments due under ORS 321.045 and subsequent deposit of these payments into the Watershed Improvement Grant Fund, the total amount of funds deposited into the Watershed Improvement Grant Fund from all sources reaches $15 million, the privilege tax levied under subsection (1) of this section shall cease.

(6) Tax paid that would otherwise be deposited into the Watershed Improvement Grant Fund except for the operation of subsection (5) of this section shall be refunded to taxpayers as follows:

(a) On or before June 30, 2000, the Department of Revenue shall determine the amount paid that would otherwise be deposited into the Watershed Improvement Grant Fund except for the operation of subsection (5) of this section. The department shall also determine the total forest products harvest volume reported during calendar year 1999. The department shall calculate a refund rate by dividing the amount paid that would otherwise be deposited into the Watershed Improvement Grant Fund except for the operation of subsection (5) of this section by the volume harvested during the calendar year.

(b) The rate calculated in paragraph (a) of this subsection shall be applied to the total harvest volume reported by each taxpayer.

(c) That portion of the tax, originally paid by the taxpayer, calculated in paragraph (b) of this subsection shall be refunded to the taxpayer. Refunds of amounts less than $25 will not be made.

SECTION 6. ORS 321.307 is amended to read:

321.307. (1) The revenue from the taxes imposed by ORS 321.273 shall be remitted by the Department of Revenue to the State Treasurer who shall deposit it in a suspense account, separate and distinct from the General Fund, established under the provisions of ORS 293.445 which shall be known as the Western Oregon Timber Tax Account. Interest earned on cash balances invested by the State Treasurer shall be credited to this account. Moneys are appropriated continuously from the Western Oregon Timber Tax Account for use in reimbursing the General Fund for expenses incurred in the collection of taxes imposed by ORS 321.273 and for costs incurred by the State Forestry Department in carrying out ORS 315.104 and 321.705 to 321.765 [for the period beginning July 1, 1997, and ending July 1, 1999] for the period beginning July 1, 1999, and ending July 1, 2001.

(2) Notwithstanding the provisions of ORS 291.238, the amount of moneys necessary to pay refunds of the taxes imposed by ORS 321.273 is appropriated continuously to the department and shall be used by the department for the payment of all refunds of taxes imposed by ORS 321.273 which have been audited and approved by the department. This appropriation shall be from the Western Oregon Timber Tax Account. Any penalties, interest and taxes due from the taxpayer on account of taxes imposed by ORS 321.273 shall be applied in that order in computing any refund, and only the balance due the taxpayer, if any, shall be refunded.

(3)(a) The records of the department shall reflect the amount of revenue deposited in the Western Oregon Timber Tax Account which it has credited to the account of each taxing district. Subject to appropriations as provided in subsections (1) and (2) of this section and ORS 321.311 and transfers required under ORS 321.299, the department shall credit the entire balance of such revenue to such districts. The amount credited to each district from the revenue collected during each calendar quarter shall be determined by allocating the revenue collected in each calendar quarter to the several western Oregon counties and then by allocating the share of each county among the several participating taxing districts within that county. Seventy-five percent of the collections shall be allocated in the proportion that the average annual harvest value of timber harvested in each county during the last five calendar years preceding the fiscal year in which the collection occurs bears to the average annual harvest value of timber harvested in all western Oregon counties during the same period. Twenty-five percent of the collections shall be allocated in the proportion that the assessed value of forestland in each western Oregon county during the preceding fiscal year bears to the assessed value of forestland in all western Oregon counties during such fiscal year. The amounts as allocated shall be apportioned and credited to each participating district in each county as follows:

(A) Seventy-five percent thereof shall be apportioned in the proportion that the average annual harvest value of timber harvested in the district during said five years, multiplied by the average of the district's rates of levy in the ad valorem tax roll for the five preceding fiscal years, bears to the average harvest value of timber harvested in all districts in the county multiplied by the corresponding average rate of levy in each district.

(B) Twenty-five percent thereof shall be apportioned in the proportion that the assessed value of forestland in the district during the preceding fiscal year multiplied by the average of the district's rates of levy in the ad valorem tax roll for the five preceding fiscal years bears to the assessed value of forestland in all districts in the county multiplied by the corresponding average rate of levy in each district.

(b) For purposes of this subsection, for fiscal years beginning before July 1, 1995, the average annual harvest value of timber harvested from land classified under ORS 321.255 to 321.360 (1975 Replacement Part) as reforestation land as of July 1, 1977, shall be adjusted. The adjustment shall be computed by dividing the total severance tax rate imposed upon timber harvested from such reforestation land by six and one-half percent. The resulting factor shall be multiplied by the value of timber harvested from the reforestation lands.

(4) All moneys credited to the taxing districts pursuant to subsection (3) of this section are continuously appropriated to the districts in whose names they are credited, and the department shall remit the full amounts including interest remaining to the credit of each district as of the 10th day of the second month following the close of each calendar quarter to the county treasurers of the respective counties in which the districts are located on or before the last day of that month, together with the department's certification of the amount thereof which is for the credit of each such district. A working balance may be retained in the Western Oregon Timber Tax Account for the payment of administrative expenses provided by subsection (1) of this section.

Approved by the Governor August 17, 1999

Filed in the office of Secretary of State August 18, 1999

Effective date October 23, 1999

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