Chapter 1097 Oregon Laws
1999
Session Law
HB 2901
Relating to taxation;
creating new provisions; and amending ORS 311.666, 311.668, 311.672, 311.676,
311.679, 311.689 and 311.691.
Be It Enacted by the People of the State of Oregon:
SECTION 1.
ORS 311.666 is amended to read:
311.666. As used in ORS 311.666 to 311.701:
(1) "Department" means the Department of Revenue.
(2) "Disabled
person" means a person receiving federal Social Security disability
benefits.
[(2)] (3) "Homestead" means the
owner occupied principal dwelling, either real or personal property, owned by
the taxpayer and the tax lot upon which it is located. If the homestead is
located in a multiunit building, the homestead is the portion of the building
actually used as the principal dwelling and its percentage of the value of the
common elements and of the value of the tax lot upon which it is built. The
percentage is the value of the unit consisting of the homestead compared to the
total value of the building exclusive of the common elements, if any.
[(3)] (4) "Taxpayer" means an
individual who has filed a claim for deferral under ORS 311.668 or individuals
who have jointly filed a claim for deferral under ORS 311.668.
[(4)] (5) "Tax-deferred property"
means the property upon which taxes are deferred under ORS 311.666 to 311.701.
[(5)] (6) "Taxes" or
"property taxes" means ad valorem taxes, assessments, fees and
charges entered on the assessment and tax roll.
SECTION 2.
ORS 311.668 is amended to read:
311.668. (1)(a) Subject to ORS 311.670, an individual, or two
or more individuals jointly, may elect to defer the property taxes on their
homestead by filing a claim for deferral with the county assessor after January
1 and on or before April 15 of the first year in which deferral is claimed if:
(A) The individual, or, in the case of two or more individuals
filing a claim jointly, each individual, is 62 years of age or older on April
15 of the year in which the claim is filed; [and] or
(B) The individual is a
disabled person on April 15 of the year in which the claim is filed. In the
case of individuals filing a claim jointly, only one individual need be a
disabled person in order to make the election.
[(B)] (b) In order to make the election
described in paragraph (a) of this subsection, the individual [has] must have, or in the case of two or more individuals filing a claim
jointly, all of the individuals together must
have household income, as defined in ORS 310.630, for the calendar year
immediately preceding the calendar year in which the claim is filed of less
than [$24,500] $27,500.
[(b)] (c) The county assessor shall forward
each claim filed under this subsection to the Department of Revenue which shall
determine if the property is eligible for deferral.
(2) When the taxpayer elects to defer property taxes for any
year by filing a claim for deferral under subsection (1) of this section, it
shall have the effect of:
(a) Deferring the payment of the property taxes levied on the
homestead for the fiscal year beginning on July 1 of such year.
(b) Continuing the deferral of the payment by the taxpayer of
any property taxes deferred under ORS 311.666 to 311.701 for previous years
which have not become delinquent under ORS 311.686.
(c) Continuing the deferral of the payment by the taxpayer of
any future property taxes for as long as the provisions of ORS 311.670 are met.
(3) If a guardian or conservator has been appointed for an
individual otherwise qualified to obtain deferral of taxes under ORS 311.666 to
311.701, the guardian or conservator may act for such individual in complying
with the provisions of ORS 311.666 to 311.701.
(4) If a trustee of an inter vivos trust which was created by
and is revocable by an individual, who is both the trustor and a beneficiary of
the trust and who is otherwise qualified to obtain a deferral of taxes under
ORS 311.666 to 311.701, owns the fee simple estate under a recorded instrument
of sale, the trustee may act for the individual in complying with the
provisions of ORS 311.666 to 311.701.
(5) Nothing in this section shall be construed to require a
spouse of an individual to file a claim jointly with the individual even though
the spouse may be eligible to claim the deferral jointly with the individual.
(6) Any person aggrieved by the denial of a claim for deferral
of homestead property taxes or disqualification from deferral of homestead
property taxes may appeal in the manner provided by ORS 305.404 to 305.560.
(7)(a) For each tax year
beginning on or after July 1, 2002, the Department of Revenue shall recompute
the maximum household income that may be incurred under an allowable claim for
deferral under subsection (1)(b) of this section. The computation shall be as
follows:
(A) Divide the average U.S.
City Average Consumer Price Index for the first six months of the current
calendar year by the average U.S. City Average Consumer Price Index for the
first six months of 2001.
(B) Recompute the maximum
household income by multiplying $27,500 by the appropriate indexing factor
determined as provided in subparagraph (A) of this paragraph.
(b) As used in this
subsection, "U.S. City Average Consumer Price Index" means the U.S.
City Average Consumer Price Index for All Urban Consumers (All Items) as
published by the Bureau of Labor Statistics of the United States Department of
Labor.
(c) If any change in the
maximum household income determined under paragraph (a) of this subsection is
not a multiple of $500, the increase shall be rounded to the nearest multiple
of $500.
SECTION 3.
ORS 311.672 is amended to read:
311.672. (1) A taxpayer's claim for deferral under ORS 311.668
shall be in writing on a form supplied by the Department of Revenue and shall:
(a) Describe the homestead.
(b) Recite facts establishing the eligibility for the deferral
under the provisions of ORS 311.666 to 311.701, including facts that establish
that the household income as defined in ORS 310.630 of the individual, or in
the case of two or more individuals claiming the deferral jointly, of all of the individuals together
was, for the calendar year immediately preceding the calendar year in which the
claim is filed, less than [$24,500] or equal to the maximum household income
that may be incurred under an allowable claim for deferral, as provided in ORS
311.668.
(c) Have attached any documentary proof required by the
department to show that the requirements of ORS 311.666 to 311.701 have been
met.
(2) There shall be annexed to the claim a statement verified by
a written declaration of the applicant making the claim to the effect that the
statements contained in the claim are true.
SECTION 4.
ORS 311.676 is amended to read:
311.676. (1) Upon determining the amount of deferred taxes on
tax-deferred property for the tax year, the Department of Revenue shall pay to
the respective county tax collectors an amount equivalent to the deferred taxes
less three percent thereof. Payment shall be made from the revolving account
established under ORS 311.701.
(2) The department shall maintain accounts for each deferred
property and shall accrue interest only on the actual amount of taxes advanced
to the county.
(3) If only a portion of
taxes are deferred under ORS 311.689, the department shall pay the portion that
is eligible for deferral to the tax collector and shall provide a separate
notice to the county assessor stating the amount of property taxes that the
department is paying.
SECTION 5.
ORS 311.679 is amended to read:
311.679. (1) At the time that the taxpayer elects to defer
property taxes under ORS 311.666 to 311.701 or if the taxpayer has elected to
defer property taxes prior to January 1, 1990, or between January 1, 1990 and
June 30, 1990, the Department of Revenue shall estimate the amount of property
taxes that will be deferred for tax years beginning on or after July 1, 1990,
interest thereon and any fees paid to the county clerk by the department in
connection with lien recording, release or satisfaction. Thereafter, the
department shall have a lien in the amount of the estimate.
(2) The lien created under subsection (1) of this section shall
attach to the property to which the election to defer relates on July 1 of the
tax year of initial deferral or on July 1, 1990, whichever is applicable.
(3) The lien created under subsection (1) of this section in
the amount of the estimate shall have the same priority as other real property
tax liens except that the lien of mortgages, trust deeds or security interests
which are recorded or noted on a certificate of title prior in time to the
attachment of the lien for deferred taxes shall be prior to the liens for
deferred taxes.
(4) If during the period of tax deferment, the amount of taxes,
interest and fees exceeds the estimate, the department shall have a lien for
the amount of the excess. The liens for the excess shall attach to the property
on July 1 of the tax year in which the excess occurs. The lien for the excess
shall have the same priority as other real property tax liens, except that the
lien of mortgages, trust deeds or security interests recorded or noted on any certificate
of title prior in time to the date that the department records an amendment to
its estimate to reflect its lien for the excess shall be prior to the lien for
the excess.
(5) Notwithstanding ORS 311.675 (2), the notice of lien for
deferred taxes recorded as provided in ORS 311.675 (1) and (2) arising on or
after October 3, 1989, shall list the amount of the estimate of deferred taxes,
interest and fees made by the department under subsection (1) of this section
and any amendment to the notice to reflect a lien for excess, as described
under subsection (4) of this section, shall list the amount of the excess that
the department claims as lien. If notice of lien with respect to any homestead
has been recorded as provided under ORS 311.675 (1) and (2) prior to January 1,
1990, and the lien has not been released or satisfied, the department shall
cause a further notice of lien to be recorded in the mortgage records of the
county. The further notice of lien shall list the amount of the estimate of
deferred taxes and interest made by the department under subsection (1) of this
section and any amendment to the notice to reflect a lien for excess, described
under subsection (4) of this section, and shall list the amount of the excess
that the department claims as lien.
(6) A lien created under this section may be foreclosed by the
department as if it were a purchase money mortgage under ORS chapter 88. The
court may award reasonable attorney fees to the prevailing party in a
foreclosure action under this section.
(7) Receipts from foreclosure proceedings shall be credited in
the same manner as other repayments of deferred property taxes under ORS
311.701.
(8) By means of voluntary payment made as provided under ORS
311.690, the taxpayer may limit the amount of the lien for deferred taxes
created under this section. If the taxpayer desires that the limit be reflected
in the records of the county, the taxpayer must request, subject to any rules
adopted by the department, that the department cause a partial satisfaction of
the lien to be recorded in the county. Upon receipt of such a request, the
department shall cause a partial satisfaction, in the amount of the voluntary
payment, to be so recorded. Nothing in this subsection shall affect the
priority of the liens of the department, as originally created under
subsections (1) and (4) of this section.
(9) Nothing in this section shall affect any lien arising under
ORS 311.666 to 311.701 for taxes assessed before January 1, 1990. However,
except as provided under this section, no lien for taxes shall arise under ORS
311.666 to 311.701 for taxes assessed after December 31, 1989.
(10)(a) Notwithstanding
any other provision of this section, a lien arising under this section as the
result of a deferral of property taxes on the homestead of a disabled person
who is younger than 62 years of age during the tax year may not exceed 90
percent of the real market value of the homestead.
(b) Property may continue to
qualify for property tax deferral under ORS 311.666 to 311.701 even though the
amount of property taxes being paid by the department may not increase the
amount of the lien arising under this section.
[(10)] (11) This section first applies to
liens for deferred taxes arising on or after October 3, 1989.
SECTION 6. Section 6a of this 1999 Act is added to and
made a part of ORS 311.666 to 311.701.
SECTION 6a. (1) Property taxes imposed on the homestead
of an individual are ineligible for deferral under ORS 311.666 to 311.701 if
the basis for deferral was the disability of the individual and the individual
is no longer disabled and:
(a) Is younger than 62 years
of age; or
(b) Is 62 years of age or
older and filed the claim for deferral jointly with an individual who is
younger than 62 years of age and who is not a disabled person.
(2) The property taxes that
are ineligible for deferral under subsection (1) of this section are those
property taxes attributable to the homestead of the individual for tax years
beginning subsequent to the loss of disability, until the individual again
qualifies for deferral under ORS 311.666 to 311.701.
(3) Nothing in this section
shall affect the continued deferral of taxes that have been deferred for tax
years beginning prior to the loss of disability.
SECTION 7.
ORS 311.689 is amended to read:
311.689. (1) Notwithstanding ORS 311.668 [(2)] or any other provision of ORS 311.666 to 311.701, if the
individual or, in the case of two or more individuals electing to defer
property taxes jointly, all of the individuals together, or the spouse who has
filed a claim under ORS 311.688, has federal adjusted gross income that exceeds
[$29,000] $32,000 for the tax year that began in the previous calendar year,
then [the taxes shall not be deferred]
for the tax year next beginning, the
amount of taxes for which deferral is allowed shall be reduced by $0.50 for
each dollar of federal adjusted gross income in excess of $32,000.
(2) Prior to [June 1,
1990, and prior to] June 1 of each year [thereafter], and notwithstanding ORS 314.835, the Department of
Revenue shall review returns filed under ORS chapter 314 and 316 to determine
if subsection (1) of this section is applicable for a homestead for the tax
year next beginning. If subsection (1) of this section is applicable, the
department shall notify by mail the taxpayer or spouse electing deferral, and
the taxes otherwise to be deferred for the tax year next beginning shall be reduced as provided in subsection
(1) of this section or, if federal adjusted gross income in excess of $32,000
exceeds the amount of property taxes by a factor of two, the property taxes shall
not be deferred.
(3) If the taxpayer or spouse does not file a return for
purposes of ORS chapters 314 and 316 and the department has reason to believe
that the federal adjusted gross income of the taxpayer or spouse exceeds [$29,000] $32,000 for the tax year that began in the previous calendar year,
the department shall notify by mail the taxpayer or spouse electing deferral.
If, within 30 days after the notice is mailed, the taxpayer or spouse does not
file a return under ORS chapter 314 or 316 or otherwise satisfy the department
that federal adjusted gross income does not exceed [$29,000] $32,000, the
department shall again notify the taxpayer or spouse, and the taxes otherwise
to be deferred for the tax year next beginning shall not be deferred.
(4) For tax years
beginning on or after July 1, 2002, the federal adjusted gross income limit set
forth in subsections (1) to (3) of this section shall be recomputed by
multiplying $32,000 by the indexing factor described in ORS 311.668 (7)(a)(A),
and rounding the amount so computed to the nearest multiple of $500.
[(4)] (5) Nothing in this section shall
affect the continued deferral of taxes that have been deferred for tax years
beginning prior to the tax year next beginning or the right to deferral of
taxes for a tax year beginning after the tax year next beginning if subsection
(1) is not applicable for that tax year for the homestead.
[(5)] (6) As used in this section,
"federal adjusted gross income" means federal adjusted gross income
of the individual or, in the case of two or more individuals electing to defer
property tax jointly, the combined federal adjusted gross income of the
individuals, or the federal adjusted gross income of the spouse who has filed a
claim under ORS 311.688, all as determined for the tax year beginning in the
calendar year prior to which a determination is required under subsection (2)
of this section. "Federal adjusted gross income" shall be determined
under the Internal Revenue Code, as amended and in effect on December 31, 1996,
without any of the additions, subtractions or other modifications or
adjustments required under ORS chapter 314 or 316.
[(6)(a)] (7)(a) If, after an initial
determination under this section has been made by the department, upon audit or
examination or otherwise, it is discovered that the taxpayer or spouse had
federal adjusted gross income in excess of the limitation provided under
subsection (1) of this section, the department shall determine the amount of
taxes deferred that should not have been deferred and give notice to the
taxpayer or spouse of the amount of taxes that should not have been deferred.
The provisions of ORS chapters 305 and 314 shall apply to a determination of the
department under this section in the same manner as those provisions are
applicable to an income tax deficiency. The amount of deferred taxes that
should not have been deferred shall bear interest from the date paid by the
department until paid at the rate established under ORS 305.220 for
deficiencies. A deficiency shall not be assessed under this section if notice
required under this section is not given to the taxpayer or spouse within three
years after the date that the department has paid the deferred taxes to the
county. Upon payment of the amount assessed as deficiency, and interest, the
department shall execute a release in the amount of the payment and the release
shall be conclusive evidence of the removal and extinguishment of the lien
under ORS 311.666 to 311.701 to the extent of the payment.
(b) If, after an initial determination under this section has
been made by the department, upon claim for refund, audit or examination or
otherwise, it is discovered that the taxpayer or spouse had federal adjusted
gross income in the amount of or less than the limitation provided under
subsection (1) of this section, the department shall determine the amount of
taxes deferred that should have been deferred and give notice to the taxpayer
or spouse of the amount of taxes that should have been deferred. The provisions
of ORS chapters 305 and 314 shall apply to a determination of the department
under this section in the same manner as those provisions are applicable to an
income tax refund. The amount of the taxes that should have been deferred shall
bear interest from the date paid by the taxpayer to the county at the rate
established under ORS 305.220 for refunds until paid. Claim for refund under
this paragraph must be filed within three years after the earliest date that
the taxpayer or spouse is notified by the department that the taxes are not
deferred.
[(7)] (8) This section applies to all
tax-deferred property, notwithstanding that election to defer taxes is made
under ORS 311.666 to 311.701 before or after October 3, 1989.
SECTION 8.
ORS 311.691 is amended to read:
311.691. (1) Notwithstanding any provision of ORS chapter 312
to the contrary and ORS 311.696 (1), upon compliance with ORS 311.693, taxes,
not in excess of $1,000, assessed against a tax-deferred homestead for any tax
year beginning on or after July 1, 1978, that were unpaid as of July 1 of the
tax year for which homestead property tax deferral was initially granted under
ORS 311.666 to 311.701, and remain unpaid, shall remain a lien and shall become
delinquent as otherwise provided by law, but shall not be subject to
foreclosure under ORS chapter 312 until August 15 of the calendar year
following the calendar year in which one of the circumstances listed in ORS
311.684 [(1) to (4)] occurs.
(2) This section does not apply if:
(a) The tax-deferred homestead property is a manufactured
structure or floating home and is moved out of state;
(b) Except in the case of a manufactured structure or floating
home, the tax-deferred homestead property is personal property; or
(c) The owner of the tax-deferred homestead property has
household income, for the calendar year immediately preceding the calendar year
in which application is filed under ORS 311.693, of [$24,500 or] more than the
maximum household income that may be incurred under an allowable claim for
deferral, as provided in ORS 311.668.
(3) If the property to which subsection (1) of this section
applies has been included on a foreclosure list, or a decree of foreclosure
entered, and taxes in excess of $1,000 assessed against the property for the
earliest year are paid, the property shall be removed from the foreclosure
list, or decree vacated, unless the proceeding against the property involves
delinquent taxes other than those described in subsection (1) of this section.
(4) Upon removal from the foreclosure list, or upon vacation of
the decree, no penalty shall be imposed under ORS 312.110 or 312.120. In lieu
thereof, the penalty is abated, or if the penalty has been paid, upon
application made to the county assessor on or before July 1 of the year
immediately following the year of vacation or removal, the penalty shall be
refunded out of the unsegregated tax collections account in the manner provided
in ORS 311.806.
(5) Within 60 days after approval of an application under ORS
311.693, with respect to any property to which this section applies, the tax
collector shall make the proper entries on the tax roll and shall remove the
property from the foreclosure list and proceeding.
(6) If a decree has been entered foreclosing liens for
delinquent taxes against any property which is the subject of an application
filed under ORS 311.693, and the delinquent taxes include only those taxes
described in subsection (1) of this section, or taxes in excess of those
described in subsection (1) of this section are paid, the decree shall be null
and void and of no effect and the tax collector shall make the proper entries
on the assessment and tax rolls to reflect the vacation of the decree and to
acknowledge the subsisting liens.
(7) Nothing in this section shall remove or release property to
which this section applies from the lien of any unpaid tax thereon, but the
unpaid taxes shall remain valid and subsisting liens as though the foreclosure
proceeding had not been instituted or as though the foreclosure proceeding had
not been instituted and a decree entered.
(8) Nothing in this section shall affect a foreclosure
proceeding instituted, or a decree entered, to foreclose liens for delinquent
taxes against properties subject to foreclosure if the delinquent taxes include
taxes other than those described under subsection (1) of this section. Such
foreclosure proceedings shall be instituted or continued without regard to this
section and such decree shall be of full force and effect as if this section
did not exist.
(9) Interest on taxes to which this section applies shall be
determined from the same dates, in the same manner and until paid as for other
property taxes remaining unpaid upon the due dates, upon preparation of the
foreclosure list in accordance with ORS chapter 312 and subsection (1) of this
section and upon entry and following a decree of foreclosure.
SECTION 9. Section 6a of this 1999 Act and the
amendments to ORS 311.666, 311.668, 311.672, 311.676, 311.679, 311.689 and
311.691 by sections 1 to 5, 7 and 8 of this 1999 Act apply to the deferral of
property taxes in tax years beginning on or after July 1, 2001.
Approved by the Governor
September 3, 1999
Filed in the office of the
Secretary of State September 3, 1999
Effective date October 23,
1999
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