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| 2007 Property Tax Division Legislation |
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Judi James, ATS Rules and Legislation Coordinator
When the 74th Legislature opened in January, it was with the promise of cooperation between both chambers and across party lines. The governor and both houses are led by members of the same political party for the first time in almost 30 years. This Legislature is also contemplating an experiment with annual sessions. During its first year, emphasis will be on balancing the budget, which may include changes in tax programs. Next year, the Legislature may meet to consider selected topics.
Below is a summary of the department's bills:
HB 2228 amends existing law to allow assessors to grant extensions of time to file property tax returns. Also, it clarifies the department authority to grant extensions of time to file for businesses doing business in multiple counties. The bill has passed the House and is now in the Senate Finance and Revenue Committee.
HB 2229 limits interest on refunds for property tax overpayment to the portion of overpayment that is not attributable to inaccurate taxpayer reports. This bill passed out of the House Revenue Committee with a do pass recommendation. The full House of Representatives has now passed the bill to the Senate.
HB 2230 and HB 2231 modify the process for reducing taxes on property that was damaged or destroyed after the assessment date. HB 2231 changes the period to apply to 60 days after damage or destruction. HB 2230 allows the department to exercise supervisory authority and consider a taxpayer's application for tax relief after that time. The bills passed out of the House and have been assigned to the Senate Revenue committee.
HB 2232 gives BOPTA authority to waive penalties for delinquent filing of property tax returns when it is a first offense. The House Revenue committee held a public hearing on the bill January 31 and has now passed it to the House floor with a do pass recommendation.
HB 2236 permits counties to make interim refund of contested property taxes prior to conclusion of appeals. It makes provision for collecting additional taxes due after final resolution. This bill passed out of the House Revenue Committee with a do pass recommendation. The full House of Representatives has now passed the bill to the Senate.
HB 2237 eliminates the annual claim filing requirement for veterans homestead exemption. The bill has been heard by the House Veterans Affairs and House Revenue committees, and passed to the House floor on March 2.
HB 2239 makes technical changes in how the centrally assessed property tax roll is managed. The House of Representatives passed this bill on March 5 and it's headed to the Senate.
SB 171, 172, and 173 relate to managing property tax return information. SB 171 allows counties to share tax return information between counties. SB 172 allows the department or the assessor to forward tax returns filed in the wrong office. SB 173 allows the department to disclose tax information with political subdivisions of other states. All three bills have passed the Senate and are now assigned to the Senate Finance and Revenue Committee.
HB 2023 is also under the department's watchful eye. It would revise the Active Duty Service Member's Exemption program enacted in 2005 to make it easier to administer. HB 2023 had its second hearing on February 23.
In all, the department uses the LINUS system, a proprietary tracking program, to follow more than 100 bills that may impact the property tax system. Program experts throughout the Property Tax Division analyze the impact on property tax administration posed by bills that have been introduced. We also discuss the impact with our county partners when appropriate.
The department prepares a report each week for county assessors, collectors, and clerks summarizing the status of the bills that may impact property taxes. For more information, contact:
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| Valuation Section Comprehensive Team |
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Shanne Johnson, appraiser analyst 3
Team Members: Bill Rodriguez (team leader), Mike Buchanan, Cherri Lyon, Kyle Shepherd, Joanne Gough, Ellen Reed, Chris Folsom, and Coleen Hanson.
Property the team values: industrial printing facilities, plastics, metals and all other types of miscellaneous industries such as airplane parts, airplanes, steel, structural beams, motor coaches, X-ray film, industrial machinery manufacturing, etc.
Value the Team manages: $4.0 billion in property value (buildings, machinery and equipment, and personal property).
About the team: The team members are assigned companies in different industries so everyone has a variety of companies. The team is making an effort to visit companies and become familiar with their operations. At the same time, we are educating the taxpayer on Oregon property tax laws, and instructing them on proper reporting. We conduct industry studies to maintain values current with what the market is indicating. The complexity and variety that our industries and companies within the industries offer keeps us busy and makes our jobs very interesting and never boring.
Photo—Back Row Left Ellen Reed, Coleen Hanson, Joanne Gough, and Cherri Lyon. Front Row Left Chris Folsom, Bill Rodriguez, and Kyle Shepherd. Not pictured: Mike Buchanan.
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| Karen's Korner |
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Karen Gregory, Property Tax Division Administrator
As I sit down to write this article in March, the Legislature is moving full steam ahead on a number of property tax issues.
I understand the House of Representatives has introduced HB 3532 at the request of DOR to allow counties some budgetary flexibility for this fiscal year only. If the bill passes, some counties that are experiencing a budget problem due to the federal funding shortfall may fund CAFFA at less than the amount they originally committed to in their 2006-07 certified budget. Those counties will still receive their portion of the grant IF they meet the minimum staffing requirement needed to maintain an adequate A&T function. We will provide more information on this if the bill passes. If it does not pass, counties run the risk of having their CAFFA distribution denied if they do not maintain their 2006-07 budget certification staffing commitment.
Assessors, tax collectors, and the department have been working on potential solutions to the federal funding shortfall. A list of ideas was developed and is in the hands of Associated Oregon Counties (AOC), the governor's office, and other decision makers. Together, we also developed an emergency rule-150-294.181. This rule defines the functions a county must maintain to receive their portion of the CAFFA grant if they choose to use the alternative method for certifying their A&T funding plan to the department. This rule will be effective by May 1, 2007, so counties, if they choose, can use it for the 2007-08 fiscal year.
All of the department's bills have been heard in at least one house and are moving through the process well. There are a couple of bills dealing with communication companies seeking exemptions for their intangible personal property; I think these will certainly get a hearing. The committees are very well run and are moving issues though very efficiently. I think that come the end of June, the session will either be over or very, very close to being completed.
The department's budget will be presented to the Ways and Means General Government subcommittee the week of April 2. Public testimony will be on Thursday, April 5 and Monday, April 9. I hope some of you will be able to attend to support the governor's request for the $5.155 million county pass-through to advise the committee how the shortfall in federal forest dollars affects your county, and how it may impact the DOR budget. By that time, we should have more answers to some of the many issues swirling around today.
This has been a very exciting and challenging time for all of us and I want to send a big thank you to all of the assessors and tax collectors. Many of you attended numerous meetings, conference calls, and meetings with AOC. You have devoted a large amount of energy, great thinking, and determination to getting issues in front of all of the decision makers and I thank you! Special thanks to Scot Langton, Ray Erland and Mike Schneyder—we would not be where we are today without your leadership. It's a pleasure to work with you.
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| Ethanol Production in Oregon |
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Shanne Johnson, appraiser analyst 3
Did you know there are ethanol plants currently being built in Oregon? These will be the first ethanol plants located in the Pacific Northwest. Currently, the nearest ethanol plants to Oregon are in Wyoming and southern California.
The importance of ethanol lies in its ability to be blended with gasoline, which reduces our dependence on foreign fuels. Each gallon of ethanol used in a 10 percent blend with gasoline cuts greenhouse gas emissions 12 to 19 percent. Cars can handle a blend of 10 percent ethanol to 90 percent gasoline without any modification to the vehicle's engine.
Simply put, ethanol is produced by turning starchy products, mainly corn, into “grain alcohol.”
In the United States, ethanol production has grown rapidly. In 1980, four companies in the U.S. produced 180 million gallons of ethanol. In 2006, 104 ethanol companies produced about 5 billion gallons of ethanol! There are 42 new plants coming on line and about 100 new plants in the planning stage. This is no small task considering that it typically takes 3 to 4 years of planning, development, and construction before a plant produces the first gallon of ethanol.
Federal and state governments are encouraging the production and use of ethanol through a variety of tax incentives. Even as this article was sent for publication, there were Oregon bills in the process of being voted on to create more incentives for ethanol use.
The larger of the two ethanol plants being built in Oregon is under construction at Port Westward in Columbia County. The owner of the plant is Cascade Grain Products LLC. Total cost is estimated at $192 million with production of approximately 113 million gallons per year of corn-based ethanol. It's estimated that 80 people will be employed when the plant is completed sometime in 2008. This ethanol plant will also be the largest plant on the west coast.
The second ethanol plant under construction in Oregon is located at the Port of Morrow in Morrow County. The owner, Pacific Ethanol Inc., plans to build a $50 million plant that will produce about 35 million gallons of corn-based ethanol a year. Employment will be about 30 people when construction is complete. They plan on being in production sometime in 2007.
Several other plants are in the planning stages to be built in Oregon. So keep your eyes on your local newspapers as ethanol use continues to grow and multi-million dollar plants continue to be built.
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| Benton County Biker |
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Photo courtesy of Dick Newkirk, Benton Assessor's office
Donna Morse, cartographer for the Benton County Assessor, is seen here prepared for her trip to the county's planning offices by bicycle, a two mile one-way trip. Donna and the Assessor's office are participating in a Benton County Health and Wellness program that encourages the use of bicycles provided by the county for county employee business purposes. “I have to watch out for traffic,” says Donna, “but I feel like I'm helping the environment and get a real sense of camaraderie when fellow bicyclists acknowledge me with a wave, head bob or smile.” Ron Zwart, the Assessor's office GIS specialist, recalls Donna and her bicycle assisting him with a survey he conducted around town, “She road and carried the equipment, I walked.” Before her first “ride,” Donna recalls thoroughly reading the Oregon Department of Transportation manual titled, “Oregon Bicycling 2006.” “When that guy cut me off, I knew I had the right-of-way.” What can you do? PS: Donna says “Hi!” to all of her friends and associates at DOR and the other counties, many of whom will remember that she once worked in the DOR cartography unit.
Note: If counties have similar articles you would like to share, contact the Grapevine newsletter.
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| Winter Assessors and Tax Collectors Conference Summary |
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In January 2007 the Oregon State Association of County Assessors (OSACA) and the Oregon Association of County Tax Collectors (OACTC) held a combined conference in Bend, Oregon. The agenda offered information on emerging issues and educational opportunities in leadership and operating procedures.
Assessment and taxation (A&T) staff from all 36 counties attended, as well as staff from the Department of Revenue's Property Tax Division and several A&T associated independent businesses. Overall, attendance exceeded 200.
The Department of Revenue's Karen Gregory spoke (see the accompanying photo caption), former state economist Tom Potiowsky gave a report and forecast, and several knowledgeable speakers addressed a variety of current event subjects.
About half of the two-day conference was devoted to break out sessions focusing on subjects of specific interest to smaller attendee groups. For example, at the end of the first day, the assessors broke for a business meeting, the tax collectors participated in the Data Exchange group meeting, cartographers continued a session started earlier in the day, and the chief appraiser/deputy group was involved in discussions on the Summary of Assessments and Levies report and classification of real property.
Following the two days of conference programs was a day of management training offered by Greg Merten, a well known specialist in these subjects.
Summer 2007 OACTC and OSACA Conference
The Summer Conference will be held at Riverhouse in Bend, Oregon from August 13-16, 2007.
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| Winter Conference Photo |
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| Karen Gregory aka DOR Director Elizabeth Harchenko |
Photo Courtesy Sharon Roosa, President Oregon Tax Collectors
DOR Director Elizabeth Harchenko is shown here speaking through DOR PTD Administrator Karen Gregory. OSACA President and the conference organizer Scott Langton's published introductory comments proved prophetic when he wrote, “Before us are a number of significant issues with the potential to have major impacts on Assessment and Taxation; plus a newly convened Legislative session.” Originally scheduled as the OSACA winter conference's opening speaker, Elizabeth was required to attend in “spirit” because she was giving unexpected testimony before a legislative committee getting an early start on county funding issues. The message Elizabeth and Karen delivered, “We're all in this together and we're looking forward to continuing our partnership.” Karen gave an update on all of the work the Assessors, Tax Collectors and DOR have done on developing ideas to deal with the federal funding shortfall.
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| Court Case Corner: March |
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Doug Adair, Assistant Attorney General
Gall v. Dept. of Revenue, TC 4767
At issue was the assessability of a personal property mobile home. The Tax Court held that personal property manufactured dwellings are subject to ordinary ad valorem taxation, that the $6 annual special assessment found in ORS 446.525 neither substituted for nor limited ordinary property tax assessments, that taxation of the property did not constitute involuntary servitude under the US Constitution's 13th Amendment, and that there was a rational basis for assessing mobile homes while recreational vehicles are exempt from taxation.
Flynn v. Lane Co., TC-MD 060086C & 060109C
The taxpayer partitioned two lots into three lots in 2003. For the 2005-06 tax year, the county determined new maximum assessed values (MAV) for each lot as exceptions under ORS 308.146(3)(b). The court determined that the county's actions were contrary to ORS 308.156(1) which limits exception MAV adjustments to partitions occurring between January 1 of the preceding and current tax year. The court noted that the county might be able to make this adjustment to the correct 2004-05 tax year under the omitted property or clerical error provisions of ORS chapter 311.
Jensen Family Trust v. Marion Co. Assessor, TC-MD 050902E
The taxpayer leased farmland to a large grass seed producer. The lessee created a 7.3 acre outdoor “showroom” for its grasses surrounding a reclamation pond that included a three-hole golf course. The county disqualified this acreage from farm special assessment. The court agreed, reasoning that the predominant uses of recreation and marketing were not qualifying uses for farm special assessment under ORS 308A.056.
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| Comings and Goings |
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Mary Kintner, Administration
New Employee: Joseph Bucher, Cadastral Information Systems
Resignation/Separation: Jesse Holler, Valuation
Retirement: Gerald Longton, Cadastral Information Systems
Promotions: Jean Massie, ATS; Michael Vaughn, ATS
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| Grapevine |
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Grapevine is published by the Oregon Department of Revenue, Property Tax Division.
Editorial Board: Al Gaines; Judi James; Shanne Johnson; Mary Kintner; John Phillips; Christie Wilson, Lead; Gary Wright.
To be added to the Grapevine mailing list or to submit articles, e-mail Grapevine, or contact us by mail at:
Oregon Department of Revenue
Property Tax Division
955 Center Street NE
Salem OR 97301-2555
Phone: 503-945-8292
Fax: 503-945-8737
TTY: 503-945-8617
In compliance with the Americans With Disabilities Act (ADA), this information is available in alternative formats upon request by calling 503-378-4988.
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