281 P.3d 621
Or. Ct. App.2012Background
- Metro enacted a 2006 construction excise tax (MC 7.04) to fund regional/local planning for land ready for development after UGB inclusion.
- SB 1036 (2007) preempts local construction taxes, but grandfathered taxes in effect as of May 1, 2007 or those that are extensions/continuations without rate increases.
- In 2009, Metro amended the tax via Ordinance 09-1220 to extend it five years, retain the rate, expand eligible projects, allow administrative expenses from proceeds, and alter distribution.
- Plaintiffs challenged the 2009 ordinance as an impermissible new tax and as failing MC 2.19.200 tax-study requirements, seeking injunctive relief and restitution.
- Trial court held the 2009 ordinance was an extension/continuation, not a new tax, and thus did not violate SB 1036 or MC 2.19.200, and entered judgment for Metro.
- On appeal, the court affirmed, holding the 2009 ordinance extended the tax and did not impose a new tax, and MC 2.19.200 did not apply.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the 2009 ordinance extended a tax or imposed a new tax. | Metro contends the change was a mere extension; plaintiffs claim it materially altered provisions to create a new tax. | Metro argues the changes fall within an extension/continuation exception and do not increase the rate. | The 2009 ordinance extended the tax; no new tax was imposed. |
| Whether MC 2.19.200 required a tax study committee before the 2009 tax extension. | Because it altered use and distribution, it required a tax study committee. | MC 2.19.200 applies only to imposing a new tax; extension does not trigger it. | No tax study committee was required; extension falls outside MC 2.19.200. |
Key Cases Cited
- Hazell v. Brown, 238 Or App 487 (2010) (summary judgment standard of review for undisputed facts)
- State v. Gaines, 346 Or 160 (2009) (statutory construction methodology for preemption)
- LaGrande/Astoria v. PERB, 281 Or 137 (1978) (preemption analysis; when state law preempts local regulation)
- Roseburg Sch. Dist. v. City of Roseburg, 316 Or 374 (1993) (government imposes tax when it creates legal obligation to pay)
- Advocates for Effective Regulation v. City of Eugene, 160 Or App 292 (1999) (statutory construction applied to determine preemption scope)