14 Or. Tax 581 | Or. T.C. | 1999
Motions for reconsideration for Plaintiffs and Intervenor granted June 3, 1999. Summary judgment of January 13, 1999, modified for Plaintiffs.
Appeal dismissed; decision (
The department contends that the court's interpretation of "unit of property" as used in section 11(1)(a), Article XI of the Oregon Constitution is both unnecessary and in error. The department argues that the court's conclusion is unnecessary because taxpayers seek a statutory remedy, not a constitutional remedy. The department asserts that the court need not construe the constitution but can restrict itself to the statutes. The court does not agree.
1. Taxpayers' Complaint specifically seeks relief under Oregon Laws 1997, chapter 541, section 2.1 That section merely rephrases section 11(1)(a), Article XI of the constitution. While the legislature may enact such legislation, it is the court's responsibility to construe the constitution. The court notes that section 11(1)(a) is not a provision granting a right that the legislature may enlarge but may not diminish. Rather, it provides directions for determining maximum assessed value. The legislature may not vary from that direction in any way. Accordingly, the court must resort to the constitution in order to determine taxpayers' claim.
The department asserts that the court's conclusion is in error for a number of reasons. The department contends that "unit of property" can have many meanings and cites as an example ORS
2. The department acknowledges that ORS
3. The department argues that the constitution assumes "unit of property" will be defined by statute. The court finds problems with this argument. Measure 47 and its replacement Measure 50 were not adopted by the people out of any special trust in their elected representatives. There is no language in either Measure 50 or in the Voters' Pamphlet that indicates an intent to allow the legislature to determine the meaning of "unit of property." Also, there is no statutory definition. The department cannot rely on a definition that does not exist.
The department asserts that the definition of "unit of property" in ORS
"* * * For purposes of determining whether the taxes on property to be imposed on any property exceed the limits imposed by section 11b, Article XI of the Oregon Constitution * * *." ORS
310.160 (1).
4. The court suggests that a definition for purposes of applying a constitutional limitation on taxes (section 11b), is not appropriate for applying a constitutional provision (section 11(1)(a)) that limits assessments. Specifically, ORS
*585"* * * [A]ll contiguous property within a single code area in the county under common ownership that is used and appraised for a single integrated purpose, whether or not that property is taxed as a single account or multiple accounts."
That provision is not consistent with ORS
"In the case of land upon which an improvement is located, and the land and the improvement are owned by different persons, if the land and improvements are a single operating unit, the unit of property shall consist of the entire improved parcel."
5. Again, this is not consistent with ORS
The department contends that construing "unit of property" to mean the assessable unit will create administrative problems. The department asserts that assessors have calculated maximum assessed value only on the total property in each tax account and may not have the information to calculate it separately.
6. ORS
7. Taxpayers' supplemental memorandum of law in response to the department's memorandum on the motion for reconsideration contends that the court erred by not considering land and improvements separately. Taxpayers argue that the court should compare the real market value of the *586
remaining improvements with the maximum assessed value of the improvements to determine the assessed value. Likewise, the court should compare the real market value of the land with the maximum assessed value of the land to determine the assessed value. Upon reconsideration, the court concludes that taxpayers are correct. If the "unit of property" is the assessable unit, as the court has concluded, then comparisons with real market value must be made on the same basis. ORS
"* * * [T]he assessed value of property to which this section applies shall equal the lessor of:
"(a) The property's maximum assessed value; or
"(b) The property's real market value."
That statutory direction is consistent with section 11(1)(f), Article XI of the Oregon Constitution, which provides that "each property's assessed value shall not exceed the property's real market value."
8. The department argues that Measure 50 was not intended to provide the lowest assessment for property, but only to provide a maximum or overall limit on assessments. What the voters may have intended, if they had sufficient knowledge to form an intent with regard to this question, is unknown. The court has no doubt that if the question were referred to the voters for decision, they would choose the method that produces the lowest assessed value. However, that is not the controlling factor here. What does control is the fact that the limitations imposed by Measure 50 are overlaid on an existing system of assessing property for taxation. By choosing to tinker with the constitution on the subject of the assessment of property, the voters must be presumed to know something about the assessment system.
In examining the Stipulated Facts, the court finds that the real market value of the improvements as of July 1, 1997, was $177,890, while the calculated maximum assessed value was $281,475. Therefore, the assessed value as of July 1, 1997, must be $177,890. The Stipulated Facts also indicate that the real market value of the land as of July 1, 1997, was $488,660, while the calculated maximum assessed value was $367,415. Inasmuch as the maximum assessed value of the *587 land is less than the real market value, the maximum assessed value must be the assessed value, which results in the following total assessed value for the property:
Improvements — $177,890
Land — $367,415
TOTAL ASSESSED VALUE — $545,305
Now, therefore,
IT IS ORDERED that the motions for reconsideration are granted and the court's Order on Cross Motions for Summary Judgment of January 13, 1999, is hereby modified. Judgment will be entered in accordance with this order. Taxpayers to recover their costs and disbursements.