VILLAGE AT MAIN STREET PHASE II, LLC, Rеspondent, υ. DEPARTMENT OF REVENUE, State of Oregon; and Clackamas County Assessor, Appellants. VILLAGE AT MAIN STREET PHASE III, LLC, Respondent, υ. DEPARTMENT OF REVENUE, State of Oregon; and Clackamas County Assessor, Appellants. VILLAGE RESIDENTIAL, LLC, Respondent, υ. DEPARTMENT OF REVENUE, State of Oregon; and Clackamas County Assessor, Appellants. VILLAGE RESIDENTIAL, LLC, Respondent, υ. DEPARTMENT OF REVENUE, State of Oregon; and Clackamas County Assessor, Appellants.
TC 5054; SC S061133 (Control) | TC 5055; SC S061137 | TC 5056; SC S061138 | TC 5057; SC S061139
Supreme Court of Oregon
Argued and submitted January 16, September 18, 2014
334 Or. 164 | 339 P.3d 428
LANDAU, J.
Limited judgments of Tax Court reversed, and cases remanded to Tax Court for further proceedings.
Kathleen J. Rastetter, Senior Assistant County Counsel, filed the briefs for appellant Clackamas County Assessor. With her on the briefs was Stephen L. Madkour, Clackamas County Counsel.
Donald H. Grim, Greene & Markley, PC, Portland, argued the cause and filed the brief for respondents on review.
LANDAU, J.
LANDAU, J.
In these consolidated property tax appeals, taxpayers challenged the valuation of their real property by the Clackamas County Assessor. In their appeals to the Magistrate Division of the Tax Court, they challenged only the valuation of the improvements on their land, not the valuation of the land itself. The Magistrate Division affirmed. Taxpayers then appealed to the Regular Division of the Tax Court, again challenging only the valuation of their improvements. In the meantime, however, the legislature had enacted
I. BACKGROUND
To provide context for the parties’ dispute about the meaning of
A. The Property Tax Appeal Process
In Oregon, property taxes are assessed for, among other things, real property, including any improvements on that real property. The taxes—referred to as “ad valorem” taxes—are based on the value of the property and improvements. The state‘s property tax system largely relies on county tax assessors to value property subject to taxation, calculate the tax, collect the tax, and distribute the revenue to taxing districts. By law, the county assessor is required to value the land and any improvements separately.
A taxpayer who is dissatisfied with the county assessor‘s valuation may appeal the
The first level of review is (in most cases) before a county board of property tax appeals (BOPTA). See
A party dissatisfied with a decision of a county BOPTA may seek review by the Tax Court.
The Magistrate Division is not a court of record; proceedings before it are informal and are not subject to the rules of evidence. See
The Regular Division, in contrast, is a court of record with general jurisdiction.
Ordinarily, a party seeking review of a county BOPTA decision must first appeal to the Magistrate Division.
A party dissatisfied with the decision of the Magistrate Division may then seek review, de novo, by filing a complaint in the Regular Division.
The fourth and final level of review is before the Supreme Court.
B. The Nepom Rule, Ballot Measure 50, and
Because an assessment entails separate valuation of both the land and the improvements, a taxpayer seeking review of an assessment is entitled to challenge the valuation of either of those components, or bоth of them. In Nepom v. Dept. of Rev., 272 Or 249, 256, 536 P2d 496 (1975), this court held that, if a taxpayer challenged the valuation of only one component—either the land or the improvements—the sole issue before the reviewing body was the valuation of that component. Thus, for example, if a taxpayer challenged the value of the improvements, arguing that they were too high, the county assessor could not seek to offset any drop in that valuation by showing that the land had been valued too low. See id. (“We conclude that plaintiff was entitled to challenge only the value of the improvements ***; however, as the value of the land was not an issue in the case, the Tax Court acted improperly in adding the reduction in the improvement values to the land.“).
Under the law in effect at the time, Nepom had limited practical effect. If a taxpayer challenged only one component of a real property assessment, and if the county assessor believed that the other component had been assessed in error, the assessor could adjust the value of that other component the following year. In 1997, however, the voters approved Ballot Measure 50, which amended the Oregon Constitution, creating a new provision, Article XI, section 11.
Among many other things, Measure 50 and its implementing statutes reduced the assessed value of property to 10 percent below 1995 values.
In 2011, the legislature enacted
“Whenever a party appeals the real market value of one or more components of a property tax account, any other party to the appeal may seek a determination from the body or tribunal of the total real market value of the property tax account, the real market value of any or all of the other components of the account, or both.”
The legislature provided that the new statute took effect “on the 91st day after the date on which the 2011 session of the Seventy-sixth Legislative Assembly adjourns sine die.” Or Laws 2011, ch 397, § 3. That led to an effective date of September 29, 2011.
C. Facts
With that background, we turn to the undisputed facts. The taxpayers in this case are Village at Main Street Phase II, LLC; Village at Main Street Phase III, LLC; and Village Residential, LLC. They own aрartment rental properties in Clackamas County. The Clackamas County Assessor assessed those properties for property tax purposes.
Taxpayers disagreed with the 2006, 2007, and 2008 real market values of two tax lots, and the 2007 and 2008 real market values of one additional tax lot. Accordingly, taxpayers appealed the assessor‘s assessments to the county BOPTA. The county BOPTA affirmed.
Taxpayers then appealed the BOPTA‘s decision to the Magistrate Division of the Tax Court. They challenged only the valuation of the improvements, not the land. At the time, the Nepom rule applied, so the sole issue before the Magistrate Division was the valuation of the improvements. While taxpayers’ appeal was still pending in the Magistrate Division, however, the legislature enacted
The Magistrate Division rendered its decisions in thеse appeals on December 13, 2011. Taxpayers, dissatisfied with the result,
The assessor, however, had come to believe that it had undervalued taxpayers’ land. Believing that the newly enacted
D. The Tax Court Decision
The Tax Court rejected the assessor‘s arguments and granted taxpayers’ motions for a preliminary ruling. Village at Main Street, 20 OTR 524. The Tax Court acknowledged that
Beginning with appeals to a county BOPTA, the Tax Court noted that, under existing statutes, “[t]he appealing party can only be the taxpayer.” 20 OTR at 529. Because “[t]he appeal referred to in
In contrast, the Tax Court found no conflict between
As for review of an assessment by the Regular Division, the Tax Court concluded that its own review mechanisms and
Turning to review by the Oregon Supreme Court, the Tax Court noted that pertinent statutes define such review as very limited in scope, extending only to errors of law or the absence of substantial evidence to support findings of fact made by the Tax Court. Applying of
After thus concluding that
After the Tax Court entered its order granting taxpayers’ motions for a preliminary ruling, the assessor again raised the
II. ANALYSIS
On appeal, the department and the assessor contend that the Tax Court erred in concluding that
A. Whether
The parties’ contentions require us to construe
We begin with the text. For convenience, we repeat it here:
“Whenever a party appeals the real market value of one or more components of a property tax account, any other party to the appeal may seek a determination from the body or tribunal of the total real market value of the property tax account, the real market value of any or all of the other components of the account, or both.”
First,
Second, the statute refers broadly to an “appeal” of an assessment. As we have noted, the relevant statutes set-ting out the four levels of review of a property tax assessment refer to each of those four levels as “appeals.” Under the circumstances, the general assumption of consistency counsels us to assume that the legislature intended the same word to have the same meaning throughout related statutes unless something in the text or context of the statute suggests a contrary intention. See, e.g., State v. Cloutier, 351 Or 68, 99, 261 P3d 1234 (2011) (“[I]n the absence of evidence to the contrary, we ordinarily assume that the legislature uses terms in related statutes consistently.“). There may well be indications in related statutes suggesting that the legislature did not intend
Third,
On the face of the statute, then,
The legislative history of
Before the Senate Committee on Finance and Revenue, Representative Barnhаrt similarly explained that, under then-current law, if a taxpayer appealed one component of an assessment, Measure 50 would preclude reassessment of the other component. Audio Recording, Senate Committee on Finance and Revenue, HB 2572, May 25, 2011, at 36:04-38:22 (statement of Rep Phil Barnhart). The bill before the committee, he explained, was intended to allow “the local appeals board and the tax court” to consider all components of a tax account, not just the one that the taxpayer challenges. Id.
During the same hearing, the policy coordinator for the Association of Oregon Counties submitted a statement to the committee asserting that the purpose of the bill was to permit “the magistrate or judge in a property tax appeal to ensure the correct final valuation of property in the process of making the component value adjustment requested by the taxpayer.” Testimony, Senate Finance and Revenue Committee, HB 2572, May 25, 2011, Ex DD (statement of Gill Riddell, Association of Oregon Counties).
Thus, it appears that the legislature was aware that, at the least,
That does not necessarily foreclose a conclusion that the statute nevertheless has a more limited application. Analysis of other relatеd statutes and other evidence of legislative intent may reveal that the legislature did not intend
1. County BOPTA Appeals
We begin with the first level of appeal, to a county BOPTA. As we have noted, the very name of the board—a board of property tax appeals—indicates that the legislature understood that review by a county BOPTA is, at least in some sense, an “appeal.” Moreover, as we have also noted,
The Tax Court nevertheless concluded that
The Tax Court first noted that applying
The Tax Court next observed that, under
2. Appeals to the Magistrate Division of the Tax Court
We turn to the second level of property tax appeals—the Magistrate Division of the Tax Court. The Tax Court concluded that
As we have noted, relevant statutes refer to review by the Magistrate Division as an “appeal.” Moreover,
3. Appeals to the Regular Division of the Tax Court
We next address appeals to the Regular Division of the Tax Court, the third level of
The Tax Court nevertheless concluded that “[t]he mechanisms of the Regular Division and
To the contrary, a review of the statutes defining the relationship between the Magistrate Division and the Regular Division suggests that allowing a new issue to be raised on appeal to the Regular Division is consistent with the role of the Regular Division. As we have noted, proceedings before the Magistrate Division are informal, not reported, and not subject to the rules of evidence. See
In contrast, Regular Division proceedings are “original, independent proceedings.”
See
That combination of statutory directives—requiring informal proceedings before the Magistrate Division, while requiring Regular Division proceedings to be original, independent, and de novo—means that the parties before the Regular Division are not limited to the evidence or the arguments that they presented in the Magistrate Division. The Tax Court itself has recognized as much, observing that its statutory duty to conduct de novo review of Magistrate Division decisions allows litigants to “start over with a clean slate in terms of arguments made and evidence presented.” Grant Cty. Assessor v. Dayville Public Sch. Dist. 16J, 20 OTR 240, 243 (2011). Or, as the Tax
“If either the taxpayer or assessor can improve his case, as he moves from successive administrative hearings to the court, by using new approaches (justified by further study) or offering stronger comparable sales (discovered through greater diligence), these changes in presentation are permitted under the statutory provision for a presentation “de novo,” so long as they aid in reaching the goal of true cash value.”
Clark v. Dept. of Rev., 14 OTR 221, 224 (1997) (quoting Price v. Dept. of Rev., 7 OTR 18, 23 (1977)).
The Tax Court also expressed concern in this case that applying
The Tax Court‘s reasoning appears to assume that
In short,
4. Appeals to the Oregon Supreme Court
The final level of property tax review is an appeal to this court. The Tax Court concluded that
On its face,
As we have noted, this court‘s review authority on appeal from the Regular Division is limited.
Furthermore, the legislature‘s decision to limit this court‘s review authority was deliberate. Before 1997, this court reviewed decisions of the Tax Court de novo. In 1995, the legislature amended the statute defining this court‘s review authority by eliminating de novo review and substituting the current, more limited scope of review. See Or Laws 1995, ch 650, § 25 (establishing present scope of review); Piedmont Plaza Investors v. Dept. of Rev., 331 Or 585, 588 n 1, 18 P3d 1092 (2001) (noting then-recent change to scope of review that became effective in 1997, but using prior de novo standard applicable to that case).
This court could not adhеre to that limited scope of review if parties could raise new valuation issues under
We are left with a choice between either reading
B. Whether
Taxpayers urge that, even if
Whether a statute applies retroactively is a question of legislative intent, determined by the usual tools of statutory construction. See Delta Air Lines, Inc. v. Dept. of Rev., 328 Or 596, 601, 984 P2d 836 (1999) (whether a statute applies retroactively is determined by applying rules of statutory construction).4 But, before we would need to address whether the legislature intended
Determining what constitutes “retroactive” application of a statute can be a difficult task because of the notoriously slippery nature of the notion of “retroactivity.” As Justice Linde observed in Whipple v. Howser, 291 Or 475, 488-89, 632 P2d 782 (1981) (Linde, J., concurring):
““Retroactivity’ itself is a deceptively simple word for a complex set оf problems. In real time, all laws can operate only prospectively, prescribing legal consequences after their enactment; they cannot change the past. On the other hand, all new laws operate upon a state of affairs formed to some extent by past events.”
See also Jill E. Fisch, Retroactivity and Legal Change: An Equilibrium Approach, 110 Harv L Rev 1055, 1072 (1997) (noting that “formulating a precise definition of retroactivity is a difficult enterprise“); W. David Slawson, Constitutional and Legislative Considerations in Retroactive Lawmaking, 48 Cal L Rev 216, 217 (1960) (“Enough has already been said to show that the concept of retroactivity has not been precisely analyzed in the literature to date and to
“Retroactive” legislation often refers to laws that “affect[] existing legal rights or obligations arising out of past transactions or occurrences.” E.g., U.S. Bancorp v. Dept. of Rev., 337 Or 625, 636-37, 103 P3d 85 (2004) (so stating). But whether a law “affects” existing rights or obligations depends on the nature of the law at issue; there is no bright-line test. As this court explained in ZRZ Realty v. Beneficial Fire and Casualty Ins., 351 Or 255, 262, 266 P3d 61 (2011), ““[r]esponsible attention to the significance to be attached to past events cannot be compressed into a simple formula. Too many different past events and too many potential legal consequences are relevant for different kinds of laws’ to announce a single formula” that would apply to all statutes. (Alteration in original; quoting Whipple, 291 Or at 489 (Linde, J., concurring).)
With that in mind, we turn to the statute at issue in this case. As we have noted,
Taxpayers object that the operative “appeal,” for purposes of retroactivity analysis, is their appeal to the Magistrate Division, which occurred before
The objection is not well taken.
Accordingly, we conclude that
The limited judgments of the Tax Court are reversed, and the cases are remanded to the Tax Court for further proceedings.