Title: Shilo Inn v. Multnomah County

State: oregon

Issuer: Oregon Supreme Court

Document:

Filed:  April 18, 2002
IN THE SUPREME COURT OF THE STATE OF OREGON

SHILO INN PORTLAND/205, LLC,
	Appellant/Respondent on Reconsideration,
	v.

MULTNOMAH COUNTY,
CITY OF PORTLAND,
and PORTLAND DEVELOPMENT COMMISSION,
	Respondents/Petitioners on Reconsideration,
	and
DEPARTMENT OF REVENUE,
State of Oregon,
	Intervenor Below/Petitioner on Reconsideration.
(OTC 4370; SC S46816)

	On respondents/petitioners on reconsideration's and
intervenor below/petitioner on reconsideration's petition for
reconsideration filed February 21, 2002.*
	Jeannette N. Launer, Pacific City, and Karen M. Williams, of
Lane Powell Spears Lubersky LLP, Portland, filed the petition for
reconsideration for respondent/petitioner on reconsideration
Portland Development Commission.  With them on the petition for
reconsideration were Sandra N. Duffy, Chief Assistant County
Counsel, Portland, for respondent/petitioner on reconsideration
Multnomah County; Linda Meng, Chief Deputy City Attorney,
Portland, for respondent/petitioner on reconsideration City of
Portland; and Douglas M. Adair, Assistant Attorney General,
Salem, and Hardy Myers, Attorney General, for intervenor below/petitioner on reconsideration Department of Revenue.
	No appearance by appellant/respondent on reconsideration.
	Before Carson, Chief Justice, and Gillette, Durham, Leeson,
Riggs, and Balmer, Justices.**
	GILLETTE, J.
	The petition for reconsideration is allowed.  The former
opinion is modified and, as modified, is adhered to.  The case is
remanded to the Oregon Tax Court for further proceedings.
	*333 Or 101, 36 P3d 954 (2001); on review from the Tax
Court, 15 OTR 36 (1999).
    **De Muniz, J., did not participate in the consideration or
decision of this case.
		GILLETTE, J.
		In Shilo Inn v. Multnomah County, 333 Or 101, 36 P3d
954 (2001), this court held that Oregon  constitutional
provisions that limit ad valorem property tax rates require the
categorization of urban renewal taxes according to their intended
use and not according to the nature of the taxing district
imposing the tax.  In accordance with that ruling, we reversed a
decision of the Oregon Tax Court, which had concluded that
statutes permitting urban renewal taxes to be characterized in
some instances as taxes "raised specifically to fund the public
school system" were permissible under the constitutional scheme.  
		Respondents Multnomah County, the City of Portland, and
Portland Development Commission, together with intervenor below,
Department of Revenue (respondents), timely petitioned for
reconsideration of this court's decision, arguing that the court
made four key, but erroneous, factual assumptions that led the
court to what respondents style as the court's "legally erroneous
conclusion" that the statutes at issue were inconsistent with
constitutional requirements.  None of respondents' arguments in
that regard is well taken, and we reject them without discussion. 
		Respondents also contend that the court made one
additional error that does not affect the outcome of the case,
but which is bound to cause confusion and, therefore, should be
corrected.  Respondents point to a passage in the introductory
section of the opinion, in which this court discussed how urban
renewal plans implemented after the date that Ballot Measure 50
was adopted will be funded.  The court's opinion states:  
	"If an urban renewal plan eventually is instituted in a
district in which there was no urban renewal area when
Measure 50 was adopted, then the assessed value of each
property in the district on the date that the permanent
rate was set necessarily would be equal to its frozen
base.  The increment would begin to accrue thereafter,
as the urban renewal plan took effect.  The urban
renewal program, therefore, would be funded by the
familiar process of extending the permanent rate
against the increment and, under subsection (15) of
Article XI, section 11, the taxes raised thereby would
be used 'exclusively to pay any indebtedness incurred
for the redevelopment or urban renewal project.'"
333 Or at 112.  Respondents argue that the first sentence of the
foregoing passage erroneously suggests that, for urban renewal
plans implemented after the adoption of Measure 50, the frozen
base for properties in the urban renewal area will be equivalent
to the assessed value for properties in that area in 1997.  In
reality, they contend, the 1997 assessed value of the affected
properties is not relevant to the calculation of the frozen base
for plans implemented after 1997. 
		The statement about which respondents complain is part
of the explanatory section of the opinion that provided
background for the later analysis.  Nonetheless, respondents are
correct that the problematic sentence could cause confusion.  The
opinion should have stated that, in the case of an urban renewal
plan implemented after the voters adopted Measure 50, the
constitutional permanent rate of the taxing district in which the
urban renewal area is located, by definition, would generate that
district's operating taxes.  Because the frozen base would be
equivalent to the assessed value of affected properties on the
date that the urban renewal plan is adopted, diverting taxes on
the increment to urban renewal thereafter would not detrimentally
affect the operating revenues available to the taxing district in
which the urban renewal area is located.  The misstatement in the
original opinion resulted from an unsuccessful attempt to state
the foregoing more briefly.  
		We allow reconsideration.  We adhere to the holding in
our former opinion that, under Measure 5, taxes used to fund
urban renewal properly fall within the category of taxes
dedicated to fund "other government" operations and that nothing
in Measure 50 signals the voters' intent to alter the way in
which those urban renewal taxes are to be categorized.  However,
we modify our former opinion in the respect described above.  
		The petition for reconsideration is allowed.  The
former opinion is modified and, as modified, is adhered to.  The
case is remanded to the Oregon Tax Court for further proceedings.