As used in this article: (1) "Class of property" means property classified for property tax purposes as provided pursuant to Section 1, Article X of the Constitution of this State and as further permitted in Section 12-43-220. Property subject to a fee in lieu of property taxes, as defined in Chapter 12, Title 4 is not included in this definition of a class of property. All classes of property are provided a credit against property tax liability as provided in this article. (2) "Political subdivision" means a county, or a school district located wholly or partly within a county area, or both the county and a school district so located. (3) "Property tax" means all property tax millage imposed for operating purposes by a political subdivision. (4) "Property tax liability" means the amount of tax due as a result of the imposition of property tax. (5) "ORS" means the Office of Research and Statistics of the State Budget and Control Board.

HISTORY: 2006 Act No. 388, Pt III, Section 1, eff January 1, 2007.

### SECTION 4-10-730.

Local option sales and use tax; credit against property tax liability.

(A)(1) Subject to the requirements of this article, the governing body of the county by a county council ordinance or by an initiated ordinance submitted to the governing body of the county by a petition signed by qualified electors of the county, equal in number to at least seven percent of the qualified electors of the county, may impose a sales and use tax in increments of one-tenth of one percent, not to exceed one percent, subject to referendum approval in order to provide a credit against property tax imposed by a political subdivision for all classes of property subject to such tax. The ordinance may provide for a credit against the property tax liability for the county or the school district(s) in the county, or the property tax liability for both the county and the school district(s) in the county. An ordinance must be enacted or a petition initiating an ordinance must be presented to the county governing body at least one hundred twenty days before the Tuesday following the first Monday of November of that year. (2) The rate of the tax must be set at an amount expressed in tenths of one percent estimated to be sufficient to produce revenues that do not exceed those necessary to replace property tax revenue in the county for the affected political subdivisions in the most recently completed fiscal year, but not more than one percent and must take into account reimbursements received by political subdivisions for property tax exemptions. (3) If the county or municipality within the county has enacted a tax increment financing redevelopment plan, or other financing plan that relies upon property tax for its funding to retire indebtedness or pay for project costs, the rate of tax must be set in an amount that must consider full funding for the project or retirement of indebtedness, which must include compliance with any covenants in the governing documents authorizing this indebtedness or future indebtedness heretofore authorized by the tax increment financing redevelopment plan that relies upon property tax for its funding for the amount that the sales tax would substitute for the property tax payments. The revenues of such tax attributable to the funding replacement for a tax increment redevelopment financing plan that relies upon property tax for its funding must be distributed by the county treasurer pursuant to Section 4-10-780. (4) The governing body of the county shall obtain from ORS after ORS has obtained all information necessary to provide such estimate, a certified estimate of the rate of sales and use tax necessary in the county to equal the property tax not collected, and for the amount, if applicable, for the funding replacement for the tax increment financing redevelopment plan or other financing plan that relies upon property tax for its funding. This certified rate, not to exceed one percent, is the rate of tax that must appear in the referendum question. (5) A qualified elector of the county desiring to circulate a petition shall file a written request with the governing body of the county detailing the property tax liability or liabilities to which the credit will apply and the governing body shall forward the request to ORS, which shall design the petition form in