2023 Oregon Revised Statutes › Volume : 08 - Revenue and Taxation › Chapter 310 - Property Tax Rates and Amounts; Tax Limitations; Tax Reduction Programs › Section 310.140 - Legislative findings; definitions.

(1) The Legislative Assembly finds that Article XI, section 11b, of the Oregon Constitution, was drafted by citizens and placed before the voters of the State of Oregon by initiative petition. Article XI, section 11b, of the Oregon Constitution, uses terms that do not have established legal meanings and require definition by the Legislative Assembly. Article XI, section 11b, of the Oregon Constitution, was amended by Article XI, section 11 (11), of the Oregon Constitution. This section is intended to interpret the terms of Article XI, section 11b, of the Oregon Constitution, as originally adopted and as amended by Article XI, section 11 (11), of the Oregon Constitution, consistent with the intent of the people in adopting these provisions, so that the provisions of Article XI, section 11b, of the Oregon Constitution, may be given effect uniformly throughout the State of Oregon, with minimal confusion and misunderstanding by citizens and affected units of government. As used in the revenue and tax laws of this state, and for purposes of Article XI, section 11b, of the Oregon Constitution:
(a)(A) "Actual cost" means all direct or indirect costs incurred by a government unit in order to deliver goods or services or to undertake a capital construction project. The "actual cost" of providing goods or services to a property or property owner includes the average cost or an allocated portion of the total amount of the actual cost of making a good or service available to the property or property owner, whether stated as a minimum, fixed or variable amount.
(B) "Actual cost" includes, but is not limited to, the costs of labor, materials, supplies, equipment rental, property acquisition, permits, engineering, financing, reasonable program delinquencies, return on investment, required fees, insurance, administration, accounting, depreciation, amortization, operation, maintenance, repair or replacement and debt service, including debt service payments or payments into reserve accounts for debt service and payment of amounts necessary to meet debt service coverage requirements.
(b) "Assessment for local improvement" means any tax, fee, charge or assessment that does not exceed the actual cost incurred by a unit of government for design, construction and financing of a local improvement.
(c) "Bonded indebtedness" means any formally executed written agreement representing a promise by a unit of government to pay to another a specified sum of money, at a specified date or dates at least one year in the future.
(d)(A) "Capital construction" means, for bonded indebtedness issued prior to December 5, 1996, and for the proceeds of any bonded indebtedness approved by electors prior to December 5, 1996, that were spent or contractually obligated to be spent prior to June 20, 1997, the construction, modification, replacement, repair, remodeling or renovation of a structure, or addition to a structure, that is expected to have a useful life of more than one year, and includes, but is not limited to:
(i) Acquisition of land, or a legal interest in land, in conjunction with the capital construction of a structure.
(ii) Acquisition, installation of machinery or equipment, furnishings or materials that will become an integral part of a structure.
(iii) Activities related to the capital construction, including planning, design, authorizing, issuing, carrying or repaying interim or permanent financing, research, land use and environmental impact studies, acquisition of permits or licenses or other services connected with the construction.
(iv) Acquisition of existing structures, or legal interests in structures, in conjunction with the capital construction.
(B) "Capital construction," for bonded indebtedness issued on or after December 5, 1996, except for the proceeds of any bonded indebtedness approved by electors prior to December 5, 1996, that were spent or contractually obligated to be spent before June 20, 1997, has the meaning given that term in subparagraph (A) of this paragraph except as provided in subparagraphs (C) and (D) of this paragraph.
(C) "Capital construction" includes public safety and law enforcement vehicles with a projected useful life of five years or more.
(D) "Capital construction" does not include:
(i) Maintenance and repairs, the need for which could be reasonably anticipated;
(ii) Supplies and equipment that are not intrinsic to the structure; or
(iii) Furnishings, unless the furnishings are acquired in connection with the acquisition, construction, remodeling or renovation of a structure, or the repair of a structure that is required because of damage or destruction of the structure.
(e)(A) "Capital costs" means costs of land and of other assets having a useful life of more than one year, including costs associated with acquisition, construction, improvement, remodeling, furnishing, equipping, maintenance or repair.
(B) "Capital costs" does not include costs of routine maintenance or supplies.
(f)(A) "Capital improvements" means, for bonded indebtedness issued prior to December 5, 1996, and for the proceeds of any bonded indebtedness approved by electors before December 5, 1996, that were spent or contractually obligated to be spent before June 20, 1997, land, structures, facilities, personal property that is functionally related and subordinate to real property, machinery, equipment or furnishings having a useful life longer than one year.
(B) "Capital improvements," for bonded indebtedness issued on or after December 5, 1996, except for the proceeds of any bonded indebtedness approved by electors prior to December 5, 1996, that were spent or contractually obligated to be spent before June 20, 1997, has the meaning given that term in subparagraph (A) of this paragraph except as provided in subparagraphs (C) and (D) of this paragraph.
(C) "Capital improvements" includes public safety and law enforcement vehicles with a projected useful life of five years or more.
(D) "Capital improvements" does not include:
(i) Maintenance and repairs, the need for which could be reasonably anticipated;
(ii) Supplies and equipment that are not intrinsic to the structure; or
(iii) Furnishings, unless the furnishings are acquired in connection with the acquisition, construction, remodeling or renovation of a structure, or the repair of a structure that is required because of damage or destruction of the structure.
(g) "Direct consequence of ownership" means that the obligation of the owner of property to pay a tax arises solely because that person is the owner of the property, and the obligation to pay the tax arises as an immediate and necessary result of that ownership without respect to any other intervening transaction, condition or event.
(h)(A) "Exempt bonded indebtedness" means:
(i) Bonded indebtedness authorized by a specific provision of the Oregon Constitution;
(ii) Bonded indebtedness incurred or to be incurred for capital construction or capital improvements that was issued as a general obligation of the issuing governmental unit on or before November 6, 1990;
(iii) Bonded indebtedness incurred or to be incurred for capital construction or capital improvements that was issued as a general obligation of the issuing governmental unit after November 6, 1990, with the approval of the electors of the issuing governmental unit prior to December 5, 1996;
(iv) Bonded indebtedness incurred or to be incurred for capital construction or capital improvements if the issuance of the bonds is approved by voters on or after December 5, 1996, in an election that is in compliance with the voter participation requirements of Article XI, section 11 (8), of the Oregon Constitution, or if the issuance of the bonds is approved by voters on or after December 4, 2008, in an election that is in compliance with the voter participation requirements of Article XI, section 11 (8), of the Oregon Constitution, as limited by Article XI, section 11k, of the Oregon Constitution; or
(v) Bonded indebtedness incurred or to be incurred for capital costs on or after January 1, 2011, if the issuance of the bonds is approved by voters in an election that is in compliance with the voter participation requirements of Article XI, section 11 (8), of the Oregon Constitution, as limited by Article XI, section 11k, of the Oregon Constitution.
(B) "Exempt bonded indebtedness" includes bonded indebtedness issued to refund or refinance any bonded indebtedness described in subparagraph (A) of this paragraph.
(i) "Incurred charge" means a charge imposed by a unit of government on property or upon a property owner that does not exceed the actual cost of providing goods or services and that can be controlled or avoided by the property owner because:
(A) The charge is based on the quantity of the goods or services used, and the owner has direct control over the quantity;
(B) The goods or services are provided only on the specific request of the property owner; or
(C) The goods or services are provided by the government unit only after the individual property owner has failed to meet routine obligations of ownership of the affected property, and such action is deemed necessary by an appropriate government unit to enforce regulations pertaining to health or safety.
(j) "Local improvement" means a capital construction project, or part thereof, undertaken by a local government, pursuant to ORS 223.387 to 223.399, or pursuant to a local ordinance or resolution prescribing the procedure to be followed in making local assessments for benefits from a local improvement upon the lots that have been benefited by all or a part of the improvement:
(A) That provides a special benefit only to specific properties or rectifies a problem caused by specific properties;
(B) The costs of which are assessed against those properties in a single assessment upon the completion of the project; and
(C) For which the property owner may elect to make payment of the assessment plus appropriate interest over a period of at least 10 years.
(k)(A) "Maintenance and repairs, the need for which could be reasonably anticipated" means activities, the type of which may be deducted as an expense under the provisions of the federal Internal Revenue Code, as defined in ORS 305.842, that keep the property in ordinarily efficient operating condition and that do not add materially to the value of the property nor appreciably prolong the life of the property.
(B) "Maintenance and repairs, the need for which could be reasonably anticipated" does not include:
(i) Maintenance and repair of property that is required by damage, destruction or defect in design, or that was otherwise not reasonably expected at the time the property was constructed or acquired, or the addition of material that is in the nature of the replacement of property and that arrests the deterioration or appreciably prolongs the useful life of the property; and
(ii) Street and highway construction, overlay and reconstruction.
(L) "Projected useful life" means the useful life, as reasonably estimated by the unit of government undertaking the capital construction or capital improvement project, beginning with the date the property was acquired, constructed or reconstructed and based on the property’s condition at the time the property was acquired, constructed or reconstructed.
(m) "Routine obligations of ownership" means a standard of operation, maintenance, use or care of property established by law, or if established by custom or common law, a standard that is reasonable for the type of property affected.
(n) "Single assessment" means the complete assessment process, including preassessment, assessment or reassessment, for any local improvement authorized by ORS 223.387 to 223.399, or a local ordinance or resolution that provides the procedure to be followed in making local assessments for benefits from a local improvement upon lots that have been benefited by all or part of the improvement.
(o) "Special benefit only to specific properties" shall have the same meaning as "special and peculiar benefit" as that term is used in ORS 223.389.
(p) "Specific request" means:
(A) An affirmative act by a property owner to seek or obtain delivery of goods or services;
(B) An affirmative act by a property owner, the legal consequence of which is to cause the delivery of goods or services to the property owner; or
(C) Failure of an owner of property to change a request for goods or services made by a prior owner of the property.
(q) "Structure" means any temporary or permanent building or improvement to real property of any kind that is constructed on or attached to real property, whether above, on or beneath the surface.
(r) "Supplies and equipment intrinsic to a structure" means the supplies and equipment that are necessary to permit a structure to perform the functions for which the structure was constructed, or that will, upon installation, constitute fixtures considered to be part of the real property that is composed, in whole or part, of the structure and land supporting the structure.
(s) "Tax on property" means any tax, fee, charge or assessment imposed by any government unit upon property or upon a property owner as a direct consequence of ownership of that property, but does not include incurred charges or assessments for local improvements. As used in this paragraph, "property" means real or tangible personal property, and intangible property that is part of a unit of real or tangible personal property to the extent that such intangible property is subject to a tax on property.
(2) For purposes of subsection (1)(i) of this section, an owner of property may control or avoid an incurred charge if the owner is capable of taking action to affect the amount of a charge that is or will be imposed or to avoid imposition of a charge even if the owner must incur expense in so doing.
(3) For purposes of subsection (1)(i)(A) of this section, an owner of property has direct control over the quantity of goods or services if the owner of property has the ability, whether or not that ability is exercised, to determine the quantity of goods or services provided or to be provided.
(4) For purposes of subsection (1)(j) of this section, the status of a capital construction project as a local improvement is not affected by the accrual of a general benefit to property other than the property receiving the special benefit. [1991 c.459 §210; 1997 c.541 §258; 1999 c.21 §25; 1999 c.90 §33; 2001 c.660 §28; 2003 c.46 §24; 2003 c.77 §6; 2003 c.195 §23; 2003 c.802 §63; 2005 c.832 §18; 2007 c.614 §6; 2007 c.783 §125; 2008 c.45 §7; 2009 c.5 §17; 2009 c.909 §17; 2010 c.82 §17; 2011 c.7 §17; 2012 c.31 §17; 2013 c.377 §17; 2013 c.491 §1; 2014 c.52 §19; 2017 c.17 §27]