Opinion ID: 1155438
Heading Depth: 1
Heading Rank: 2

Heading: INTERPRETATION OF ARTICLE IX, SECTION 1c

Text: 1. Authorizing Taxes Imposed to Pay the Principal and Interest on Bonded Indebtedness. Article IX, section 1c, of the Oregon Constitution (the urban renewal provision) provides: The Legislative Assembly may provide that the ad valorem taxes levied by any taxing unit, in which is located all or part of an area included in a redevelopment or urban renewal project, may be divided so that the taxes levied against any increase in the true cash value, as defined by law, of property in such area obtaining after the effective date of the ordinance or resolution approving the redevelopment or urban renewal plan for such area, shall be used to pay any indebtedness incurred for the redevelopment or urban renewal project. The legislature may enact such laws as may be necessary to carry out the purposes of this section. The majority holds that [t]he 1960 amendment [the urban renewal provision] empowers or sanctions a particular form of repayment for debt [tax increment financing], even including by implication bonded debt. 314 Or. at 192, 838 P.2d at 576. That form of repayment, as the majority correctly explains, is by imposing a tax. Id. at 188, 838 P.2d at 573, n. 2. Under the urban renewal provision, if implemented by legislation, ad valorem taxes levied by any taxing unit containing an urban renewal project may be divided so that the taxes levied against any increase in the true cash value of property  shall be used to pay any indebtedness incurred for the project. Article IX, § 1c (emphasis added). In short, the urban renewal provision relates directly to the subject of tax increment financing to pay for all urban renewal indebtedness, including bonded indebtedness, and the urban renewal provision expressly authorizes the legislature to enact the necessary laws to carry out the purposes of tax increment financing. The urban renewal provision qualifies as a specific provision of the Oregon Constitution that authorizes taxes imposed to pay the principal and interest on bonded indebtedness.