Opinion ID: 1155438
Heading Depth: 1
Heading Rank: 3

Heading: Authorizing Bonded Indebtedness.

Text: Even accepting everything that the majority says in Parts A and B of its opinion, it reaches the wrong conclusion. When adopted, the urban renewal provision in fact authorized a form of bonded indebtedness that was not previously used. Stated differently, the voters in 1960 enacted a constitutional amendment to empower or sanction the incurring of a particular form of bonded indebtedness secured by a pledge of property tax increment revenues. The urban renewal provision expressly authorizes the legislature to enact laws to provide for allocation of urban renewal property tax increment revenues that shall secure the repayment of any urban renewal indebtedness, which term, by definition, includes urban renewal bonded indebtedness. The urban renewal provision thereby expressly authorizes the legislature to enact laws so that localities may issue revenue bonds. The meaning and effect of the express terms of the urban renewal provision are to empower or sanction the incurring of indebtedness, specifically the incurring of bonded indebtedness secured by property tax increment revenues ( i.e., revenue bonds). [7] Indeed, the voters believed that, by enacting the urban renewal provision, they would thereby permit the legislature to enact laws authorizing localities both to engage in tax increment allocation of revenues and to incur debt, including bonded debt, secured by property tax increment revenues. The measure was viewed as a means to  provide the tools to help municipalities to raise their one-third of the cost of urban renewal projects, approving a method for local governments to raise money for these projects. 314 Or. at 190, 838 P.2d at 574 (emphasis in majority). It is clear, not only that the voters believed that the constitutional amendment was necessary to permit the incurring of bonded indebtedness secured by property tax increment revenues (issuance of revenue bonds), but also that the amendment itself facially purports to authorize the legislature to enact such laws as may be necessary toward that end. I am aware that the urban renewal provision does not state either that urban renewal agencies may issue bonds and incur bonded debt or that urban renewal agencies may issue bonds and incur bonded debt secured by tax increment financing revenues. 314 Or. at 192, 838 P.2d at 576. The majority considers this lack of an express facial reference to bonds to be critical. Yet, no one disputes that bonds are the principal form of urban renewal debt. The express term, any indebtedness incurred for the redevelopment or urban renewal project (Art. IX, § 1c (emphasis added)), includes its principal component, urban renewal bonds. The majority's position is that that is not explicit enough, as if a provision authorizing the legislature to enact such laws as may be necessary to buy any animals with black and white stripes would not be a provision authorizing the state to own zebras, because it described the intermediate step of purchase and included other black and white striped animals. I am not convinced. The very purpose of Article IX, section 1c, is to authorize local utilization of tax increment bonds. I am also aware that general statutory authority for urban renewal agencies to issue bonds and incur bonded debt preceded the constitutional amendment by three years. 314 Or. at 191, 838 P.2d at 575. It was, however, unclear whether the 1957 general statutory authority to incur debt extended to the issuance of bonds secured by a pledge of property tax increment revenues. The prior existence of general statutory authority in no way precludes the people from enacting a constitutional provision, the purpose of which is to empower or sanction the specific practice of offering bonds. The majority would, inappropriately, add two requirements to subsection (3)(a) of Measure 5, by reading it to except taxes imposed to pay the principal and interest on bonded indebtedness if a specific provision of the constitution authorizes every form of bonded indebtedness for a given purpose and authorizes bonded indebtedness for that purpose for the first time. Neither requirement appears in Measure 5. Finally, the majority relies on its view as to what the voters likely would have thought about the issue before us. 314 Or. at 193, 838 P.2d at 576. The majority cites no authority for its view. It bears noting that there is no indication whatever in the text or history of Measure 5 that its effect on taxes imposed to repay urban renewal debt was ever considered, one way or the other, by the sponsors of the measure. It is just as likely that the voters who adopted Measure 5 did not intend to enact a system that could force a locality to have insufficient funds to repay bonds that were secured by a pledge of dedicated tax revenues and did not intend to cripple the 30-year program of tax increment bond financing that the voters had adopted in 1960. Measure 5 and the urban renewal provision share some common objectives: both result in lower taxes in the long run; both favor the use of public funds to benefit particular areas of the taxing jurisdiction that are in need of improvements; and both recognize the importance of government bond programs to the economic health of Oregon. More importantly, the majority's and my assertions about what the voters would have thought had they been presented with this issue are beside the point. Our task is to interpret subsection (3)(a) of Measure 5, as written, and then to shift our focus to whether the urban renewal provision, as written, meets the requirements of that exception. I conclude that property tax increment revenue to repay bonded indebtedness, provided for in Article IX, section 1c, is exempt from the limitations of Measure 5 pursuant to Article XI, section 11b(3)(a), of the Oregon Constitution. I would reverse the judgment of the Tax Court and, accordingly, dissent. RICHARDSON, J. Pro Tem., joins in this dissent.