Opinion ID: 1155438
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Heading: INTERPRETATION OF SUBSECTION (3)(a) EXEMPTION

Text: We first consider the subsection (3)(a) exemption, which provides that the tax rate limitations apply to all taxes imposed on property or property ownership except [t]axes imposed to pay the principal and interest on bonded indebtedness authorized by a specific provision of this Constitution. The Tax Court concluded that for the urban renewal provision to be specific within the terms of the exemption, it must at least mention bonds or bonded indebtedness. 12 OTR at ____, 1992 WL 110091 (Tax Court Order at 8). Because it concluded that the urban renewal provision did not do so, the Tax Court held that property tax increment revenues were subject to Measure 5's tax rate limitations. Ibid. The (3)(a) phrase authorized by a specific provision of this Constitution clearly refers to its immediate antecedent, bonded indebtedness. Subsection (3)(a) thereby exempts taxes imposed to pay bonded indebtedness only if that bonded indebtedness is authorized by a specific provision of [the Oregon] Constitution. The dissent disagrees on this point and concludes that the phrase authorized by a specific provision of this Constitution modifies the words all taxes imposed. That conclusion is, however, belied by the grammar of subsection (3)(a), wherein authorized ordinarily would modify its closest noun or noun phrase, bonded indebtedness. Moreover, if authorized were intended to refer to taxes, the provision could have more clearly stated its meaning, by stating, for example: taxes imposed to pay    bonded indebtedness and authorized by a specific provision of this Constitution; or taxes authorized by a specific provision of this Constitution and imposed to pay    bonded indebtedness. Finally, reference to the other Measure 5 exception, stated in subsection (3)(b) (quoted 314 Or. at 182, 838 P.2d at 570 above), reveals that it is construed in an exactly parallel manner to the exemption in subsection (3)(a), and that its substitute for the word authorized is the word incurred, which clearly relates in context to bonded indebtedness and not to taxes. In the final analysis, we are convinced that the most usual grammatical reading of subsection (3)(a) and the identical structure of the exemptions in subsections (3)(a) and (3)(b) are the strongest indicators of the voters' intent. Consequently, we interpret subsection (3)(a) to exempt a tax imposed to pay bonded indebtedness if that bonded indebtedness is authorized by another specific provision of the Oregon Constitution. Respondents assert that the term specific provision must mean something more than any discrete or identifiable provision, because such a definition would render the word specific merely redundant. The something more that they suggest is that a specific authorizing provision means one that expressly authorizes bonded indebtedness. Respondents further assert that the authorization required by subsection (3)(a) is a constitutional provision that expressly creates the authority for the bonded indebtedness, such as the provisions in Article XI of the Oregon Constitution that expressly authorize the state to issue bonds for various purposes. Or. Const., Art. XI-A, XI-E through XI-J. City asserts that the term specific provision means a constitutional provision that expressly or implicitly authorizes bonded indebtedness. City further asserts that authorized means explicitly or implicitly allowed or particularly limited or regulated by the constitution. As the positions of the parties demonstrate, the key phrase, authorized by a specific provision of this Constitution, contains two separate but related terms that require interpretation, authorized and specific provision. For the reasons set out below, we interpret the phrase authorized by a specific provision of this Constitution to mean that the constitutional provision must explicitly empower or sanction the incurring of bonded indebtedness. Measure 5 did not use either the phrase authorized by a provision of this Constitution or the phrase authorized by any provision of this Constitution. It used the phrase authorized by a specific provision of this Constitution. (Emphasis added.) The adjective specific has several common meanings. One is something specifying, explicit, The Random House Dictionary of the English Language 1832 (unabridged 1987), or something that is characterized by precise formulation or accurate restriction, Webster's Third New International Dictionary 2187 (unabridged 1976). Another common meaning for specific is something having a special application, bearing, or reference or peculiar or proper to    something, as qualities, characteristics, effects, etc. Random House, supra at 1832. The first of these definitions fits more naturally into the context of subsection (3)(a), although the second definition is not inconsistent with the first. By requiring that the authorizing provision be explicit, the first definition of specific is consistent with the function that subsection (3)(a) performs, which is to identify a category of constitutional provisions that are exempt from the limitations of Measure 5. An explicit provision is one whose meaning and effect are clear and unambiguous, express and not implied. Thus, to the extent that specific furthers the categorizing function of subsection (3)(a), it does so by requiring that an exempt provision be clearly identifiable as one that explicitly authorizes bonded indebtedness. We next consider the word authorized in subsection (3)(a). As with the term specific, our interpretation of the term authorized is more closely in accord with the position taken by respondents. Authorized means to give authority or official power, to empower, to formally or duly sanction. See Random House, supra at 139, and Webster, supra at 146, for definitions of authorized and authorize. The City's proposed definitionthat authorized means explicitly or implicitly allowed or particularly limited or regulated by the constitutionis a strained definition untethered to the common meaning of the word. We conclude that, in order to qualify as exempt from the limitations of Measure 5 pursuant to subsection (3)(a), an authorizing provision must explicitly empower or sanction the incurring of bonded indebtedness. Earlier in this opinion we stated that one purpose of subsection (3)(a) is to exempt from Measure 5 limitations an identifiable category of constitutional provisions related to bonded indebtedness. A number of such identifiable provisions are in the Oregon Constitution. Although they are not presently financed by property tax revenues (which are the target of Measure 5), there are a variety of state-financed bonds explicitly authorized by provisions of Article XI of the Oregon Constitution. E.g., Article XI-A, and XI-E through XI-J (dealing with veteran loans and higher education, as examples). Those provisions contain explicit language (such as Bonds issued pursuant to this article   , Or. Const., Art. XI-F(1), § 4; or Bonds of the State of Oregon    may be issued, Or. Const., Art. XI-F(2), § 1) authorizing the incurring of debt and the issuing of state-financed bonds, that constitutional authorization being necessary to avoid the general prohibition of Article XI, section 7, of the Oregon Constitution, that the Legislative Assembly shall not lend the credit of the state nor in any manner create any debt or liabilities   . Provisions such as these are specific provisions that authorize bonded indebtedness within the meaning of subsection (3)(a). This dovetailing of the common meaning of authorized with an explicitly identified range of constitutionally authorized bonded indebtedness for which taxes imposed for repayment would be exempt, leads us to conclude that subsection (3)(a) exempts from Measure 5 limitations taxes imposed to pay for bonded indebtedness if another provision of the constitution explicitly empowers or sanctions the incurring of the bonded indebtedness. [2]