Comcast Corp. III v. Dept. of Rev. (TC 4909) , 22 Or. Tax 233 ( 2016 )

No. 26 September 15, 2016 233
26
Comcast Corp. III v. Dept. of Rev. (TC 4909) 22 OTR
September 15, 2016
IN THE OREGON TAX COURT
REGULAR DIVISION
COMCAST CORPORATION,
Plaintiff,
v.
DEPARTMENT OF REVENUE,
Defendant.
(TC 4909)
On remand from the Oregon Supreme Court, the court considered the issue
of the determination of the maximum assessed value (MAV) of Plaintiff’s (tax-
payer’s) property under Measure 50. Defendant (the department) argued that
the new property exception to the 3% Limit (either the constitutional or stat-
utory limit) justified an increase in the MAV for taxpayer’s properties of more
than 130 percent. That, coupled with a substantial increase in real market value
(RMV) determined by the department, resulted in an increase in the assessed
value (AV) for taxpayer’s properties in the order of hundreds of millions of dol-
lars. In addition, the determination of the MAV would have an effect on future
years, as once MAV has been determined based upon an exception to the 3%
Limit, the calculation of MAV in future years would be subject to the 3% Limit
in those years, determined by reference to the exception MAV. Taxpayer argued
that the department’s assessment was incorrect because the MAV determined
by the department for tax year 2009-10 exceeded the 3% Limit. The department
acknowledged that it increased taxpayer’s MAV more than the 3% Limit, but
relied on the new property exception to the 3% Limit. The court ruled that the
department’s action of adding taxpayer’s property to the central assessment tax
roll did not, absent some action or event attributable to taxpayer, qualify as an
“addition” to a property tax account for purposes of the new property exception
under ORS 308.149(5)(a)(C). Accordingly, because the majority of taxpayer’s prop-
erty was existing and subject to central assessment before the assessment date of
the immediately preceding tax year, the court held that the new property excep-
tion did not apply to that property in the tax year in question. However, the court
did not prohibit the department from using the new property exception at all, as
taxpayer conceded that it had $86 million in new property additions. The court
therefore concluded that the record did not support a decision on MAV and that
further evidentiary proceedings were warranted.
Oral argument on cross-motions was held March 16,
2016, in the courtroom of the Oregon Tax Court, Salem.
Joseph M. DePew, Sutherland Asbill & Brennan LLP,
Atlanta, and Cynthia M. Fraser, Garvey Schubert Barer
PC, Portland, filed the motion and argued the cause for
Plaintiff (taxpayer).
Marilyn J. Harbur, Senior Assistant Attorney General,
Department of Justice, Salem, filed the cross-motion and
234 Comcast Corp. III v. Dept. of Rev. (TC 4909)
argued the cause for Defendant Department of Revenue (the
department).
Decision rendered September 15, 2016.
HENRY C. BREITHAUPT, Judge.
I. INTRODUCTION
This case is on remand from the Oregon Supreme
Court. That Court held that property owned by Comcast
Corporation (taxpayer) and used to provide cable television,
voice over internet protocol (VOIP), and internet services was
subject to central assessment in tax year 2009-10. Comcast
Corp. v. Dept. of Rev., 356 Or 282, 337 P3d 768 (2014).
II. MEASURE 50 AND MAV
This order concerns the principles regarding the
determination of the maximum assessed value (MAV) of
taxpayer’s property under Measure 50—codified in Article
XI, section 11, of the Oregon Constitution—and the statutes
implementing Measure 50. There are other issues before the
court not addressed in this order.1
Before Measure 50, the base for property tax-
ation, to which tax rates were applied, was the real mar-
ket value (RMV) of the property—the amount at which a
property would sell in an arm’s-length transaction between
an informed buyer and informed seller.2 ORS 308.205.3 In
effect, the value at which a property was assessed and the
value upon which taxes were actually levied, was, for any
given year, equal to its RMV. If, in a subsequent year, the
property’s RMV went up, so did the assessed value (AV) and
1
As previously ordered, still pending on remand are taxpayer’s discrimi-
nation claims under the Oregon and federal constitutions, and taxpayer’s claim
under the Internet Tax Freedom Act. See Comcast Corp. II v. Dept. of Rev. (TC
4909), 22 OTR 64 (2015) (Order on Scope of Remand). In addition, because the
court’s ruling here only governs the principles applicable in determining the
MAV and AV under Measure 50, there may yet be need for a decision on the final
value calculation under these principles.
2
This is true unless the property is subject to special assessment, in which
case it will be assessed at a value other than its RMV. See, e.g., ORS 308A.050 -
308A.128 (addressing farm use special assessment).
3
Unless otherwise noted, all references to the Oregon Revised Statutes
(ORS) are to 2009. The definition in ORS 308.205 has not materially changed
since at least 1995, the last bound version of the ORS before Measure 50.
Cite as 22 OTR 233 (2016) 235
the associated tax burden. Valuation disputes were more
prevalent before Measure 50 because successfully challeng-
ing an assessor’s conclusion as to a property’s RMV in any
year would change the tax burden for that year, and could
become an adjudicated value under ORS 309.115 for a lim-
ited number of future years.4
Measure 50 effected a change in the mechanism
for computation of the tax base against which property tax
rates were applied. It did so by introducing the concept of
maximum assessed value (MAV) for property. Measure 50
also dictated that the AV of property in any year must be the
lesser of the RMV or the MAV of that property for the year
in question. Or Const, Art XI, §§ 11(1)(b), (f); see also ORS
308.146(2).
Under Measure 50, if the RMV determined by an
assessor is above the MAV applicable for any given year, the
MAV, being lesser, will generally be the AV. Challenging the
RMV will produce no economic relief for a taxpayer unless
the taxpayer is asserting that the RMV of the property is
below the MAV.5 A corollary to this concept is that even if
an assessor can defend a very significant RMV for property,
that RMV will not produce property tax revenue to the extent
that it exceeds the MAV of the property. Indeed, that is the
situation presented for decision in this case. Defendant (the
department) assessed taxpayer under the central assess-
ment regime, found in ORS 308.550 to 308.665. This per-
mitted the department to include, in the RMV of all of tax-
payer’s properties, significant additional value inherent in
the intangible property of taxpayer. The limiting factor and
the issue here is whether the MAV of taxpayer’s properties
is less than the RMV of those properties.
4
Unless otherwise specified, “assessor” refers to either the local assessor or
the Department of Revenue.
5
In cases where a taxpayer is not asserting an RMV lower than the MAV,
this court has held that no justiciable controversy exists. Paris v. Dept. of Rev.,
19 OTR 519 (2008). One exception to this rule is “compression” under Article
XI, section 11b, of the Oregon Constitution (commonly known as Measure 5).
Measure 5 limits the amount of taxes that can be collected on a property. These
limits are expressed as a number of dollars for each $1,000 of RMV. Or Const, Art
XI, § 11b(1). Accordingly, in cases of compression, a taxpayer asserting an RMV
lower than the RMV determined by the assessor—but higher than the MAV—
may still have a justiciable controversy.
236 Comcast Corp. III v. Dept. of Rev. (TC 4909)
Under Measure 50, once a MAV has been deter-
mined for property, the MAV of the property generally can-
not, in the future, increase more than three percent from the
prior year’s MAV (the 3% Constitutional Limit). Or Const,
Art XI, § 11(1)(b). The 3% Constitutional Limit provides for a
three percent ceiling, but it does not provide for a calculation
of MAV. That calculation is provided for by statute.
ORS 308.146(1) provides that the MAV of property
in any given year is the greater of 100 percent of the prior
year’s MAV or 103 percent of the prior year’s AV (the Statu-
tory Limit). The Statutory Limit is slightly different from—
but not contrary to—the 3% Constitutional Limit.6 The 3%
Constitutional Limit requires that the MAV not increase by
more than three percent in any given year. The Statutory
Limit can result in an increase in MAV of less than three
percent in some years. The MAV will only increase where
103 percent of the prior year’s AV exceeds the prior year’s
MAV.7 Where it is not important to distinguish between the
3% Constitutional Limit and the Statutory Limit, the court
will refer to both limits together as the 3% Limit.
Although calculation of the 3% Limit is straightfor-
ward, disputes can arise, and in this case have arisen, over
whether one of a limited number of exceptions to the 3%
Limit exists.8 These exceptions are provided for by Measure
50 and implemented in ORS 308.146(3).
There are six exceptions to the operation of the
3% Limit. In each of these an assessor can determine an
increase to MAV that exceeds the 3% Limit. In such cases
6
Neither party asserts that the Statutory Limit violates Measure 50.
7
See the Appendix to this order for examples of the interactions between AV,
MAV, and RMV.
8
The term “exception” to the 3% Limit is something of a misnomer. It does
not mean that the 3% Limit is ignored. For example, in the case of new prop-
erty, the 3% Limit still applies to the property existing in the prior year. See ORS
308.153(1)(a); ORS 308.146(1). The “exception” to the 3% Limit is more accurately
described as a “determination” of MAV as to that new property. See ORS 308.153
(1)(b), (2)(a). The current year’s MAV is equal to the addition of the previously
existing property (with a MAV subject to the 3% Limit) and the newly existing
property (with a MAV newly established for it). ORS 308.153(1). The court uses
the term “exception” both because it has taken root in legal parlance and because
it has a basis in statute. See ORS 308.146(2) (“Except as provided in * * *.”); but
cf. Or Const, Art XI, § 11(1)(b) (no use of the term “except” or “exception”).
Cite as 22 OTR 233 (2016) 237
an exception value is determined. The exception value is
based upon the value of the property or element of property
subject to the exception multiplied by the “changed property
ratio” (CPR).9
There is no dispute that computation of MAV may
escape the 3% Limit only where property is, for the current
assessment year, i.e., as of the assessment date:10 (1) new;
(2) partitioned or subdivided; (3) rezoned; (4) omitted from
the assessment roll; (5) disqualified from exemption, partial
exemption, or special assessment; or (6) subjected to lot line
adjustment. Or Const, Art XI, § 11(1)(c); ORS 308.146(3).
The only exception that the department relies upon
is the exception for new property.11 The department argues
90
The CPR is a colloquial term used to describe the ratio used in determin-
ing the MAV for property when an exception has been satisfied. The MAV calcula-
tion for new property is contained in ORS 308.153. ORS 308.153(1) provides that
the MAV equals the sum of (1) the 3% Limit and (2) the product of the RMV of
the new property multiplied by the CPR. The CPR is equal to the ratio of average
MAV over average RMV for the assessment year for property located in the same
area and of the same class, but no more than 1.00. Or Const, Art XI, § 11(a)(c);
ORS 308.153(1)(b).
10
Understanding the time periods used in the assessment statutes is critical.
An assessment year is a calendar year. ORS 308.007(1)(b); see also ORS 308.007
(1)(d) (defining “year” as “assessment year”). The assessment date, the date on
which value is determined for the assessment year, is January 1 at 1:00 a.m. ORS
308.007(1)(a); see ORS 308.210, ORS 308.250. The tax year is a fiscal period that
runs from July 1 to June 30. ORS 308.007(1)(c). The assessment year relates to
the tax year beginning in the same calendar year. See ORS 308.007(2). To clarify:
an assessment date of January 1, 2009, (at 1:00 a.m.) corresponds to an assess-
ment (calendar) year of 2009, which corresponds to a tax year running from
July 1, 2009 to June 30, 2010 (tax year 2009-10).
11
During oral argument, the department confirmed that this is the only
exception at issue. The court notes, however, that there are hints in the depart-
ment’s briefing that suggest the department holds that intangible property is
exempted from local assessment. There are also hints that transition to central
assessment could be seen as a loss of that alleged exemption. However, ORS
307.030(2) provides that, except in central assessment, “intangible personal
property is not subject to assessment and taxation.” (Emphasis added.)
There is a difference between not being subject to assessment and being sub-
ject to but exempted from assessment. This is highlighted by the fact that in all
circumstances, except those not relevant here, exemption requires an application
for exemption by a taxpayer, and property that is exempt can be disqualified from
exemption. Indeed, such a disqualification event triggers an exception to MAV.
There is no similar application or possible disqualification for intangible property
in local assessment, because it is simply not subject to assessment and taxation.
The department acknowledges this, but fails to see the point. In its briefing,
the department notes:
238 Comcast Corp. III v. Dept. of Rev. (TC 4909)
that the new property exception to the 3% Limit justifies
an increase in the MAV for taxpayer’s properties of more
than 130 percent. This, coupled with a substantial increase
in RMV determined by the department, resulted in an
increase in the AV for taxpayer’s properties in the order of
hundreds of millions of dollars.
Further, the parties here are not simply argu-
ing about the department’s determination of MAV as it
affects the taxes levied on taxpayer’s property in tax year
2009-10. That determination will have effects beyond that
year. Recall that, before Measure 50, valuation disputes
affected the tax burden only for the year of the dispute. In
subsequent years, the question of RMV, and therefore the
base for taxation, could be litigated anew.12 Under Measure
50, however, once a MAV has been determined based upon
an exception to the 3% Limit, the calculation of MAV in
future years is subject to the 3% Limit in those years, deter-
mined by reference to the exception MAV. Or Const, Art XI,
§ 11(1)(d).
With this perspective, the court turns to the facts
and arguments in this case.
III. FACTS AND PROCEDURAL HISTORY
Taxpayer has three lines of business in which it
provides services for its customers. They are cable televi-
sion, internet access, and VOIP. Taxpayer’s VOIP property
has, for many years, been subjected to central assessment by
the department without objection from taxpayer. Taxpayer’s
cable television and internet access property, however, was
not subjected to central assessment by the department until
tax year 2009-10. Before that, taxpayer’s cable television
and internet access property was subjected to local assess-
ment by the counties.
“Comcast argues that its previously unassessed intangible property can-
not be considered exempt property and added to the central assessment roll
because it was not ‘disqualified’ from exemption. This argument ignores the
fact that this property never ‘qualified’ for exemption. Intangible property is
not subject to assessment on the local assessment rolls, as provided by law in
ORS 307.030(2).”
The exception for disqualification from exemption does not apply here.
12
There are only a few limited exceptions to this rule. See, e.g., ORS 309.115.
Cite as 22 OTR 233 (2016) 239
In tax year 2009-10, the department for the first
time subjected all of taxpayer’s properties to central assess-
ment as a unit. The department issued a notice of proposed
assessment on May 22, 2009. Taxpayer objected to that
notice on June 12, 2009. On July 10, 2009, the department
rejected taxpayer’s objections and, on July 14, 2009, the
department issued an opinion and order determining that
taxpayer was subject to central assessment with an RMV of
$1,013,000,000. On August 19, 2009, taxpayer filed a com-
plaint in the Magistrate Division of this court, before suc-
cessfully petitioning for special designation to the Regular
Division in September 2009. Taxpayer argued before this
court that its cable television and internet access property
was not subject to central assessment because neither ser-
vice was a “communication” service under ORS 308.515
(1)(h).
This court found that taxpayer’s cable television
service was not subject to central assessment as a commu-
nication service. This court determined that taxpayer’s
internet access property would have been subject to central
assessment, but that the internet access service was inte-
grated with the cable television service. Further, this court
determined that taxpayer’s cable television service was the
primary use of the property. Accordingly, because this court
found that the cable television service was not subject to
central assessment, this court determined that the internet
service was also not subject to central assessment. Comcast
Corp. v. Dept. of Rev., 20 OTR 319, 334-37 (2011).
The department appealed to the Supreme Court.
The court determined that all of taxpayer’s property was, in
the 2009-10 tax year and for several years prior to that, sub-
ject to central assessment as property used for communica-
tion services. Comcast Corp., 356 Or at 332-34. However, the
court did not determine the MAV or AV of taxpayer’s prop-
erties, instead remanding the case for this court to address
Measure 50 and the 3% Limit as well as other matters that
had been rendered moot by the initial decision of this court
as to those properties.13
13
As previously stated, taxpayer’s discrimination and ITFA claims are still
pending before this court. On remand, the department argued that no issue
240 Comcast Corp. III v. Dept. of Rev. (TC 4909)
For tax year 2008-09, the year prior to the year at
issue in this case, the real and tangible personal property
assessed in various counties had, in the aggregate, an AV
and an RMV of $212,044,900, and a MAV of $361,702,602.14
Taxpayer’s centrally assessed VOIP property had an AV
and RMV of $32,000,000, with a MAV of $72,381,600. In
total, taxpayer’s property on the tax rolls had an RMV of
$244,044,900 and a MAV of $434,084,202. The total AV of
all property of taxpayer was, therefore, $244,044,900.
For tax year 2009-10, the department subjected
taxpayer’s cable television, VOIP, and internet services
property to central assessment as one unit.15 Applying val-
uation rules used in central assessment, which allow for the
assessment and taxation of property in Oregon based on
an allocated value of all of taxpayer’s properties wherever
located, including intangible property,16 the department
determined that the RMV of all of taxpayer’s property was
$1,013,000,000. On the basis that this was the first year
that the department was assessing all of taxpayer’s prop-
erty as centrally assessed property, the department treated
all of taxpayer’s property as new property, and determined
a MAV of $1,013,000,000. Taxpayer concedes that there was
$86 million of new net tangible property additions, but dis-
putes that any other portion of its property was new prop-
erty for tax year 2009-10.
The change in assessment values between tax
years 2008-09 and 2009-10 is shown in the following chart.
Remember that the 3% Limit only applies to the MAV of
survived on remand except the Measure 50 issue. This court rejected that posi-
tion. Comcast Corp. II, 22 OTR 64 (2015). It has been rejected by the Supreme
Court as well. See DIRECTV, Inc. v. Dept. of Rev., 360 Or 21, 25 n 1, 377 P3d 568
(2016).
14
Because the AV for this property is lower than the MAV, the AV must nec-
essarily be equal to the RMV.
15
The term “unit” is not a technical term for purposes of Measure 50, but
it is significant for purposes of determining RMV in central assessment in ORS
308.505 to 308.665. In central assessment, the department “may value the entire
property, both within and without the State of Oregon, as a unit,” and then
“ascertain the property subject to taxation in Oregon” by some measure of appor-
tionment. ORS 308.550; ORS 308.555.
16
ORS 307.030(2).
Cite as 22 OTR 233 (2016) 241
property.17 The percentage increase with respect to RMV
and AV is shown for informational purposes only.
AV MAV RMV
Tax Year 2008-09 $244,044,900 $434,084,202 $244,044,900
Tax Year 2009-10 $1,013,000,000 $1,013,000,000 $1,013,000,000
Percentage Change 315% Increase 133% Increase 315% Increase
IV. THE ARGUMENTS OF THE PARTIES
Measure 50 does not purport to only apply to cer-
tain types of property. Consistent with that fact, the par-
ties concede that Measure 50 and the implementing stat-
utes apply to both locally and centrally assessed property.
Taxpayer argues that the department’s assessment is incor-
rect because the MAV determined by the department for
tax year 2009-10 exceeds the 3% Limit. The department
acknowledges that it increased taxpayer’s MAV more than
the 3% Limit, but relies on the new property exception to the
3% Limit. The department treated all of taxpayer’s prop-
erties, including previously assessed real and tangible per-
sonal property, as new property. At the center of this case is
a dispute regarding whether, or to what extent, the transi-
tion from local assessment to central assessment qualifies
as an event triggering the new property exception to the 3%
Limit.18
On the question of new property, taxpayer concedes
that it had $86 million in new property for purposes of the
MAV for tax year 2009-10. Therefore, taxpayer concedes
that some upward adjustment to the MAV calculated under
the 3% Limit for tax year 2009-10 is appropriate under ORS
17
This is commonly misunderstood. The MAV places an upper limit on the
tax base of property, which base is used to calculate taxes. However, the MAV is
not a limit on increases to the tax burden. So long as the AV does not exceed the
MAV, the AV—and the associated tax burden—can increase more than three
percent. See Appendix, 22 OTR at 260.
18
To the extent that taxpayer acknowledges addition of $86 million in new
property, it does not question the application of the new property exception. The
total amount of new property will be the subject of further proceedings, dis-
cussed below in Section VI (B) as the department may dispute that there is only
$86 million in new property. See 22 OTR at 258.
242 Comcast Corp. III v. Dept. of Rev. (TC 4909)
308.153. However, taxpayer challenges the CPR of 1.00
used by the department in calculating any exception value.
Taxpayer also asserts it had no other new property subject
to assessment as of January 1, 2009.
Neither party has presented evidence supporting
an argument or finding that taxpayer’s operations changed
in any material way from the year 2000 up until 2009-10.19
As to the cable and internet businesses, those operations
were digital at least by tax year 2008-09, and digital there-
after. Nor did the VOIP business change. Accordingly, nei-
ther party disputes that taxpayer was subject—even if not
subjected—to central assessment on its cable television and
internet services property well before tax years 2008-09
and 2009-10.20 A more precise determination of when the
transition from analog operations to digital operations is
not required for resolution of this case. The department,
for whatever reason, simply chose not to subject all of tax-
payer’s properties to assessment under the central assess-
ment regime until tax year 2009-10.21
V. ISSUE
The issue in this proceeding is the proper con-
struction and application of the “new property” exception to
Measure 50.
19
According to the exhaustive review of history conducted by the Supreme
Court, the technological “convergence,” from analog technology to digital tech-
nology, resulting in taxpayer’s property becoming subject to central assessment,
likely occurred in the mid-1990s. 356 Or at 317-19.
20
To illustrate the difference between being subject and subjected to assess-
ment, consider a house completely built as of the assessment date for tax year
2008-09, that an assessor did not notice and therefore did not assess. The house
was assessable, and therefore subject to assessment and taxation. It was not,
however, assessed, and therefore was not subjected to assessment and taxation.
In such cases, an exception to Measure 50 for omitted property could apply.
See ORS 308.146(3)(d). The department makes no claim that the omitted prop-
erty exception applies to this case. In addition, the department seems confused as
to whether there is a difference in the operation of the omitted property exception
in central assessment as opposed to local assessment. As will be discussed in
Section VI (A)(3), there is no difference. See 22 OTR at 247-51.
21
As discussed in this court’s prior order, although the department did not
formally act until tax year 2009-10, it had for some time believed that cable oper-
ations were subject to central assessment and sought legislative change to clarify
the requirement. See Comcast Corp. v. Dept. of Rev., 20 OTR 319, 323-325 (2011).
Cite as 22 OTR 233 (2016) 243
VI. ANALYSIS
As already discussed, the department’s assess-
ment clearly exceeds the 3% Limit because the department
increased the MAV for taxpayer’s properties by over 130 per-
cent. The only justification the department claims for such
action lies in the new property exception.
Although Measure 50 provides for the new prop-
erty exception, it does not define what constitutes new prop-
erty. New property is, however, defined in the implement-
ing provisions of ORS 308.149(5)(a). To the extent that ORS
308.149(5)(a), as construed, does not conflict with Measure
50, the statutory definition controls the outcome of this case.
Accordingly, the court looks to the proper construction of the
provisions in ORS 308.149(5)(a).
A. Construction of the New Property Exception
ORS 308.149(5)(a) provides:
“ ‘New property or new improvements’ means changes
in the value of property as the result of:
“(A) New construction, reconstruction, major addi-
tions, remodeling, renovation or rehabilitation of property;
“(B) The siting, installation or rehabilitation of manu-
factured structures or floating homes; or
“(C) The addition of machinery, fixtures, furnishing,
equipment or other taxable real or personal property to the
property tax account.”
The department relies only on ORS 308.149(5)(a)(C)
(hereinafter referred to as Sub (C)). The department’s argu-
ment is that, once the department itself subjected all of the
operations of taxpayer to central assessment, the depart-
ment “created a new unit of property, as authorized by ORS
308.555, which was coterminous with the statewide unit of
property for MAV calculation purposes.” The department
argues that the new unit of property was “add[ed]” to a new
central assessment property tax account as new property.22
22
Nothing in the Oregon Constitution, the statutes, or even the depart-
ment’s rules contemplates a central assessment “property tax account.” The term
“property tax account” refers to local property tax accounts. See ORS 308.142(2)
(referring to ORS 308.215). In central assessment, the department conducts its
244 Comcast Corp. III v. Dept. of Rev. (TC 4909)
Accordingly, in the department’s view, it follows that all of
taxpayer’s previously existing and assessable property—
whether previously assessed or unassessed and whether
tangible or intangible—became “new” property in tax year
2009-10.
In the context of the assessment statutes generally,
there are several reasons why that reading of Sub (C) is
unavailing in this case.
1. Property previously subject to assessment is not
“new”
The department admits that taxpayer’s property,
with the exception of the $86 million in new additions, pre-
viously existed, was used in taxpayer’s businesses, and was
previously subject to assessment. All such property had, or
could have had, a MAV determined for it. As the Supreme
Court held, taxpayer was subject to central assessment in
respect of its cable and internet properties from the point
of the conversion of analog technology to digital technol-
ogy. Comcast Corp., 356 Or at 317-19, 324. The fact that the
department did not attempt to subject the cable and inter-
net access property, including intangible property, to central
assessment does not change that fact.
This court has already held that in the case of
property existing and assessable, but unassessed, only
property added in the prior assessment year is “new prop-
erty” for purposes of applying ORS 308.149 and ORS
308.153 in preparation of a roll for any assessment year
that will then lead to levy of tax in the corresponding tax
year. See Douglas County Assessor v. Crawford, 21 OTR
6 (2012). In Crawford, this court observed that “new” is
defined as: “ ‘[H]aving existed or having been made but
a short time; having originated or occurred lately * * *.’ ”
Id. at 10 (quoting Webster’s Third New Int’l Dictionary
1522 (unabridged ed 2002)) (alteration and omission in
assessment and places the property on the “assessment roll,” which is then allo-
cated out to the counties. See ORS 308.540; ORS 308.621. However, this property
is then added to a local property tax account. As will be discussed below, the
“addition” to a property tax account must be made by a taxpayer. Accordingly, it
does not matter whether the department or a county assessor causes the “addi-
tion” to be reflected in a property tax account.
Cite as 22 OTR 233 (2016) 245
original). This court concluded that there is, implicit in
that definition, a temporal requirement. Specifically, con-
sidering the actual provisions in Oregon statutes, “ ‘new
property or new improvements’ ” are those that “come into
being between January 1 of the preceding assessment year
* * * and January 1 of the current assessment year * * *.”
Id. (Emphasis added.) Under Crawford, property that was
already subject to assessment before January 1, 2008—
the beginning of the assessment year immediately prior to
the assessment year at issue in this case—does not qualify
as new property under Sub (C).
2. Crawford was correctly decided
The department argues that Crawford was incor-
rectly decided. However, the court sees no reason to depart
from its analysis or conclusion in Crawford.23 Of primary
importance, any argument that new property includes prop-
erty acquired prior to the immediately preceding assessment
year renders superfluous the statutory provisions of ORS
308.156(3) governing determination of MAV for omitted
property.
Those statutory provisions, linked as they are to
ORS 311.216(1), reach as far back as five years prior to the
last certified roll. ORS 308.156(3)(a) requires a calculation
for the first year the property is added as omitted. For that
oldest year, ORS 308.156(5)(b) requires that the CPR for
that oldest year be used. In short, the CPR is for the oldest
year, not the current year. Those rules would not be needed
if, upon discovery of property omitted from any roll in such
five year look back period, the assessor could simply treat
the property as “new” and determine the MAV under ORS
308.153(1)(b) based on the current RMV multiplied by the
current assessment year CPR.
Nor can the current assessment year be a period
in which a determination is made as to what, if any, new
23
To clarify one statement in Crawford, this court noted that, where consti-
tutional limitations are involved, “[a]n action of the assessor cannot supply the
authority for the action of the assessor.” See Crawford, 21 OTR at 9 n 3. That
should be read as true for constitutional or statutory limits where action of an
assessor is not stated as determinative as to the limit.
246 Comcast Corp. III v. Dept. of Rev. (TC 4909)
property has come into existence.24 That is because all
assessors, local and central, must complete all assessment
calculations, RMV, MAV, and AV, before the current assess-
ment year ends on December 31.25 They must therefore have
determined what “new property” exists long before the cur-
rent assessment year ends.
If neither a year prior to the immediately preced-
ing assessment year nor the current assessment year can
be years in which the addition of “new” property is statuto-
rily contemplated, the only year left in which the status of
“new” can occur is the immediately preceding assessment
year itself. The only year left in which the status “new” can
occur, as determined in Crawford, is the immediately pre-
ceding assessment year itself. This conclusion as to when
property is “new” is buttressed by ORS 308.149(5)(c). That
statute provides that new property includes property “that
on January 1 of the assessment year is located in a different
tax code area than on January 1 of the preceding assessment
year.” (Emphasis added.)
Moreover, the statutory implementation of other
MAV exceptions—not including the omitted property MAV
rule discussed above—also applies to changes after January 1
of the preceding assessment year and before January 1 of
the current assessment year. See ORS 308.156(1) (sub-
divided or partitioned); (2) (rezoned); and (4)(a) (disqualified
from exemption, partial exemption, or special assessment).
These provisions are highly relevant context, strongly
24
To be clear, the current assessment year is the year in which the assessor
is preparing the assessment roll. For example, as of the time that an assessor is
preparing the 2009 assessment roll, the current assessment year is 2009, run-
ning January 1, 2009 to January 1, 2010, which corresponds to tax year 2009-10.
As will be seen in Section VI (A)(3), it is important not to confuse the current
assessment year and the current assessment roll. See 22 OTR at 247-51. At the
time the assessor is preparing the 2009 assessment roll, the current assessment
roll is the 2008 assessment roll, completed for the 2008 assessment year, and
corresponding to tax year 2008-09.
25
The department must prepare a tentative roll on or before June 15 of
the assessment year. ORS 308.585. The Director of the department then must
review, correct, and apportion the roll to the counties by August 1 of the tax year.
ORS 308.600. The county assessors must print their rolls by September 25. ORS
308.219(2). Those rolls must be delivered to the tax collectors so that tax state-
ments may be sent out by October 25. ORS 311.115. The tax statements are due
payable on November 15. ORS 311.250(1).
Cite as 22 OTR 233 (2016) 247
supporting the conclusion of this court that “new” property
is determined by reference to changes occurring during
the prior assessment year—in this case, during the period
January 1, 2008 to January 1, 2009.
This conclusion raises the question, as it did in
Crawford, as to when any property asserted to be “new” came
into existence or was added to a property tax account. That
question is one of fact for further evidentiary proceedings.26
3. Crawford is applicable for centrally assessed property
In addition to arguing that Crawford was not cor-
rectly decided, the department argues that the analysis in
Crawford is limited to local assessment because this court’s
interpretation of the meaning of “new property” in ORS
308.149(5) is not applicable to determining MAV for cen-
trally assessed properties. The premise of the department’s
argument is that the central assessment procedures and tax
periods to which those procedures apply differ as between
local assessment and central assessment.27
In support of this premise, the department notes
that the central assessment statute for omitted prop-
erty, ORS 308.628, refers to property that “has not been
assessed on the assessment roll for the year in which the
roll was last certified,” whereas the local assessment stat-
ute for omitted property, ORS 311.216, refers to property
omitted from the “current assessment and tax rolls.” The
department argues that the two statutes refer to two differ-
ent time periods in which property is deemed to have been
“omitted.”
The supporting argument and premise are simply
incorrect, as will be discussed below.
a. Local assessment of omitted property
For locally assessed property, ORS 311.216 pro-
vides that an assessor who discovers that property has been
26
See Section VI (B), 22 OTR at 258, for a description of the further proceed-
ings and associated burden of proof.
27
Of course, the department’s premise assumes that there is a legally signif-
icant connection between the assessment of RMV and the determination of MAV.
That is only true when an exception event has occurred, and not otherwise.
248 Comcast Corp. III v. Dept. of Rev. (TC 4909)
omitted “on the current assessment and tax rolls or on any
such rolls for any year or years not exceeding five years
prior to the last certified roll,” must proceed to assess such
property as omitted property. (Emphasis added.)
To understand this provision it is helpful to ana-
lyze a hypothetical. Assume an assessor becomes aware of
an omission in May 2009—which is also May of the 2009
assessment year. Assume further that the omitted prop-
erty was in existence, came into existence, or was acquired
by the taxpayer in the assessment year 2002. Finally, also
assume that the property still exists and is still owned by
the taxpayer in May of 2009.
That property should have been reflected in the
assessment roll for 2003 and taxed in tax year 2003-04.
Upon discovery of the omission, the assessor must add that
omitted property to the “current assessment roll.” ORS
311.216 - 311.232.
As discussed in Multnomah County Assessor v.
Portland Devel. Comm., 20 OTR 395 (2011), as of May 2009,
the “current” roll is the roll for the immediately preceding
assessment year or, stated differently, the roll last certified.
In the hypothetical, that would be the 2008 assessment year,
corresponding to the 2008-09 tax year. As of May 2009,
when, in this hypothetical, the omitted property comes to
the attention of the assessor, the “current roll” must be a
roll that has been certified. It cannot be a roll yet to be com-
pleted. The reason for this is that until the roll is completed
it would not be possible to say that any property had been
either included or omitted on that roll. Therefore, the refer-
ence to the current assessment roll is not to the roll that the
assessor is preparing for the 2009 assessment year (and the
2009-10 tax year)—a roll which was not yet completed and
certified. Completion and certification occur in September,
in the case of the hypothetical it is September 2009. ORS
308.219(2); ORS 311.105.
This does not, however, mean that the property
omitted from a prior roll or rolls, and entered on those rolls
by reason of the omitted property procedure, will not be
shown on the roll yet to be finalized. Such property will be
shown on the roll to be finalized if, as in the hypothetical,
Cite as 22 OTR 233 (2016) 249
the property still exists. The assessor, in May 2009, now
knows of its existence and is required to put it on the roll
being prepared for the 2009-10 tax year. ORS 308.232. The
phrase “current roll” does not refer to ongoing work on an
assessment roll. Rather, the proper definition of the “cur-
rent roll” serves to define the “current roll plus prior 5 rolls”
period of reach back for addition of omitted property under
ORS 311.216. In the hypothetical, that period will include
the assessment years 2008, 2007, 2006, 2005, 2004, and
2003.
b. Central assessment of omitted property
The procedures and time frames for central assess-
ment of omitted property are, contrary to the department’s
argument, in all material respects, the very same as those
found in ORS 311.216 to 311.232 for locally assessed prop-
erty. The only difference is that those procedures, which
contemplate action by the Director instead of the local
assessor, are outlined in the central assessment statutes in
ORS chapter 308, where the Director of the department is
the relevant actor.
Under ORS 308.628, if the Director of the depart-
ment determines that any property that is assessable “has
not been assessed on the assessment roll for the year in which
the roll was last certified or on the roll for any prior year that
does not exceed five years prior to the year for which the last
roll was certified,” then the department is to proceed with an
omitted property assessment so as to correct each certified
roll, within the look back period, from which the property
was omitted. ORS 308.636.
Applying these rules to a taxpayer subject to central
assessment and using the same hypothetical set out above
for a locally assessed taxpayer, the results would be as fol-
lows. The department discovers in May 2009 that assessable
property that was in existence, came into existence, or was
acquired by a taxpayer in the 2002 assessment year. That
property should have been added to the roll for the 2003
assessment year and for each assessment year thereafter, to
and including the 2008 assessment year, for which the roll
was last certified—and which related to the tax year 2008-09,
running, as it did, from July 1, 2008 to June 30, 2009.
250 Comcast Corp. III v. Dept. of Rev. (TC 4909)
These are precisely the same actions and timing of
actions as for the locally assessed property. The use of the
term “current assessment roll” in ORS 311.216 and “roll last
certified” in ORS 308.628 makes no substantive difference.
The department also points to ORS 308.590(4) in
making its argument about the alleged difference between
omitted assessments in the central as opposed to the local
assessment regimes. Here again, the department is mis-
taken. ORS 308.590(4) does not purport to deal with the
addition of omitted property to rolls previously certified by
the department. At most it addresses the process of adjust-
ing a roll that is yet to be completed. It provides that the
Director can insure that staff errors made in preparation of
the “tentative assessment roll” are corrected.28
Accordingly, in the hypothetical example set forth
above, it authorizes the Director, if necessary, to insure that
the omitted property added in past central assessment years
is also taken into account on the roll being completed but not
yet complete or certified.
Here again, there is no difference between central
and local assessment. If a local assessor has made an omit-
ted property assessment of property that still exists, the
local assessor has both the authority and duty to assess that
property in the assessment (calendar) year in which the
omission is discovered. ORS 308.232.
Further, in both cases, the existence of authority or
duty to take omitted property into account in a roll being pre-
pared does not mean that the rules for adding such property
to prior rolls are suspended. The omitted property statutes
provide no authority for the local assessor or the Director to
simply add all such property to the roll then being prepared.
Addition of omitted property to the prior rolls will
be at 100 percent of RMV in all cases, local or central. ORS
28
Nor is it correct to assert, as the department does in its brief, that in
examining the tentative assessment roll under ORS 308.590, the Director is
examining and correcting the “current year roll,” except, perhaps, to the extent
that wording used by the department is meant to refer to the roll then currently
being prepared but not yet completed. For both the local and central assessment
regimes, whether the term “current roll” or “roll last certified” is used, the statu-
tory reference is to the last roll finalized and in place.
Cite as 22 OTR 233 (2016) 251
308.232. However, a determination of MAV for any such
additions of property is also necessary. For both central and
local assessment, that is to be done pursuant to ORS 308.146
and will be determined under one set of rules: the rules of
ORS 308.156(3) and (5). Those rules, and the constitutional
provisions they implement, make no distinction as between
central and local assessment.29
The only other discussion by the department of
omitted property provisions and MAV is with respect to the
provisions of ORS 308.166. The department points out that
this statute states that if MAV adjustments are authorized
under both ORS 308.153 (new property) and ORS 308.156
(several adjustments including omitted property), ORS
308.166(1) directs that the first adjustment is to be under
ORS 308.153. This ordering rule is needed, however, when
both new and omitted property adjustments are required
in a property tax account. The ordering rule says nothing
about whether the new or omitted adjustments are justi-
fied. Nor does it authorize “new property” adjustments to be
made in cases in which omitted property adjustments were,
for whatever reason, not made.
4. The new property exception does not erase previously
determined MAV
The department argues that taxpayer’s property,
already assessed on an assessment roll and with a previ-
ously determined MAV, loses the constitutional and stat-
utory MAV protections. This, the department asserts, is
based entirely upon a decision of the department to estab-
lish a central assessment account and apply unit valuation.
There is no statutory or constitutional support for such a
position, and the department has not cited to any. In fact,
the statutory provisions contemplate just the opposite.
ORS 308.153 provides for the calculation of the
current year’s MAV in situations of new property. First,
29
Differences as between the assessment regimes may affect the RMV of cer-
tain property, including whether it is even assessed. That does not translate into
a separate determination of MAV for that property, except that, once an exception
event has occurred, the RMV for property subject to the exception event is multi-
plied by the CPR to determine the MAV for that property. See ORS 308.153; ORS
308.156.
252 Comcast Corp. III v. Dept. of Rev. (TC 4909)
the assessor calculates the MAV under the 3% Limit for all
property that is not new, i.e., taxpayer’s property already
assessed and on an assessment role, with a previously deter-
mined MAV. ORS 308.153(1)(a). Second, the assessor calcu-
lates “[t]he product of the value of the new property or new
improvements” multiplied by the CPR. ORS 308.153(1)(b);
see also ORS 308.153(2)(a). The MAV of all property in the
account is the sum of the two calculations. ORS 308.153(1).
The new property “exception” only applies to new property.
It does not affect the previously determined MAV of other
property.
5. “Addition” to the property tax account requires some
action attributable to a taxpayer
The department’s argument is that the department
itself is the actor that causes the “addition of * * * property to
the property tax account.” ORS 308.149(5)(a)(C). To be sure,
the language of Sub (C) is ambiguous in this regard because
it is written in the passive voice. That leaves open the ques-
tion of who, under Sub (C), makes the addition to the account.
It is true that an assessor administratively causes the addi-
tion of property to be reflected in the property tax account.
However, for the following reasons, the court concludes that
the actual “addition” must be made by a taxpayer—not the
department.
Sub (C) does not directly speak to who makes or
effects the “addition of * * * property to the property tax
account.” However, the department’s interpretation conflicts
with the context of the provision. In considering the con-
text of Sub (C), the court consults two maxims of statutory
construction.
The first maxim is noscitur a sociis, pursuant to
which the court looks to the other definitions of new prop-
erty contained in ORS 308.149(5)(a). Any similarities or
dissimilarities among the provisions in paragraph (a) may
be instructive as to the meaning of Sub (C). See State v.
McCullough, 347 Or 350, 361 n 8, 220 P3d 1182 (2009) (quot-
ing Nunner v. Erickson, 151 Or 575, 609, 51 P2d 839 (1935)).
Subparagraph (A) of ORS 308.149(5)(a) defines new
property in terms of construction and renovation. These
Cite as 22 OTR 233 (2016) 253
actions can only refer to actions of a taxpayer. Subparagraph
(B) of ORS 308.149(5)(a) defines new property in terms of
siting or rehabilitating manufactured or floating homes.
Again, these actions can only refer to actions of a taxpayer.
If subparagraphs (A) and (B) contain definitions referring
only to actions of a taxpayer, Sub (C) should, absent textual
direction to the contrary, also be said to refer to actions of
a taxpayer.30 The department or assessor administratively
cause the property tax account to reflect this “addition”—but
they do not add property.
The second maxim is ejusdem generis, which calls
for review of the other terms contained in Sub (C) itself.
See McCullough, 347 Or at 361 n 9 (quoting Liberty v. State
Dept. of Transportation, 342 Or 11, 20, 148 P3d 909 (2006)).
Sub (C) contains some specifically listed items and two
catchall provisions. The department relies upon one of the
catchall provisions.
Applying ejusdem generis, the court looks to the spe-
cifically listed terms in Sub (C) in construing each of the
catchall terms. The specifically listed terms are “machin-
ery, fixtures, furnishings, [and] equipment.” Any addition
to the property tax account of these specifically listed items
must be based on a physical addition, acquisition, or some
other action of a taxpayer.31
In addition to the specifically listed terms, the
legislature also added two catchall provisions, unspecified
“real” or “personal property.” Real property is clearly prop-
erty that can only be added to a tax account as a result of
an acquisition by a taxpayer. This leaves only the general
catchall of “other taxable * * * personal property.” Because,
as to personal property, the listed terms—machinery, fix-
tures, furnishing, and equipment—can only be “added” to a
property tax account as a result of an action of a taxpayer in
30
In addition, in defining what does not constitute new property, the legisla-
ture again spoke in terms of actions that can only refer to actions of a taxpayer—
“General ongoing maintenance and repair” and “Minor construction.” ORS
308.149(5)(b)(A), (B).
31
ORS 308.162 authorizes assessors to merge property tax accounts. But
property in the merged account has in no sense been “added” by a taxpayer to the
surviving account. It is merely “reflected” in the surviving account created by the
assessor.
254 Comcast Corp. III v. Dept. of Rev. (TC 4909)
acquiring or constructing them, the court concludes that an
action of a taxpayer is required in respect of adding “other
taxable * * * personal property” to the property tax account
for purposes of ORS 308.149(5)(a)(C).32
Once these maxims are employed, it becomes clear
that the entity responsible for the “addition” is a taxpayer,
not the department or an assessor.33
6. Transition to central assessment is not an exception
to the 3% limit
The department’s position is that employing unit
valuation and assessing intangible property for the first time
somehow creates new property, even in respect to previously
existing and assessed real and tangible personal property.
Unit valuation is a method of determining the value of a
taxpayer’s property in Oregon based on an allocable share
of the value of a taxpayer’s property both inside and outside
the state. ORS 308.550; ORS 308.555. The statement of a
valuation rule for property necessarily assumes the exis-
tence of the property. A valuation rule, and its application,
cannot create property.
The department attempts to bolster its argument
by pointing to a distinction in the definition of “property”
between local and central assessment. In local assess-
ment, the department states that property means “All
property included within a single property tax account.”
ORS 308.142(1)(a) (emphasis suggested by department). In
central assessment, the department states that property
means “the total statewide value of all property assessed
to a company.” ORS 308.142(1)(b) (emphasis suggested by
department).
The department suggests that these statutes sup-
port a conclusion that a change in valuation methodology
under central assessment creates new property. See ORS
308.550 (unit valuation). However, ORS 308.510(5) is incon-
sistent with that argument. ORS 308.510(5) provides that,
32
With respect to intangible property, the action of a taxpayer might be the
acquisition of favorable new contracts, leases, or franchises.
33
There is no relevant legislative history to assist the court.
Cite as 22 OTR 233 (2016) 255
for purposes of determining the MAV under Measure 50,
“ ‘property’ means all property assessed to each company that
is subject to [central assessment].” (Emphasis added.) ORS
308.510(5) confirms that the focus is on property, not value.
Of at least equal importance, nothing in Measure 50 or the
implementing statutes provides a basis for the department’s
position that a transition from local to central assessment
constitutes an exception event for purposes of the Measure
50 limitations.
As the court has observed elsewhere in this order,
the statutory structure providing for the determination of
RMV is different from the statutory structure providing for
the determination of MAV. These separate structures may
at times “connect.” This happens when, but only when, an
exception occurs and RMV must be used as part of the cal-
culation of MAV. This occurs under ORS 308.153 and ORS
308.156, both of which deal with determination of exception
value.
The basic error in the department’s position is that
it makes the very act of subjecting property to central assess-
ment, and a different valuation methodology, an exception
to the 3% Limit. The 3% Limit is subject only to explicitly
stated exceptions. Or Const, Art XI, § 11(1). For example,
the constitution does contemplate an exception to the 3%
Limit for certain changes in status (disqualification from
exemption or partial exemption) or valuation methodologies
(disqualification from special assessment). See Or Const,
Art XI, § 11(1)(c)(E); ORS 308.146(3)(e). However, neither the
constitution nor the implementing statutes contemplate an
exception for changes in valuation methodology from local
assessment to unit valuation under central assessment.
As stated above, the department misunderstands
the purpose of the definitions of property in ORS 308.142.
Those definitions are to be used only for comparing the AV
and MAV of “property” for purposes of Measure 50. For local
assessment, the assessor looks at the AV and MAV for all
items in the property tax account. See Flavorland Foods v.
Washington County Assessor, 334 Or 562, 578, 54 P3d 582
(2002). For central assessment, the number is an allocable
share of a unit value. ORS 308.550; ORS 308.555. The term
256 Comcast Corp. III v. Dept. of Rev. (TC 4909)
“value” is used instead of “property,” but use of “value” does
not mean new property is created, and it cannot be used to
avoid Measure 50.
7. Changes in RMV do not dictate changes in MAV
The department’s final argument is that, unless a
MAV is determined for taxpayer’s unit of property under
the new property exception, there will be no MAV for tax-
payer’s previously unassessed intangible property. In other
words, the department’s argument is that some exception
to Measure 50 must exist. That argument ignores the fun-
damental reality that a change—even a big change—in the
RMV of property is not an exception event for purposes of
Measure 50. To exceed the 3% Limit, that change in RMV
must be coupled with an exception event provided for by the
constitution.
The department’s argument must fail because,
even if taxpayer’s previously unassessed intangible prop-
erty has no MAV, property lacking a MAV is not automat-
ically considered new property for purposes of an excep-
tion event. However, where the new property exception has
not been satisfied, it may be that another exception applies.
Alternatively, it may be that there is a gap in Measure 50,
namely, that transition to central assessment is not stated
as an exception event (setting aside whether property
that could have been subjected to assessment but was not
subjected to assessment has some exception applicable
to it).
In addition, the department’s concern runs counter
to the fact that there will be a MAV associated with tax-
payer’s previously unassessed intangible property. Although
not yet fully briefed and argued, it would appear that the
MAV for taxpayer’s centrally assessed unit of property—
which includes taxpayer’s previously unassessed intangi-
ble property—would be equal to an aggregate sum of tax-
payer’s MAV from its assessment accounts in tax year
2008-09. This amount would be adjusted in accordance with
the 3% Limit, and to that number would be added an MAV
for taxpayer’s $86 million of concededly new property, deter-
mined under ORS 308.153.
Cite as 22 OTR 233 (2016) 257
In making this line of argument, the department
makes two additional statements in its reply brief that must
be addressed.
First, on page 9, lines 3 through 4 of the depart-
ment’s reply brief, the department asserts, “Measure 50
requires that a unit of property on the assessment roll be
given a maximum assessed value that is not less than its
real market value on the roll.” There is no textual justifica-
tion for this argument in Measure 50 or the implementing
statutes. In fact, this unbelievably broad assertion is only
true where, in the first year that property is assessed, it
is added using its RMV multiplied by a CPR of 1.00. The
assertion also ignores that property may be subject to spe-
cial assessment, and thus not assessed at its RMV. Finally,
the department’s assertion also ignores that the CPR might
be something other than 1.00, which CPR taxpayer chal-
lenges in this case.
Second, on pages 9 and 10, the department relies
on an argument supporting Measure 50 in the voters’ pam-
phlet and argues, “There is no evidence, however, that vot-
ers intended that Measure 50 should be construed to pre-
vent later assessment and taxation of centrally assessed
property that was not on the central assessment roll in
1995.” There is nothing in the text of Measure 50 that sup-
ports this assertion. Moreover, there is nothing in the text
of Measure 50 that says the rules of Measure 50 apply to
taxpayers except for when the taxpayer is a business.
The department’s concern regarding the disparity
between the RMV and the MAV associated with taxpayer’s
properties is an insufficient basis to conclude the new prop-
erty exception applies in this case.
8. Conclusion as to the new property exception
The department’s action of adding taxpayer’s prop-
erty to the central assessment tax roll does not, absent some
action or event attributable to taxpayer, qualify as an “addi-
tion” to a property tax account for purposes of the new prop-
erty exception under ORS 308.149(5)(a)(C). However, that is
not to say that the department cannot use the new property
exception at all. At the very least, taxpayer conceded that it
had $86 million in new property additions.
258 Comcast Corp. III v. Dept. of Rev. (TC 4909)
B. Further Evidentiary Proceedings are Necessary
In their briefs, the parties touched on the issue of
calculating the MAV for taxpayer’s property in tax year
2009-10.34 The record does not support a decision on this
matter; further evidentiary proceedings are warranted.35
Taxpayer has questioned the department’s determination
of the CPR. In addition, the department has not had an
opportunity to determine and prove what amount, if any, of
intangible property, or other tangible property, was added
by taxpayer since the assessment date for tax year 2008-09.
There may be more than $86 million in new property for tax
year 2009-10.
The assignment of the burden of proof in these
future proceedings bears discussion. In the Tax Court, the
party seeking affirmative relief—in this case, taxpayer—
bears the burden of proof, and a preponderance of the evi-
dence is sufficient to sustain such burden. ORS 305.427.
Taxpayer seeks relief on the grounds that the
department has violated the general rule established by
Measure 50 and its implementing statutes. The general rule
is that the MAV cannot exceed the 3% Limit. Absent some
exception, if the MAV exceeds the 3% Limit, a taxpayer
is entitled to affirmative relief. The MAV asserted by the
department well exceeds that limit. Accordingly, taxpayer’s
burden of proof is satisfied.
The department seeks to avoid defeat by relying on
the new property exception. A party seeking an exception to
a general rule is required to prove facts sufficient to invoke
that exception. Cf. Harvey v. Davis, 276 Or App 680, 685-86,
371 P3d 1208 (2016). This should be especially true when
the general rule is of constitutional origin.
The department will be afforded an opportunity to
prove whether there was additional new property for tax
year 2009-10 in addition to the $86 million conceded by tax-
payer to be new property.
34
Among other issues that remain to be determined, is whether or how to
apply ORS 308.162 (merger of accounts).
35
It was agreed at the hearing on the scope or remand that discovery would
be stayed pending the outcome of this decision.
Cite as 22 OTR 233 (2016) 259
VII. CONCLUSION
Property existing and subject to central assessment
before the assessment date for tax year 2008-09 is not new
property when it is first subjected to central assessment in
tax year 2009-10. At this time, the court cannot determine a
specific MAV for taxpayer’s property. The parties are to con-
fer regarding further discovery resulting from this order,
and other matters still pending. Now, therefore,
IT IS ORDERED that the parties are directed to
continue pursuant to this order and the rules of the court.
260 Comcast Corp. III v. Dept. of Rev. (TC 4909)
APPENDIX
This Appendix illustrates the interactions between
the AV, MAV, and RMV for purposes of Measure 50 and
the legislature’s implementing statutes. Recall that, as dis-
cussed in the body of the order, there are two limits with
respect to MAV, but only the Statutory Limit provides a cal-
culation. The Statutory Limit provides that MAV is equal
to greater of either 103 percent of the prior year’s AV or 100
percent of the prior year’s MAV.
Neither limit is a restriction on the increase of AV.
However, this Appendix illustrates the effect on the AV, as
restricted by the MAV, resulting from changes in the RMV.
It does not address any changes to the MAV resulting from
“exceptions.” The discussion in this Appendix is based on
the following chart. Each year will be discussed separately.
Illustration of Change to AV
based on Change in RMV as Limited by MAV
% % %
AV Change MAV Change RMV Change
Base $100,000 N/A $100,000 N/A $100,000 N/A
Year 1 $100,000 0% $103,000 +3% $100,000 0%
Year 2 $101,000 +1% $103,000 0% $101,000 +1%
Year 3 $75,000 -26% $104,030 +1% $75,000 -26%
Year 4 $90,000 +20% $104,030 0% $90,000 +20%
Year 5 $104,030 +16% $104,030 0% $125,000 +39%
Year 6 $107,151 +3% $107,151 +3% $175,000 +40%
Year 7 $110,366 +3% $110,366 +3% $180,000 +3%
Year 8 $113,677 +3% $113,677 +3% $190,000 +6%
Year 9 $117,087 +3% $117,087 +3% $210,000 +11%
Year 10 $120,600 +3% $120,600 +3% $215,000 +2%
Base Year. The base year is the year immedi-
ately preceding year 1. It is included so that any changes in
year 1 can be measured. The property’s AV, MAV, and RMV
is $100,000.
Year 1. RMV remained at $100,000. Notice, how-
ever, that MAV increased to $103,000. This is because the
Cite as 22 OTR 233 (2016) 261
current year’s MAV is equal to the greater of either 103 per-
cent of the prior year’s AV (103% x $100,000 = $103,000) or
100% of the prior year’s MAV (100% x $100,000 = $100,000).
The current year’s AV, however, is the lesser of the current
year’s RMV ($100,000) or MAV ($103,000). Accordingly, the
AV remained at $100,000.
Year 2. RMV increased to $101,000. Notice that
the MAV remained at $103,000.36 As explained in Year 1,
this is because the current year’s MAV is based on the prior
year’s AV or MAV. The current year’s AV, however, increased
to $101,000 (1% increase) because it is equal to the lesser of
the current year’s MAV ($103,000) or RMV ($101,000).
Year 3. RMV decreased to $75,000. The MAV, how-
ever, increased to $104,030.37 This is another example of the
fact that the current year’s MAV is based on the prior year’s
AV and MAV. The current year’s AV decreased to $75,000
(26% decrease), however, because it is equal to the lesser of
the current year’s MAV ($104,030) or RMV ($75,000).
Year 4. RMV increased to $90,000. The MAV
remained at $104,030.38 Notice the current year’s AV
increased to $90,000, equivalent to a 20 percent increase,
because it is equal to the lesser of MAV ($104,030) or RMV
($90,000). Recall that the 3% Limit only applies to MAV.
Year 5. RMV increased to $125,000. The MAV
remained at $104,030.39 The current year’s AV increased to
$104,030 (16% increase) because it is equal to the lesser of
MAV ($104,030) or RMV ($125,000).
36
The current year’s MAV is equal to the greater of either 103 percent of the
prior year’s AV (103% x $100,000 = $103,000) or 100 percent of the prior year’s
MAV (100% x $103,000 = $103,000).
37
Equal to the greater of either 103 percent of the prior year’s AV (103% x
$101,000 = $104,030) or 100 percent of the prior year’s MAV (100% x $103,000 =
$103,000).
38
Equal to the greater of either 103 percent of the prior year’s AV (103% x
$75,000 = $77,250) or 100 percent of the prior year’s MAV (100% x $104,030 =
$104,030).
39
Equal to the greater of either 103 percent of the prior year’s AV (103% x
$90,000 = $92,700) or 100 percent of the prior year’s MAV (100% x $104,030 =
$104,030).
262 Comcast Corp. III v. Dept. of Rev. (TC 4909)
Year 6. RMV increased to $175,000. The MAV
increased to $107,151 (3% increase).40 The current year’s AV
increased to $107,151 (3% increase) because it is equal to the
lesser of MAV ($107,151) or RMV ($175,000).
Years 7-10. These years are included to demon-
strate the common understanding of how Measure 50
works. In periods of rising inflation, where RMV contin-
ues to exceed MAV, the AV is limited to the three percent
increase to MAV. However, it is important to recall that, as
demonstrated in Years 1-6, the 3% Limit is on MAV, not AV.
For a graphical representation of all years, please
see below. Note that there is relatively little movement in
the MAV line, and that the AV line is restricted to the lesser
of the RMV or MAV line. The RMV line is unrestricted.
40
Equal to the greater of either 103 percent of the prior year’s AV (103% x
$107,151 = $110,365) or 100 percent of the prior year’s MAV (100% x $104,030 =
$104,030).